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HBIO Reports Fourth Quarter and Full Year 2008 Results

2009 MAR 18 - (VerticalNews.com) -- Harvard Bioscience, Inc. (Nasdaq: HBIO), a global developer, manufacturer, and marketer of a broad range of tools to advance life science research, reported unaudited financial highlights for the fourth quarter and full year ended December 31, 2008. Fourth Quarter Reported Results Revenues from the Company's continuing operations for the three months ended December 31, 2008 were $23.1 million, a decrease of $1.4 million, or 6.0%, compared to revenues of $24.5 million for the three months ended December 31, 2007. In constant currency, revenues grew by 6.4% for the fourth quarter, compared with the fourth quarter of 2007. Income from continuing operations, as measured under U.S. generally accepted accounting principles ("GAAP"), was $1.7 million, or $0.06 per diluted share, for the three months ended December 31, 2008 compared to $2.3 million, or $0.07 per diluted share, for the same period in 2007. Included in the fourth quarter 2008 results was a $0.01 per share negative impact from currency exchange rates compared with the fourth quarter of 2007. GAAP income from continuing operations for the fourth quarter of 2008 included $0.5 million in costs related to an asset write-off and $0.3 million of costs related to acquisition initiatives.

Non-GAAP adjusted income from continuing operations was $3.0 million, or $0.10 per diluted share, for the three months ended December 31, 2008 compared with $3.1 million, or $0.10 per diluted share, for the same period in 2007.

The Company ended 2008 with a strong balance sheet. We had cash and cash equivalents, net of debt, totaling $12.3 million at December 31, 2008, after having repaid $6.3 million of debt and repurchasing 891,000 of the Company's shares, at a cost of $2.6 million, during the year then ended. Full Year Reported Results Revenues from the Company's continuing operations for the year ended December 31, 2008 were $88.0 million, an increase of 5.6% compared with revenues of $83.4 million for the year ended December 31, 2007. On a constant currency basis, revenues grew 9.2% year to year. Income from continuing operations, as measured under U.S. generally accepted accounting principles ("GAAP"), was $5.4 million, or $0.17 per diluted share, for the year ended December 31, 2008 compared to $7.6 million, or $0.24 per diluted share, for the same period in 2007. GAAP income from continuing operations for the year ended December 31, 2008 included the effect of approximately $1.8 million in costs related to the Company's ongoing initiative to consolidate business functions to reduce future operating expenses, $0.5 million in costs related to an asset write-off and $0.3 million of costs related to acquisition initiatives during the year.

Non-GAAP adjusted income from continuing operations was $9.9 million, or $0.32 per diluted share, for the year ended December 31, 2008 compared to $9.8 million, or $0.31 per diluted share, for the same period in 2007. The 2008 results included a $0.01 per share negative impact from year to year currency exchange rate changes.

See Exhibits 4 and 5 for reconciliations of GAAP to non-GAAP adjusted income from continuing operations and GAAP earnings per diluted share from continuing operations to non-GAAP adjusted earnings per diluted share from continuing operations.

Chane Graziano, CEO, stated, "Despite the weakening economy during the second half of 2008, we finished the year with a strong fourth quarter. Organic growth in revenues was approximately 6% and non-GAAP operating profit was a record high of $4.6 million, up approximately 18% versus 2007. We saw strength in most product lines but the highlights in revenue growth were the Harvard Apparatus catalog business in the U.S., worldwide demand for the Panlab behavioral products and Biochrom plate readers. The record non-GAAP operating profit was largely driven by the consolidation of the plate reader business from Austria into our Biochrom subsidiary and sales, marketing and G&A for the Hoefer products from California to Harvard Apparatus in Holliston, Massachusetts."

Mr. Graziano continued, "I believe our strength in the fourth quarter demonstrates the strength of our strategy of providing a broad range of well-established specialty products at relatively low price points, leverage of acquisition products through our distribution channels and operational improvements in the companies we acquire."

He added, "As we look forward to 2009, we see a difficult economic situation with 11% foreign exchange headwinds in revenues and $0.04 earnings per share at January 31, 2009 exchange rates. Therefore, without acquisitions we expect revenues to be in the $80.0 - $85.0 million range and non-GAAP earnings per share in the $0.27 - $0.32 range. For the first quarter of 2009, without acquisitions we expect revenues to be in the $19.0 - $20.0 million range and non-GAAP earnings per share in the $0.06 - $0.07 range.

There are factors such as continued expansion of the distribution of the Panlab products, penetration of the U.S. market for the Biochrom products, continued impact of the catalogs we launched in 2008 and further operational improvements that could enable us to overachieve this guidance. However, it will be the acquisitions that we are able to make in 2009 that will be the major factor. Therefore, with a strong balance sheet and a good credit line, acquisitions will be a major focus in 2009."

Our revenue guidance was calculated using January 31, 2009 exchange rates (USD 1.45/GBP and USD 1.28/Euro) and assumes a continuation of the business conditions as we see them at this time. The non-GAAP adjusted earnings per diluted share from continuing operations guidance excludes amortization of intangible assets, the impact of future acquisitions and acquisition costs in 2009, any future restructuring actions, stock-based compensation expense recognized under SFAS No. 123(R) and the utilization of deferred tax assets that have full valuation allowances. See the table below for a reconciliation of our estimated non-GAAP adjusted earnings per diluted share from continuing operations to our estimated GAAP adjusted earnings per diluted share from continuing operations. See Exhibits 3, 4 and 5 for reconciliations of GAAP to non-GAAP adjusted operating income from continuing operations, GAAP to non-GAAP adjusted income from continuing operations and GAAP earnings per diluted share to non-GAAP adjusted earnings per diluted share from continuing operations for the three months and year ended December 31, 2008. Reconciliation of Guidance for US GAAP Earnings per Diluted Share From Continuing Operations to Adjusted Non-GAAP Earnings per Diluted Share From Continuing Operations (unaudited) ? Three Months Ended ? Year Ended March 31, 2009 December 31, 2009 Low Estimate ? High Estimate Low Estimate ? High Estimate ?

Non-GAAP adjusted diluted earnings per common share from continuing operations - A $

0.06

0.07

0.27

0.32

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