Harvard Bioscience(US:HBIO)2022-03-11 21:40Revenue and Sales Performance - Harvard Bioscience's revenues from direct sales to end-users represented approximately 67% of total revenues for the year ended December 31, 2021[31]. - The Cellular and Molecular Technologies (CMT) product family accounted for approximately 57% of global revenues for the years ended December 31, 2021 and 2020[27]. - The Preclinical product family made up approximately 43% of global revenues for the years ended December 31, 2021 and 2020[28]. - Approximately 14% and 15% of revenues for the years ended December 31, 2021 and 2020, respectively, came from factored products sold from other manufacturers[26]. - Revenues for the years ending December 31, 2021, and 2020 were negatively impacted due to disruptions from COVID-19 and supply chain issues[115]. - Revenues for the year ended December 31, 2021, were $118.9 million, an increase of approximately $16.8 million, or 16.5%, compared to $102.1 million for the year ended December 31, 2020[122]. - Total revenues for the year ended December 31, 2021, were $118,904,000, representing an increase of 16.4% from $102,100,000 in 2020[202]. Financial Performance and Expenses - Research and development expenses were approximately $10.8 million and $8.7 million for the years ended December 31, 2021 and 2020, respectively[35]. - Sales and marketing expenses increased $4.7 million, or 23.7%, to $24.6 million for the year ended December 31, 2021, compared to $19.9 million during the same period in 2020[124]. - Research and development expenses were $10.8 million for the year ended December 31, 2021, an increase of $2.1 million, or 24.3%, compared with $8.7 million for the year ended December 31, 2020[126]. - Interest expense decreased by $3.3 million, or 68.1%, to $1.5 million for the year ended December 31, 2021, compared with $4.8 million for the year ended December 31, 2020[128]. - The net loss for 2021 narrowed to $288,000 compared to a net loss of $7,810,000 in 2020, showing a substantial reduction in losses[202]. - The company reported comprehensive income of $2,751,000 for 2021, a significant improvement from a comprehensive loss of $8,187,000 in 2020[204]. Operational Challenges - The company faced significant disruptions in the global supply chain during 2021, leading to increased costs and delayed customer shipments[15]. - The global supply chain experienced significant disruptions during 2021, leading to increased costs and delays in customer shipments[114]. - The ongoing military conflict between Russia and Ukraine has created economic uncertainty that may adversely affect the company's financial condition[93]. - The company transitioned a significant portion of its workforce to work-from-home during the COVID-19 pandemic, impacting productivity and sales activities[14]. Debt and Financial Obligations - The company has a term loan of $40.0 million and a $25.0 million senior revolving credit facility, with outstanding borrowings of $49.5 million as of December 31, 2021[66]. - The company’s ability to make scheduled payments on debt and comply with financial covenants is dependent on its financial and operating performance, which may be affected by economic conditions and other uncontrollable factors[71]. - The company expects that available cash, cash generated from operations, and debt capacity will be sufficient to finance current operations for at least the next 12 months[142]. Market and Competitive Landscape - The company derives a significant portion of its revenues from pharmaceutical and biotechnology companies, which are subject to risks that may adversely affect financial results[57]. - The company faces competition from established companies with greater financial and operational resources, which may impact its market position[54]. - The company expects increased competition as the number of products and competitors in its market segment grows[46]. - The company operates in a highly competitive biotechnology industry, which may impact its revenues and operating results[95]. Human Resources and Workforce - The restructuring plan initiated in December 2019 aimed to deliver significant cost savings and included a reduction in force of approximately 10% of headcount[18]. - As of December 31, 2021, the company employed 494 employees, including 475 full-time employees[49]. - The company has never experienced a general work stoppage or strike, indicating good relations with employees[49]. - The company’s success is highly dependent on retaining key personnel, and competition for qualified employees is intense, particularly in key geographic areas[83]. Regulatory and Compliance - The company is not subject to direct governmental regulation for its current products, which are not required to undergo pre-market approval by the FDA[48]. - The company is subject to various covenants under its Credit Agreement, including a maximum consolidated net leverage ratio and a minimum consolidated fixed charge coverage ratio[68]. - The company maintains effective internal control over financial reporting as of December 31, 2021, as confirmed by independent auditors[170]. - Management's evaluation of internal control effectiveness is based on the COSO framework, concluding effectiveness as of December 31, 2021[165]. Asset and Equity Management - Total assets increased to $162,344,000 in 2021 from $156,254,000 in 2020, indicating growth in the company's asset base[200]. - Total liabilities decreased slightly to $78,943,000 in 2021 from $79,573,000 in 2020, reflecting improved financial stability[200]. - Stockholders' equity rose to $83,401,000 in 2021, up from $76,681,000 in 2020, indicating a strengthening balance sheet[200]. Currency and Tax Considerations - A significant portion of the company’s revenues is derived from international operations, making it susceptible to foreign currency exchange rate fluctuations, which could adversely affect sales prices and costs[74]. - Changes in foreign currency exchange rates resulted in a favorable effect on revenues of approximately $1.7 million during the year ended December 31, 2021[144]. - The company is subject to income taxes in the U.S. and various foreign jurisdictions, with significant judgment required in determining the annual tax rate[153]. - Changes in tax reserves could materially impact the company's financial condition or results of operations[154].