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Harvard Bioscience(HBIO) - 2025 Q1 - Earnings Call Transcript
HBIOHarvard Bioscience(HBIO)2025-05-12 13:00
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Financial Data and Key Metrics Changes - Revenue for Q1 2025 was 21.8million,downfrom21.8 million, down from 24.5 million in Q1 2024, aligning with the higher end of guidance [7][10] - Gross margin decreased to 56% from 60.3% in the previous year [8][14] - Operating loss was 49.7millioncomparedtoalossof49.7 million compared to a loss of 2.3 million in Q1 2024, primarily due to a goodwill impairment charge of 48million[8][10]−AdjustedEBITDAwas48 million [8][10] - Adjusted EBITDA was 800,000, down from 1.6millioninQ12024[15]−Cashflowfromoperationsimprovedto1.6 million in Q1 2024 [15] - Cash flow from operations improved to 3 million from 1.4millionintheprioryear[16]BusinessLineDataandKeyMetricsChanges−RevenueinTheAmericasdeclined9.41.4 million in the prior year [16] Business Line Data and Key Metrics Changes - Revenue in The Americas declined 9.4% year-over-year and 5.4% sequentially [11] - European revenue decreased 29% sequentially and 9% year-over-year [12] - APAC revenue increased 6.6% sequentially but was down 17% compared to the prior year [13] Market Data and Key Metrics Changes - The Americas faced a slowdown attributed to budget clarity issues for academic and NIH funding [11] - European sales were impacted by a lack of seasonal bump and lower CRO sales [12] - APAC market showed slight sequential growth but anticipated challenges due to tariff announcements [13] Company Strategy and Development Direction - Focus on expanding adoption of new products while reducing costs, with an expected reduction in operating expenses by an additional 1 million per quarter starting Q2 2025 [25] - New product introductions include the SOHO telemetry devices and VivaMARS system, targeting both academic and industrial customers [19][20] - Emphasis on bioproduction applications and exploring partnerships for CAR T therapy production [21][31] Management's Comments on Operating Environment and Future Outlook - Management expressed concerns over NIH funding and the impact of tariffs on revenue, particularly in China [25][53] - Positive outlook on the adoption of organoid systems due to government policy changes encouraging alternative testing methods [24][34] - Anticipated Q2 revenue guidance is between 18millionto18 million to 20 million, with gross margin expected to be in the 55% to 57% range [25] Other Important Information - Goodwill impairment charge of 48millionwasrecordedduetoadecreaseinmarketcapitalization[10][29]−Netdebtdecreasedto48 million was recorded due to a decrease in market capitalization [10][29] - Net debt decreased to 30.8 million, reflecting improved cash flow management [16] Q&A Session Summary Question: Can you elaborate on the impairment charge? - Management explained that the impairment was due to a drop in market cap, necessitating a reassessment of goodwill, leading to a non-cash charge of $48 million [29] Question: What about the bioproduction business and CAR T therapy? - Management confirmed that the BTX system is being adopted by a domestic biotech for CAR T therapy production, indicating strong traction in the market [31] Question: How is the MEA product line performing amid NIH funding uncertainties? - Management noted strong interest in the MEA product line, particularly from academic researchers, despite a slowdown in purchasing processes due to NIH staffing changes [34][45] Question: What are the refinancing plans? - Management indicated that refinancing will be more expensive than commercial rates, with terms likely spanning four to five years [46][48]