HARVARD APPARATUS REGENERATIVE TECHNOLOGY INC. Enabling discovery, safety and production of tomorrow's therapeutics
NASDAQ: HBIO
Q2'23 Earnings Presentation
Jim Green, Chairman, President & CEO
Jennifer Cote, CFO/Treasurer
August 08, 2023
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.
Management's Use of Non-GAAP Financial Information
This document includes non-GAAP financial information, including adjusted operating income (loss), adjusted net income (loss), adjusted EBITDA, adjusted EBITDA margin, adjusted diluted earnings (loss) per share and net leverage ratio. 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, litigation settlement, restructuring and other costs, unrealized gain/loss on equity securities and income taxes. They also exclude 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 forward-looking measures, we provide an outlook for adjusted EBITDA margin, and net leverage ratio. Many of the items that we exclude from these forward- looking measure calculations 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 reported net income and other 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: Q2'23 Highlights
Continuing our strong start to the year
Income Statement Components | Q2' 2023 | Q2' 2022 |
Revenue (GAAP) | 28.8 | 29.2 |
Growth Rate | (1.5%) | |
Favorable FX Impact | 0.1 | |
Net Reduction in Discontinued Products vs Q2'22 | 1.6 | |
Gross Margin | 16.7 | 16.6 |
% of Revenue | 58.0% | 57.0% |
Adj. Operating Profit* | 3.6 | 3.1 |
% of Revenue | 12.4% | 10.5% |
Adj. EBITDA* | 3.9 | 3.4 |
% of Revenue | 13.6% | 11.6% |
Diluted (Loss) Earnings per Share | (0.02) | 0.06 |
Adj. Diluted Earnings per Share* | 0.04 | 0.05 |
Cash Flows from Operations (GAAP) | 3.6 | (0.2) |
* Non-GAAP measure, reconciliations to GAAP financial measures are available in the appendix
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2023 Q2 Revenue by Product Family
(in $M) | Q2 | Q2 | Comments | ||
2023 | 2022 | Vs. | |||
Q2'22** | |||||
Cellular & | 13.5* | 15.3 | -12.3% | Cellular and Molecular Product Revenue were down (12.0%) as reported, down (12.3%) | |
Molecular | adjusted for currency and down (3.6%) when also adjusted for discontinued products | ||||
o Strong growth in APAC, EMEA was flat, offset by slowness in the Americas | |||||
o Continued rotation out of low margin products sold through distribution | |||||
o Revenue includes a net reduction of $1.6 million from discontinued products | |||||
predominantly in CMT compared to last year | |||||
Pre-Clinical | 15.2* | 13.9 | 9.5% | Pre-Clinical revenue up 10.0% as reported, up 9.5% at constant currency and up 11.5% | |
adjusted for discontinued products | |||||
o Asia had strong growth, driven by Inhalation & respiratory related products | |||||
o EMEA had very strong growth across the Pre-Clinical Portfolio | |||||
o Americas down modestly on slower sales of Inhalation & respiratory related products | |||||
Currency | 0.1 | 0.4% | Currency impacted by favorable Euro FX | ||
Revenue | 28.8 | 29.2 | -1.5% | -1.5% growth as reported, 3.9% adjusted for FX impact and discontinued products | |
* Non-GAAP measure, reconciliations to GAAP financial measures are available in the appendix | 4 | |
**Percentages above are subject to rounding | Confidential | 4 |
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NPI: Leading MEA Technology Academic Labs / Discovery
Advanced cell-based testing supports penetration of CROs & BioPharma applications
Research & Discovery, Bridge to Bio-Production | Pre-Clinical Toxicology & Safety Pharmacology | |||
MOLECULES | CELLS | ORGANOIDS | PRECLINICAL | CLINICAL |
/ORGANS |
Advanced Cellular
MCS Mesh Array Organoid MEA Platform
- Single-wellHigh density Multi Electrode Array (MEA) embedded within the organoid
- Based on our market leading MEA technology
- 1st organoid-centric MEA targeting Neuro and Cardiac for activation/metabolism/toxicology
- We expect adoption of organoid level testing to applications historically limited to whole organ or animal models
Electrophysiology
MCS Multi-well MEA 2nd Generation Platform
- Designed for higher volume MEA applications
- Leverage our lead position in high density MEA in Academics and Discovery, and expand in industrial CRO and BioPharma applications
- Base platform for incorporating advances such as organoids and electrophysiology applications
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Harvard Apparatus Regenerative Technology Inc. published this content on 08 August 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 08 August 2023 11:25:32 UTC.
