HARVARD BIOSCIENCE INC Q1 FY2025 earnings call

• Revenue in Q1 2025 was $21.8M, below prior year's $24.5M, aligning with guidance. - Gross margin was 56% vs 60.3% in 2024, impacted by lower absorption of fixed manufacturing overhead and mix. - Operating expense declined $3.2M from prior year, but operating loss was $49.7M due to $48M goodwill impairment charge. - New product launches: SoHo family of implanted telemetry devices expanding capabilities, Viva Mars system automated neurobehavior monitoring, BTX systems seeing consumable revenue growth, AAA Systems expanding for bioproduction, MeshMEA organoid platform with beta testing and early adopters, and policy changes driving interest in NAMS.

Revenue for the first quarter was $21.8 million, down from $24.5 million in the prior year, aligning with the higher end of guidance communicated in March. By product segment: Base business makes up approximately 76% of total revenue, electroporation and bioproduction related systems about 16%, and MEA and organoid related systems about 8%. Regional results: Americas revenue declined sequentially and year-over-year; Europe revenue declined sequentially and year-over-year; APAC revenue was sequentially up but down year-over-year, with softening in China post-tariff announcements.

• Expect second quarter revenue in range of $18M to $20M and gross margin in 55% to 57% range. - Focus on expanding new product adoption and lowering costs, with cost actions expected to reduce operating expense by an additional $1M per quarter starting in Q2.

• Goodwill impairment due to market cap decline. - Uncertainty around NIH and academic research funding. - China tariff situation impacting APAC revenue.

Q: Can you tell us a little bit more about the impairment charge?

A: Mark Frost explains it was due to market cap drop, using DCF approach leading to $48M non-cash charge.

Q: On the product line, how do cross currents like HHS NAM pronouncement and NIH funding net out?

A: Jim Green says interest in products is strong, funnel growing for academic research, and government policy on NAMS driving interest from biopharma and CROs.

Q: Regarding BTX technology, when will it compete in MaxSight's sector?

A: Jim Green says it depends on volume needs, starting with early adopters and preclinical phases.

Q: On MeshMEA product line, is animal testing slowing down?

A: Jim Green says animal testing won't slow down long-term, but MeshMEA helps with early testing.

Q: What kind of rate and term for debt refinance?

A: Mark Frost says rate will be higher than commercial, term still being negotiated but likely 4-5 years.