HARVARD BIOSCIENCE INC Q4 FY2025 earnings call

• 2025 was a crucial year for building foundations, including completing a comprehensive refinancing, strategically consolidating the manufacturing footprint, strengthening governance by appointing new Board members and establishing a product and Scientific Advisory Board, and solidifying executive leadership. • In the fourth quarter, revenue was above the guidance midpoint, gross margin was at the high end of guidance, and adjusted EBITDA grew year-over-year due to favorable mix shift, cost reductions, and disciplined expense management. • The company's priorities for 2026 include leading the translational science bridge, accelerating high-margin innovation, expanding consumables and recurring revenue, and achieving operational excellence and disciplined growth. • For 2026, the guidance is low single-digit revenue growth and high single-digit adjusted EBITDA growth driven by higher-margin NPI growth.

In the fourth quarter, revenue was $23.7 million, which was above the midpoint of the guidance range. The gross margin was 59.7%, at the high end of the guidance range. Adjusted EBITDA was $3.8 million, showing a 27% year-over-year growth. For the full year, revenue was $86.6 million, down from the previous year. The gross margin was 57.7%, down from the prior year. Adjusted EBITDA increased by 12.5% to $8.1 million. Geographically, in the fourth quarter, Americas revenues decreased by 2% year-over-year, Europe's revenues dropped by 12% year-over-year, while China and Asia Pacific revenues increased by 10% year-over-year. For the full year, Americas revenues were down 7% year-over-year, Europe's were down 6% year-over-year, and China and Asia Pacific's were down due to lower distribution revenue.

• Full-year 2026 revenue is expected to grow by 2% to 4%. • Full-year 2026 gross margin is projected to be between 58% and 60%. • Full-year 2026 adjusted EBITDA is expected to grow by 6% to 10%. • First-quarter 2026 revenue is anticipated to be between $20 million and $22 million, adjusted gross margin between 57% and 59%, and adjusted EBITDA between $1 million and $2.2 million.

Q: Regarding the NIH, how quickly do you think the approval will translate to a better academic environment for the company?

A: Expect to start seeing a positive impact towards the end of Q1 and into Q2.

Q: What percentage of the company's revenue comes from NIH?

A: NIH revenue is about 20% of the company's U.S. revenue.

Q: Can you talk about the growth of BTX and Mesh MEA and their expected growth in 2026?

A: Both are key parts of the NPI and are expected to grow in double digits in 2026.

Q: What is the plan for debt paydown this year?

A: The debt structure has no amortization in the first 2 years, has the ability to convert term loan A to ABL for lower interest rate and flexibility, and Term Loan C can potentially be converted to equity.

Q: The pop in Asia Pac revenue this quarter, is it a sign of turnaround and what are expectations for 2026?

A: Had catch-up in the fourth quarter, and expect to return to a normal cadence in Asia Pac.

Q: Any changes in backlog during the fourth quarter?

A: Ended the year with the highest backlog in over 2 years and has continued to maintain it.

Q: How is the pharmaceutical biotech CRO side of the business characterized?

A: Year-to-date, that part of the business is up and is factored into the 2026 guidance