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Harvard Bioscience Inc. Reports Operating Results (10-Q)

August 10, 2009 | About:
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Harvard Bioscience Inc. (HBIO) filed Quarterly Report for the period ended 2009-06-30.

HARVARD BIOSCIENCE develops manufactures and markets tools used in drug discovery research at pharmaceutical and biotechnology companies universities and government laboratories. Harvard Bioscience Inc. has a market cap of $119.72 million; its shares were traded at around $4.03 with a P/E ratio of 21.21 and P/S ratio of 1.36. Harvard Bioscience Inc. had an annual average earning growth of 4.5% over the past 5 years.

Highlight of Business Operations:

Stock compensation expenses. Stock-based compensation expense recognized under SFAS No. 123(R) was $0.7 million and $1.0 million for the three and six months ended June 30, 2009, respectively. Stock-based compensation expense recognized under SFAS No. 123(R) was $0.6 million and $1,000 for the three months ended June 30, 2008 in our continuing operations and discontinued operations, respectively, and $1.0 million and $5,000 for the six months ended June 30, 2008 in our continuing operations and discontinued operations, respectively. This stock-based compensation expense was related to employee stock options and the employee stock purchase plan and was recorded as a component of cost of product revenues, sales and marketing expenses, general and administrative expenses, research and development expenses and discontinued operations.

Revenues decreased $5.0 million, or 21.7%, to $18.0 million for the three months ended June 30, 2009 compared to $23.0 million for the same period in 2008. The effect of a strengthened U.S. dollar decreased the Companys second quarter of 2009 revenues by $1.6 million, or 6.9%, compared with the same period in 2008. Adjusting for the effect of foreign currency fluctuation, revenues were down $3.4 million for the second quarter of 2009, primarily due to the weaker economic environment this year and an exceptionally strong performance in the second quarter last year.

Other income (expense), net, was $0.5 million expense and $24,000 income for the three months ended June 30, 2009 and 2008, respectively. Net interest expense was $28,000 for the three months ended June 30, 2009 compared to net interest income of $37,000 for the three months ended June 30, 2008. The shift between interest expense and interest income was primarily due to lower interest rates. Other income, net, also included foreign exchange losses of $0.4 million and $37,000 for the three months ended June 30, 2009 and 2008, respectively. These exchange losses were primarily the result of currency fluctuations on foreign cash balances and intercompany transactions between our subsidiaries.

Revenues decreased $7.9 million, or 17.5%, to $37.1 million for the six months ended June 30, 2009 compared to $45.0 million for the same period in 2008. The effect of a strengthened U.S. dollar decreased the Companys revenues for the six months ended June 30, 2009 by $4.5 million, or 10.0%, compared with the same period in 2008. Adjusting for the effect of foreign currency fluctuation, revenues at our Harvard Apparatus and Biochrom businesses were down $0.8 million and $2.6 million year-to-year, respectively.

Other income (expense), net, was $0.4 million expense and $0.2 million income for the six months ended June 30, 2009 and 2008, respectively. Net interest expense was $0.1 million for the six months ended June 30, 2009 compared to net interest expense of $15,000 for the six months ended June 30, 2008, Other income, net, also included foreign exchange losses of $0.3 million for the six months ended June 30, 2009 compared to foreign exchange gains of $0.2 million for the six months ended June 30, 2008, respectively. The 2009 exchange losses were primarily the result of currency fluctuations on foreign cash balances and intercompany transactions between our subsidiaries.

During the six months ended June 30, 2009, no charges were recorded relating to the 2008 restructuring. During the six months ended June 30, 2008, we recorded charges relating to the 2008 restructuring of approximately $1.8 million. These charges were comprised of $1.0 million in severance payments, $0.4 million in various other costs, $0.3 million in inventory impairment charges related to the discontinuance of certain product lines (included in cost of product revenues) and $0.1 million in facility closure costs.

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