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

November 09, 2009 | About:
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10qk

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Harvard Bioscience Inc. (HBIO) filed Quarterly Report for the period ended 2009-09-30.

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 $114.03 million; its shares were traded at around $3.87 with a P/E ratio of 20.37 and P/S ratio of 1.3. 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 FASB ASC 718, Compensation Stock Compensation (formerly SFAS No. 123(R)) was $0.7 million and $1.7 million for the three and nine months ended September 30, 2009, respectively. Stock-based compensation expense recognized under FASB ASC 718 was $0.4 million and $4,000 for the three months ended September 30, 2008 in our continuing operations and discontinued operations, respectively, and $1.4 million and $9,000 for the nine months ended September 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.

Other expense, net, was $0.4 million and $39,000 for the three months ended September 30, 2009 and 2008, respectively. Included in other expense, net for the three months ended September 30, 2009 were $0.4 million of direct acquisition costs. Net interest expense was $55,000 for the three months ended September 30, 2009 compared to net interest income of $21,000 for the three months ended September 30, 2008. The shift between interest expense and interest income was primarily the result of higher average long-term debt balances and due to lower interest rates on investments. Other income, net, also included foreign exchange gains of $19,000 for the three months ended September 30 2008 primarily as a result of currency fluctuations on foreign cash balances and intercompany transactions between our subsidiaries.

Revenues decreased $6.9 million, or 10.6%, to $58.1 million for the nine months ended September 30, 2009 compared to $65.0 million for the same period in 2008. Our recently acquired Denville Scientific subsidiary contributed approximately $1.9 million in revenues. The effect of a strengthened U.S. dollar decreased the Companys revenues for the nine months ended September 30, 2009 by $5.4 million, or 8.2%, compared with the same period in 2008. Excluding the effect of $5.4 million in foreign currency fluctuation, revenues at our Harvard Apparatus and Biochrom businesses were down 2.1% and 7.9% year-to-year, respectively, primarily due to the weaker economic environment this year.

General and administrative expenses decreased $0.2 million, or 2.2%, to $10.8 million for the nine months ended September 30, 2009 compared with $11.0 million for the nine months ended September 30, 2008. The year-to-year quarterly decrease was primarily due to changes in foreign exchange rates partially offset by an increase of $0.3 million in stock compensation expense and $0.1 million of expenses related to our Denville subsidiary acquisition. Excluding the $0.5 million decrease from currency effect of foreign exchange, general and administrative expenses increased 2.2% for the nine months ended September 30, 2009 compared with the same period of 2008.

Other income (expense), net, was $0.8 million expense and $0.2 million income for the nine months ended September 30, 2009 and 2008, respectively. Included in other expense, net for the nine months ended September 30, 2009 were $0.4 million of direct acquisition costs. Net interest expense was $0.1 million for the nine months ended September 30, 2009 compared to net interest income of $6,000 for the nine months ended September 30, 2008, The shift between interest expense and interest income was primarily the result of higher average long-term debt balances and due to lower interest rates on investments. Other income, net, also included foreign exchange losses of $0.3 million for the nine months ended September 30, 2009 compared to foreign exchange gains of $0.2 million for the nine months ended September 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 nine months ended September 30, 2009, no charges were recorded relating to the 2008 restructuring. During the nine months ended September 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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