Harvard Bioscience Inc (HBIO) 2009 Q1 法說會逐字稿

Good day, ladies and gentlemen, and welcome to the First Quarter 2009 Harvard Bioscience Incorporated Earnings Conference Call.

My name is Gwen, and I will be your operator for today.

At this time, all participants are in listen-only mode.

(Operator Instructions) This call is being recorded for replay purposes.

I would now like to turn the presentation over to your host, Mr.

Tom McNaughton.

Please proceed, sir.

Thank you, Gwen.

Good afternoon, this is Tom McNaughton, Chief Financial Officer, Harvard Bioscience.

Thank you for joining us to discuss our results for the first quarter of 2009.

Chane Graziano, our CEO and David Green, our President, are also on the call today.

After the Safe Harbor statement, I'll turn the call over to Chane and David, who will present an overview of the first quarter and comments on our outlook for the remainder of this year.

Lastly, I'll present some additional financial highlights related to our balance sheet.

Following those comments, we will open the call for any questions.

In our discussion today, we may make statements that constitute forward-looking statements under the Safe Harbor Provisions of the Private Securities Litigation Reform Act of 1995.

Our actual results may differ materially from those projected due to risks and uncertainties, including those detailed in our annual report on Form 10K for the fiscal year ended December 31, 2008, and other public filings.

Any forward-looking statements, including those related to our future results, represent our estimates as of today and should not be relied upon as representing our estimates as of any subsequent day.

Further information regarding forward-looking statements and risk factors is included in the press release issued earlier today reporting our first quarter results.

Please note that during this call, we will discuss non-GAAP financial measures.

For each non-GAAP financial measure discussed, we have made available as part of our press release or on our website in the Investor Relations section, a reconciliation to the most directly comparable GAAP financial measure.

Additionally, any material, financial or other statistical information presented on the call which is not included in our press release will be archived an available in the Investor Relations section of our website -- look on the Investor Relations section and click on the "Investor Presentations" or website icon as appropriate.

A replay of this call will also be archived on the same location at our website.

Our website is located at www.HarvardBioscience.com.

Lastly, all financial information presented in this conference call relates to our continuing operations unless otherwise stated.

I will now turn the call over to Chane.

Chane?

Thank you, Tom, and good evening, everyone.

Against the backdrop of the current difficult economic environment and 13% foreign exchange headwinds, our performance in Q1 2009 was consistent with our expectations and our guidance.

On a constant currency basis, revenues were flat year-over-year.

Our non-GAAP adjusted earnings per diluted share were $0.07 and reflected an adverse currency translation effect of approximately $0.02 per diluted share.

We see little change in these trends for the balance of the year and, therefore, on that basis, we reconfirm our guidance for the year of $80 million to $85 million in revenues and $0.27 to $0.32 in non-GAAP adjusted earnings per share.

In the second quarter of 2009, we see revenues in the $18.5 million to $19.5 million range, and non-GAAP adjusted earnings per share in the $0.05 to $0.06 range.

In order to achieve our long-term goal of doubling revenues and profits in the next three to five years, we will continue to focus on our three major objectives -- operational efficiencies throughout the Company, the introduction of major new products, and, thirdly, acquisitions.

With a strong balance sheet and good cash flow, I believe we are well positioned to achieve these goals and be a much stronger company coming out of this recession.

David will now comment further on our first quarter results and our 2009 initiative.

Thank you, Chane, and good evening, everyone.

Q1 was a solid quarter for Harvard Bioscience.

Despite the global recession, we reported non-GAAP adjusted earnings of $0.07 per diluted share in spite of an adverse currency translation effect of $0.02 per diluted share.

We achieved this even on revenue that was flat with last year on a constant currency basis.

We were able to do this because of our program of operational improvements, which increased our non-GAAP adjusted operating income 90 basis points to 16.1% of revenue from 15.2% a year ago.

We intended to continue the program of operation improvements, to continue to drive operating profit growth even in a challenging revenue environment.

During Q1 we saw a mixed revenue picture with some product lines, particularly at the Harvard Apparatus business showing good organic growth but with others, particularly at Biochrom, showing weakness.

Toward the end of Q1, we saw a significant increase in quote activity in the US, which we believe may lead to orders later in the year as the NIH stimulus funding gets disbursed.

Outside the NIH funding, we expect overall demand to remain fairly soft.

In Q2, we will continue our strategy of driving organic growth with direct marketing and new product development.

In May, we will mail approximately 28,000 copies of the new electrophoresis catalog in the USA.

Also in May, we expect to announce the launch of a major new product within one of our core product lines.

We continue to invest in new product development even during a recession, because we believe that these new products will position us well for growth when the economy recovers.

We expect to launch a further major new product later this year, and we are also working on longer-term new products that will be announced when they reach significant milestones.

This investment in growth is part of our original plan for 2009 and was included in the guidance we gave.

We are on track to meet this plan and on maintaining our guidance for 2009.

In addition to the organic growth programs and operational improvements, we believe that one of the best opportunities for us to grow this year is through acquisitions.

Currently, we have a robust pipeline of acquisition candidates.

We do not include the potential future acquisitions in our guidance as they inherently uncertain.

We have a strong balance sheet and lines of credit to support our acquisition strategy.

In short, while we face challenging business conditions in 2009 and a significant foreign exchange headwind, we believe the execution of our strategy of organic growth, tuck-under acquisitions, and operational improvements, we'll be able to strengthen the Company and position ourselves well for when the economy recovers.

I'll now turn the call over to Tom for additional comments.

Thanks, David.

Our Company has a strong balance sheet.

At March 31, 2009, our cash and cash equivalents net of debt totaled $14.9 million, which represent an increase of $2.6 million from the beginning of the year.

During the first quarter we purchased approximately 434,000 of our shares for approximately $1.2 million.

Since we initiated a current share repurchase program in the third quarter of last year, the Company has now repurchased 1.4 million, or 4.6% of our shares for approximately $4.1 million.

We ended the first quarter with no balance outstanding on our $20 million senior credit facility.

We are currently negotiating with our bank to extend that facility for three years.

We'll now open the call to any questions.

(Operator Instructions) There are no questions at this time.

Okay.

If there are no questions at all, I thank everyone for joining our call today.

Despite the weak economy, Harvard Bioscience is in strong financial condition, and we remain committed to use our strength to increase long-term growth in revenues and profits.

Thank you.

Goodnight.

Thank you for your participation in today's conference.

This concludes the presentation.

You may now disconnect.