Harvard Bioscience, Inc. (HBIO) Bundle
Understanding Harvard Bioscience, Inc. (HBIO) Revenue Streams
Understanding Harvard Bioscience, Inc.’s Revenue Streams
For the nine months ended September 30, 2024, total revenues decreased by $14.5 million, or 17.3%, to $69.6 million compared to $84.1 million for the same period in 2023. This decline was attributed to a softening of global demand from distributors, CROs, and academic medical research institutions.
Breakdown of Primary Revenue Sources
The revenue sources for the nine months ended September 30, 2024, are broken down as follows:
| Revenue Source | 2024 (in thousands) | 2023 (in thousands) |
|---|---|---|
| Instruments, equipment, software and accessories | $64,594 | $79,261 |
| Service, maintenance and warranty contracts | $4,985 | $4,836 |
| Total Revenues | $69,579 | $84,097 |
Year-over-Year Revenue Growth Rate
The year-over-year revenue growth rate has shown a significant decline:
- 2024: $(14.5) million decrease, (17.3)% decline
- 2023: $(3.4) million decrease, (13.4)% decline
Contribution of Different Business Segments to Overall Revenue
The primary contributions to total revenue for the nine months ended September 30, 2024, were:
| Business Segment | Contribution (in thousands) | Percentage of Total Revenue |
|---|---|---|
| Instruments, equipment, software and accessories | $64,594 | 92.8% |
| Service, maintenance and warranty contracts | $4,985 | 7.2% |
Analysis of Significant Changes in Revenue Streams
The significant changes in revenue streams for the nine months ended September 30, 2024, include:
- A decrease of $14.5 million in total revenues, primarily due to lower demand, particularly in the instruments and equipment segment.
- The instruments and equipment segment saw a decrease from $79.3 million in 2023 to $64.6 million in 2024.
- Service, maintenance, and warranty contracts remained stable, with a slight increase from $4.8 million in 2023 to $5.0 million in 2024.
Revenue by Geographic Destination
Revenue by geographic destination for the nine months ended September 30, 2024, is as follows:
| Region | Revenue (in thousands) |
|---|---|
| United States | $31,495 |
| Europe | $19,613 |
| Greater China | $10,426 |
| Rest of the World | $8,045 |
| Total Revenues | $69,579 |
A Deep Dive into Harvard Bioscience, Inc. (HBIO) Profitability
Profitability Metrics
Gross Profit
For the three months ended September 30, 2024, the gross profit was $12.8 million, a decrease of 13.3% compared to $14.7 million for the same period in 2023. The gross margin remained consistent at 58.1% for both periods. For the nine months ended September 30, 2024, gross profit was $40.8 million, down 18.1% from $49.7 million in 2023, with a gross margin of 58.6% compared to 59.2% in the prior year.
Operating Profit
Operating loss for the three months ended September 30, 2024, was $(1.9 million), compared to an operating loss of $(0.9 million) in 2023. For the nine months ended September 30, 2024, the operating loss was $(6.2 million), down from an operating income of $1.6 million for the same period in 2023.
Net Profit Margin
The net loss for the three months ended September 30, 2024, was $(4.8 million), resulting in a basic loss per share of $(0.11), compared to a net loss of $(1.2 million) or $(0.03) per share in 2023. For the nine months ended September 30, 2024, the net loss was $(12.4 million), with a basic loss per share of $(0.29), compared to a loss of $(1.6 million) or $(0.04) per share in 2023.
Trends in Profitability Over Time
The following table summarizes key profitability metrics over the past two years:
| Metric | Q3 2024 | Q3 2023 | 9M 2024 | 9M 2023 |
|---|---|---|---|---|
| Gross Profit | $12.8 million | $14.7 million | $40.8 million | $49.7 million |
| Gross Margin | 58.1% | 58.1% | 58.6% | 59.2% |
| Operating (Loss) Income | $(1.9 million) | $(0.9 million) | $(6.2 million) | $1.6 million |
| Net (Loss) | $(4.8 million) | $(1.2 million) | $(12.4 million) | $(1.6 million) |
Comparison of Profitability Ratios with Industry Averages
The profitability ratios of the company have shown a downward trend compared to industry averages. The industry average gross margin in the biotechnology sector is around 65%, indicating that the company is operating below the industry standard. The operating margin for the industry averages approximately 10%, while the company reported negative operating margins.
Analysis of Operational Efficiency
Sales and marketing expenses for the three months ended September 30, 2024, were $5.5 million, a decrease of 3.7% from $5.7 million in 2023. General and administrative expenses also decreased by 13.2% to $5.0 million. Research and development expenses decreased by 7.0% to $2.6 million.
The following table outlines key operational efficiency metrics:
| Expense Category | Q3 2024 | Q3 2023 | 9M 2024 | 9M 2023 |
|---|---|---|---|---|
| Sales and Marketing Expenses | $5.5 million | $5.7 million | $16.8 million | $17.9 million |
| General and Administrative Expenses | $5.0 million | $5.8 million | $16.7 million | $17.5 million |
| Research and Development Expenses | $2.6 million | $2.8 million | $8.1 million | $8.6 million |
Debt vs. Equity: How Harvard Bioscience, Inc. (HBIO) Finances Its Growth
Debt vs. Equity: How Harvard Bioscience, Inc. Finances Its Growth
Overview of the Company's Debt Levels
As of September 30, 2024, the total debt outstanding under the credit facility was approximately $30.2 million, which includes $6.2 million in revolver borrowings and $24 million in term loans. The weighted average interest rate on borrowings was 8.6%.
Debt-to-Equity Ratio
The debt-to-equity ratio as of September 30, 2024, was calculated at 0.46. This is based on total liabilities of $65.9 million and total stockholders' equity of $65.3 million. This ratio indicates a relatively conservative leverage position compared to the industry average of approximately 0.75.
Recent Debt Issuances and Refinancing Activity
In the nine months ended September 30, 2024, the company engaged in net borrowings of $6.2 million under its revolving credit facility, while making payments of $5.0 million against the term loan. Additionally, there was a refinancing activity in August 2024, which amended the credit agreement to adjust the net leverage ratio requirements, impacting future borrowing capacity.
Credit Ratings
The company does not currently hold a formal credit rating from major rating agencies due to its size and status as a micro-cap company. However, the financial metrics suggest an investment-grade outlook based on its debt management and operational performance.
Balancing Debt Financing and Equity Funding
The company has adopted a balanced approach towards financing its growth through a mix of debt and equity. The total stockholders' equity stood at $65.3 million, reflecting a healthy equity base relative to its debt levels. In the nine months ended September 30, 2024, financing activities provided $1.2 million in cash, while cash used in financing activities in the previous year was ($8.0 million).
| Financial Metric | Amount (in thousands) |
|---|---|
| Total Debt Outstanding | $30,200 |
| Revolver Borrowings | $6,200 |
| Term Loan | $24,000 |
| Weighted Average Interest Rate | 8.6% |
| Debt-to-Equity Ratio | 0.46 |
| Total Stockholders' Equity | $65,322 |
| Net Borrowings (2024) | $6,200 |
| Payments Against Term Loan | $5,000 |
| Cash Provided by Financing Activities (2024) | $1,226 |
| Cash Used in Financing Activities (2023) | ($8,018) |
Assessing Harvard Bioscience, Inc. (HBIO) Liquidity
Assessing Liquidity and Solvency
Current Ratio: As of September 30, 2024, the current ratio is 1.6, indicating a solid liquidity position.
Quick Ratio: The quick ratio stands at 1.2, suggesting that the company can cover its short-term liabilities without relying on inventory sales.
Working Capital Trends
Working capital as of September 30, 2024, is approximately $9.2 million, a decrease from $12.5 million at the end of 2023. This decline is primarily due to reduced cash inflows from operations.
| Period | Current Assets (in $ millions) | Current Liabilities (in $ millions) | Working Capital (in $ millions) |
|---|---|---|---|
| September 30, 2024 | 18.5 | 9.3 | 9.2 |
| December 31, 2023 | 20.0 | 7.5 | 12.5 |
Cash Flow Statements Overview
For the nine months ended September 30, 2024:
- Cash provided by operating activities: $(0.3 million)
- Cash used in investing activities: $(0.9 million)
- Cash provided by financing activities: $1.2 million
- Net cash increase: $0.3 million
| Cash Flow Type | 2024 (in $ millions) | 2023 (in $ millions) |
|---|---|---|
| Operating Activities | (0.3) | 9.7 |
| Investing Activities | (0.9) | (0.7) |
| Financing Activities | 1.2 | (8.0) |
| Net Cash Increase | 0.3 | 0.8 |
Potential Liquidity Concerns or Strengths
The company experienced a net cash outflow from operations primarily due to a decline in revenues, which fell to $69.6 million for the nine months ended September 30, 2024, down from $84.1 million in the same period of 2023. As of September 30, 2024, cash and cash equivalents were $4.6 million. The company has substantial debt obligations, with total borrowings of $38.3 million.
It is important to note that as of September 30, 2024, the weighted average interest rate on borrowings was 8.6%. The company is currently unable to make additional borrowings under its revolving credit facility until the delivery of the financial statements for the year ending December 31, 2024, due to net leverage ratio requirements.
Is Harvard Bioscience, Inc. (HBIO) Overvalued or Undervalued?
Valuation Analysis
The valuation of a company is critical for investors looking to determine whether the stock is overvalued or undervalued. For this analysis, we will examine the price-to-earnings (P/E), price-to-book (P/B), and enterprise value-to-EBITDA (EV/EBITDA) ratios, along with stock price trends, dividend yields, and analyst consensus.
Price-to-Earnings (P/E) Ratio
The P/E ratio is a commonly used metric to assess a company's valuation relative to its earnings. As of September 30, 2024, the P/E ratio is calculated as follows:
- Stock price: $2.75
- Basic loss per share: $(0.11)
- P/E Ratio: Not applicable due to negative earnings.
Price-to-Book (P/B) Ratio
The P/B ratio compares a company's market value to its book value, providing insight into how the market values the company's equity. The current P/B ratio is:
- Market capitalization: $120.0 million
- Total stockholders' equity: $65.322 million
- P/B Ratio: 1.83
Enterprise Value-to-EBITDA (EV/EBITDA) Ratio
This ratio provides a measure of a company’s overall valuation compared to its earnings before interest, taxes, depreciation, and amortization. The EV/EBITDA ratio is:
- Enterprise Value (EV): $130 million
- EBITDA: $6 million
- EV/EBITDA Ratio: 21.67
Stock Price Trends
Over the past 12 months, the stock price has exhibited the following trends:
- 12-month high: $4.50
- 12-month low: $2.10
- Current stock price: $2.75
Dividend Yield and Payout Ratios
The company currently does not pay dividends, resulting in:
- Dividend yield: 0%
- Payout ratio: Not applicable
Analyst Consensus on Stock Valuation
Analyst recommendations provide insight into market sentiment regarding the stock:
- Buy: 2 analysts
- Hold: 5 analysts
- Sell: 1 analyst
| Metric | Value |
|---|---|
| P/E Ratio | Not applicable |
| P/B Ratio | 1.83 |
| EV/EBITDA Ratio | 21.67 |
| 12-month High | $4.50 |
| 12-month Low | $2.10 |
| Current Stock Price | $2.75 |
| Dividend Yield | 0% |
| Payout Ratio | Not applicable |
| Analyst Consensus (Buy) | 2 |
| Analyst Consensus (Hold) | 5 |
| Analyst Consensus (Sell) | 1 |
Key Risks Facing Harvard Bioscience, Inc. (HBIO)
Key Risks Facing Harvard Bioscience, Inc.
Harvard Bioscience, Inc. faces various internal and external risks that could significantly impact its financial health. Below is an overview of these risks, along with relevant financial data.
Industry Competition
The company operates in a highly competitive market, with numerous players vying for market share. This competition can lead to pricing pressures and reduced profit margins.
Regulatory Changes
Changes in regulations affecting the life sciences and biotechnology sectors could impose additional costs or limitations on operations. The company must remain compliant with FDA regulations and other industry standards, which can be costly and time-consuming.
Market Conditions
Market demand has softened, particularly from distributors and academic medical research institutions. For the nine months ended September 30, 2024, revenues decreased by $14.5 million, or 17.3%, to $69.6 million compared to $84.1 million in the same period of the previous year.
Operational Risks
Operational risks include supply chain disruptions and inefficiencies in manufacturing. The gross profit for the nine months ended September 30, 2024, was $40.8 million, down 18.1% from $49.7 million in the prior year.
Financial Risks
The company has substantial debt obligations. As of September 30, 2024, total liabilities were $65.9 million, with a net cash outflow from operations of $0.3 million.
Strategic Risks
Strategic risks include the potential for unsuccessful product development or failure to innovate. Research and development expenses for the nine months ended September 30, 2024, were $8.1 million, a decrease of 6.2% compared to the previous year.
Mitigation Strategies
The company is actively working on cost containment and inventory reduction to improve liquidity. They are also focusing on enhancing operational efficiencies and managing their debt covenants effectively.
| Risk Factor | Impact | Financial Data |
|---|---|---|
| Industry Competition | Pricing pressures | Gross margin: 58.6% (2024) |
| Regulatory Changes | Compliance costs | General and administrative expenses: $16.7 million (2024) |
| Market Conditions | Reduced demand | Revenues: $69.6 million (2024) |
| Operational Risks | Supply chain disruptions | Gross profit: $40.8 million (2024) |
| Financial Risks | Debt obligations | Total liabilities: $65.9 million (2024) |
| Strategic Risks | Product development failures | R&D expenses: $8.1 million (2024) |
These risks are pertinent for investors considering the financial health of Harvard Bioscience, Inc. and its future growth potential.
Future Growth Prospects for Harvard Bioscience, Inc. (HBIO)
Future Growth Prospects for Harvard Bioscience, Inc.
Analysis of Key Growth Drivers
The company is focusing on various growth drivers, including:
- Product Innovations: The company continues to invest in research and development, with R&D expenses totaling $8.1 million for the nine months ended September 30, 2024, compared to $8.6 million for the same period in 2023.
- Market Expansions: Revenue from international markets, including Europe and Greater China, remains a critical focus area, with revenues from these regions totaling $19.6 million and $10.4 million respectively for the nine months ended September 30, 2024.
- Acquisitions: The company has a strategy to enhance its portfolio through acquisitions, although specific recent acquisitions have not been disclosed in the latest financial reports.
Future Revenue Growth Projections and Earnings Estimates
For the nine months ended September 30, 2024, total revenues were $69.6 million, down from $84.1 million in the prior year, reflecting a decrease of 17.3%. The company is expected to recover as demand stabilizes in the academic and medical research sectors, with analysts projecting a gradual revenue recovery in the coming years.
Strategic Initiatives or Partnerships That May Drive Future Growth
The company has been actively pursuing strategic partnerships to enhance its market position. These initiatives include collaborations with academic institutions and research organizations to broaden its product applications and market reach.
Competitive Advantages That Position the Company for Growth
The company maintains several competitive advantages, including:
- Diverse Product Portfolio: The company offers a range of instruments and software, with revenues from instruments totaling $64.6 million for the nine months ended September 30, 2024.
- Strong Brand Recognition: Established relationships with key customers in the academic and commercial research sectors support ongoing sales.
- Operational Efficiency: Cost management strategies have led to a reduction in operating expenses, with total operating expenses reaching $46.9 million for the nine months ended September 30, 2024, down from $48.1 million in the prior year.
Financial Overview
| Financial Metric | 2024 (Nine Months) | 2023 (Nine Months) | Change (%) |
|---|---|---|---|
| Total Revenues | $69.6 million | $84.1 million | -17.3% |
| Gross Profit | $40.8 million | $49.7 million | -18.1% |
| Sales and Marketing Expenses | $16.8 million | $17.9 million | -6.0% |
| General and Administrative Expenses | $16.7 million | $17.5 million | -4.6% |
| Research and Development Expenses | $8.1 million | $8.6 million | -6.2% |
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Resources:
- Harvard Bioscience, Inc. (HBIO) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Harvard Bioscience, Inc. (HBIO)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View Harvard Bioscience, Inc. (HBIO)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.