HARVARD BIOSCIENCE INC Q2 FY2025 earnings call

• Mark Frost introduces John Duke as new CEO. - Q2 2025 financial results: revenue $20.5M above guidance, gross margin 56.4% within range, operating expenses reduced improving adjusted metrics. - Key priorities: Maintain financial discipline (deliver cost efficiencies, positive cash flow), Accelerate product adoption (new product pipeline, shipments of SoHo Telemetry, progress with VivaMARS, BTX bioproduction milestone, expansion of Mesh MEA platform), Strengthen capital structure (credit facility amendment, time to refinance debt).

Revenue for Second Quarter 2025 was $20.5 million, down from $23.1 million in the prior year but above the guidance of $18 million to $20 million. Gross margin was 56.4% versus 57.2% in 2024 and within the guidance range of 55% to 57%. Operating expenses declined $2 million from the prior year. For product segments: Americas - revenue declined sequentially and year-over-year, with CMT having sequential growth due to MEA's organoids but preclinical sales down due to NIH budget clarity issues. Europe - overall revenue increased sequentially, flat year-over-year; Cellular and Molecular sales flat year-over-year, preclinical sales up driven by higher pharma sales. China and APAC - revenue down over 25% sequentially and year-over-year due to tariff uncertainty, orders halted in April but returning to normal after tariff agreement. Year-to-date cash flow operations were strong at $5.7 million, net debt was down to $27.9 million from $32 million.

• Q3 guidance: Revenue range $19 million to $21 million, gross margin range 56% to 58% based on higher volume. - Outlook: Continued financial discipline; NIH funding delays affecting academic cycles but budgets in place; tariffs still uncertain but worst may be behind; focus on stabilizing core business and restructuring balance sheet.

• NIH funding delays extending academic purchasing cycles. - Tariff uncertainty impacting China/APAC and European operations. - Uncertainty around debt refinancing terms and macroeconomic conditions.

Q: You have until December 5 on a refinance. What do you expect total debt to be at that point?

A: Sure, Paul. We would expect to continue to pay down the debt, which is $1 million a quarter. So our debt would likely be around $33 million at that point in time.

Q: Regarding NIH, thoughts on budget improvement?

A: I think there's a lot of different scenarios how things could unfold at NIH. We -- what we have seen is that the academic purchasing cycles have been extended, but the budgets remain in place. I mean, clearly, government -- sales to government NIH are a reasonable portion of our business in the United States. And if things were to improve into 2026, that would clearly benefit our business.

Q: China exposure and Q2 performance?

A: Sure, yes. The China business is about 10% of our revenue. And as I indicated on the call, it did go almost to 0 in April, but we're now back to more normal run rate as we saw in '25.

Q: European tariffs and macro factors?

A: It's Mark. It's a good question. The one open area is the European tariffs. And right now, we can all see we're at 15%, but we are seeing some volatility still in some of the other countries. I think -- we have to see if that settles out. I think the one thing for our business is we do have a number of European operations. So we do have additional options to move country of origin if that holds true or if there's further volatility on the European side.

Q: Mesh MEA publications?

A: Well, there is a big show, the Society of Neuroscience in November. And at that show, you'll see some information, which we're going to be sharing and look forward to those academic results.