Harvard Bioscience, Inc.

Good day and thank you for standing by. Welcome to Harvard Bioscience first quarter 2023 earnings conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 1-1 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 1-1 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Dave Sorois, Director of FCC Director. Please go ahead.

Thank you, Amy, and good morning, everyone. Thank you for joining the Harvard Bioscience First Quarter 2023 Earnings Conference Call. Before we begin, I would like to suggest that you take a moment and download a copy of a presentation that will be referred to during this call. The file is entitled Q1 2023 HBio Quarterly Earnings Presentation and is located in the investor overview events and presentation section of our website. Leading the call today will be Jim Green, Chairman of the Board, President and Chief Executive Officer, and Jennifer Cody, Interim Chief Financial Officer. Before I turn the call over to Jim, I will read our safe harbor statement. In our discussion today, we're going to make statements that constitute forward-looking statements. Our actual results and performance may differ materially from what we have projected due to risks and uncertainties, including those described in our annual report on Form 10-K for the period ended December 31, 2022, our subsequent quarterly reports on Form 10-Q, and our other public filings. Any forward-looking statements, including those related to the company's future results and activities, represent our estimates as of today and should not be relied upon as representing our estimates as of any subsequent day. Also, much of today's call will focus on our non-GAAP quarterly results, which we believe better represents the ongoing economics of the business, reflects how we set and measure our incentive compensation plans, and how we manage the business internally. The differences between our GAAP and non-GAAP results are outlined in the earnings release and today's presentation. These two documents, as well as a replay of this call, can be found on our website under Investor Overview, Events and Presentations. Additionally, any material, financial or other statistical information presented on the call, which is not included in our press release and presentation, will be archived and available in the Investor Relations section of our website. I will now turn the call over to Jim. Jim, please go ahead.

Thank you, Dave. Hello, everybody. Let me start by saying how pleased I am to have the last two years and the turnaround phase behind us and to now focus on delivering the profitable growth platform we envisioned. Let's go to slide three of the presentation to take a look at the highlights for the quarter. Reported revenue for the quarter was $30 million, up 4% on an as-reported basis. When I think about a half million dollars of negative impact from currency and consider the 1.1 million of discontinued products, I see underlying core growth around 10% over Q1 last year. Gross margin improved to 18.3 million, or 61 percent of revenue. That's five percentage points above last year. Adjusted operating profit improved to 4.4 million, or 15 percent of revenue, up seven percentage points. Adjusted EBITDA measured 4.8 million, or 16 percent of revenue, also up seven percentage points from last year. Gap earnings per share improved to a positive one cent from negative 17 cents last year. Adjusted EPS measured $0.06 per share, up $0.02 from last year. Cash flow from operations was $1.8 million versus a negative $2 million last year. And in the appendix, you'll find the bridge from non-GAAP measurements to GAAP. Move to slide four, take a look at the revenue in the quarter by product family. This slide shows Q1-23 revenue adjusted to reflect Q1-22's exchange rates. Starting with the first row of the table, our cellular molecular technology revenue was roughly flat when adjusted for currency and includes an impact from the discontinued products. We had solid growth in Asia Pacific, which was offset somewhat by slowness in the Americas and Europe. BTX electroporation growth was driven by our new focus in bioproduction. Cell-based testing products were up strong. We continue to rotate out of low margin products primarily sold through distribution. and discontinued product sales decreased by approximately 1.1 million versus prior year. Next, our preclinical product revenue was up 10.3% as reported and up 11.6% on a constant currency basis. Asia had strong growth in Panema Enterprise software, telemetry, and respiratory systems. America saw strong growth in respiratory systems. The U.S. dollar compared to the Euro and British pound caused a currency impact of a half million dollars. All said, we grew 4% as reported, and this includes a half million negative impact of currency and further negative impact of discontinued products of 1.1 million compared to last year. Now let's move to slide five so I can tell you a little bit about some of the exciting new product introductions. Before I start, let me explain a little bit about this slide. Over the last three years, we've optimized our product offerings to critical areas of the drug and therapy continuum. Our product strategy is to continue to introduce new technologies and applications in academic research, and at the same time, apply these technologies to further penetrate larger industrial applications with our customers in pharma, CROs, and biotech. A key benefit to this approach is to offer higher-value products with higher ASPs and recurring revenue streams. We do this by capitalizing on our strong call points with preclinical customers. I'd like to highlight three of the new products that we've introduced so far this year. Starting from the left, our new SmartUsing epithelial system builds on our using technology from metabolism and permeability studies, which has already been proven in academic research labs. This new system has been designed for ease of use, making it attractive for higher volume needs of CROs and pharma customers. I'm pleased to report that the first smart USING system has been installed and is in use at a large pharma lab in Europe. In the middle is our new STG5 stimulation generator. Building on our leadership in stimulation, this new product follows the theme of simplicity, modularity, and ease of use, which opens access to our technology in higher value industrial labs where automation and ease of use enables lab techs as opposed to highly trained PhDs to operate. Last, we're excited to announce that after the quarter end, we received the first order for our new high-capacity behavior monitoring system from a large CRO customer. This system combines our high-precision activity tracking with our GLP-compliant Panema Enterprise software, which is heavily used by CROs and pharma today for safety and efficacy data collection and regulatory reporting. Scalable and with substantially higher technology content, We expect the industrial-level systems to provide higher ASPs and additional recurring revenue streams compared to academic research-focused products. This new offering is the basis of our expanded industrial-level product line with substantially higher ASPs ranging well into the hundreds of thousands of dollars. As an example, this first order is in excess of $800,000. Now I'll turn the call over to Jennifer Cody, our interim CFO, for a look at key financials. Jen?