Harvard Bioscience, Inc.

Good day, and welcome to the third quarter 2024 Harvard Biosciences, Inc. 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. Instructions will be given at that time. As a reminder, this call may be recorded. I would like to turn the call over to Katherine Flynn, corporate controller. Please go ahead.

Thank you, Michelle, and good morning, everyone. Thank you for joining the Harvard Bioscience third quarter 2024 earnings conference call. Leading the call today will be Jim Green, president and chief executive officer, and Jennifer Cody, chief financial officer. In conjunction with today's recorded call, we have provided a presentation that will be referenced during our remarks that is posted to the investor section of our website at investor.harvardbioscience.com. Please note that statements made in today's discussion that are not historical facts, including statements or expectations or future events or future financial performance, are forward-looking statements and are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those expressed or implied. Please refer to today's press release for other disclosures on forward-looking statements. These facts and other risks and uncertainties are described in the company's filings with the Security and Exchange Commission. Harvard Bioscience assumes no obligation to update or revise any forward-looking statements publicly and management statements are made as of today. During the call, management will also reference certain non-GAAP financial measures, which can be useful in evaluating the company's operations related to our financial condition and results. These non-GAAP measures are intended to supplement GAAP financial information and should not be considered a substitute. Reconciliations of GAAP to non-GAAP measures are provided in today's earnings press release. I will now turn the call over to Jim. Jim, please go ahead.

Thank you, Katherine. Good morning, everybody. Let's go ahead and move to slide three of the presentation and take a look at our quarterly results. Revenue in the third quarter came in at $22 million. That's 13% below Q3 last year. On a sequential basis, we were down about 5%, impacted primarily on weakness in China or Asia Pacific. Taking a minute now on the market environment, Americas and Europe seemed to be stabilizing with three sequential revenue quarters that were roughly flat. China APAC saw further weakness in Q3 that was now expected to flatten or improve modestly going forward. So despite the delayed market recovery, overall we believe we have a stable base revenue run rate that we'll be building on with new products now going into production. Gross margin came in at 12.8 million or 58.1%. close to our 60% target despite a low revenue quarter. On a GAAP basis, we reported an operating loss of $1.9 million. On an adjusted basis, our operating income measured $800,000 or 3.8% of revenue and adjusted EBITDA came in at 1.3 million or 6% of revenue. It's worth mentioning a major operating milestone. During Q3, we successfully transitioned and merged all US operations onto one modern ERP system. This enterprise toolset enables significant improvement in both inventory and supply chain management, and we already see in early Q4 improvements in supply chain-related delayed shipments, which have plagued us for well over a year. In addition, with our continued focus on efficiencies and operating costs, we took additional actions during Q3 and early Q4, which are expected to reduce operating expense by an additional $1 million a quarter beginning here in the fourth quarter. These reductions are designed to structurally and long-term optimize our overall cost of our business and to enable self-funding from operations even on low revenue quarters. Operating cost reductions combined with new product introductions now shipping are expected to further improve gross margins and with strong operating leverage significantly improve EBITDA in the fourth quarter and beyond. I'll give some more color on our new product commercializations later in the presentation, but first let me turn it over to Jennifer Cody, our CFO, to discuss our third quarter financial results in more detail. Jen?