Harvard Apparatus Regenerative Technology : Q4 - 2023 HBIO Quarterly Earnings Presentation

Enabling discovery, safety and

production of tomorrow's therapeutics

NASDAQ: HBIO

Q4'23 Earnings Presentation

Jim Green, Chairman, President & CEO

Jennifer Cote, CFO & Treasurer

March 7, 2024

Forward-Looking Statements and Non-GAAP Financial Information

Forward-Looking Statements

This document contains forward-looking statements within the meaning of the federal securities laws, including the Private Securities Litigation Reform Act of 1995. Forward-looking statements may be identified by the use of words such as "may," "will," "expect," "plan," "anticipate," "estimate," "intend" and similar expressions or statements that do not relate to historical matters. Forward-looking statements include, but are not limited to, information concerning expected future financial and operational performance including revenues, gross margins, earnings, cash and debt position, growth and the introduction of new products, and the strength of the Company's market position and business model. Forward-looking statements are not guarantees of future performance and involve known and unknown uncertainties, risks, assumptions, and contingencies, many of which are outside the Company's control. Risks and other factors that could cause the Company's actual results to differ materially from those described its forward-looking statements include those described in the "Risk Factors" section of the Company's most recently filed Annual Report on Form 10-K as well as in the Company's other filings with the Securities and Exchange Commission. Forward-looking statements are based on the Company's expectations and assumptions as of the date of this document. Except as required by law, the Company assumes no obligation to update forward-looking statements to reflect any change in expectations, even as new information becomes available.

Management's Use of Non-GAAP Financial Information

This document includes non-GAAP financial information including one or more of adjusted operating income (loss), adjusted net income (loss), adjusted EBITDA, adjusted EBITDA margin, adjusted diluted earnings (loss) per share, foreign exchange adjusted revenue, net debt and net leverage ratio. We believe that this non-GAAP financial information provides investors with an enhanced understanding of the underlying operations of the business. For the periods presented, these non-GAAP financial measures have excluded certain expenses and income resulting from items that we do not believe are representative of the underlying operations of the business. Items excluded include stock-based compensation, amortization of intangibles related to acquisitions, litigation settlement, restructuring and other costs, unrealized gain/loss on equity securities, income taxes and the tax impact of the reconciling items. Management believes that this non-GAAP financial information is important in comparing current results with prior period results and is useful to investors and financial analysts in assessing the Company's operating performance. Non-GAAP historical financial statement information included herein is accompanied by a reconciliation to the nearest corresponding GAAP measure which is included as exhibits below.

With respect to forward-looking measures, we provide an outlook for adjusted EBITDA margin. Many of the items that we exclude from this forward-looking measure calculation are less capable of being controlled or reliably predicted by management. These items could cause the forward-looking measures presented in our outlook statements to vary materially from our reported net income and other GAAP results.

The non-GAAP financial information provided in this presentation should be considered in addition to, not as a substitute for, the financial information provided and presented in accordance with GAAP and may be different than other companies' non-GAAP financial information.

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CEO Summary: Q4'23 Highlights

Growth in Americas offset by post-Covid-19 Academic funding from China

Income Statement Components	Q4' 2023	Q4' 2022
Revenue (GAAP)	28.2	28.4
Growth Rate	-1.0%
Favorable FX Impact	0.4
Net Reduction in Discontinued Products	(0.9)
Gross Margin	16.3	15.8
% of Revenue	58.0%	55.7%
Operating Profit	0.3	(0.5)
% of Revenue	1.0%	-1.6%
Adj. Operating Profit*	3.3	3.4
% of Revenue	11.6%	11.9%
Adj. EBITDA*	3.6	3.7
% of Revenue	13.0%	13.0%
Diluted Loss per Share	(0.04)	(0.04)
Diluted Adj. Earnings per Share*	0.04	0.04
Cash Flow from Operations (GAAP)	4.3	2.7

• Non-GAAPmeasure, reconciliations to GAAP financial measures are available in the appendix $ Millions except per share data

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Q4'23 Revenue: Americas Solid, Impacted by Reduced China Funding

As Reported

Fx Adjustment
(in $M)	Q4'23		Q4'22
CMT	$	12.8	$	14.0	-8.4%
Pre-Clinical	$	14.9	$	14.4	3.4%
Currency*	$	0.4			1.4%
Total	$	28.2	$	28.4	-1.0%

Americas

• Overall:Up 4.1% as reported, includes 2.1% net reduction from discontinued products
• Pre-clinical:Strong growth in telemetry and Ponemah enterprise software offset by reductions in respiratory
• CMT:Growth in electroporation, bioproduction and cell-based testing, impacted by discontinued products

EMEA

• Overall:Up 3.1% as reported, includes 2.9% net reduction from disco products, positive FX impact of 4.1%
• Pre-clinical:Modest growth, augmented by the first installation of the new VivaMarsTM Behavior System
• CMT:Modestly decrease on discontinued products.

APAC

• Overall:Down 15% as reported, includes 5.4% net reduction from discontinued products, positive FX impact of 0.7%
• Pre-clinical: Telemetry and Ponemah enterprise software had modest growth
• CMT:Down on lower government funding for academic research

Confidential	4

New Product Introductions: Focused on Commercialization

STRENGTHEN THE BASE

EXPAND HIGH

VOLUME APPICATIONS

EXPAND TO BIO-

PRODUCTION

INNOVATE CELLULAR

PRECLINICAL

• Introduced SoHo Shared Housing Telemetry Family at the Society for Neuroscience (SfN) conference

• Introduced latest

Ponemah software to integrate VivaMARS high-capacity behavioral testing

• Expanding field services

PRECLINICAL

• Introduced VivaMARS High Capacity Behavioral System at SfN
• Q4 - First commercial installation of VivaMARS with large CRO customer
• Showcasing VivaMARS at next week's Society of
  Toxicology (SoT) conference

CMT

• Established commercial team dedicated to bio- production
• Q1- Released our GLP/cGMP compliant Amino Acid Analyzer for Pharma/CRO bioproduction, adapted from our leading clinical analyzer

CMT-

ORGANOIDS

• Launched the Mesh MEA Organoid Platform at SfN
• Showcasing Mesh MEA at next week's SoT conference
• Initial applications in research and biopharma discovery, leading to higher volume compound analysis & testing applications

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Financials

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Q4'23 Performance versus Q4'22 (GAAP except where noted)

$ Million except	REVENUE
per share data

GROSS MARGIN

ADJUSTED EBITDA*

$3.6$3.7

Q4'23 Revenue includes $0.1 million and Q4'22 includes $1.0 million

in sales of discontinued products

(LOSS) EARNINGS PER SHARE

CASH FLOW FROM OPERATIONS

NET DEBT*

Q4'23

Q4'22

Q4'23

Q4'22

* Non-GAAP measure, reconciliations to GAAP financial measures are available in the appendix

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FY23 Performance versus FY22 (GAAP except where noted)

$ Million except	REVENUE
per share data

GROSS MARGIN

ADJUSTED EBITDA*

$14.6

$10.8

FY23 Revenue includes $0.5 million and FY22 includes $5.5 million in sales of discontinued products

(LOSS) EARNINGS PER SHARE

CASH FLOW FROM OPERATIONS

NET DEBT*

FY23

FY22

FY23

FY22

* Non-GAAP measure, reconciliations to GAAP financial measures are available in the appendix

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Outlook

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2024 Full Year Outlook: 'A Tale of Two Halves'

For FY2024, we expect:

• Flat to modest revenue growth for the full year
• Weakness in the first half versus a strong prior year comparison
• Strong second half growth versus both first half of 2024 and versus the second half of 2023, supported by new product commercializations and improving China funding
• Gross Margins in the 60% range
• Adjusted EBITDA margins to the mid-teens

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