HBIO Board Unanimously Rejects Skystone's Offer to Acquire the Company.
"After careful analysis and consideration, the Board determined that Skystone's offer undervalued Harvard Bioscience," said Chane Graziano, Harvard Bioscience's chief executive officer. "We believe our current strategy of combining tuckunder acquisitions with organic growth can deliver better value to all our stockholders than the Skystone offer. Over the last 10 years this strategy has delivered compound annual growth rates of revenue of 23% and of non-GAAP adjusted operating income from continuing operations of 22%. A reconciliation of the non-GAAP information to the most comparable GAAP information is included with this press release. We believe the recently announced launch of our microliter spectrophotometer and the acquisition of Panlab confirms we are implementing this strategy. In addition, we believe the recently announced divestiture of the majority of our capital equipment division will enable us to focus more management attention on our growth strategy. Finally, the recently announced authorization of the $10 million share repurchase program confirms our optimism about the future prospects for the company."
About Harvard Bioscience.
Harvard Bioscience (HBIO) is a global developer, manufacturer, and marketer of a broad range of specialized products, primarily scientific instruments and apparatus, used to advance life science research at pharmaceutical and biotechnology companies, universities and government laboratories worldwide. HBIO sells its products to thousands of researchers in over 100 countries through its 1,100 page catalog (and various other specialty catalogs), its website and through its distributors, including GE Healthcare, Thermo Fisher and VWR. HBIO has sales and manufacturing operations in the United States, the United Kingdom, Germany, Spain, and Austria with additional facilities in France and Canada. For more information, please visit www.harvardbioscience.com.
This press release contains forward-looking statements within the meaning of the federal securities laws. You can identify these statements by our use of the words "guidance," "expects," "plans," "estimates," "projects," "intends," "believes" and similar expressions that do not relate to historical matters.
These statements involve known and unknown risks, uncertainties and other factors that may cause the Company's actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Factors that may cause the Company's actual results to differ materially from those in the forward-looking statements include the Company's failure to successfully integrate acquired businesses or technologies, expand its product offerings, introduce new products or commercialize new technologies, unanticipated costs relating to acquisitions, decreased demand for the Company's products due to changes in its customers' needs, financial position, general economic outlook, or other circumstances, overall economic trends, the timing of our customers' capital equipment purchases and the seasonal nature of purchasing in Europe, our potential misinterpretation of trends of our capital equipment product lines due to the cyclical nature of this market, economic, political and other risks associated with international revenues and operations, additional costs of complying with recent changes in regulatory rules applicable to public companies, our ability to manage our growth, our ability to retain key personnel, competition from our competitors, technological changes resulting in our products becoming obsolete, our ability to meet the financial covenants contained in our credit facility, our ability to protect our intellectual property and operate without infringing on others' intellectual property, potential costs of any lawsuits to protect or enforce our intellectual property, economic and political conditions generally and those affecting pharmaceutical and biotechnology industries, impact of any impairment of our goodwill or intangible assets, the amount of earn-out consideration that the Company receives in connection with the recent disposition of a portion of the Company's Capital Equipment Business segment and factors that may impact the receipt of this consideration, such as the revenues of the businesses disposed of, the Company's inability to complete the divestiture of the remaining portion of its Capital Equipment Business segment on attractive terms, the potential loss of business at the remaining portion of the Company's Capital Equipment Business segment relating to the Company's decision to divest this business, unanticipated costs or expenses related to the divestiture of the remaining portion of the Capital Equipment Business segment, and our acquisition of Genomic Solutions failing to qualify as a tax-free reorganization for federal tax purposes, plus factors described under the heading "Item 1A. Risk Factors" in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2006 or described in the Company's other public filings. The Company's results may also be affected by factors of which the Company is not currently aware. The Company may not update these forward-looking statements, even though its situation may change in the future, unless it has obligations under the federal securities laws to update and disclose material developments related to previously disclosed information.
Text of letter to Ms. Nelson from Mr. Graziano delivered 14 December 2007. -0-
Harvard Bioscience, Inc. 84 October Hill Road Holliston, MA 01746 Tel: 508 893 8999 Fax: 508 429 8478 By fax. December 14, 2007. Ms. Kerry Nelson Managing Member Skystone Advisors LLC Two International Place 18th Floor Boston MA 02110 Dear Ms. Nelson, Thank you for your letter addressed to the Board of Directors (the "Board") of Harvard Bioscience, Inc. (the "Company") dated December 12, 2007. I have discussed this letter with the Board and the Board's conclusion is that the offer made by Skystone Advisors LLC ("Skystone") is not in the best interests of the Company's stockholders as the Board believes the Company's current strategy of organic growth plus tuckunder acquisitions can deliver better value to the Company's stockholders than the offer made by Skystone. Sincerely, Chane Graziano, CEO Harvard Bioscience, Inc.-0-
Harvard Bioscience Inc. Continuing Operations $, 000's For the years ended December 31 ------------------------------------------ 1997 1998 1999 2000 2001 ------------------------------------------ Revenues $11,464 $12,154 $26,178 $ 30,575 $38,088 Reconciliation of US GAAP to Non-GAAP Adjusted US GAAP operating income (loss) $ 2,119 $ 2,412 $ 1,196 $(10,438) $ 3,112 Stock compensation expense - - $ 3,284 $ 14,676 $ 2,656 Amortization of intangible assets $ 27 $ 368 $ 604 $ 956 Fair value adjustments to costs of product sales - - - - - In-process research and development expense - - - - $ 159 Restructuring and severance related expense - - - - - Non GAAP adjusted operating income $ 2,119 $ 2,439 $ 4,848 $ 4,842 $ 6,883 For the years ended December 31 ----------------------------------------- 2002 2003 2004 2005 2006 ----------------------------------------- Revenues $47,009 $52,024 $64,745 $67,431 $76,181 Reconciliation of US GAAP to Non-GAAP Adjusted US GAAP operating income (loss) $ 5,425 $ 7,173 $ 8,384 $ 7,924 $ 8,690 Stock compensation expense $ 1,269 $ 519 $ 69 - $ 1,934 Amortization of intangible assets $ 595 $ 891 $ 1,582 $ 1,664 $ 1,697 Fair value adjustments to costs of product sales - $ 336 $ 258 - $ 50 In-process research and development expense - - - - - Restructuring and severance related expense $ 474 - - $ 302 - Non GAAP adjusted operating income $ 7,763 $ 8,919 $10,293 $ 9,890 $12,371
Harvard Bioscience, Inc.
David Green, 508-893-8999
Posted: December 2007