Summary of Harvard Bioscience Conference Call Company Overview - **Company**: Harvard Bioscience (NasdaqGM: HBIO) - **Date**: March 17, 2026 - **Speakers**: John Duke (CEO), Mark Frost (CFO) Key Points Company Strategy and Leadership - John Duke has over 10 years in the life science industry, previously CEO of a private equity-owned company before joining Harvard Bioscience in July 2025 [2] - The company has recently refinanced short-term debt, which was a significant focus [2] - Harvard Bioscience has a diverse product portfolio, with 54% of products being recurring, including consumables and software [3] Market Growth Areas - The organoid market is growing at a rate of 15%-20%, which is a key area of focus for the company [6] - The BTX product line in bioproduction is also highlighted as a growth area, with a cGMP product launch expected in the second half of the year [8] - The company aims to maintain leadership in its SoHo telemetry platform [6] Competitive Landscape - Competitors in the organoid space include Axion BioSystems, MaxWell Biosystems, and 3Brain, with Harvard's unique Mesh MEA system providing a competitive edge [9] - The organoid products have seen increased adoption in pharmaceutical companies, expanding beyond research institutes [10] Regulatory Environment - The FDA's promotion of cell-based research is seen as complementary to Harvard's business, with expectations that animal testing will remain relevant in the near term [11] - The company anticipates a gradual shift towards new methodologies over the next 10-20 years [12] Financial Performance and Guidance - In 2025, revenue distribution was 50% from academic institutions, 28% from pharma and biotech, and 22% from contract research organizations [15] - The company expects NIH funding to remain flat at 1% for the year, with new products projected to double their contribution to revenue from 5% to 10% [18] - Debt service costs are expected to decrease from $8 million to $5 million over the next two years, allowing for additional cash flow for investment [38] Product Development and Innovation - New products introduced include the Mesh MEA and Incub8 platform for organoid research, and new telemetry implants [21] - The company is consolidating manufacturing to improve efficiency and reduce costs, with expectations of significant gross margin improvements [53] Market Conditions and Future Outlook - The contract research marketplace is expected to remain flat to low single digits in growth for the year [31] - There are signs of recovery in the biotech market, particularly among large pharma and biotech companies [34] - The company is optimistic about growth potential, aiming for EBITDA margins to reach low 20% levels in the future [60] Distribution and Market Reach - Distribution is split 39% through distributors and 61% direct sales, with a focus on expanding the sales force [43] - The company is seeing recovery in the Chinese market after previous tariff impacts, with expectations for improved orders in Q2 [44] Non-Core Business and Margin Improvement - Harvard Bioscience has removed $8 million-$10 million in non-core revenue over the past five years, resulting in improved gross margins [47] - Current gross margins are reported at 58%-60%, with expectations to increase through new product introductions and cost reductions [49] Conclusion - Harvard Bioscience is positioned for growth with a focus on innovative products, strategic market expansion, and improved financial health through debt management and operational efficiencies [69]