Financial Data and Key Metrics Changes - Revenue increased by 25% compared to Q2 2020, reaching $29.2 million, returning to pre-COVID levels [8][11] - Gross margin was 56%, down 340 basis points from the previous year due to increased costs from global supply chain issues [11][12] - Adjusted operating income was $4.3 million, with an adjusted operating margin of 14.6% [12] - GAAP earnings per share improved to negative $0.01 from negative $0.04 last year, while adjusted earnings per share rose to $0.06 from $0.05 [12] Business Line Data and Key Metrics Changes - Cellular and molecular product revenue grew by 22%, driven by strong order and backlog growth, despite shipment delays [13] - Preclinical product revenue increased by 20%, supported by strong demand from CROs, pharma, and academic labs [14] - Sales in the Americas rose by 28%, while Europe saw a 32% increase, indicating strong academic lab demand [15] Market Data and Key Metrics Changes - European labs are recovering, although slowly, with expectations for improved demand as the year progresses [15][46] - Overall reported revenue grew by 25%, with a 21% increase on a currency-adjusted basis [15] Company Strategy and Development Direction - The company aims to focus on organic sales growth and new product introductions while addressing COGS issues from supply chain disruptions [29][30] - There is an emphasis on improving sales effectiveness and marketing to drive revenue growth [29] - The company plans to continue portfolio rationalization to enhance revenue quality [33] Management's Comments on Operating Environment and Future Outlook - Management acknowledged challenges from global supply chain disruptions but expressed confidence in improving operational efficiencies and cost management [30][39] - The outlook for revenue growth has been raised to approximately 12% to 15% for the year, with expectations for continued gross margin expansion [31][34] - Management is optimistic about achieving sustained double-digit revenue growth in the future [49] Other Important Information - The company introduced 17 new products in the first half of the year, with a focus on preclinical and cellular product lines [17][68] - The restructuring program initiated in 2019 has resulted in $7 million of annualized cost savings [24] Q&A Session Summary Question: How fixable are the supply chain issues? - Management indicated that while some costs are expected to remain, improvements in supply chain management will help reduce costs over the next few quarters [37][39] Question: What products drove the 25% Q2 growth? - The preclinical DSI products and inhalation products were significant contributors to growth, despite some shipment constraints [41][42] Question: Will new product launches be delayed due to supply chain issues? - Some delays are anticipated, but new product introductions are expected to drive sustained revenue growth [53] Question: Is there an expected increase in demand from academic labs in the fall? - Management expects demand to increase as new budgets are allocated at the start of the academic year [55] Question: Will the backlog be worked through in the second half of the year? - Management does not expect to clear the entire backlog but anticipates getting closer to a normalized backlog by year-end [60][62] Question: What areas are the new products focused on? - Most new products are in the preclinical line, with significant investments in software systems and cellular testing capabilities [68][70]
Harvard Bioscience(HBIO) - 2021 Q2 - Earnings Call Transcript