Harvard Bioscience (NASDAQ:HBIO) executives outlined a turnaround plan centered on translational science, new product launches, recurring revenue growth and manufacturing consolidation during a company presentation and Q&A session.
Chief Executive Officer Jim Green, who said he joined the company’s board a year ago and became CEO 10 months ago, described Harvard Bioscience as a provider of “tools, equipment, consumables to accelerate drug development through translational science.” Chief Financial Officer Mark Frost, who became permanent CFO about a month ago after serving as a consultant and interim CFO, reviewed the company’s financial profile and recent restructuring actions.
Company Targets Modest 2026 Growth, Margin Expansion
The CFO said 54% of revenue comes from recurring sources, including consumables, service and software, while 46% comes from instruments. Frost said management expects recurring revenue to move toward 60% over the next two years as new product launches increase the mix of consumables, which he said carry margins above 60%.
Frost said gross margins are approaching 60%, and the company expects to be “solidly” in the 60% gross margin range by 2027, supported by new product introductions and cost savings from its restructuring program.
Green said Harvard Bioscience is spending about 10% of revenue on research and development for new products, which he said carry gross margins north of 60%. New product innovation represented 4% of total revenue last year and is expected to represent 10% to 15% this year, he said.
Project Viking Expected to Drive Cost Savings
Frost said the company is consolidating its Holliston, Massachusetts, operations over a 15-month period, with most production moving to its Minneapolis facility. Some products will move to sites in Germany and the U.K. where the products originated, he said.
The initiative, referred to as Project Viking, is expected to generate about $3 million in cost savings beginning in 2027 and an additional $1 million on a full-year basis in 2028, according to Frost. He said the program could improve EBITDA from $8 million to $12 million assuming flat revenue.
During the Q&A, Frost said one production line has already been moved and additional moves are planned in the second quarter. He said the company remains on track to complete the consolidation by the end of the first quarter of 2027.
Frost said restructuring charges began in the first quarter and are expected to occur over the 15-month period, with a larger amount in the fourth quarter and first quarter. He said the company’s restructuring guidance of $3.4 million to $4.4 million includes a worst-case assumption for the Holliston lease, with about 30% of the estimate related to that lease. He said the company has hired a broker and the facility is on the market.
Debt Refinancing Provides Flexibility
Frost also reviewed a $40 million debt refinancing completed in December. The structure includes three tranches, referred to as Term Loan A, B and C, and extends to 2029, with an ability to move to five years.
He said Term Loan C can convert to equity at $10 at the lender’s discretion and automatically at $15 when the stock reaches that price. Frost said Term Loan A can be converted to an asset-based lending revolver, which he said could reduce the interest rate by 400 to 500 basis points, provide flexibility to scale down debt and reduce an exit fee on Term Loan B.
Frost said the refinancing reduced debt service by $3 million over the next two years, which the company is using primarily in 2026 to fund Project Viking.
Translational Science and Organoids Highlighted as Growth Areas
Green said a key element of Harvard Bioscience’s strategy is a focus on translational science, including New Approach Methodologies. He said the FDA now requires drug submissions to include data not only from animal models but also from laboratory models, creating what he described as a tailwind for the company’s technologies.
Green specifically highlighted the organoid market, which he said is growing 10% to 20% year over year. He said Harvard Bioscience has a portfolio for the segment that includes a microelectrode array consumable, related equipment and software used to analyze generated data.
The company is also introducing products in animal testing and bioproduction. Green said a new technology called SoHo, short for social housing, allows companies to test in a smaller environment using Bluetooth transmitters and receivers. Frost said a cGMP-compliant electroporation product expected in the fourth quarter should increase the company’s exposure to bioproduction.
Customer Mix, Tariffs and Funding Exposure
Green said 50% of 2025 revenue came from academic institutions, 28% from pharma and biotech customers and 22% from contract research organizations. He said the company is making a concerted effort to grow sales to pharma, biotech and CRO customers, adding that first-quarter revenue to pharma and biotech customers grew more than 20% from the prior year.
Frost said about 10% of total revenue, or roughly $9 million, is tied to NIH funding. He said that exposure has declined over the last few years and is “manageable.” Green said orders from academic customers began to come through late in the first quarter after NIH funding was addressed in the budget reconciliation bill, and that impact should begin to appear in second-quarter results due to the company’s three- to six-week order-to-shipment cycle for many products.
On tariffs, Frost said the company’s exposure on inputs was less than seven figures and has not been material, but retaliatory tariffs in China caused the company’s China business to “basically” go to zero in the second quarter of last year before recovering as tariffs returned to a 10% level. He said the company has initiated a “Made in China” activity involving final assembly through a hired partner and has shipped its first product under that approach.
Green said the company’s long-term organic growth target is mid-single digits, with potential upside from portfolio additions and pruning. Frost said the company generated $7 million in cash flow last year, expects 2026 cash flow to be break-even to slightly positive due to inventory and restructuring costs, and expects to return to stronger cash flow generation in 2027.
About Harvard Bioscience (NASDAQ:HBIO)
Harvard Bioscience, Inc develops, manufactures and distributes life science research instruments and consumables used by academic, biopharmaceutical and government laboratories worldwide. The company’s product portfolio spans cellular physiology, microfluidics, electrophysiology and lab automation, providing tools that enable researchers to study everything from cell behavior and organ function to drug delivery and tissue mechanics.
Through its operating units—most notably Harvard Apparatus, BTX, Radnoti and Warner Instruments—Harvard Bioscience offers a diverse range of scientific equipment including precision pumps, stereotaxic instruments, electroporation and gene delivery systems, perfusion systems and microinjection tools.
