Harvard Bioscience Amends Credit Agreement with Lenders Amid Concerns Over Future Operations

Harvard Bioscience has amended its credit agreement with lenders, waiving certain defaults and adjusting financial covenants. However, this raises concerns about the company's ability to continue operations beyond December 2025 without securing additional capital or refinancing its debt. The most recent analyst rating is a Buy with a $4.50 price target.

Harvard Bioscience Inc. (NASDAQ: HBIO) has recently amended its credit agreement with lenders, waiving certain defaults and adjusting financial covenants. The move comes as the company aims to secure additional capital or refinance its debt to ensure continued operations beyond December 2025. The most recent analyst rating is a Buy with a $4.50 price target.

In the second quarter of 2025, Harvard Bioscience reported revenue of $20.5 million, which was above the guidance range of $18 million to $20 million. The company achieved a gross margin of 56.4%, towards the high end of its guidance of 55% to 57%. Operating expenses declined by $2 million from the prior year, contributing to an improvement in adjusted operating income to $1 million from $0.8 million in Q2 2024. Adjusted EBITDA increased to $1.5 million from $1.3 million in Q2 2024, driven by reduced operating expenses. The company generated strong cash flow from operations, with $5.7 million year-to-date compared to $0.6 million in the same period last year. Net debt was reduced by over $4 million to $27.9 million from $32 million at year-end.

The company expects to continue paying down the debt at $1 million per quarter, projecting the debt to be around $33 million by December 5, the deadline for the refinance. The CEO, John Duke, stated that the company is prepared to manage well even without significant changes in NIH funding, but improvements into 2026 would benefit the business. The company's China business, which accounts for about 10% of its revenue, has returned to a more normal run rate after a near-zero period in April.

The company faces ongoing uncertainty regarding NIH funding delays and academic purchasing cycles. The CEO expressed optimism that if the NIH budget emphasizes neuroscience, it would enhance their products, particularly their Mesh MEA platform for organoids. The company is also watching macroeconomic risks, including European tariffs, which are currently at 15% with some volatility in other countries.

The most recent analyst rating is a Buy with a $4.50 price target, reflecting the company's progress and the potential for future growth. However, the company's ability to secure additional capital or refinance its debt by the December 2025 deadline will be crucial for its continued operations.

References:
[1] https://finance.yahoo.com/news/harvard-bioscience-inc-hbio-q2-070220604.html
[2] https://seekingalpha.com/news/4483242-harvard-bioscience-outlines-19m-21m-q3-revenue-target-as-debt-refinancing-advances-and