10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-Q

x Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended March 31, 2019

¨ Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from               to             

Commission file number 001-33957

HARVARD BIOSCIENCE, INC.

(Exact Name of Registrant as Specified in Its Charter)

Delaware	04-3306140
(State or Other Jurisdiction of Incorporation or Organization)	(IRS Employer Identification No.)

84 October Hill Road, Holliston, MA	01746
(Address of Principal Executive Offices)	(Zip Code)

(508) 893-8999

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    x  YES     ¨  NO

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    x  YES     ¨  NO

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	¨		Accelerated filer	x
Non-accelerated filer	¨  (Do not check if a smaller reporting company)		Smaller reporting company	x
Emerging growth company		¨

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    ¨  YES     x  NO

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $0.01 par value	HBIO	The NASDAQ Stock Market

As of May 2, 2019, there were 37,687,608 shares of common stock, par value $0.01 per share, outstanding.

1

HARVARD BIOSCIENCE, INC.

FORM 10-Q

For the Quarter Ended March 31, 2019

INDEX

			Page
PART I - FINANCIAL INFORMATION			3
	Item 1.	Financial Statements	3
		Consolidated Balance Sheets as of March 31, 2019 and December 31, 2018 (unaudited)	3
		Consolidated Statements of Operations and Comprehensive Income (Loss) for the Three Months Ended March 31, 2019 and 2018 (unaudited)	4
		Consolidated Statement of Stockholders' Equity for the Three Months Ended March 31, 2019  (unaudited)	5
		Consolidated Statement of Stockholders' Equity for the Three Months Ended March 31, 2018  (unaudited)	6
		Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2019 and 2018 (unaudited)	7
		Notes to Unaudited Consolidated Financial Statements	8
	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	24
	Item 3.	Quantitative and Qualitative Disclosures about Market Risk	32
	Item 4.	Controls and Procedures	32
	PART II - OTHER INFORMATION		33
	Item 1A.	Risk Factors	33
	Item 6.	Exhibits	33
	SIGNATURES		34

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PART I. FINANCIAL INFORMATION

Item 1.  Financial Statements.

HARVARD BIOSCIENCE, INC.

CONSOLIDATED BALANCE SHEETS

(Unaudited, in thousands, except share and per share data)

		March 31, 2019			December 31, 2018
Assets
Current assets:
Cash and cash equivalents	$	5,030		$	8,173
Accounts receivable, net of allowance for doubtful accounts of $341 and $332, respectively		18,788			21,463
Inventories		26,557			25,087
Other receivables and other assets		3,222			3,109
Total current assets		53,597			57,832
Property, plant and equipment, net		5,582			5,898
Operating lease right-of-use assets		9,106			-
Deferred income tax assets		208			211
Amortizable intangible assets, net		42,991			44,532
Goodwill		57,375			57,304
Other indefinite lived intangible assets		1,228			1,232
Other assets		1,249			1,604
Total assets	$	171,336		$	168,613
Liabilities and Stockholders' Equity
Current liabilities:
Current portion, long-term debt	$	2,207		$	5,982
Current portion, operating lease liabilities		2,297			-
Accounts payable		7,311			7,359
Deferred revenue		3,715			3,820
Accrued income taxes		1,339			978
Accrued expenses		5,377			5,762
Other liabilities - current		1,895			1,588
Total current liabilities		24,141			25,489
Long-term debt, less current installments		54,135			54,813
Deferred income tax liabilities		2,289			2,301
Operating lease liabilities		9,062			-
Other long term liabilities		1,360			3,286
Total liabilities		90,987			85,889
Commitments and contingencies
Stockholders' equity:
Preferred stock, par value $0.01 per share, 5,000,000 shares authorized		-			-
Common stock, par value $0.01 per share, 80,000,000 shares authorized; 45,433,115 and 45,124,309 shares issued and 37,687,608 and 37,378,802 shares outstanding, respectively		436			436
Additional paid-in-capital		226,547			226,377
Accumulated deficit		(122,259	)		(119,889	)
Accumulated other comprehensive loss		(13,707	)		(13,532	)
Treasury stock at cost, 7,745,507 common shares		(10,668	)		(10,668	)
Total stockholders' equity		80,349			82,724
Total liabilities and stockholders' equity	$	171,336		$	168,613

See accompanying notes to unaudited consolidated financial statements.

3

HARVARD BIOSCIENCE, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(Unaudited, in thousands, except per share data)

	Three Months Ended March 31,
		2019			2018
Revenues	$	28,202		$	26,759
Cost of revenues		12,048			13,490
Gross profit		16,154			13,269
Sales and marketing expenses		6,306			5,646
General and administrative expenses		5,649			5,384
Research and development expenses		2,735			2,402
Amortization of intangible assets		1,430			1,103
Total operating expenses		16,120			14,535
Operating income (loss)		34			(1,266	)
Other expense:
Foreign exchange		(179	)		(347	)
Interest expense, net		(1,405	)		(894	)
Other expense, net		(244	)		(2,738	)
Other expense, net		(1,828	)		(3,979	)
Loss from continuing operations before income taxes		(1,794	)		(5,245	)
Income tax expense		576			605
Loss from continuing operations		(2,370	)		(5,850	)
Discontinued operations:
Income from discontinued operations before income taxes		-			913
Income tax expense (benefit)		-			(873	)
Income from discontinued operations		-			1,786
Net loss	$	(2,370	)	$	(4,064	)
(Loss) earnings per share:
Basic loss per common share from continuing operations	$	(0.06	)	$	(0.16	)
Basic earnings per common share from discontinued operations		-			0.05
Basic loss per common share	$	(0.06	)	$	(0.11	)
Diluted loss per common share from continuing operations	$	(0.06	)	$	(0.16	)
Diluted earnings per common share from discontinued operations		-			0.05
Diluted loss per common share	$	(0.06	)	$	(0.11	)
Weighted average common shares:
Basic		37,645			35,463
Diluted		37,645			35,463
Comprehensive loss:
Net loss	$	(2,370	)	$	(4,064	)
Foreign currency translation adjustments		4			1,506
Derivatives qualifying as hedges, net of tax:
Loss on derivative instruments designated and qualifying as cash flow hedges		(196	)		(254	)
Amounts reclassified from accumulated other comprehensive loss to net loss		17			(25	)
Total comprehensive loss	$	(2,545	)	$	(2,837	)

See accompanying notes to unaudited consolidated financial statements.

4

HARVARD BIOSCIENCE, INC.

CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY

(Unaudited, in thousands)

Three Months Ended March 31, 2019

	Number of Shares Issued			Common Stock		Additional Paid-in Capital			Accumulated Deficit			Accumulated Other Comprehensive Loss			Treasury Stock			Total Stockholders’ Equity
Balance at December 31, 2018	45,124			436		226,377			(119,889	)		(13,532	)		(10,668	)		82,724
Stock option exercises	3			-		-			-			-			-			-
Vesting of restricted stock units	440			-		(421	)		-			-			-			(421	)
Shares withheld for taxes	(134	)		-		-			-			-			-			-
Stock compensation expense	-			-		591			-			-			-			591
Net loss	-			-		-			(2,370	)		-			-			(2,370	)
Other comprehensive loss	-			-		-			-			(175	)		-			(175	)
Balance at March 31, 2019	45,433		$	436	$	226,547		$	(122,259	)	$	(13,707	)	$	(10,668	)	$	80,349

See accompanying notes to consolidated financial statements.

5

HARVARD BIOSCIENCE, INC.

CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY

(Unaudited, in thousands)

Three Months Ended March 31, 2018

	Number of Shares Issued			Common Stock			Additional Paid-in Capital			Accumulated Deficit			Accumulated Other Comprehensive (Loss) Income			Treasury Stock			Total Stockholders’ Equity
Balance at December 31, 2017	42,764			419			218,792			(116,967	)		(10,676	)		(10,668	)		80,900
Stock option exercises	298			1			816			-			-			-			817
Vesting of restricted stock units	532			5			-			-			-			-			5
Shares withheld for taxes	(185	)		(3	)		(600	)		-			-			-			(603	)
Stock compensation expense	-			-			1,012			-			-			-			1,012
Net loss	-			-			-			(4,064	)		-			-			(4,064	)
Other comprehensive income	-			-			-			-			1,227			-			1,227
Balance at March 31, 2018	43,409		$	422		$	220,020		$	(121,031	)	$	(9,449	)	$	(10,668	)	$	79,294

See accompanying notes to consolidated financial statements.

6

HARVARD BIOSCIENCE, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited, in thousands)

	Three Months Ended March 31,
		2019			2018
Cash flows from operating activities:
Net loss	$	(2,370	)	$	(4,064	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Stock compensation expense		591			1,012
Depreciation		538			495
Gain on sale of Denville		-			(1,227	)
Amortization of catalog costs		5			6
Provision for allowance for doubtful accounts		(16	)		5
Amortization of intangible assets		1,430			1,150
Amortization of deferred financing costs		91			276
Deferred income taxes		(1	)		(1,354	)
Changes in operating assets and liabilities:
Decrease in accounts receivable		2,695			149
(Increase) decrease in inventories		(1,416	)		799
Decrease in other receivables and other assets		536			650
(Decrease) increase in trade accounts payable		(118	)		1,346
Increase in accrued income taxes		380			173
(Decrease) increase in accrued expenses		(76	)		850
(Decrease) increase in deferred revenue		(116	)		429
Decrease in other liabilities		(143	)		(247	)
Net cash provided by operating activities		2,010			448
Cash flows used in investing activities:
Additions to property, plant and equipment		(143	)		(493	)
Additions to catalog costs		(9	)		(13	)
Acquisition, net of cash acquired		-			(67,413	)
Disposition, net of cash sold		-			15,730
Net cash used in investing activities		(152	)		(52,189	)
Cash flows (used in) provided by financing activities:
Proceeds from issuance of debt		-			67,000
Repayments of debt		(4,583	)		(14,047	)
Payments of debt issuance costs		-			(1,928	)
(Net taxes paid for) net proceeds from issuance of common stock		(421	)		219
Net cash (used in) provided by financing activities		(5,004	)		51,244
Effect of exchange rate changes on cash		3			755
(Decrease) increase in cash and cash equivalents		(3,143	)		258
Cash and cash equivalents at the beginning of period		8,173			5,733
Cash and cash equivalents at the end of period	$	5,030		$	5,991
Supplemental disclosures of cash flow information:
Cash paid for interest	$	927		$	944
Cash paid (refunded) for income taxes	$	94		$	(489	)

See accompanying notes to unaudited consolidated financial statements.

7

HARVARD BIOSCIENCE, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

1. Basis of Presentation and Summary of Significant Accounting Policies

Basis of Presentation

The unaudited consolidated financial statements of Harvard Bioscience, Inc. and its wholly-owned subsidiaries (collectively, Harvard Bioscience or the Company) as of March 31, 2019 and for the three months ended March 31, 2019 and 2018 have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission (SEC). Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. generally accepted accounting principles (U.S. GAAP) have been condensed or omitted pursuant to such rules and regulations. The December 31, 2018 consolidated balance sheet was derived from audited financial statements, but does not include all disclosures required by U.S. GAAP. However, the Company believes that the disclosures are adequate to make the information presented not misleading. These unaudited consolidated financial statements should be read in conjunction with the consolidated financial statements and the notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2018, which was filed with the SEC on March 18, 2019.

In the opinion of management, all adjustments, which include normal recurring adjustments necessary to present a fair statement of financial position as of March 31, 2019, results of operations and comprehensive income (loss) for the three months ended March 31, 2019 and 2018 and cash flows for the three months ended March 31, 2019 and 2018, as applicable, have been made. The results of operations for the three months ended March 31, 2019 are not necessarily indicative of the operating results for the full fiscal year or any future periods.

Prior Period Financial Statement Correction of Immaterial Error

During the quarter ended March 31, 2019, the Company identified an immaterial misclassification error in the Company’s consolidated balance sheet as of December 31, 2018.  The immaterial misclassification understated current portion, long term debt and overstated long term debt, less current installments.  This misclassification, in the amount of approximately $4.0 million, related to the classification of the Company’s excess cash flow payment made to its lenders during the quarter ended March 31, 2019 as long term instead of current on its consolidated balance sheet at December 31, 2018.  The misclassification had no impact on total reported debt.  Refer to footnote 14 for further details. The Company assessed the materiality of this error on the financial statements for prior periods in accordance with the SEC Staff Accounting Bulletin (SAB) No. 99, Materiality, codified in Accounting Standards Codification (ASC) 250, Presentation of Financial Statements, and concluded that it was not material to any prior annual or interim periods.  The Company recorded an adjustment to decrease long term debt, less current installments and increase current portion, long term debt in the consolidated balance sheet at December 31, 2018 with no impact on total reported debt.

Reclassifications

As disclosed in Note 5, on January 22, 2018, the Company sold substantially all the assets of its operating subsidiary, Denville Scientific, Inc. (Denville). The sale of Denville represented a strategic shift that had a major effect on the Company’s operations and financial results. As such and pursuant to Accounting Standards Codification (ASC) 205-20 – Presentation of Financial Statements - Discontinued Operations, the operating results of Denville for the three months ended March 31, 2018 have been presented in discontinued operations in the consolidated statements of operations. These reclassifications and adjustments had no effect on total amounts within the consolidated balance sheet, consolidated statements of operations and comprehensive income (loss), consolidated statements of cash flows for any of the periods presented.

Summary of Significant Accounting Policies

The accounting policies underlying the accompanying unaudited consolidated financial statements are those set forth in Note 2 to the consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018, which was filed with the SEC on March 18, 2019. Except for the accounting for leases as noted below there have been no material changes in the company’s significant accounting policies during the three months ended March 31, 2019.

Leases

The Company accounts for its leases in accordance with ASC 842 Leases. The Company leases office space, manufacturing facilities, automobiles and equipment. The Company concludes on whether an arrangement is a lease at inception. This determination as to whether an arrangement contains a lease is based on an assessment as to whether a contract conveys the right to the Company to control the use of identified property, plant or equipment for period of time in exchange for consideration. Leases with an initial term of 12 months or less are not recorded on the balance sheet. The Company recognizes these lease expenses on a straight line basis over the lease term.

As of March 31, 2019, the Company has assessed its contracts and concluded that its leases consist of operating leases. Operating leases are included in operating lease right-of-use (ROU) assets, current portion of operating lease liabilities, and operating lease liabilities in the Company’s consolidated balance sheets.

8

ROU assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As most of the Company’s leases do not provide an implicit rate, the Company determines an incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. The incremental borrowing rate represents a significant judgment that is based on an analysis of the Company’s credit rating, country risk, treasury and corporate bond yields, as well as comparison to the Company’s borrowing rate on its most recent loan. The Company uses the implicit rate when readily determinable. The operating lease ROU asset also includes any lease payments made and excludes lease incentives. Lease expense for lease payments is recognized on a straight-line basis over the lease term.

The Company has lease agreements with lease and non-lease components, which are generally accounted for separately. Additionally, for its leases, the Company applies a portfolio approach to effectively account for the operating lease ROU assets and liabilities.

2. Recently Issued Accounting Pronouncements

In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which amends the impairment model by requiring entities to use a forward-looking approach based on expected losses rather than incurred losses to estimate credit losses on certain types of financial instruments, including trade receivables. This may result in the earlier recognition of allowances for losses. The ASU is effective for public entities for fiscal years beginning after December 15, 2019, with early adoption permitted. In November 2018, the FASB issued ASU No. 2018-19, Codification Improvements to Topic 326, Financial Instruments—Credit Losses, which provided additional implementation guidance on the previously issued ASU. Management has not yet completed its assessment of the impact of the new standard on the Company’s Consolidated Financial Statements. Currently, the Company believes that the most notable impact of this ASU will relate to its processes around the assessment of the adequacy of its allowance for doubtful accounts on trade accounts receivable and the recognition of credit losses.

In August 2018, the FASB issued ASU No. 2018-14, Disclosure Framework—Changes to the Disclosure Requirements for Defined Benefit Plans, which amends ASC 715 to add, remove and clarify disclosure requirements related to defined benefit pension and other postretirement plans. The ASU is effective for public entities for fiscal years beginning after December 15, 2020, with early adoption permitted. Management has not yet completed its assessment of the impact of the new standard on the Company’s Consolidated Financial Statements.

Recently Adopted Accounting Pronouncements

In August 2017, the FASB issued ASU 2017-12, Derivatives and Hedging (Topic 815) which amends the hedge accounting recognition and presentation requirements in ASC 815, Derivatives and Hedging. The Board’s objectives in issuing the ASU are to (1) improve the transparency and understandability of information conveyed to financial statement users about an entity’s risk management activities by better aligning the entity’s financial reporting for hedging relationships with those risk management activities and (2) reduce the complexity of and simplify the application of hedge accounting by preparers. The ASU is effective for annual reporting periods, including interim periods within those annual reporting periods, beginning after December 15, 2018. The Company adopted this guidance as of January 1, 2019, and it did not have a material impact on its consolidated financial position, results of operations and cash flows.

In February 2016, the FASB issued Accounting Standards Update (ASU) 2016-02, Leases, which is intended to improve financial reporting about leasing transactions. The update requires a lessee to record on its balance sheet the assets and liabilities for the rights and obligations created by lease terms of more than 12 months. The update is effective for fiscal years beginning after December 15, 2018. A modified retrospective transition approach is required for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements, with certain practical expedients available. The Company elected to utilize a practical expedient in its method of adoption of the standard and adopted the guidance as of January 1, 2019.  Under this expedient, which is a “current-period adjustment method,” the Company applied ASC 842 as of January 2019 and recognized operating lease liabilities of $11.7 million and right of use assets of $9.4 million for all leases with lease terms of more than 12 months. There was no impact to retained earnings as of that date. In addition, the Company adopted the guidance by electing the following practical expedients: (1) the Company did not reassess whether any expired or existing contracts contained leases, (2) the Company did not reassess the lease classification for any expired or existing leases, and (3) the Company excluded variable payments from the lease contract consideration and recorded those as incurred. The Company’s future commitments under lease obligations and additional disclosures are summarized in Note 12.

9

3. Accumulated Other Comprehensive Loss

Changes in each component of accumulated other comprehensive loss, net of tax are as follows:

(in thousands)		Foreign currency translation adjustments			Derivatives qualifying as hedges			Defined benefit pension plans			Total
Balance at December 31,  2018	$	(12,630	)	$	(170	)	$	(732	)	$	(13,532	)
Other comprehensive income (loss) before reclassifications		4			(196	)		-			(192	)
Amounts reclassified from AOCI		-			17			-			17
Other comprehensive income (loss)		4			(179	)		-			(175	)
Balance at March 31, 2019	$	(12,626	)	$	(349	)	$	(732	)	$	(13,707	)

4. Acquisition

On January 31, 2018, the Company acquired all of the issued and outstanding shares of Data Sciences International, Inc. (DSI), a Delaware corporation, for approximately $71.1 million. The Company funded the acquisition from its existing cash balances, excess proceeds from the Denville Transaction discussed in Note 5, and proceeds from the Financing Agreement discussed in Note 14.

DSI, a St. Paul, Minnesota-based life science research company, is a recognized leader in physiologic monitoring focused on delivering preclinical products, systems, services and solutions to its customers. Its customers include pharmaceutical and biotechnology companies, as well as contract research organizations, academic labs and government researchers. This acquisition diversifies the Company’s customer base into the biopharmaceutical and contract research organization markets.

The aggregate purchase price for this acquisition was allocated to tangible and intangible net assets acquired as follows:

	(in thousands)
Tangible assets	$	34,010
Liabilities assumed		(11,949	)
Net assets		22,061
Goodwill and intangible assets:
Goodwill		21,865
Amortizable intangible assets:
Trade name		3,524
Developed technology		25,570
Customer relationships		9,837
In-process research and development		1,387
Total amortizable intangible assets		40,318
Deferred tax liabilities, net		(13,120	)
Total goodwill and intangible assets, net of tax		49,063
Acquisition purchase price	$	71,124
Tangible assets and liabilities assumed, as referenced above, consisted of the following:
Cash acquired	$	2,576
Accounts receivable, net		5,069
Inventories		11,512
Other current assets		810
Property, plant and equipment, net		3,574
Deferred income tax assets, net		10,469
Tangible assets	$	34,010
Accounts payable and accrued liabilities	$	6,001
Deferred revenue including customer advances		2,976
Other long term liabilities		2,972
Liabilities assumed	$	11,949

10

The Company finalized the purchase price allocation for DSI as of December 31, 2018. The weighted-average amortization periods for definite-lived intangible assets acquired was 9.4 years for tradenames, 8.2 years for developed technology, 12.4 years for customer relationships and 7.4 years for in-process research and development assets. The weighted average amortization period for all definite-lived intangible assets acquired was 9.3 years.

Goodwill recorded as a result of the acquisition of DSI is not deductible for tax purposes.

The results of operations for DSI have been included in the Company’s consolidated financial statements from the date of acquisition. The revenues of DSI included in the Company’s consolidated statement of operations from the date of acquisition to March 31, 2018 were approximately $7.6 million. The net loss of DSI included in the Company’s consolidated statement of operations for the same period was approximately $0.4 million. Included in the net loss for the three months ended March 31, 2018 was a $1.5 million charge recognized in cost of revenues related to purchase accounting inventory fair value step up amortization. The total inventory fair value step up was valued at $3.8 million and was recognized into cost of revenues over one inventory turn, or approximately five and a half months. Also included in the net loss of DSI for that period was $0.7 million of intangible asset amortization expense.

The following consolidated pro forma information is based on the assumption that the acquisition of DSI occurred on January 1, 2017. Accordingly, the historical results have been adjusted to reflect amortization expense, interest expense and other purchase accounting adjustments that would have been recognized on such a pro forma basis. The pro forma information is presented for comparative purposes only and is not necessarily indicative of the financial position or results of operations which would have been reported had the Company completed the acquisition during these periods or which might be reported in the future.

		Three Months Ended March 31, 2018
		(in thousands)
Pro Forma
Revenues	$	30,071
Loss from continuing operations		(2,168	)

Direct acquisition costs recorded in other expense, net in the Company’s consolidated statements of operations were $0 and $2.6 million for the three months ended March 31, 2019 and 2018, respectively.

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5. Discontinued Operations

On January 22, 2018, the Company sold substantially all the assets of its wholly owned subsidiary, Denville, for approximately $20.0 million, which includes a $3.0 million earn-out provision (the Denville Transaction). Upon the closing of the transaction, the Company received $15.7 million. The $3.0 million earn-out provision represents consideration that is contingent on Denville achieving certain performance metrics over a period of two years.

The following table is a reconciliation of the major line items of income from discontinued operations presented within the Company’s consolidated statements of operations for the three months ended March 31, 2019 and 2018.

	Three Months Ended March 31,
		2019		2018
	(in thousands)
Revenues	$	-	$	893
Cost of revenues		-		(534	)
Operating and other expenses		-		(673	)
Gain on disposal of discontinued operations		-		1,227
Income from discontinued operations before income taxes	$	-	$	913
Income tax benefit		-		(873	)
Income from discontinued operations		-		1,786

Total operating and investing cash flows for Denville in the Company’s consolidated statements of cash flows for the three months ended March 31, 2018, were immaterial There were no operating or investing cash flows for Denville in the Company’s consolidated statements of cash flows for the three months ended March 31, 2019.

6. Goodwill and Other Intangible Assets

Intangible assets consist of the following:

	March 31, 2019					December 31, 2018					Weighted Average Life		(a)
	(in thousands)
Amortizable intangible assets:		Gross		Accumulated Amortization			Gross		Accumulated Amortization
Existing technology	$	41,285	$	(17,173	)	$	41,268	$	(16,215	)		6.9	Years
Trade names		7,786		(3,007	)		7,828		(2,861	)		7.5	Years
Distribution agreements/customer relationships		22,538		(9,780	)		22,657		(9,509	)		10.4	Years
In-process research and development		1,387		(45	)		1,387		(30	)		7.2	Years
Patents		218		(218	)		211		(204	)		-	Years
Total amortizable intangible assets		73,214	$	(30,223	)		73,351	$	(28,819	)
Indefinite-lived intangible assets:
Goodwill		57,375					57,304
Other indefinite-lived intangible assets		1,228					1,232
Total goodwill and other indefinite-lived intangible assets		58,603					58,536
Total intangible assets, gross	$	131,817				$	131,887

(a) Weighted average life as of March 31, 2019.

12

The change in the carrying amount of goodwill for the three months ended March 31, 2019 is as follows:

		(in thousands)
Balance at December 31, 2018	$	57,304
Effect of change in currency translation		71
Balance at March 31, 2019	$	57,375

Amortization of intangible assets

Intangible asset amortization expense from continuing operations was $1.4 million and $1.1 million for the three months ended March 31, 2019 and 2018, respectively. Amortization expense of existing amortizable intangible assets is currently estimated to be $5.6 million for the year ending December 31, 2019, $5.6 million for the year ending December 31, 2020, $5.6 million for the year ending December 31, 2021, $5.5 million for the year ending December 31, 2022 and $5.4 million for the year ending December 31, 2023.

7. Inventories

Inventories consist of the following:

		March 31, 2019		December 31, 2018
	(in thousands)
Finished goods	$	7,679	$	6,936
Work in process		3,834		3,667
Raw materials		15,044		14,484
Total	$	26,557	$	25,087

8. Property, Plant and Equipment

As of March 31, 2019 and December 31, 2018, property, plant and equipment consist of the following:

		March 31, 2019			December 31, 2018
	(in thousands)
Land, buildings and leasehold improvements	$	2,542		$	2,468
Machinery and equipment		9,907			9,678
Computer equipment and software		9,713			9,685
Furniture and fixtures		1,407			1,390
Automobiles		114			115
		23,683			23,336
Less: accumulated depreciation		(18,101	)		(17,438	)
Property, plant and equipment, net	$	5,582		$	5,898

13

9. Related Party Transactions

As part of the acquisitions of Multi Channel Systems MCS GmbH (MCS) and Triangle BioSystems, Inc. (TBSI) in 2014, the Company signed lease agreements with the former owners of the acquired companies. The principals of such former owners of MCS and TBSI were employees of the Company as of March 31, 2019 and 2018. Pursuant to a lease agreement, the Company made rent payments of approximately $78 thousand and $79 thousand to the former owners of MCS for the three months ended March 31, 2019 and 2018, respectively. The Company made rent payments of approximately $11 thousand to the former owner of TBSI for both the three months ended March 31, 2019 and 2018.

10. Warranties

Warranties are estimated and accrued at the time revenues are recorded. A rollforward of the Company’s product warranty accrual is as follows:

		Beginning Balance	(Payments)\ Credits		Additions		Ending Balance
	(in thousands)
Year ended December 31, 2018	$	246	(37	)	182	$	391
Three months ended March 31, 2019	$	391	(22	)	1	$	370

11. Employee Benefit Plans

The Company’s subsidiary in the United Kingdom, Biochrom Limited, maintains contributory, defined benefit pension plans for substantially all of its employees. These defined benefit pension plans have been closed to new employees since 2014, as well as closed to the future accrual of benefits for existing employees. The components of the Company’s defined benefit pension expense were as follows:

	Three Months Ended March 31,
	2019			2018
	(in thousands)
Components of net periodic benefit cost:
Interest cost	$	132		$	132
Expected return on plan assets		(182	)		(204	)
Net amortization loss		76			58
Net periodic benefit cost (income)	$	26		$	(14	)

For the three months ended March 31, 2019 and 2018, the Company contributed $0.2 million, for both periods, to its defined benefit pension plans. The Company expects to contribute at $0.5 million to its defined benefit pension plans during the remainder of 2019.

The Company had an underfunded pension liability of approximately $0.9 million as of March 31, 2019 and December 31, 2018 included in the other long term liabilities line item in the consolidated balance sheets.

12. Leases

The Company has noncancelable operating leases for office, manufacturing facilities, warehouse space, automobiles and equipment expiring at various dates through 2023 and thereafter. As discussed in Footnote 1, the Company adopted ASC 842 as of January 1, 2019, using a current period adjustment method. In accordance with this method, the Company recognized a right of use asset of $9.4 million and an operating lease liability of $11.7 million as of January 1, 2019. As a result of using the current period adjustment method, the lease expense for three months ended March 31, 2019 and 2018 was recognized under ASC 842, and ASC 840, the previous standard, respectively.

14

The components of lease expense for the three months ended March 31, 2019 are as follows:

		Three Months Ended March 31, 2019
		(in thousands)
Operating lease cost	$	523
Short term lease cost		76
Sublease income		(102	)
Total lease cost	$	497

Supplemental cash flow information related to the Company's operating leases was as follows

		Three Months Ended March 31, 2019
		(in thousands)
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from operating leases	$	702
Right-of-use assets obtained in exchange for lease obligations
Operating leases	$	-

Supplemental balance sheet information related to the Company's operating leases was as follows:

		March 31, 2019
		(in thousands)
Operating lease right-of use assets	$	9,106
Current portion, operating lease liabilities	$	2,297
Operating lease liabilities, long term		9,062
Total operating lease liabilities	$	11,359
Weighted average remaining lease term		8.6		years
Weighted average discount rate		9.2	%

Rent payments for continuing operations were approximately $0.5 million for the three months ended March 31, 2018. Future minimum lease payments for operating leases, with initial or remaining terms in excess of one year at March 31, 2019, are as follows:

		Operating Leases
		(in thousands)
2020	$	2,297
2021		2,268
2022		1,862
2023		1,813
2024		1,795
Thereafter		6,970
Total lease payments		17,005
Less interest		(5,646	)
Total operating lease liabilities		11,359

15

13. Capital Stock

Common Stock

The Company has 80.0 million shares of common stock authorized for issuance. As of March 31, 2019, the Company had 37.7 million shares of common stock issued and outstanding.

Preferred Stock

The Company’s Board of Directors has the authority to issue up to 5.0 million shares of preferred stock and to determine the price, privileges and other terms of the shares. The Board of Directors may exercise this authority without any further approval of stockholders. As of March 31, 2019, the Company had no preferred stock issued or outstanding.

Employee Stock Purchase Plan (as amended, the ESPP)

In 2000, the Company approved the ESPP. Under this ESPP, participating employees can authorize the Company to withhold a portion of their base pay during consecutive six-month payment periods for the purchase of shares of the Company’s common stock. At the conclusion of the period, participating employees can purchase shares of the Company’s common stock at 85% of the lower of the fair market value of the Company’s common stock at the beginning or end of the period. Shares are issued under the ESPP for the six-month periods ending June 30 and December 31. As of March 31, 2019, 1,050,000 shares of common stock are authorized for issuance, of which 890,762 shares were issued. There were no shares issued under the ESPP during the three months ended March 31, 2019 and 2018, respectively.

Stock Option and Equity Incentive Plans

Third Amended and Restated 2000 Stock Option and Incentive Plan (as amended, the Third A&R Plan)

The Third Amendment to the Third A&R Plan (the Amendment) was adopted by the Board of Directors on April 2, 2018. Such Amendment was approved by the stockholders at the Company’s 2018 Annual Meeting of Stockholders. Pursuant to the Amendment, the aggregate number of shares authorized for issuance under the Third A&R Plan was increased by 3,400,000 shares to 20,908,929.

Restricted Stock Units with a Market Condition (the Market Condition RSUs)

On May 24, 2018, the Compensation Committee of the Board of Directors of the Company approved and granted deferred stock awards of Market Condition RSUs (the 2018 Market Condition RSUs) to certain members of the Company’s management team under the Third A&R Plan. The vesting of the 2018 Market Condition RSUs is based on a graded-vesting schedule (one third at the end of each year for three years) and linked to the achievement of a relative total shareholder return of the Company’s common stock from May 24, 2018 to the earlier of (i) May 24, 2019 or (ii) upon a change of control (measured relative to the NASDAQ Biotechnology index and based on the 20-day trading average price before each such date). As of March 31, 2019, the target number of these restricted stock units that may be earned is 94,444 shares; the maximum amount is 150% of the target number.

On March 7, 2019, the Compensation Committee of the Board of Directors of the Company approved and granted deferred stock awards of Market Condition RSUs (the 2019 Market Condition RSUs) to certain members of the Company’s management team under the Third A&R Plan. The vesting of the 2019 Market Condition RSUs is based on a graded-vesting schedule (one third at the end of each year for three years) and linked to the achievement of a relative total shareholder return of the Company’s common stock from March 7, 2019 to the earlier of (i) March 7, 2020 or (ii) upon a change of control (measured relative to the NASDAQ Biotechnology index and based on the 20-day trading average price before each such date). As of March 31, 2019, the target number of these restricted stock units that may be earned is 75,514 shares; the maximum amount is 150% of the target number.

16

Stock-Based Payment Awards

The Company accounts for stock-based payment awards in accordance with the provisions of FASB ASC 718, which requires it to recognize compensation expense for all stock-based payment awards made to employees and directors including stock options, restricted stock units, Market Condition RSUs and employee stock purchases related to the ESPP. The Company has elected as an accounting policy to account for forfeitures for service based awards as they occur, with no adjustment for estimated forfeitures.

Stock option and restricted stock unit activity under the Company’s Third A&R Plan for the three months ended March 31, 2019 was as follows:

	Stock Options					Restricted Stock Units					Market Condition RSU's
		Stock Options Outstanding			Weighted Average Exercise Price		Restricted Stock Units Outstanding			Grant Date Fair Value		Market Condition RSU's Outstanding			Grant Date Fair Value
Balance at December 31, 2018		1,956,732		$	4.25		1,233,762		$	3.36		116,944		$	4.19
Granted		559,909			3.80		383,827			3.67		75,514			4.16
Exercised		(2,500	)		3.25		-			-		-			-
Vested (RSUs)		-			-		(439,875	)		3.26		-			-
Cancelled / forfeited		(75,000	)		4.66		(95,509	)		2.83		(22,500	)		4.19
Balance at March 31, 2019		2,439,141		$	4.13		1,082,205		$	3.56		169,958		$	4.18

The weighted average fair value of the options granted under the Third A&R Plan during the three months ended March 31, 2019 was $1.58. There were no options granted under the Third A&R Plan during the three months ended March 31, 2018. The following assumptions were used to estimate the fair value, using the Black-Scholes option pricing model, of stock options granted during the three months ended March 31, 2019:

	Three Months Ended March 31,
	2019
Volatility		45.58	%
Risk-free interest rate		2.44	%
Expected holding period (in years)		4.73	years
Dividend yield		-	%

The weighted average fair value of the 2019 Market Condition RSUs which were granted under the Third A&R Plan during the three months ended March 31, 2019 was $4.16. There were no Market Condition RSUs granted under the Third A&R Plan during the three months ended March 31, 2018. The following assumptions were used to estimate the fair value, using a Monte-Carlo valuation simulation, of the Market Condition RSUs granted during the three months ended March 31, 2019:

	Three Months Ended March 31,
	2019
Volatility	48.00	%
Risk-free interest rate	2.50	%
Correlation coefficient	0.27	%
Dividend yield	-	%

The Company used historical volatility to calculate the expected volatility for each grant as of the grant date. Historical volatility was determined by calculating the mean reversion of the daily adjusted closing stock price. The risk-free interest rate assumption is based upon observed U.S. Treasury bill interest rates (risk-free) appropriate for the term of the Company’s stock options and Market Condition RSUs. The expected holding period of stock options represents the period of time options are expected to be outstanding and is based on historical experience. The vesting period ranges from one to four years and the contractual life is ten years. The correlation coefficient, used to value the Market Condition RSUs, represents the way in which entities move in relation to the NASDAQ Biotechnology index as a whole.

17

Stock-based compensation expense related to stock options, restricted stock units, Market Condition RSUs and the ESPP for the three months ended March 31, 2019 and 2018 was allocated as follows:

	Three Months Ended March 31,
		2019			2018
	(in thousands)
Cost of revenues	$	13		$	11
Sales and marketing		(7	)		124
General and administrative		551			697
Research and development		34			30
Discontinued operations		-			150
Total stock-based compensation	$	591		$	1,012

The Company did not capitalize any stock-based compensation.

Earnings per share

Basic earnings per share is based upon net income divided by the number of weighted average common shares outstanding during the period. The calculation of diluted earnings per share assumes conversion of stock options, restricted stock units and Market Condition RSUs into common stock using the treasury method. The weighted average number of shares used to compute basic and diluted earnings per share consists of the following:

	Three Months Ended March 31,
		2019	2018
Basic		37,644,684	35,462,989
Effect of assumed conversion of employee and director stock options, restricted stock units and Market Condition RSUs		-	-
Diluted		37,644,684	35,462,989

Excluded from the shares used in calculating the diluted earnings per common share in the above table are options, restricted stock units and Market Condition RSUs of approximately 3,691,304 and 4,899,228 shares of common stock for the three months ended March 31, 2019 and 2018, respectively, as the impact of these shares would be anti-dilutive.

14. Long Term Debt

On January 22, 2018, in connection with the closing of the Denville Transaction, the Company terminated the Third Amended and Restated Credit Agreement (the Credit Agreement), among the Company, Brown Brothers Harriman & Co. and each of the other lenders party thereto, and Bank of America, as administrative agent. All outstanding amounts under the agreement were repaid in full using a portion of the proceeds of the Denville Transaction. At the time of repayment, there was approximately $11.9 million outstanding.

On January 31, 2018, the Company entered into a financing agreement by and among the Company and certain subsidiaries of the Company parties thereto, as borrowers (collectively, the Borrower), certain subsidiaries of the Company parties thereto, as guarantors, various lenders from time to time party thereto (the Lenders), and Cerberus Business Finance, LLC, as collateral agent and administrative agent for the Lenders (the Financing Agreement). On August 16, 2018, the Company and Cerberus Business Finance, LLC entered into a First Amendment to the Financing Agreement, which such amendment modified certain provisions related to the borrowing base and reporting, among other things.

18

The Financing Agreement provided for senior secured credit facilities (the Senior Secured Credit Facilities) comprised of a $64.0 million term loan and up to a $25.0 million revolving line of credit. The proceeds of the term loan and $4.8 million of advances under the revolving line of credit were used to fund a portion of the DSI acquisition, and to pay fees and expenses related thereto and the closing of the Senior Secured Credit Facilities. In addition, the revolving facility is available for use by the Company and its subsidiaries for general corporate and working capital needs, and other purposes to the extent permitted by the Financing Agreement. The Senior Secured Credit Facilities have a maturity of five years.

Commencing on March 31, 2018, the outstanding term loans began to amortize in equal quarterly installments equal to $0.4 million per quarter on such date and during each of the next three quarters thereafter, $0.6 million per quarter during the next four quarters thereafter and $0.8 million per quarter thereafter, with a balloon payment at maturity. Furthermore, within ten days of the Company’s delivery of its audited annual financial statements each year, the term loans are permanently reduced pursuant to certain mandatory prepayment events including an annual “excess cash flow sweep” of 50% of the consolidated excess cash flow; provided that, in any fiscal year, any voluntary prepayments of the term loans shall be credited against the Company’s “excess cash flow” prepayment obligations on a dollar-for-dollar basis for such fiscal year.

The obligations of the Borrower under the Senior Secured Credit Facilities are unconditionally guaranteed by the Company and certain of the Company’s existing and subsequently acquired or organized subsidiaries. The Senior Secured Credit Facilities and related guarantees are secured on a first-priority basis (subject to certain liens permitted under the Financing Agreement) by a lien on substantially all the tangible and intangible assets of the Borrower and the subsidiary guarantors, including all of the capital stock held by such obligors (subject to a 65% limitation on pledges of capital stock of foreign subsidiaries), subject to certain exceptions.

Interest on all loans under the Senior Secured Credit Facilities is paid monthly. Borrowings under the Financing Agreement accrue interest at a per annum rate equal to, at the Borrower’s option, a base rate plus 4.75% or a London Interbank Offered Rate (LIBOR) rate plus 6.25%. The loans are also subject to a 1.25% interest rate floor for LIBOR loans and a 4.25% interest rate floor for base rate loans.

The Financing Agreement contains customary representations and warranties and affirmative covenants applicable to the Company and its subsidiaries and also contains certain restrictive covenants, including, among others, limitations on the incurrence of additional debt, liens on property, acquisitions and investments, loans and guarantees, mergers, consolidations, liquidations and dissolutions, asset sales, dividends and other payments in respect of the Company’s capital stock, prepayments of certain debt, transactions with affiliates and modifications of organizational documents, material contracts, affiliated practice agreements and certain debt agreements. The Financing Agreement also contains customary events of default. As of March 31, 2019, the Company was in compliance with all financial covenants contained in the Financing Agreement, was subject to covenant and working capital borrowing restrictions and had available borrowing capacity under its Financing Agreement of $14.5 million.

As of March 31, 2019 and December 31, 2018, the Company had borrowings net of debt issuance costs of $56.3 million and $60.8 million respectively, outstanding. The carrying value of the debt approximates fair value because the interest rate under the obligation approximates market rates of interest available to the Company for similar instruments. 

As of March 31, 2019, the weighted effective interest rate, net of the impact of the Company’s interest rate swap, on its term loan was 8.87%.

As of March 31, 2019 and December 31, 2018, the Company’s borrowings were comprised of:

		March 31, 2019			December 31, 2018
	(in thousands)
Long-term debt:
Term loan	$	57,817		$	62,400
Total unamortized deferred financing costs		(1,475	)		(1,605	)
Total debt		56,342			60,795
Less: current installments		(2,600	)		(6,383	)
Current unamortized deferred financing costs		393			401
Long-term debt	$	54,135		$	54,813

15. Derivatives

The Company uses interest-rate-related derivative instruments to manage its exposure related to changes in interest rates on its variable-rate debt instruments. The Company does not enter into derivative instruments for any purpose other than cash flow hedging. The Company does not speculate using derivative instruments.

19

By using derivative financial instruments to hedge exposures to changes in interest rates, the Company exposes itself to credit risk and market risk. Credit risk is the failure of the counterparty to perform under the terms of the derivative contract. When the fair value of a derivative contract is positive, the counterparty owes the Company, which creates credit risk for the Company. When the fair value of a derivative contract is negative, the Company owes the counterparty and, therefore, the Company is not exposed to the counterparty’s credit risk in those circumstances. The Company minimizes counterparty credit risk in derivative instruments by entering into transactions with carefully selected major financial institutions based upon their credit profile.

Market risk is the adverse effect on the value of a derivative instrument that results from a change in interest rates. The market risk associated with interest-rate contracts is managed by establishing and monitoring parameters that limit the types and degree of market risk that may be undertaken.

The Company assesses interest rate risk by continually identifying and monitoring changes in interest rate exposures that may adversely impact expected future cash flows and by evaluating hedging opportunities. The Company maintains risk management control systems to monitor interest rate risk attributable to both the Company’s outstanding or forecasted debt obligations as well as the Company’s offsetting hedge positions. The risk management control systems involve the use of analytical techniques, including cash flow sensitivity analysis, to estimate the expected impact of changes in interest rates on the Company’s future cash flows.

The Company uses variable-rate LIBOR debt to finance its operations. The debt obligations expose the Company to variability in interest payments due to changes in interest rates. Management believes that it is prudent to limit the variability of a portion of its interest payments. To meet this objective, management enters into LIBOR based interest rate swap agreements to manage fluctuations in cash flows resulting from changes in the benchmark interest rate of LIBOR. These swaps change the variable-rate cash flow exposure on the debt obligations to fixed cash flows. Under the terms of the interest rate swaps, the Company receives LIBOR based variable interest rate payments and makes fixed interest rate payments, thereby creating the equivalent of fixed-rate debt for the notional amount of its debt hedged.

As disclosed in Note 14, on January 31, 2018, the Company entered into a Financing Agreement comprised of a $64.0 million term loan and up to a $25.0 million revolving line of credit. Shortly after entering into this Credit Agreement, the Company entered into an interest rate swap contract with PNC Bank with a notional amount of $36.0 million and a termination date of January 1, 2023 in order to hedge the risk of changes in the effective benchmark interest rate (LIBOR) associated with the Company’s Term Loan. The swap contract converted specific variable-rate debt into fixed-rate debt and fixed the LIBOR rate associated with a portion of the term loan under the Financing Agreement at 2.72%. The interest rate swap was designated as a cash flow hedge instrument in accordance with ASC 815 “Derivatives and Hedging”.

The notional amount of the Company’s derivative instruments as of March 31, 2019 was $33.0 million.

The following table presents the notional amount and fair value of the Company’s derivative instruments as of March 31, 2019 and December 31, 2018.

		March 31, 2019
		Notional Amount		Fair Value (a)
Derivatives designated as hedging instruments under ASC 815	Balance sheet classification	(in thousands)
Interest rate swaps	Other assets (long term liabilities)	$	32,976	$	(349	)

		December 31, 2018
		Notional Amount		Fair Value (a)
Derivatives designated as hedging instruments under ASC 815	Balance sheet classification	(in thousands)
Interest rate swaps	Other assets (long term liabilities)	$	34,090	$	(170	)

(a) See Note 16 for the fair value measurements related to these financial instruments.

All of the Company’s derivative instruments are designated as hedging instruments.

20

The Company has structured its interest rate swap agreements to be 100% effective and as a result, there was no impact to earnings resulting from hedge ineffectiveness. Changes in the fair value of interest rate swaps designated as hedging instruments that effectively offset the variability of cash flows associated with variable-rate, long-term debt obligations are reported in accumulated other comprehensive income (AOCI). These amounts subsequently are reclassified into interest expense as a yield adjustment of the hedged interest payments in the same period in which the related interest affects earnings. The Company’s interest rate swap agreement was deemed to be fully effective in accordance with ASC 815, and, as such, unrealized gains and losses related to these derivatives were recorded as AOCI.

The following table summarizes the effect of derivatives designated as cash flow hedging instruments and their classification within comprehensive loss for the three months ended March 31, 2019 and 2018:

Derivatives in Hedging Relationships	Amount of gain (loss) recognized in OCI on derivative (effective portion)
	Three Months Ended March 31,
	2019			2018
	(in thousands)
Interest rate swaps	$	(196	)	$	(254	)

The following table summarizes the reclassifications out of accumulated other comprehensive loss for the three months ended March 31, 2019 and 2018:

Details about AOCI Components	Amount reclassified from AOCI into income (effective portion)					Location of amount
	Three Months Ended March 31,					reclassified from AOCI
	2019		2018			into income (effective portion)
	(in thousands)
Interest rate swaps	$	17	$	(25	)	Interest expense

As of March 31, 2019, $93 thousand of deferred losses on derivative instruments accumulated in AOCI are expected to be reclassified to earnings during the next twelve months. Transactions and events expected to occur over the next twelve months that will necessitate reclassifying these derivatives’ losses to earnings include the repricing of variable-rate debt.

16. Fair Value Measurements

Fair value measurement is defined as the price that would be received to sell an asset or paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date. A fair value hierarchy is established, which prioritizes the inputs used in measuring fair value into three broad levels as follows:

Level 1—Quoted prices in active markets for identical assets or liabilities.

Level 2—Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly.

Level 3—Unobservable inputs based on the Company’s own assumptions.

21

The following tables present the fair value hierarchy for those assets or liabilities measured at fair value on a recurring basis:

	Fair Value as of March 31, 2019
(In thousands)	Level 1		Level 2			Level 3		Total
Assets (Liabilities):
Interest rate swap agreements	$	-	$	(349	)	$	-	$	(349	)

	Fair Value as of December 31, 2018
(In thousands)	Level 1		Level 2			Level 3		Total
Assets (Liabilities):
Interest rate swap agreements	$	-	$	(170	)	$	-	$	(170	)

The Company uses the market approach technique to value its financial liabilities. The Company’s financial assets and liabilities carried at fair value include derivative instruments used to hedge the Company’s interest rate risks. The fair value of the Company’s interest rate swap agreements was based on LIBOR yield curves at the reporting date. 

17. Revenues

The following table represents a disaggregation of revenue from contracts with customers. Revenue from continuing operations originating from the following geographic areas for the three months ended March 31, 2019 and 2018 consist of:

	Three Months Ended March 31, 2019
	(in thousands)
	United States		United Kingdom		Germany		Rest of the world		Total
Instruments, equipment, software and accessories	$	18,671	$	3,129	$	2,913	$	2,044	$	26,757
Service, maintenance and warranty contracts		1,143		190		97		15		1,445
Total revenues	$	19,814	$	3,319	$	3,010	$	2,059	$	28,202

	Three Months Ended March 31, 2018
	(in thousands)
	United States		United Kingdom		Germany		Rest of the world		Total
Instruments, equipment, software and accessories	$	16,147	$	3,495	$	3,707	$	2,255	$	25,604
Service, maintenance and warranty contracts		896		201		52		6		1,155
Total revenues	$	17,043	$	3,696	$	3,759	$	2,261	$	26,759

Deferred revenue

As of March 31, 2019 and December 31, 2018, the Company had approximately $3.7 million and $3.8 million, respectively, in deferred revenue comprised of revenue deferred from service contracts and revenue deferred from advance payments.

22

Changes in deferred revenue from service contracts and advance payments from customers during the three months ended March 31, 2019 and 2018 were as follows:

	Three Months Ended March 31, 2019
	(in thousands)
		Service Contracts			Customer Advances			Total
Balance at December 31, 2018	$	1,659		$	2,161		$	3,820
Deferral of revenue		845			111			956
Recognition of deferred revenue		(848	)		(223	)		(1,071	)
Effect of foreign currency translation		10			-			10
Balance at March 31, 2019	$	1,666		$	2,049		$	3,715

	Three Months Ended March 31, 2018
	(in thousands)
		Service Contracts			Customer Advances			Total
Balance at December 31, 2017	$	505		$	-		$	505
Addition due to business combination		849			2,128			2,977
Deferral of revenue		1,193			128			1,321
Recognition of deferred revenue		(758	)		(196	)		(954	)
Effect of foreign currency translation		4			-			4
Balance at March 31, 2018	$	1,793		$	2,060		$	3,853

Allowance for doubtful accounts

Activity in the allowance for doubtful accounts was as follows: 

	Three Months Ended March 31,
		2019			2018
	(in thousands)
Balance, beginning of period	$	332		$	193
Bad debt expense (recoveries)		(16	)		5
Charged to allowance		27			-
Other		-			36
Effect of foreign currency translation		(2	)		-
Balance, end of period	$	341		$	234

18. Income Tax

Income tax expense from continuing operations was approximately $0.6 million for both the three months ended March 31, 2019 and 2018, respectively. The effective tax rate on continuing operations was (32.1)% for the three months ended March 31, 2019 compared with (11.5)% for the same period in 2018.

The difference between the Company’s effective tax rates in 2019 and 2018 compared to the U.S. statutory tax rate of 21% is primarily due to the mix of year-to-date and forecasted income or losses in the U.S. and foreign tax jurisdictions, the impact of different tax rates in certain foreign jurisdictions, the impact of the inclusion of foreign income in U.S. taxable income under the GILTI (Global Intangible Low-Taxed Income) tax rules, limitations on interest expense deductions and, in 2018, certain non-deductible acquisition costs. 

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For the three months ended March 31, 2019, no income tax expense or benefit was recorded for discontinued operations. In the same period in 2018, income tax benefit for discontinued operations was $0.8 million.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Forward-Looking Statements

This Quarterly Report on Form 10-Q contains statements that are not statements of historical fact and are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 (the Exchange Act). The forward-looking statements are principally, but not exclusively, contained in “Item 2: Management’s Discussion and Analysis of Financial Condition and Results of Operations.” These statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Forward-looking statements include, but are not limited to, statements about management’s confidence or expectations, and our plans, objectives, expectations and intentions that are not historical facts. In some cases, you can identify forward-looking statements by terms such as “may,” “will,” “should,” “could,” “would,” “seek,” “expects,” “plans,” “aim,” “anticipates,” “believes,” “estimates,” “projects,” “predicts,” “intends,” “think,” “potential,” “objectives,” “optimistic,” “strategy,” “goals,” “sees,” “new,” “guidance,” “future,” “continue,” “drive,” “growth,” “long-term,” “projects,” “develop,” “possible,” “emerging,” “opportunity,” “pursue” and similar expressions intended to identify forward-looking statements. These statements reflect our current views with respect to future events and are based on assumptions and subject to risks and uncertainties. Given these uncertainties, you should not place undue reliance on these forward-looking statements. Factors that may cause our actual results to differ materially from those in the forward-looking statements include reductions in customers’ research budgets or government funding; domestic and global economic conditions; economic, political and other risks associated with international revenues and operations; newly enacted U.S. government tax reform; currency exchange rate fluctuations; economic and political conditions generally and those affecting pharmaceutical and biotechnology industries; the seasonal nature of purchasing in Europe; our failure to expand into foreign countries and international markets; our inability to manage our growth; competition from our competitors; failure or inadequacy of the our information technology structure; impact of difficulties implementing our enterprise resource planning systems; information security incidents or cybersecurity breaches; our failure to identify potential acquisition candidates and successfully close such acquisitions with favorable pricing or integrate acquired businesses or technologies; unanticipated costs relating to acquisitions and known and unknown costs arising in connection with our consolidation of business functions and any restructuring initiatives; failure of any banking institution in which we deposit our funds or its failure to provide services; our substantial debt and our ability to meet the financial covenants contained in our credit facility; our failure to raise or generate capital necessary to implement our acquisition and expansion strategy; the failure of Biostage to indemnify us for any liabilities associated with Biostage’s business; impact of any impairment of our goodwill or intangible assets; our ability to retain key personnel; failure or inadequacy or our information technology structure; rising commodity and precious metals costs;  our ability to protect our intellectual property and operate without infringing on others’ intellectual property; exposure to product and other liability claims; global stock market volatility, currency exchange rate fluctuations and regulatory changes caused by the United Kingdom’s likely exit from the European Union; plus other factors described under the heading “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2018, or described in our other public filings. Our results may also be affected by factors of which we are not currently aware. We may not update these forward-looking statements, even though our situation may change in the future, unless we have obligations under the federal securities laws to update and disclose material developments related to previously disclosed information.

Overview

Harvard Bioscience, Inc., a Delaware corporation, is a global developer, manufacturer, marketer and provider of a broad range of scientific instruments, systems, software and services used to advance life science for basic research, drug discovery, physiologic monitoring, clinical and environmental testing. Our products and services are sold to thousands of researchers in over 100 countries through our global sales organization, websites, catalogs, and through distributors including Thermo Fisher Scientific Inc., VWR and other specialized distributors. We have sales and manufacturing operations in the United States, the United Kingdom, Germany, Sweden, Spain, France, Canada, Italy and China.

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We are pursuing a strategy to grow the business organically as well as through strategic, accretive acquisitions, including five acquisitions since the fourth quarter of 2014. In January 2018, we acquired Data Sciences International, Inc. (DSI) for approximately $71.1 million. DSI, a St. Paul, Minnesota-based life science research company, is a recognized leader in physiologic monitoring focused on delivering preclinical products, systems, services and solutions to its customers. Its customers include pharmaceutical and biotechnology companies, as well as contract research organizations, academic labs and government researchers. This acquisition diversifies our customer base into the biopharmaceutical and contract research organization markets and offers revenue and cost synergies. The acquisition also helped to increase our gross profit margins.

We have also conducted a multi-year restructuring program to reduce costs, align global functions and consolidate facilities to optimize our global footprint, divest non-core businesses and to reinvest in key areas such as sales and marketing and new product development through R&D. As part of these efforts, during the first quarter of 2018, we sold substantially all the assets of our wholly-owned subsidiary, Denville Scientific, Inc. (Denville) for approximately $20.0 million, which included a $3.0 million earn-out provision. Denville was a laboratory products supplier that was no longer core to our vision.

 Our Strategy

Our vision is to be a world leading life science company that excels in meeting the needs of our customers by providing a wide breadth of innovative products and solutions, while providing exemplary customer service. Our business strategy is to grow our top-line and bottom-line, and build shareholder value through a commitment to:

• commercial excellence;

• organic growth;

• operational efficiencies;

• new product development; and

• strategic acquisitions.

Components of Operating Income

As previously described above, on January 22, 2018, we sold substantially all the assets of our operating subsidiary, Denville. The sale of Denville represented a strategic shift that had a major effect on our operations and financial results. As such and pursuant to the accounting standards, the operating results of Denville for the three months ended March 31, 2018 have been presented in discontinued operations in the consolidated statements of operations. Therefore the amounts and percentages discussed below exclude the revenues and expenses of Denville unless otherwise described.

Revenues.     We generate revenues by selling apparatus, instruments, devices, systems, software, services, and consumables through our distributors, direct sales force, websites and catalogs. Our websites and catalogs serve as the primary sales tools for our various product lines. These product lines include both proprietary manufactured products and complementary products from various suppliers. Our reputation as a leading producer in many of our manufactured products creates traffic to our website, enables cross-selling and facilitates the introduction of new products. We have field sales teams in the U.S., Canada, the United Kingdom, Germany, France, Spain and China. In those regions where we do not have a direct sales team, we use distributors. Revenues from direct sales to end users included in continuing operations represented approximately 68% and 53% of our revenues for the three months ended March 31, 2019 and 2018, respectively.

Our products consist of instruments, consumables, and systems that are made up of several individual products. Sales prices of these products range from under $100 to over $100,000, although are mostly priced in the range of $5,000 to $15,000. They are mainly scientific instruments like spectrophotometers and plate readers that analyze light to detect and quantify a wide range of molecular and cellular processes, or apparatus like gel electrophoresis units. Our products and services also include wireless monitors, data acquisition and analysis products and software, and ancillary services including post-contract customer support, training and installation.

We use distributors for both our catalog products and our higher priced products, as well as for sales in locations where we do not have subsidiaries or where we have existing distributors in place from acquired businesses. For the three months ended March 31, 2019 and 2018, approximately 32% and 47% of our total revenues from continuing operations, respectively, were derived from sales to distributors.

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For the three months ended March 31, 2019 and 2018, approximately 84% and 86% of our revenues from continuing operations, respectively, were derived from products we manufacture and approximately 16% and 14%, respectively, were derived from complementary products we distribute in order to provide the researcher with a single source for all equipment needed to conduct a particular experiment.

For the three months ended March 31, 2019 and 2018, approximately 30% and 36% of our revenues from continuing operations, respectively, were derived from sales made by our non-United States operations.

Cost of revenues.     Cost of revenues includes material, labor and manufacturing overhead costs, obsolescence charges, packaging costs, warranty costs, shipping costs and royalties. Our cost of revenues may vary over time based on the mix of products sold. We sell products that we manufacture and products that we purchase from third parties. The products that we purchase from third parties typically have a higher cost of revenues as a percent of revenues because the profit is effectively shared with the original manufacturer. We anticipate that our manufactured products will continue to have a lower cost of revenues as a percentage of revenues as compared with the cost of non-manufactured products for the foreseeable future. Additionally, our cost of revenues as a percent of revenues will vary based on mix of direct to end user sales and distributor sales, mix by product line and mix by geography.

Sales and marketing expenses.     Sales and marketing expense consists primarily of salaries and related expenses for personnel in sales, marketing and customer support functions. We also incur costs for travel, trade shows, demonstration equipment, public relations and marketing materials, consisting primarily of the printing and distribution of our catalogs, supplements and the maintenance of our websites. We may from time to time expand our marketing efforts by employing additional technical marketing specialists in an effort to increase sales of selected categories of products. We may also from time to time expand our direct sales organizations in an effort to concentrate on key accounts or promote certain product lines.

General and administrative expenses.     General and administrative expense consists primarily of salaries and other related costs for personnel in executive, finance, accounting, information technology and human resource functions. Other costs include professional fees for legal and accounting services, information technology infrastructure, facility costs, investor relations, insurance and provision for doubtful accounts.

Research and development expenses.     Research and development expense consists primarily of salaries and related expenses for personnel and spending to develop and enhance our products. Other research and development expense includes fees for consultants and outside service providers, and material costs for prototype and test units. We expense research and development costs as incurred. Grants received from governmental entities related to research projects are accounted for as a reduction in research and development expense over the period of the project. We believe that investment in product development is a competitive necessity and plan to continue to make these investments in order to realize the potential of new technologies that we develop, license or acquire for existing markets.

Stock-based compensation expenses.     Stock-based compensation expense for the three months ended March 31, 2019 and 2018 was $0.6 million and $1.0 million, respectively. These amounts include stock-based compensation related to discontinued operations of $0 and $0.2 million, respectively. The stock-based compensation expense related to stock options, restricted stock units, restricted stock units with a market condition and the employee stock purchase plan and was recorded as a component of cost of revenues, sales and marketing expenses, general and administrative expenses, research and development expenses, and income (loss) from discontinued operations.

Selected Results of Operations

Three Months Ended March 31, 2019 compared to Three Months Ended March 31, 2018

	Three Months Ended
	March 31,							Dollar		%
		2019			2018			Change		Change
	(dollars in thousands)
Revenues	$	28,202		$	26,759		$	1,443		5.4	%
Cost of revenues		12,048			13,490			(1,442	)	-10.7	%
Gross margin percentage		57.3	%		49.6	%		N/A		15.5	%
Sales and marketing expenses		6,306			5,646			660		11.7	%
General and administrative expenses		5,649			5,384			265		4.9	%
Research and development expenses		2,735			2,402			333		13.9	%
Amortization of intangible assets		1,430			1,103			327		29.6	%
Other expense, net		1,828			3,979			(2,151	)	-54.1	%
Income from discontinued operations		-			1,786			(1,786	)	-100.0	%

Unless otherwise described, the amounts and percentages in the table above and those amounts and percentages discussed below exclude the revenues and expenses of Denville.

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Revenues

Revenues for the three months ended March 31, 2019 were $28.2 million, an increase of approximately 5.4%, or $1.4 million, compared to revenues of $26.8 million for the three months ended March 31, 2018.  

The increase in revenues reflects three months of revenues from DSI in the quarter, whereas the prior comparable period had two months of DSI revenues.

Reconciliation of Changes In Revenues Compared to the Same Period of the Prior Year
	For the Three Months Ended March 31, 2019
Organic and DSI change		8.2	%
Foreign exchange effect		-2.8	%
Total revenue change		5.4	%

Each reporting period, we face currency exposure that arises from translating the results of our worldwide operations to the United States dollar at exchange rates that fluctuate from the beginning of such period. We evaluate our results of operations on both a reported and a foreign currency-neutral basis, which excludes the impact of fluctuations in foreign currency exchange rates. We believe that disclosing this non-GAAP financial information provides investors with an enhanced understanding of the underlying operations of the business. This non-GAAP financial information is used by our management to internally evaluate our operating results. The non-GAAP financial information provided in the table above should be considered in addition to, not as a substitute for, the financial information provided and presented in accordance with accounting principles generally accepted in the United States, or GAAP and may be different than other companies’ non-GAAP financial information.

Cost of revenues

Cost of revenues were $12.0 million for the three months ended March 31, 2019, a decrease of $1.5 million, or 10.7%, compared with $13.5 million for the three months ended March 31, 2018. The decrease in cost of revenues was primarily due to a $1.5 million charge recognized in cost of revenues related to a purchase accounting inventory fair value step up due to the DSI acquisition for the three months ended March 31, 2018. Gross profit margin as a percentage of revenues increased to 57.3% for the three months ended March 31, 2019 compared with 49.6% for 2018. The increase in gross profit margin is primarily attributable to the effect of three months of higher margin products following the acquisition of DSI, as compared to two months in the prior year, as well as the effect of the aforementioned $1.5 million charge in 2018.

Sales and marketing expenses

Sales and marketing expenses increased $0.7 million or 11.7% to $6.3 million for the three months ended March 31, 2019 compared to $5.6 million during the same period in 2018. The increase in sales and marketing expenses was primarily due to the impact of three months of DSI expenses compared to two months in the prior year.

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General and administrative expenses

General and administrative expenses were $5.6 million for the three months ended March 31, 2019, an increase of $0.2 million, or 4.9%, compared with $5.4 million for the three months ended March 31, 2018. The increase in these expenses was primarily attributable to the impact of three months of expenses for DSI compared to two months in the prior year, as well as an approximately $0.4 million long term receivable write-off during the three months ended March 31, 2019. These increases were partially offset by a decrease in stock-based compensation expense.

Research and development expenses

Research and development expenses were $2.7 million for the three months ended March 31, 2019, an increase of $0.3 million, or 13.9%, compared with $2.4 million for the three months ended March 31, 2018. The increase in these expenses was primarily attributable to the impact of three months of expenses for DSI compared to two months in the prior year.

Amortization of intangible assets

Amortization of intangible asset expenses was $1.4 million and $1.1 million for the three months ended March 31, 2019 and 2018, respectively. The increase in amortization expense was primarily due to the impact of three months of amortization expenses for DSI compared to two months in the prior year.

Other expense, net

Other expense, net, from continuing operations was $1.8 million and $4.0 million for the three months ended March 31, 2019 and 2018, respectively. The decrease in other expense, net was primarily due to a decrease in transaction costs offset by an increase in interest expense, and changes in currency fluctuation gains or losses. The three months ended March 31, 2018 included approximately $2.8 million in transaction costs that were incurred in connection with the DSI acquisition and the Denville disposition. Included in other expense, net for three months ended March 31, 2019 and 2018 was interest expense of $1.4 million and $0.9 million, respectively. The increase in interest expense was primarily due three months of interest on a higher debt balance during the first quarter of 2019 as compared to two months of interest on the higher debt balance in the same period in 2018.

Income taxes

Income tax expense from continuing operations was approximately $0.6 million for both the three months ended March 31, 2019 and 2018, respectively.

The difference between our effective tax rates in 2019 and 2018 compared to the U.S. statutory tax rate of 21% is primarily due to the mix of year-to-date and forecasted income or losses in the U.S. and foreign tax jurisdictions, the impact of different tax rates in certain foreign jurisdictions, the impact of the inclusion of foreign income in U.S. taxable income under the GILTI (Global Intangible Low-Taxed Income) tax rules, limitations on interest expense deductions and, in 2018, certain non-deductible acquisition costs. 

Income from discontinued operations

Discontinued operations resulted in income of $0 for the three months ended March 31, 2019 and $1.8 million for the same period in the prior year. On January 22, 2018, we sold substantially all the assets of Denville, for approximately $20.0 million, which includes a $3.0 million earn-out provision (the Denville Transaction). The results of Denville were presented in discontinued operations for the three months ended March 31, 2018.

Liquidity and Capital Resources

Historically, we have financed our business through cash provided by operating activities, bank borrowings, and the issuance of common stock. Our liquidity requirements arise primarily from investing activities, including funding of acquisitions, and other capital expenditures.

On January 22, 2018, we sold the operations of Denville, and received approximately $15.7 million, net of cash on hand. Simultaneously, we retired the existing debt balances of approximately $11.9 million. On January 31, 2018, we entered into a financing agreement, which comprised of a $64.0 million term loan and up to a $25.0 million line of credit. Finally, on January 31, 2018, we acquired DSI for approximately $67.4 million, net of cash acquired.

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As of March 31, 2019, we held cash and cash equivalents from continuing operations of $5.0 million, compared with $8.2 million at December 31, 2018. As of March 31, 2019 and December 31, 2018, we had $56.3 million and $60.8 million of borrowings outstanding under our credit facility, net of deferred financing costs, respectively. Total debt, net of cash and cash equivalents was $51.3 million at March 31, 2019, compared to $52.6 million at December 31, 2018. In addition, we had an underfunded United Kingdom pension liability of approximately $0.9 million at March 31, 2019 and December 31, 2018, respectively.

As of March 31, 2019 and December 31, 2018, cash and cash equivalents held by our foreign subsidiaries was $2.6 million and $3.2 million, respectively. During 2017, we changed our indefinite reinvestment assertion to provide that all foreign cash balances above the level required for local operating expenses would be repatriated to the U.S. in tax years after 2017. We maintain this modified assertion at March 31, 2019. As a result of the 2017 Tax Act, post-2017 dividends from qualifying Controlled Foreign Corporations are no longer taxed in the U.S. However, any dividends to the U.S. must still be assessed for withholding tax liability as well as income state tax liability. As a result of our assertion, we determined the potential state income tax liability related to available cash balances at foreign subsidiaries would be immaterial in both 2019 and 2018.

Condensed Cash Flow Statements (unaudited)
	Three Months Ended March 31,
		2019			2018
	(in thousands)
Cash flows from operations:
Net loss	$	(2,370	)	$	(4,064	)
Other adjustments to operating cash flows		2,638			363
Changes in assets and liabilities		1,742			4,149
Net cash provided by operating activities		2,010			448
Investing activities:
Additions to property, plant and equipment		(143	)		(493	)
Acquisition, net of cash acquired		-			(67,413	)
Disposition, net of cash sold		-			15,730
Other investing activities		(9	)		(13	)
Net cash used in investing activities		(152	)		(52,189	)
Financing activities:
(Repayments of)/proceeds from issuance of debt		(4,583	)		52,953
Other financing activities		(421	)		(1,709	)
Net cash (used in) provided by financing activities		(5,004	)		51,244
Effect of exchange rate changes on cash		3			755
(Decrease) increase in cash and cash equivalents	$	(3,143	)	$	258

Our operating activities provided cash of $2.0 million and $0.4 million for the three months ended March 31, 2019 and 2018, respectively. The increase in net cash flow from operations was primarily due to the decrease in net loss.

Our investing activities used cash of $0.2 million and $52.2 million for the three months ended March 31, 2019 and 2018, respectively. Investing activities during the three months ended March 31, 2019 primarily consisted of cash used for purchases of property, plant and equipment. Investing activities during the three months ended March 31, 2018 primarily consisted of $67.4 million paid for the acquisition of DSI and $15.7 million received from the disposition of Denville. We spent $0.1 million and $0.5 million on capital expenditures during the three months ended March 31, 2019 and 2018, respectively.

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Our financing activities have historically consisted of borrowings and repayments under our revolving credit facility and term loans, payments of debt issuance costs and the issuance of common stock. During the three months ended March 31, 2019, financing activities used cash of $5.0 million, compared with $51.2 million of cash provided by financing activities for the three months ended March 31, 2018. During the three months ended March 31, 2019, we repaid $4.6 million of debt, including approximately $4.0 million in an excess cash flow payment, and ended the quarter with $56.3 million of borrowings, net of deferred financing costs of $1.5 million. During the three months ended March 31, 2018 we borrowed $67.0 million, repaid $14.0 million of debt and ended the quarter with $63.0 million of borrowings, net of deferred financing costs of $1.9 million. Net cash paid for tax withholdings from the issuance from common stock, related to the vesting of restricted stock units was $0.4 million for the three months ended March 31, 2019. Net cash proceeds from the issuance of common stock for the three months ended March 31, 2018 was $0.2 million.

Borrowing Arrangements

On January 22, 2018, in connection with the closing of the sale of Denville, we terminated the Third Amended and Restated Credit Agreement (the Credit Agreement), dated as of May 1, 2017, among us, Brown Brothers Harriman & Co. and each of the other lenders party thereto, and Bank of America, as administrative agent. All outstanding amounts under the agreement were repaid in full using a portion of the proceeds of the Denville sale. At the time of repayment, there was approximately $11.9 million of borrowings outstanding.

On January 31, 2018, we entered into a financing agreement by and among us and certain of our subsidiaries, as borrowers (collectively, the Borrower), certain of our subsidiaries thereto, as guarantors, various lenders from time to time party thereto (the Lenders), and Cerberus Business Finance, LLC, as collateral agent and administrative agent for the Lenders (the Financing Agreement). On August 16, 2018, we and Cerberus Business Finance, LLC entered into a First Amendment to the Financing Agreement, which such amendment modified certain provisions relating to the borrowing base and reporting, among other things.

The Financing Agreement provides for senior secured credit facilities (the Senior Secured Credit Facilities) comprised of a $64.0 million term loan and up to a $25.0 million revolving line of credit. The proceeds of the term loan and $4.8 million of advances under the revolving line of credit were used to fund a portion of the DSI acquisition, and to pay fees and expenses related thereto and the closing of the Senior Secured Credit Facilities. In addition, the revolving facility is available for use by the Company and its subsidiaries for general corporate and working capital needs, and other purposes to the extent permitted by the Financing Agreement. The Senior Secured Credit Facilities have a maturity of five years. At the closing date of the Financing Agreement, we had approximately $14.5 million of available borrowing capacity under the revolving line of credit.

Commencing on March 31, 2018, the outstanding term loans began to amortize in equal quarterly installments equal to $0.4 million per quarter on such date and during each of the next three quarters thereafter, $0.6 million per quarter during the next four quarters thereafter and $0.8 million per quarter thereafter, with a balloon payment at maturity. Furthermore, within ten days of the delivery of our audited annual financial statements each year, the term loans are permanently reduced pursuant to certain mandatory prepayment events including an annual “excess cash flow sweep” of 50% of the consolidated excess cash flow; provided that, in any fiscal year, any voluntary prepayments of the term loans shall be credited against our “excess cash flow” prepayment obligations on a dollar-for-dollar basis for such fiscal year.

The obligations of the Borrower under the Senior Secured Credit Facilities are unconditionally guaranteed by our and certain of our existing and subsequently acquired or organized subsidiaries. The Senior Secured Credit Facilities and related guarantees are secured on a first-priority basis (subject to certain liens permitted under the Financing Agreement) by a lien on substantially all the tangible and intangible assets of the Borrower and the subsidiary guarantors, including all of the capital stock held by such obligors (subject to a 65% limitation on pledges of capital stock of foreign subsidiaries), subject to certain exceptions.

Interest on all loans under the Senior Secured Credit Facilities is paid monthly. Borrowings under the Financing Agreement accrue interest at a per annum rate equal to, at the Borrower’s option, a base rate plus 4.75% or a LIBOR rate plus 6.25%. The loans are also subject to a 1.25% interest rate floor for LIBOR loans and a 4.25% interest rate floor for base rate loans.

The Financing Agreement contains customary representations and warranties and affirmative covenants applicable to us and our subsidiaries and also contains certain restrictive covenants, including, among others, limitations on the incurrence of additional debt, liens on property, acquisitions and investments, loans and guarantees, mergers, consolidations, liquidations and dissolutions, asset sales, dividends and other payments in respect of our capital stock, prepayments of certain debt, transactions with affiliates and modifications of organizational documents, material contracts, affiliated practice agreements and certain debt agreements. The Financing Agreement also contains customary events of default.

As of March 31, 2019 and December 31, 2018, we had borrowings net of debt issuance costs of $56.3 million and $60.8 million respectively, outstanding. The carrying value of the debt approximates fair value because the interest rate under the obligation approximates market rates of interest available to us for similar instruments. As of March 31, 2019, we were in compliance with all financial covenants contained in the Financing Agreement, were subject to covenant and working capital borrowing restrictions and had available borrowing capacity under our Financing Agreement of $14.5 million.

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As of March 31, 2019, the weighted effective interest rate, net of the impact of our interest rate swap, on our Term Loan was 8.87%.

Our forecast of the period of time through which our financial resources will be adequate to support our operations is a forward-looking statement that involves risks and uncertainties, and actual results could vary as a result of a number of factors. Based on our current operations and current operating plans, we expect that our available cash, cash generated from current operations and debt capacity will be sufficient to finance current operations and capital expenditures for the next 12 months and beyond. We may however need to incur additional debt or raise equity capital for our business. Additional capital raising activities will dilute the ownership interests of existing stockholders to the extent we raise capital by issuing equity securities and we cannot guarantee that we will be successful in raising additional capital on favorable terms or at all.

Critical Accounting Policies

The critical accounting policies underlying the accompanying unaudited consolidated financial statements are those set forth in Part II, Item 7 included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2018, which was filed with the SEC on March 18, 2019.

Impact of Foreign Currencies

Our international operations in some instances operate in a natural hedge as we sell our products in many countries and a substantial portion of our revenues, costs and expenses are denominated in foreign currencies, especially the British pound, the euro, the Canadian dollar and the Swedish krona.

During the three months ended March 31, 2019, changes in foreign currency exchange rates resulted in an unfavorable translation effect on our consolidated revenues and on our consolidated net loss. Changes in foreign currency exchange rates resulted in an unfavorable effect on revenues of approximately $0.8 million and a favorable effect on expenses of approximately $0.6 million.

The gain associated with the translation of foreign equity into U.S. dollars included as a component of comprehensive gain (loss) during the three months ended March 31, 2019, was approximately $4.0 thousand, compared to a gain of $1.5 million for the three months ended March 31, 2018.

In addition, currency exchange rate fluctuations included as a component of net loss resulted in approximately $0.2 million and $0.3 million in currency losses during the three months ended March 31, 2019 and 2018, respectively.

Recently Issued Accounting Pronouncements

In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which amends the impairment model by requiring entities to use a forward-looking approach based on expected losses rather than incurred losses to estimate credit losses on certain types of financial instruments, including trade receivables. This may result in the earlier recognition of allowances for losses. The ASU is effective for public entities for fiscal years beginning after December 15, 2019, with early adoption permitted. In November 2018, the FASB issued ASU No. 2018-19, Codification Improvements to Topic 326, Financial Instruments—Credit Losses, which provided additional implementation guidance on the previously issued ASU. We have not yet completed its assessment of the impact of the new standard on our consolidated financial statements. Currently, we believe that the most notable impact of this ASU will relate to its processes around the assessment of the adequacy of our allowance for doubtful accounts on trade accounts receivable and the recognition of credit losses.

In August 2018, the FASB issued ASU No. 2018-14, Disclosure Framework—Changes to the Disclosure Requirements for Defined Benefit Plans, which amends ASC 715 to add, remove and clarify disclosure requirements related to defined benefit pension and other postretirement plans. The ASU is effective for public entities for fiscal years beginning after December 15, 2020, with early adoption permitted. We have not yet completed our assessment of the impact of the new standard on our consolidated financial statements.

Recently Adopted Accounting Pronouncements

In August 2017, the FASB issued ASU 2017-12, Derivatives and Hedging (Topic 815) which amends the hedge accounting recognition and presentation requirements in ASC 815, Derivatives and Hedging. The Board’s objectives in issuing the ASU are to (1) improve the transparency and understandability of information conveyed to financial statement users about an entity’s risk management activities by better aligning the entity’s financial reporting for hedging relationships with those risk management activities and (2) reduce the complexity of and simplify the application of hedge accounting by preparers. The ASU is effective for annual reporting periods, including interim periods within those annual reporting periods, beginning after December 15, 2018. We adopted this guidance as of January 1, 2019, and it did not have a material impact on our consolidated financial position, results of operations and cash flows.

31

In February 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2016-02, Leases, which is intended to improve financial reporting about leasing transactions. The update requires a lessee to record on its balance sheet the assets and liabilities for the rights and obligations created by lease terms of more than 12 months. The update is effective for fiscal years beginning after December 15, 2018. A modified retrospective transition approach is required for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements, with certain practical expedients available. We elected to utilize a practical expedient in our method of adoption of the standard and adopted the guidance as of January 1, 2019.  Under this expedient, which is a “current-period adjustment method,” we applied ASC 842 as of January 2019 and recognized operating lease liabilities of $11.7 million and right of use assets of $9.4 million. There was no impact to retained earnings as of that date. In addition, we adopted the guidance by electing the following practical expedients: (1) we did not reassess whether any expired or existing contracts contained leases, and (2) we did not reassess the lease classification for any expired or existing leases. Our future commitments under lease obligations and additional disclosures are summarized in Note 12.

Item 3. Quantitative and Qualitative Disclosures about Market Risk.

The majority of our manufacturing and testing of products occurs in our facilities in the United States, Germany, Sweden and Spain. We sell our products globally through our distributors, direct sales force, websites and catalogs. As a result, our financial results are affected by factors such as changes in foreign currency exchange rates and weak economic conditions in foreign markets.

We collect amounts representing a substantial portion of our revenues and pay amounts representing a substantial portion of our operating expenses in foreign currencies. As a result, changes in currency exchange rates from time to time may affect our operating results.

We are exposed to market risk from changes in interest rates primarily through our financing activities. As of March 31, 2019, we had $56.3 million outstanding under our Financing Agreement, net of deferred financing costs.

As noted above under the heading “Borrowing Arrangements”, on January 22, 2018, we terminated the Credit Agreement, and on January 31, 2018, entered into the Financing Agreement. As a result of terminating the Credit Agreement, we unwound our previously existing swap agreement and received an immaterial amount of proceeds. On February 16, 2018, we entered into a new interest rate swap contract with PNC bank with a notional amount of $36.0 million and a termination date of January 31, 2023 in order to hedge the risk of changes in the effective benchmark interest rate (LIBOR) associated with the Financing Agreement. The swap contract converted specific variable-rate debt into fixed-rate debt and fixed the LIBOR rate associated with a portion of the term loan under the Financing Agreement at 2.72%.

As of March 31, 2019, the weighted effective interest rates, net of the impact of our interest rate swaps, on our Term Loan was 8.87%. Assuming no other changes which would affect the margin of the interest rate, the estimated effect of interest rate fluctuations on outstanding borrowings under our Financing Agreement as of March 31, 2019 is quantified and summarized as follows:

If compared to the rate as of March 31, 2019		Interest expense increase
	(in thousands)
Interest rates increase by 1%	$	248
Interest rates increase by 2%	$	497

Item 4. Controls and Procedures.

Disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) are designed to ensure that information required to be disclosed in reports filed or submitted under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in SEC rules and forms and that such information is accumulated and communicated to management, including the Chief Executive Officer and the Principal Financial Officer, to allow timely decisions regarding required disclosures.

32

As required by Rules 13a-15(e) and 15d-15(e) under the Exchange Act, our management, under the supervision and with the participation of our Chief Executive Officer and Principal Financial Officer, conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures as of March 31, 2019. Our disclosure controls and procedures are designed to provide reasonable assurance that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and our management necessarily was required to apply its judgment in evaluating and implementing our disclosure controls and procedures. Based upon the evaluation described above, our management concluded that our disclosure controls and procedures for the periods covered by this report were effective, as of the end of the period covered by this Quarterly Report on Form 10-Q, in providing reasonable assurance that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is accumulated and communicated to our management, including our Chief Executive Officer and Principal Financial Officer, to allow timely decisions regarding required disclosures, and is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms.

We reviewed our internal control over financial reporting at March 31, 2019. As a result of the acquisition of Data Sciences International, Inc. (“DSI”) in January 2018, we continue to integrate certain business processes and systems of DSI. Accordingly, certain changes have been made and will continue to be made to our internal controls over financial reporting until such time as this integration is complete. There were no other changes in our internal controls over financial reporting identified in an evaluation thereof that occurred during the three months ended March 31, 2019 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II. OTHER INFORMATION

Item 1A. Risk Factors.

To our knowledge, and except to the extent additional factual information disclosed in this Quarterly Report on Form 10-Q relates to such risk factors, there has been no material changes in the risk factors described in “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2018, which was filed with the SEC on March 18, 2019.

Item 6. Exhibits

Exhibit Index
31.1	Certification of Chief Financial Officer of Harvard Bioscience, Inc., pursuant to Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2	Certification of Chief Executive Officer of Harvard Bioscience, Inc., pursuant to Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1*	Certification of Chief Financial Officer of Harvard Bioscience, Inc., pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2*	Certification of Chief Executive Officer of Harvard Bioscience, Inc., pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS	XBRL Instance Document
101.SCH	XBRL Taxonomy Extension Schema Document
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document
101.LAB	XBRL Taxonomy Extension Labels Linkbase Document
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document

* This certification shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, or otherwise subject to the liability of that section, nor shall it be deemed to be incorporated by reference into any filing under the Securities Act of 1933 or the Securities Exchange Act of 1934.

33

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by undersigned thereunto duly authorized.

Date: May 8, 2019

HARVARD BIOSCIENCE, INC.
By:	/S/ JEFFREY A. DUCHEMIN
	Jeffrey A. Duchemin
	Chief Executive Officer
By:	/S/ KAMALAM UNNINAYAR
	Kamalam Unninayar
	Chief Financial Officer

34

INDEX TO EXHIBITS

31.1	Certification of Chief Financial Officer of Harvard Bioscience, Inc., pursuant to Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2	Certification of Chief Executive Officer of Harvard Bioscience, Inc., pursuant to Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1*	Certification of Chief Financial Officer of Harvard Bioscience, Inc., pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2*	Certification of Chief Executive Officer of Harvard Bioscience, Inc., pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS	XBRL Instance Document
101.SCH	XBRL Taxonomy Extension Schema Document
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document
101.LAB	XBRL Taxonomy Extension Labels Linkbase Document
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document

* This certification shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, or otherwise subject to the liability of that section, nor shall it be deemed to be incorporated by reference into any filing under the Securities Act of 1933 or the Securities Exchange Act of 1934.

35

EX-31.1

EXHIBIT 31.1

Certification

I, Kam Unninayar, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Harvard Bioscience, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)), and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c. Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d. Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 8,  2019	/s/ KAMALAM UNNINAYAR
	Kamalam Unninayar
	Chief Financial Officer

EX-31.2

EXHIBIT 31.2

Certification

I, Jeffrey A. Duchemin, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Harvard Bioscience, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)), and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c. Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d. Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 8,  2019	/s/ JEFFREY A. DUCHEMIN
	Jeffrey A. Duchemin
	Chief Executive Officer

EX-32.1

EXHIBIT 32.1

CERTIFICATION OF PERIODIC FINANCIAL REPORT

PURSUANT TO 18 U.S.C. SECTION 1350

The undersigned officer of Harvard Bioscience, Inc. (the Company) hereby certifies to her knowledge that the Company’s Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2019 (the Report) to which this certification is being furnished as an exhibit, as filed with the Securities and Exchange Commission on the date hereof, fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934, as amended (the Exchange Act), and that the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. This certification is provided solely pursuant to 18 U.S.C. Section 1350 and Item 601(b)(32) of Regulation S-K (Item 601(b)(32)) promulgated under the Securities Act of 1933, as amended (the Securities Act), and the Exchange Act. In accordance with clause (ii) of Item 601(b)(32), this certification (A) shall not be deemed “filed” for purposes of Section 18 of the Exchange Act, or otherwise subject to the liability of that section, and (B) shall not be deemed to be incorporated by reference into any filing under the Securities Act or the Exchange Act, except to the extent that the Company specifically incorporates it by reference.

Date: May 8,  2019	/s/ Kamalam Unninayar
	Name: Kamalam Unninayar
	Title: Chief Financial Officer

EX-32.2

EXHIBIT 32.2

CERTIFICATION OF PERIODIC FINANCIAL REPORT

PURSUANT TO 18 U.S.C. SECTION 1350

The undersigned officer of Harvard Bioscience, Inc. (the Company) hereby certifies to his knowledge that the Company’s Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2019 (the Report) to which this certification is being furnished as an exhibit, as filed with the Securities and Exchange Commission on the date hereof, fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934, as amended (the Exchange Act), and that the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. This certification is provided solely pursuant to 18 U.S.C. Section 1350 and Item 601(b)(32) of Regulation S-K (Item 601(b)(32)) promulgated under the Securities Act of 1933, as amended (the Securities Act), and the Exchange Act. In accordance with clause (ii) of Item 601(b)(32), this certification (A) shall not be deemed “filed” for purposes of Section 18 of the Exchange Act, or otherwise subject to the liability of that section, and (B) shall not be deemed to be incorporated by reference into any filing under the Securities Act or the Exchange Act, except to the extent that the Company specifically incorporates it by reference.

Date: May 8,  2019	/s/ JEFFREY A. DUCHEMIN
	Name: Jeffrey A. Duchemin
	Title: Chief Executive Officer

XML

Document and Entity Information - shares	3 Months Ended
	Mar. 31, 2019	May 02, 2019
Document And Entity Information [Abstract]
Document Type	10-Q
Document period end date	Mar. 31, 2019
Amendment flag	false
Document Period Focus	Q1
Document Fiscal Year Focus	2019
Current fiscal year end date	--12-31
Entity central index key	0001123494
Entity filer category	Accelerated Filer
Entity registrant name	HARVARD BIOSCIENCE INC
Entity common stock shares outstanding		37,687,608
Trading Symbol	HBIO
Entity emerging growth	false
Entity small business	true

XML

CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018
Current Assets:
Cash and cash equivalents	$ 5,030	$ 8,173
Accounts receivable, net of allowance for doubtful accounts of $341 and $332 respectively	18,788	21,463
Inventories	26,557	25,087
Other receivables and other assets	3,222	3,109
Total current assets	53,597	57,832
Property, plant and equipment, net	5,582	5,898
Operating Lease, Right-of-Use Asset	9,106	0
Deferred income tax assets	208	211
Amortizable intangible assets, net	42,991	44,532
Goodwill	57,375	57,304
Other indefinite lived intangible assets	1,228	1,232
Other assets	1,249	1,604
Total Assets	171,336	168,613
Current liabilities:
Current portion, long-term debt	2,207	5,982
Current portion, operating lease liabilities	2,297	0
Accounts payable	7,311	7,359
Deferred revenue	3,715	3,820
Accrued income taxes	1,339	978
Accrued expenses	5,377	5,762
Other liabilities - current	1,895	1,588
Total current liabilities	24,141	25,489
Long-term debt, less current installments	54,135	54,813
Deferred income tax liabilities	2,289	2,301
Other long term liabilities	1,360	3,286
Operating lease liabilities	9,062	0
Total liabilities	90,987	85,889
Commitments and contingencies
Stockholders Equity Abstract
Preferred stock, par value $0.01 per share, 5,000,000 shares authorized	0	0
Common stock, par value $0.01 per share, 80,000,000 shares authorized; 45,433,115 and 45,124,309 shares issued and 37,687,608 and 37,378,802 shares outstanding, respectively	436	436
Additional paid-in-capital	226,547	226,377
Accumulated deficit	(122,259)	(119,889)
Accumulated other comprehensive loss	(13,707)	(13,532)
Treasury stock at cost, 7,745,507 common shares	(10,668)	(10,668)
Total stockholders' equity	80,349	82,724
Total liabilities and stockholders' equity	$ 171,336	$ 168,613

XML

CONSOLIDATED BALANCE SHEETS (Parentheticals) - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018
CONSOLIDATED BALANCE SHEETS
Allowance for doubtful accounts	$ 341	$ 332
Preferred Stock Par value	$ 0.01	$ 0.01
Preferred Stock - Shares Authorized	5,000,000	5,000,000
Common stock par value	$ 0.01	$ 0.01
Common Stock- Shares Authorized	80,000,000	80,000,000
Common Stock- Shares Issued	45,433,115	45,124,309
Common Stock- Shares Outstanding	37,687,608	37,378,802
Treasury Stock common shares	7,745,507	7,745,507

XML

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
CONSOLIDATED STATEMENTS OF OPERATIONS
Revenues	$ 28,202	$ 26,759
Cost of revenues	12,048	13,490
Gross profit	16,154	13,269
Sales and marketing expenses	6,306	5,646
General and administrative expenses	5,649	5,384
Research and development expenses	2,735	2,402
Amortization of intangible assets	1,430	1,103
Total operating expenses	16,120	14,535
Operating loss	34	(1,266)
Other income (expense):
Foreign exchange	(179)	(347)
Interest expense, net	(1,405)	(894)
Other expense, net	(244)	(2,738)
Other expense, net	(1,828)	(3,979)
Loss from continuing operations before income taxes	(1,794)	(5,245)
Income tax expense (benefit)	576	605
Loss from continuing operations	(2,370)	(5,850)
Discontinued operations:
Income (loss) from discontinued operations before income taxes	0	913
Income tax (benefit) expense	0	(873)
Income (loss) from discontinued operations	0	1,786
Net loss	$ (2,370)	$ (4,064)
Loss per share:
Basic earnings per common share from continuing operations	$ (0.06)	$ (0.16)
Basic earnings (loss) per common share from discontinued operations	0	0.05
Basic loss per common share	(0.06)	(0.11)
Diluted loss per common share from continuing operations	(0.06)	(0.16)
Diluted earnings (loss) per common share from discontinued operations	0	0.05
Diluted loss per common share	$ (0.06)	$ (0.11)
Weighted average common shares:
Basic	37,644,684	35,462,989
Diluted	37,644,684	35,462,989
Comprehensive loss:
Net loss	$ (2,370)	$ (4,064)
Foreign currency translation adjustments	4	1,506
Derivatives qualifying as hedges, net of tax:
(Loss) gain on derivative instruments designated and qualifying as cash flow hedges	(196)	(254)
Amounts reclassified from accumulated other comprehensive loss to net loss	17	(25)
Total comprehensive loss	$ (2,545)	$ (2,837)

XML

CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY - USD ($) $ in Thousands	Total	Common Stock [Member]	Additional Paid-in Capital [Member]	Retained Earnings [Member]	Accumulated Other Comprehensive Income (Loss) [Member]	Treasury Stock [Member]
Total stockholders' equity at begining of the year, Value at Dec. 31, 2017	$ 80,900	$ 419	$ 218,792	$ (116,967)	$ (10,676)	$ (10,668)
Stock option exercises	817	1	816	0	0	0
Vesting of restricted stock units	(5)	(5)	0	0	0	0
Shares withheld for taxes	(603)	(3)	(600)	0	0	0
Stock compensation expense	1,012	0	1,012	0	0	0
Net income (loss)	(4,064)	0	0	(4,064)	0	0
Other Comprehensive Income (Loss)	1,227	0	0	0	1,227	0
Total stockholders' equity at year end, Value at Mar. 31, 2018	$ 79,294	$ 422	220,020	(121,031)	(9,449)	(10,668)
Beginning balance shares at Dec. 31, 2017	42,764,000	42,764,000
Stock option exercises, shares	298,000	298,000
Vesting of restricted stock units, shares	532,000	532,000
Shares withheld for taxes, shares	(185,000)	(185,000)
Ending balance shares at Mar. 31, 2018	43,409,000	43,409,000
Total stockholders' equity at begining of the year, Value at Dec. 31, 2018	$ 82,724	$ 436	226,377	(119,889)	(13,532)	(10,668)
Vesting of restricted stock units	(421)	0	(421)	0	0	0
Stock compensation expense	591	0	591	0	0	0
Net income (loss)	(2,370)	0	0	(2,370)	0	0
Other Comprehensive Income (Loss)	(175)	0	0	0	(175)	0
Total stockholders' equity at year end, Value at Mar. 31, 2019	$ 80,349	$ 436	$ 226,547	$ (122,259)	$ (13,707)	$ (10,668)
Beginning balance shares at Dec. 31, 2018	45,124,000	45,124,000
Stock option exercises, shares	2,500	3,000
Stock purchase plan, shares	0
Vesting of restricted stock units, shares	440,000	440,000
Shares withheld for taxes, shares	(134,000)	(134,000)

XML

CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Cash flows from operating activities:
Net loss	$ (2,370)	$ (4,064)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Stock-based compensation expense	591	1,012
Depreciation	538	495
Gain on sale of Denville	0	(1,227)
Loss on disposal of fixed assets	0	0
Amortization Of Catalog Costs	5	6
Provision for allowance for doubtful accounts	(16)	5
Amortization of Intangible Assets	1,430	1,150
Amortization of deferred financing costs	91	276
Deferrred Income Taxes	(1)	(1,354)
Changes in operating assets and liabilities:
(Increase) decrease in accounts receivable	2,695	149
(Increase) decrease in inventories	(1,416)	799
Decrease (increase) in other receivables and other assets	536	650
Increase (decrease) in trade accounts payable	(118)	1,346
Increase in accrued income taxes	380	173
(Decrease) increase in accrued expenses	(76)	850
(Decrease) increase in deferred revenue	(116)	429
(Decrease) increase in other liabilities	(143)	(247)
Net cash provided by operating activities	2,010	448
Cash flows used in investing activities:
Additions to property, plant and equipment	(143)	(493)
Additions to catalog costs	(9)	(13)
Acquisitions, net of cash acquired	0	(67,413)
Disposition, net of cash sold	0	15,730
Net cash used in investing activities	(152)	(52,189)
Cash flows provided by (used in) financing activities:
Proceeds from issuance of debt	0	67,000
Repayments of debt	(4,583)	(14,047)
Payments of debt issuance costs	0	(1,928)
Net proceeds from (net taxes paid for) issuance of common stock	(421)	219
Net cash provided by (used in) financing activities	(5,004)	51,244
Effect of exchange rate changes on cash	3	755
(Decrease) increase in cash and cash equivalents	(3,143)	258
Cash and cash equivalents at the begining of period	8,173	5,733
Cash and cash equivalents at the end of period	5,030	5,991
Supplemental cash flow information [Abstract]
Cash paid for interest	927	944
Cash refunded for income taxes	$ 94	$ (489)

XML

Basis of Presentation and Summary of Significant Accounting Policies

3 Months Ended

Mar. 31, 2019

Basis of Presentation and Summary of Significant Accounting Policies Disclosure [Abstract]

Basis of Presentation and Summary of Significant Accounting Policies Disclosure [Text Block]

HARVARD BIOSCIENCE, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

1.Basis of Presentation and Summary of Significant Accounting Policies

Basis of Presentation

The unaudited consolidated financial statements of Harvard Bioscience, Inc. and its wholly-owned subsidiaries (collectively, Harvard Bioscience or the Company) as of March 31,2019 and for the three months endedMarch 31,2019 and 2018 have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission (SEC). Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. generally accepted accounting principles (U.S. GAAP) have been condensed or omitted pursuant to such rules and regulations. The December 31, 2018 consolidated balance sheet was derived from audited financial statements, but does not include all disclosures required by U.S. GAAP. However, the Company believes that the disclosures are adequate to make the information presented not misleading. These unaudited consolidated financial statements should be read in conjunction with the consolidated financial statements and the notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2018, which was filed with the SEC on March 18, 2019.

In the opinion of management, all adjustments, which include normal recurring adjustments necessary to present a fair statement of financial position as of March 31,2019, results of operations and comprehensive income (loss) for the three months endedMarch 31,2019 and 2018 and cash flows for the three months endedMarch 31,2019 and 2018, as applicable, have been made. The results of operations for the three months endedMarch 31,2019 are not necessarily indicative of the operating results for the full fiscal year or any future periods.

Prior Period Financial Statement Correction of Immaterial Error

During the quarter ended March 31, 2019, the Company identified an immaterial misclassification error in the Company’s consolidated balance sheet as of December 31, 2018.  The immaterial misclassification understated current portion, long term debt and overstated long term debt, less current installments.  This misclassification, in the amount of approximately $4.0 million, related to the classification of the Company’s excess cash flow payment made to its lenders during the quarter ended March 31, 2019 as long term instead of current on its consolidated balance sheet at December 31, 2018.  The misclassification had no impact on total reported debt.  Refer to footnote 14 for further details. The Company assessed the materiality of this error on the financial statements for prior periods in accordance with the SEC Staff Accounting Bulletin (SAB) No. 99, Materiality, codified in Accounting Standards Codification (ASC) 250, Presentation of Financial Statements, and concluded that it was not material to any prior annual or interim periods.  The Company recorded an adjustment to decrease long term debt, less current installments and increase current portion, long term debt in the consolidated balance sheet at December 31, 2018 with no impact on total reported debt.

Reclassifications

As disclosed in Note 5, on January 22, 2018, the Company sold substantially all the assets of its operating subsidiary, Denville Scientific, Inc. (Denville). The sale of Denville represented a strategic shift that had a major effect on the Company’s operations and financial results. As such and pursuant to Accounting Standards Codification (ASC) 205-20 – Presentation of Financial Statements - Discontinued Operations, the operating results of Denville for the three months endedMarch 31,2018 have been presented in discontinued operations in the consolidated statements of operations. These reclassifications and adjustments had no effect on total amounts within the consolidated balance sheet, consolidated statements of operations and comprehensive income (loss), consolidated statements of cash flows for any of the periods presented.

Summary of Significant Accounting Policies

The accounting policies underlying the accompanying unaudited consolidated financial statements are those set forth in Note 2 to the consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018, which was filed with the SEC on March 18, 2019. Except for the accounting for leases as noted below there have been no material changes in the company’s significant accounting policies during the three months endedMarch 31,2019.

Leases

The Company accounts for its leases in accordance with ASC 842 Leases. The Company leases office space, manufacturing facilities, automobiles and equipment. The Companyconcludes on whether an arrangement is a lease at inception. This determination as to whether an arrangement contains a lease is based on an assessment as to whether a contract conveys the right to the Company to control the use of identified property, plant or equipment for period of time in exchange for consideration. Leases with an initial term of 12 months or less are not recorded on the balance sheet. The Company recognizes these lease expenses on a straight line basis over the lease term.

As of March 31,2019, the Company has assessed its contracts and concluded that its leases consist of operating leases. Operating leases are included in operating lease right-of-use (ROU) assets, current portion of operating lease liabilities, and operating lease liabilities in the Company’s consolidated balance sheets.

ROU assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As most of the Company’s leases do not provide an implicit rate, the Company determines an incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. The incremental borrowing rate represents a significant judgment that is based on an analysis of the Company’s credit rating, country risk, treasury and corporate bond yields, as well as comparison to the Company’s borrowing rate on its most recent loan. The Company uses the implicit rate when readily determinable. The operating lease ROU asset also includes any lease payments made and excludes lease incentives. Lease expense for lease payments is recognized on a straight-line basis over the lease term.

The Company has lease agreements with lease and non-lease components, which are generally accounted for separately. Additionally, for its leases, the Company applies a portfolio approach to effectively account for the operating lease ROU assets and liabilities.

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Recently Issued Accounting Pronouncements

3 Months Ended

Mar. 31, 2019

Recently Issued Accounting Pronouncements [Abstract]

Recently Issued Accounting Pronouncements Disclosure [Text Block]

2. Recently Issued Accounting Pronouncements

In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which amends the impairment model by requiring entities to use a forward-looking approach based on expected losses rather than incurred losses to estimate credit losses on certain types of financial instruments, including trade receivables. This may result in the earlier recognition of allowances for losses. The ASU is effective for public entities for fiscal years beginning after December 15, 2019, with early adoption permitted. In November 2018, the FASB issued ASU No. 2018-19, Codification Improvements to Topic 326, Financial Instruments—Credit Losses, which provided additional implementation guidance on the previously issued ASU. Management has not yet completed its assessment of the impact of the new standard on the Company’s Consolidated Financial Statements. Currently, the Company believes that the most notable impact of this ASU will relate to its processes around the assessment of the adequacy of its allowance for doubtful accounts on trade accounts receivable and the recognition of credit losses.

In August 2018, the FASB issued ASU No. 2018-14, Disclosure Framework—Changes to the Disclosure Requirements for Defined Benefit Plans, which amends ASC 715 to add, remove and clarify disclosure requirements related to defined benefit pension and other postretirement plans. The ASU is effective for public entities for fiscal years beginning after December 15, 2020, with early adoption permitted. Management has not yet completed its assessment of the impact of the new standard on the Company’s Consolidated Financial Statements.

Recently Adopted Accounting Pronouncements

In August 2017, the FASB issued ASU 2017-12, Derivatives and Hedging (Topic 815) which amends the hedge accounting recognition and presentation requirements in ASC 815, Derivatives and Hedging. The Board’s objectives in issuing the ASU are to (1) improve the transparency and understandability of information conveyed to financial statement users about an entity’s risk management activities by better aligning the entity’s financial reporting for hedging relationships with those risk management activities and (2) reduce the complexity of and simplify the application of hedge accounting by preparers. The ASU is effective for annual reporting periods, including interim periods within those annual reporting periods, beginning after December 15, 2018. The Company adopted this guidance as of January 1, 2019, and it did not have a material impact on its consolidated financial position, results of operations and cash flows.

In February 2016, the FASB issued Accounting Standards Update (ASU) 2016-02, Leases, which is intended to improve financial reporting about leasing transactions. The update requires a lessee to record on its balance sheet the assets and liabilities for the rights and obligations created by lease terms of more than 12 months. The update is effective for fiscal years beginning after December 15, 2018. A modified retrospective transition approach is required for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements, with certain practical expedients available. The Company elected to utilize a practical expedient in its method of adoption of the standard and adopted the guidance as of January 1, 2019.  Under this expedient, which is a “current-period adjustment method,” the Company applied ASC 842 as of January 2019 and recognized operating lease liabilities of $11.7 million and right of use assets of $9.4 million for all leases with lease terms of more than 12 months. There was no impact to retained earnings as of that date. In addition, the Company adopted the guidance by electing the following practical expedients: (1) the Company did not reassess whether any expired or existing contracts contained leases, (2) the Company did not reassess the lease classification for any expired or existing leases, and (3) the Company excluded variable payments from the lease contract consideration and recorded those as incurred. The Company’s future commitments under lease obligations and additional disclosures are summarized in Note 12.

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Accumulated Other Comprehensive Income Loss

3 Months Ended

Mar. 31, 2019

Accumulated Other Comprehensive Income [Abstract]

Accumulated Other Comprehensive Income Disclosure [Text Block]

3. Accumulated Other Comprehensive Loss

Changes in each component of accumulated other comprehensive loss, net of tax are as follows:

		Foreign currency		Derivatives
		translation		qualifying as		Defined benefit
(in thousands)		adjustments		hedges		pension plans		Total
Balance at December 31, 2018	$	(12,630)	$	(170)	$	(732)	$	(13,532)
Other comprehensive income (loss) before reclassifications		4		(196)		-		(192)
Amounts reclassified from AOCI		-		17		-		17
Other comprehensive income (loss)		4		(179)		-		(175)
Balance at March 31, 2019	$	(12,626)	$	(349)	$	(732)	$	(13,707)

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Acquisitions

3 Months Ended

Mar. 31, 2019

Acquisition Disclosure [Abstract]

Acquisitions Disclosure [Text Block]

4. Acquisition

On January 31, 2018, the Company acquired all of the issued and outstanding shares of Data Sciences International, Inc. (DSI), a Delaware corporation, for approximately $71.1 million. The Company funded the acquisition from its existing cash balances, excess proceeds from the Denville Transaction discussed in Note 5, and proceeds from the Financing Agreement discussed in Note 14.

DSI, a St. Paul, Minnesota-based life science research company, is a recognized leader in physiologic monitoring focused on delivering preclinical products, systems, services and solutions to its customers. Its customers include pharmaceutical and biotechnology companies, as well as contract research organizations, academic labs and government researchers. This acquisition diversifies the Company’s customer base into the biopharmaceutical and contract research organization markets.

The aggregate purchase price for this acquisition was allocated to tangible and intangible net assets acquired as follows:

		(in thousands)
Tangible assets	$	34,010
Liabilities assumed		(11,949)
Net assets		22,061
Goodwill and intangible assets:
Goodwill		21,865
Amortizable intangible assets:
Trade name		3,524
Developed technology		25,570
Customer relationships		9,837
In-process research and development		1,387
Total amortizable intangible assets		40,318
Deferred tax liabilities, net		(13,120)
Total goodwill and intangible assets, net of tax		49,063
Acquisition purchase price	$	71,124
Tangible assets and liabilities assumed, as referenced above, consisted of the following:
Cash acquired	$	2,576
Accounts receivable, net		5,069
Inventories		11,512
Other current assets		810
Property, plant and equipment, net		3,574
Deferred income tax assets, net		10,469
Tangible assets	$	34,010
Accounts payable and accrued liabilities	$	6,001
Deferred revenue including customer advances		2,976
Other long term liabilities		2,972
Liabilities assumed	$	11,949

The Company finalized the purchase price allocation for DSI as of December 31, 2018. The weighted-average amortization periods for definite-lived intangible assets acquired was 9.4 years for tradenames, 8.2years for developed technology, 12.4 years for customer relationships and 7.4 years for in-process research and development assets. The weighted average amortization period for all definite-lived intangible assets acquired was 9.3 years.

Goodwill recorded as a result of the acquisition of DSI is not deductible for tax purposes.

The results of operations for DSI have been included in the Company’s consolidated financial statements from the date of acquisition. The revenues of DSI included in the Company’s consolidated statement of operations from the date of acquisition to March 31, 2018 were approximately $7.6 million. The net loss of DSI included in the Company’s consolidated statement of operations for the same period was approximately $0.4 million. Included in the net loss for the three months endedMarch 31,2018 was a $1.5 million charge recognized in cost of revenues related to purchase accounting inventory fair value step up amortization. The total inventory fair value step up was valued at $3.8 million and was recognized into cost of revenues over one inventory turn, or approximately five and a half months. Also included in the net loss of DSI for that period was $0.7 million of intangible asset amortization expense.

The following consolidated pro forma information is based on the assumption that the acquisition of DSI occurred on January 1, 2017. Accordingly, the historical results have been adjusted to reflect amortization expense, interest expense and other purchase accounting adjustments that would have been recognized on such a pro forma basis. The pro forma information is presented for comparative purposes only and is not necessarily indicative of the financial position or results of operations which would have been reported had the Company completed the acquisition during these periods or which might be reported in the future.

		Three Months Ended March 31,
		2018
		(in thousands)
Pro Forma
Revenues	$	30,071
Loss from continuing operations		(2,168)

Direct acquisition costs recorded in other expense, net in the Company’s consolidated statements of operations were $0 and $2.6million for the three months endedMarch 31,2019 and 2018, respectively.

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Discontinued Operations

3 Months Ended

Mar. 31, 2019

Discontinued Operations [Abstract]

Discontinued Operations Disclosure [Text Block]

5. Discontinued Operations

On January 22, 2018, the Company sold substantially all the assets of its wholly owned subsidiary, Denville, for approximately $20.0 million, which includes a $3.0 million earn-out provision (the Denville Transaction). Upon the closing of the transaction, the Company received $15.7 million. The $3.0 million earn-out provision represents consideration that is contingent on Denville achieving certain performance metrics over a period of two years.

The following table is a reconciliation of the major line items of income from discontinued operations presented within the Company’s consolidated statements of operations for the three months endedMarch 31,2019 and 2018.

	Three Months Ended
	March 31,
	2019			2018
	(in thousands)
Revenues	$	-	$	893
Cost of revenues		-		(534)
Operating and other expenses		-		(673)
Gain on disposal of discontinued operations		-		1,227
Income from discontinued operations before income taxes	$	-	$	913
Income tax benefit		-		(873)
Income from discontinued operations		-		1,786

Total operating and investing cash flows for Denville in the Company’s consolidated statements of cash flows for the three months endedMarch 31,2018, were immaterial There were no operating or investing cash flows for Denville in the Company’s consolidated statements of cash flows for the three months endedMarch 31,2019.

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Goodwill and Other Intangible Assets

3 Months Ended

Mar. 31, 2019

Goodwill And Other Intangible Assets Disclosure [Abstract]

Goodwill And Other Intangible Assets Disclosure [Text Block]

6. Goodwill and Other Intangible Assets

Intangible assets consist of the following:

									Weighted
									Average
		March 31, 2019				December 31, 2018			Life	(a)
		(in thousands)
Amortizable intangible assets:		Gross		Accumulated Amortization		Gross		Accumulated Amortization
Existing technology	$	41,285	$	(17,173)	$	41,268	$	(16,215)	6.9	Years
Trade names		7,786		(3,007)		7,828		(2,861)	7.5	Years
Distribution agreements/customer relationships		22,538		(9,780)		22,657		(9,509)	10.4	Years
In-process research and development		1,387		(45)		1,387		(30)	7.2	Years
Patents		218		(218)		211		(204)	-	Years
Total amortizable intangible assets		73,214	$	(30,223)		73,351	$	(28,819)
Indefinite-lived intangible assets:
Goodwill		57,375				57,304
Other indefinite-lived intangible assets		1,228				1,232
Total goodwill and other indefinite-lived intangible assets		58,603				58,536
Total intangible assets, gross	$	131,817			$	131,887
(a) Weighted average life as of March 31, 2019.

The change in the carrying amount of goodwill for the three months endedMarch 31,2019 is as follows:

			(in thousands)
Balance at December 31, 2018		$	57,304
	Effect of change in currency translation		71
Balance at March 31, 2019		$	57,375

Amortization of intangible assets

Intangible asset amortization expense from continuing operations was $1.4 million and $1.1 million for the three months endedMarch 31,2019 and 2018, respectively. Amortization expense of existing amortizable intangible assets is currently estimated to be $5.6 million for the year ending December 31, 2019, $5.6 million for the year ending December 31, 2020, $5.6 million for the year ending December 31, 2021, $5.5 million for the year ending December 31, 2022 and $5.4 million for the year ending December 31, 2023.

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Inventories

3 Months Ended

Mar. 31, 2019

Inventories Disclosure [Abstract]

Inventories Disclosure [Text Block]

7. Inventories

Inventories consist of the following:

			March 31,		December 31,
			2019		2018
			(in thousands)
Finished goods		$	7,679	$	6,936
Work in process			3,834		3,667
Raw materials			15,044		14,484
	Total	$	26,557	$	25,087

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Property, Plant and Equipment

3 Months Ended

Mar. 31, 2019

Property, Plant and Equipment Disclosure [Abstract]

Property, Plant and Equipment Disclosure [Text Block]

8. Property, Plant and Equipment

As of March 31,2019 and December 31, 2018, property, plant and equipment consist of the following:

		March 31,		December 31,
		2019		2018
		(in thousands)
Land, buildings and leasehold improvements	$	2,542	$	2,468
Machinery and equipment		9,907		9,678
Computer equipment and software		9,713		9,685
Furniture and fixtures		1,407		1,390
Automobiles		114		115
		23,683		23,336
Less: accumulated depreciation		(18,101)		(17,438)
Property, plant and equipment, net	$	5,582	$	5,898

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Related Party Transactions

3 Months Ended

Mar. 31, 2019

Related Party Transactions [Abstract]

Related Party Transactions Disclosure [Text Block]

9. Related Party Transactions

As part of the acquisitions of Multi Channel Systems MCS GmbH (MCS) and Triangle BioSystems, Inc. (TBSI) in 2014, the Company signed lease agreements with the former owners of the acquired companies. The principals of such former owners of MCS and TBSI were employees of the Company as of March 31,2019 and 2018.Pursuant to a lease agreement, the Company made rent payments of approximately $78 thousand and $79 thousand to the former owners of MCS for the three months endedMarch 31,2019 and 2018, respectively. The Company made rent payments of approximately $11 thousand to the former owner of TBSI for both the three months endedMarch 31,2019 and 2018.

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Warranties

3 Months Ended

Mar. 31, 2019

Warranties Disclosure [Abstract]

Warranties Disclosure [Text Block]

10. Warranties

Warranties are estimated and accrued at the time revenues are recorded. A rollforward of the Company’s product warranty accrual is as follows:

		Beginning	(Payments)\			Ending
		Balance	Credits	Additions		Balance
		(in thousands)
Year ended December 31, 2018	$	246	(37)	182	$	391
Three months ended March 31, 2019	$	391	(22)	1	$	370

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Employee Benefit Plans

3 Months Ended

Mar. 31, 2019

Employee Benefit Plans Disclosure [Abstract]

Employee Benefit Plans Disclosure [Text Block]

11. Employee Benefit Plans

The Company’s subsidiary in the United Kingdom, Biochrom Limited, maintains contributory, defined benefit pension plans for substantially all of its employees. These defined benefit pension plans have been closed to new employees since 2014, as well as closed to the future accrual of benefits for existing employees. The components of the Company’s defined benefit pension expense were as follows:

		Three Months Ended
		March 31,
		2019		2018
		(in thousands)
Components of net periodic benefit cost:
Interest cost	$	132	$	132
Expected return on plan assets		(182)		(204)
Net amortization loss		76		58
Net periodic benefit cost (income)	$	26	$	(14)

For the three months endedMarch 31,2019 and 2018, the Company contributed $0.2 million, for both periods, to its defined benefit pension plans. The Company expects to contribute at $0.5 million to its defined benefit pension plans during the remainder of 2019.

The Company had an underfunded pension liability of approximately $0.9 million as of March 31,2019 and December 31, 2018included in the other long term liabilities line item in the consolidated balance sheets.

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Leases

3 Months Ended

Mar. 31, 2019

Leases [Abstract]

Leases [Text Block]

12. Leases

The Company has noncancelable operating leases for office, manufacturing facilities, warehouse space, automobiles and equipment expiring at various dates through 2023 and thereafter. As discussed in Footnote 1, the Company adopted ASC 842 as of January 1, 2019, using a current period adjustment method. In accordance with this method, the Company recognized a right of use asset of $9.4 million and an operating lease liability of $11.7 million as of January 1, 2019. As a result of using the current period adjustment method, the lease expense for three months endedMarch 31,2019 and 2018 was recognized under ASC 842, and ASC 840, the previous standard, respectively.

The components of lease expense for the three months endedMarch 31,2019 are as follows:

		Three Months Ended
		March 31, 2019
		(in thousands)
Operating lease cost	$	523
Short term lease cost		76
Sublease income		(102)
Total lease cost	$	497
Supplemental cash flow information related to the Company's operating leases was as follows
		Three Months Ended
		March 31, 2019
		(in thousands)
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from operating leases	$	702
Right-of-use assets obtained in exchange for lease obligations
Operating leases	$	-
Supplemental balance sheet information related to the Company's operating leases was as follows:
		March 31, 2019
		(in thousands)
Operating lease right-of use assets	$	9,106
Current portion, operating lease liabilities	$	2,297
Operating lease liabilities, long term		9,062
Total operating lease liabilities	$	11,359
Weighted average remaining lease term		8.6	years
Weighted average discount rate		9.2%

Rent payments for continuing operations were approximately $0.5 million for the three months endedMarch 31,2018. Future minimum lease payments for operating leases, with initial or remaining terms in excess of one year at March 31,2019, are as follows:

		Operating
		Leases
		(in thousands)
2020	$	2,297
2021		2,268
2022		1,862
2023		1,813
2024		1,795
Thereafter		6,970
Total lease payments		17,005
Less interest		(5,646)
Total operating lease liabilities		11,359

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Capital Stock

3 Months Ended

Mar. 31, 2019

Capital Stock Disclosure [Abstract]

Capital Stock Disclosure [Text Block]

13. Capital Stock

Common Stock

TheCompany has 80.0 million shares of common stock authorized for issuance. As of March 31,2019, the Company had 37.7 million shares of common stock issued and outstanding.

Preferred Stock

The Company’s Board of Directors has the authority to issue up to 5.0 million shares of preferred stock and to determine the price, privileges and other terms of the shares. The Board of Directors may exercise this authority without any further approval of stockholders. As of March 31,2019, the Company had no preferred stock issued or outstanding.

Employee Stock Purchase Plan (as amended, the ESPP)

In 2000, the Company approved the ESPP. Under this ESPP, participating employees can authorize the Company to withhold a portion of their base pay during consecutive six-month payment periods for the purchase of shares of the Company’s common stock. At the conclusion of the period, participating employees can purchase shares of the Company’s common stock at 85% of the lower of the fair market value of the Company’s common stock at the beginning or end of the period. Shares are issued under the ESPP for the six-month periods ending June 30 and December 31. As of March 31,2019,1,050,000 shares of common stock are authorized for issuance, of which 890,762 shares were issued. There wereno shares issued under the ESPP during the three months endedMarch 31,2019 and 2018, respectively.

Stock Option and Equity Incentive Plans

Third Amended and Restated 2000 Stock Option and Incentive Plan (as amended, the Third A&R Plan)

The Third Amendment to the Third A&R Plan (the Amendment) was adopted by the Board of Directors on April 2, 2018. Such Amendment was approved by the stockholders at the Company’s 2018 Annual Meeting of Stockholders. Pursuant to the Amendment, the aggregate number of shares authorized for issuance under the Third A&R Plan was increased by 3,400,000 shares to 20,908,929.

Restricted Stock Units with a Market Condition (the Market Condition RSUs)

On May 24, 2018, the Compensation Committee of the Board of Directors of the Company approved and granted deferred stock awards of Market Condition RSUs (the 2018 Market Condition RSUs) to certain members of the Company’s management team under the Third A&R Plan. The vesting of the 2018 Market Condition RSUs is based on a graded-vesting schedule (one third at the end of each year for three years) and linked to the achievement of a relative total shareholder return of the Company’s common stock from May 24, 2018 to the earlier of (i) May 24, 2019 or (ii) upon a change of control (measured relative to the NASDAQ Biotechnology index and based on the 20-day trading average price before each such date). As of March 31,2019, the target number of these restricted stock units that may be earned is 94,444 shares; the maximum amount is 150% of the target number.

On March 7, 2019, the Compensation Committee of the Board of Directors of the Company approved and granted deferred stock awards of Market Condition RSUs (the 2019 Market Condition RSUs) to certain members of the Company’s management team under the Third A&R Plan. The vesting of the 2019 Market Condition RSUs is based on a graded-vesting schedule (one third at the end of each year for three years) and linked to the achievement of a relative total shareholder return of the Company’s common stock from March 7, 2019 to the earlier of (i) March 7, 2020 or (ii) upon a change of control (measured relative to the NASDAQ Biotechnology index and based on the 20-day trading average price before each such date). As of March 31,2019, the target number of these restricted stock units that may be earned is 75,514 shares; the maximum amount is 150% of the target number.

Stock-Based Payment Awards

The Company accounts for stock-based payment awards in accordance with the provisions of FASB ASC 718, which requires it to recognize compensation expense for all stock-based payment awards made to employees and directors including stock options, restricted stock units, Market Condition RSUs and employee stock purchases related to the ESPP. The Company has elected as an accounting policy to account for forfeitures for service based awards as they occur, with no adjustment for estimated forfeitures.

Stock option and restricted stock unit activity under the Company’s Third A&R Plan for the three months endedMarch 31,2019 was as follows:

		Stock Options			Restricted Stock Units			Market Condition RSU's
				Weighted
		Stock		Average	Restricted			Market
		Options		Exercise	Stock Units		Grant Date	Condition RSU's		Grant Date
		Outstanding		Price	Outstanding		Fair Value	Outstanding		Fair Value
Balance at December 31, 2018		1,956,732	$	4.25	1,233,762	$	3.36	116,944	$	4.19
	Granted	559,909		3.80	383,827		3.67	75,514		4.16
	Exercised	(2,500)		3.25	-		-	-		-
	Vested (RSUs)	-		-	(439,875)		3.26	-		-
	Cancelled / forfeited	(75,000)		4.66	(95,509)		2.83	(22,500)		4.19
Balance at March 31, 2019		2,439,141	$	4.13	1,082,205	$	3.56	169,958	$	4.18

The weighted average fair value of the options granted under the Third A&R Plan during the three months endedMarch 31,2019was$1.58. There were no options granted under the Third A&R Plan during the three months ended March 31, 2018. The following assumptions were used to estimate the fair value, using the Black-Scholes option pricing model, of stock options granted during the three months endedMarch 31,2019:

	Three Months Ended
	March 31,
	2019
Volatility	45.58	%
Risk-free interest rate	2.44	%
Expected holding period (in years)	4.73	years
Dividend yield	-	%

The weighted average fair value of the 2019 Market Condition RSUs which were granted under the Third A&R Plan during the three months endedMarch 31,2019 was $4.16. There were no Market Condition RSUs granted under the Third A&R Plan during the three months endedMarch 31,2018. The following assumptions were used to estimate the fair value, using a Monte-Carlo valuation simulation, of the Market Condition RSUs granted during the three months ended March 31, 2019:

	Three Months Ended
	March 31,
	2019
Volatility	48.00	%
Risk-free interest rate	2.50	%
Correlation coefficient	0.27	%
Dividend yield	-	%

The Company used historical volatility to calculate the expected volatility for each grant as of the grant date. Historical volatility was determined by calculating the mean reversion of the daily adjusted closing stock price. The risk-free interest rate assumption is based upon observed U.S. Treasury bill interest rates (risk-free) appropriate for the term of the Company’s stock options and Market Condition RSUs. The expected holding period of stock options represents the period of time options are expected to be outstanding and is based on historical experience. The vesting period ranges from one to four years and the contractual life is ten years. The correlation coefficient, used to value the Market Condition RSUs, represents the way in which entities move in relation to the NASDAQ Biotechnology index as a whole.

Stock-based compensation expense related to stock options, restricted stock units, Market Condition RSUs and the ESPP for thethree months endedMarch 31,2019 and 2018 was allocated as follows:

		Three Months Ended
		March 31,
		2019		2018
		(in thousands)
Cost of revenues	$	13	$	11
Sales and marketing		(7)		124
General and administrative		551		697
Research and development		34		30
Discontinued operations		-		150
Total stock-based compensation	$	591	$	1,012

The Company did not capitalize any stock-based compensation.

Earnings per share

Basic earnings per share is based upon net income divided by the number of weighted average common shares outstanding during the period. The calculation of diluted earnings per share assumes conversion of stock options, restricted stock units and Market Condition RSUs into common stock using the treasury method. The weighted average number of shares used to compute basic and diluted earnings per share consists of the following:

	Three Months Ended
	March 31,
	2019	2018
Basic	37,644,684	35,462,989
Effect of assumed conversion of employee and director stock options, restricted stock units and Market Condition RSUs	-	-
Diluted	37,644,684	35,462,989

Excluded from the shares used in calculating the diluted earnings per common share in the above table are options, restricted stock units and Market Condition RSUs of approximately 3,691,304 and 4,899,228 shares of common stock for the three months endedMarch 31,2019 and 2018, respectively, as the impact of these shares would be anti-dilutive.

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Long Term Debt

3 Months Ended

Mar. 31, 2019

Long Term Debt Disclosure [Abstract]

Long Term Debt Disclosure [Text Block]

14.Long Term Debt

On January 22, 2018, in connection with the closing of the Denville Transaction, the Company terminated the Third Amended and Restated Credit Agreement (the Credit Agreement), among the Company, Brown Brothers Harriman & Co. and each of the other lenders party thereto, and Bank of America, as administrative agent. All outstanding amounts under the agreement were repaid in full using a portion of the proceeds of the Denville Transaction. At the time of repayment, there was approximately $11.9 million outstanding.

On January 31, 2018, the Company entered into a financing agreement by and among the Company and certain subsidiaries of the Company parties thereto, as borrowers (collectively, the Borrower), certain subsidiaries of the Company parties thereto, as guarantors, various lenders from time to time party thereto (the Lenders), and Cerberus Business Finance, LLC, as collateral agent and administrative agent for the Lenders (the Financing Agreement). On August 16, 2018, the Company and Cerberus Business Finance, LLC entered into a First Amendment to the Financing Agreement, which such amendment modified certain provisions related to the borrowing base and reporting, among other things.

The Financing Agreement provided for senior secured credit facilities (the Senior Secured Credit Facilities) comprised of a $64.0 million term loan and up to a $25.0 million revolving line of credit. The proceeds of the term loan and $4.8 million of advances under the revolving line of credit were used to fund a portion of the DSI acquisition, and to pay fees and expenses related thereto and the closing of the Senior Secured Credit Facilities. In addition, the revolving facility is available for use by the Company and its subsidiaries for general corporate and working capital needs, and other purposes to the extent permitted by the Financing Agreement. The Senior Secured Credit Facilities have a maturity of five years.

Commencing on March 31, 2018, the outstanding term loans began to amortize in equal quarterly installments equal to $0.4 million per quarter on such date and during each of the next three quarters thereafter, $0.6 million per quarter during the next four quarters thereafter and $0.8 million per quarter thereafter, with a balloon payment at maturity.Furthermore, within ten days of the Company’s delivery of its audited annual financial statements each year, the term loans are permanently reduced pursuant to certain mandatory prepayment events including an annual “excess cash flow sweep” of 50% of the consolidated excess cash flow; provided that, in any fiscal year, any voluntary prepayments of the term loans shall be credited against the Company’s “excess cash flow” prepayment obligations on a dollar-for-dollar basis for such fiscal year.

The obligations of the Borrower under the Senior Secured Credit Facilities are unconditionally guaranteed by the Company and certain of the Company’s existing and subsequently acquired or organized subsidiaries. The Senior Secured Credit Facilities and related guarantees are secured on a first-priority basis (subject to certain liens permitted under the Financing Agreement) by a lien on substantially all the tangible and intangible assets of the Borrower and the subsidiary guarantors, including all of the capital stock held by such obligors (subject to a 65% limitation on pledges of capital stock of foreign subsidiaries), subject to certain exceptions.

Interest on all loans under the Senior Secured Credit Facilities is paid monthly. Borrowings under the Financing Agreement accrue interest at a per annum rate equal to, at the Borrower’s option, a base rate plus 4.75% or a London Interbank Offered Rate (LIBOR) rate plus 6.25%. The loans are also subject to a 1.25% interest rate floor for LIBOR loans and a 4.25% interest rate floor for base rate loans.

The Financing Agreement contains customary representations and warranties and affirmative covenants applicable to the Company and its subsidiaries and also contains certain restrictive covenants, including, among others, limitations on the incurrence of additional debt, liens on property, acquisitions and investments, loans and guarantees, mergers, consolidations, liquidations and dissolutions, asset sales, dividends and other payments in respect of the Company’s capital stock, prepayments of certain debt, transactions with affiliates and modifications of organizational documents, material contracts, affiliated practice agreements and certain debt agreements. The Financing Agreement also contains customary events of default. As of March 31,2019, the Company was in compliance with all financial covenants contained in the Financing Agreement, was subject to covenant and working capital borrowing restrictions and had available borrowing capacity under its Financing Agreement of $14.5 million.

As of March 31,2019 and December 31, 2018, the Company had borrowings net of debt issuance costs of $56.3 million and $60.8 million respectively, outstanding. The carrying value of the debt approximates fair value because the interest rate under the obligation approximates market rates of interest available to the Company for similar instruments.

As of March 31,2019, the weighted effective interest rate, net of the impact of the Company’s interest rate swap, on its term loan was 8.87%.

As of March 31,2019 and December 31, 2018, the Company’s borrowings were comprised of:

		March 31,		December 31,
		2019		2018
		(in thousands)
Long-term debt:
Term loan	$	57,817	$	62,400
Total unamortized deferred financing costs		(1,475)		(1,605)
Total debt		56,342		60,795
Less: current installments		(2,600)		(6,383)
Current unamortized deferred financing costs		393		401
Long-term debt	$	54,135	$	54,813

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Derivatives

3 Months Ended

Mar. 31, 2019

Derivatives [Abstract]

Derivatives Disclosure [Text Block]

15.Derivatives

The Company uses interest-rate-related derivative instruments to manage its exposure related to changes in interest rates on its variable-rate debt instruments. The Company does not enter into derivative instruments for any purpose other than cash flow hedging. The Company does not speculate using derivative instruments.

By using derivative financial instruments to hedge exposures to changes in interest rates, the Company exposes itself to credit risk and market risk. Credit risk is the failure of the counterparty to perform under the terms of the derivative contract. When the fair value of a derivative contract is positive, the counterparty owes the Company, which creates credit risk for the Company. When the fair value of a derivative contract is negative, the Company owes the counterparty and, therefore, the Company is not exposed to the counterparty’s credit risk in those circumstances. The Company minimizes counterparty credit risk in derivative instruments by entering into transactions with carefully selected major financial institutions based upon their credit profile.

Market risk is the adverse effect on the value of a derivative instrument that results from a change in interest rates. The market risk associated with interest-rate contracts is managed by establishing and monitoring parameters that limit the types and degree of market risk that may be undertaken.

The Company assesses interest rate risk by continually identifying and monitoring changes in interest rate exposures that may adversely impact expected future cash flows and by evaluating hedging opportunities. The Company maintains risk management control systems to monitor interest rate risk attributable to both the Company’s outstanding or forecasted debt obligations as well as the Company’s offsetting hedge positions. The risk management control systems involve the use of analytical techniques, including cash flow sensitivity analysis, to estimate the expected impact of changes in interest rates on the Company’s future cash flows.

The Company uses variable-rate LIBOR debt to finance its operations. The debt obligations expose the Company to variability in interest payments due to changes in interest rates. Management believes that it is prudent to limit the variability of a portion of its interest payments. To meet this objective, management enters into LIBOR based interest rate swap agreements to manage fluctuations in cash flows resulting from changes in the benchmark interest rate of LIBOR. These swaps change the variable-rate cash flow exposure on the debt obligations to fixed cash flows. Under the terms of the interest rate swaps, the Company receives LIBOR based variable interest rate payments and makes fixed interest rate payments, thereby creating the equivalent of fixed-rate debt for the notional amount of its debt hedged.

As disclosed in Note 14, on January 31, 2018, the Company entered into a Financing Agreement comprised of a $64.0 million term loan and up to a $25.0 million revolving line of credit. Shortly after entering into this Credit Agreement, the Company entered into an interest rate swap contract with PNC Bank with a notional amount of $36.0 million and a termination date of January 1, 2023 in order to hedge the risk of changes in the effective benchmark interest rate (LIBOR) associated with the Company’s Term Loan. The swap contract converted specific variable-rate debt into fixed-rate debt and fixed the LIBOR rate associated with a portion of the term loan under the Financing Agreement at 2.72%. The interest rate swap was designated as a cash flow hedge instrument in accordance with ASC 815 “Derivatives and Hedging”.

The notional amount of the Company’s derivative instruments as of March 31,2019 was $33.0 million.

The following table presents the notional amount and fair value of the Company’s derivative instruments as of March 31,2019 and December 31, 2018.

				March 31, 2019
				Notional Amount		Fair Value (a)
Derivatives designated as hedging instruments under ASC 815		Balance sheet classification		(in thousands)
Interest rate swaps		Other assets (long term liabilities)	$	32,976	$	(349)
				December 31, 2018
				Notional Amount		Fair Value (a)
Derivatives designated as hedging instruments under ASC 815		Balance sheet classification		(in thousands)
Interest rate swaps		Other assets (long term liabilities)	$	34,090	$	(170)
	(a) See Note 16 for the fair value measurements related to these financial instruments.

All of the Company’s derivative instruments are designated as hedging instruments.

The Company has structured its interest rate swap agreements to be 100% effective and as a result, there was no impact to earnings resulting from hedge ineffectiveness. Changes in the fair value of interest rate swaps designated as hedging instruments that effectively offset the variability of cash flows associated with variable-rate, long-term debt obligations are reported in accumulated other comprehensive income (AOCI). These amounts subsequently are reclassified into interest expense as a yield adjustment of the hedged interest payments in the same period in which the related interest affects earnings. The Company’s interest rate swap agreement was deemed to be fully effective in accordance with ASC 815, and, as such, unrealized gains and losses related to these derivatives were recorded as AOCI.

The following table summarizes the effect of derivatives designated as cash flow hedging instruments and their classification within comprehensive loss for the three months endedMarch 31,2019 and 2018:

Derivatives in Hedging Relationships	Amount of gain (loss) recognized in OCI on derivative (effective portion)
	Three Months Ended March 31,
	2019		2018
	(in thousands)
Interest rate swaps	$	(196)	$	(254)

The following table summarizes the reclassifications out of accumulated other comprehensive loss for the three months endedMarch 31,2019 and 2018:

Details about AOCI Components	Amount reclassified from AOCI into income (effective portion)
	Three Months Ended March 31,				Location of amount reclassified from AOCI
	2019		2018		into income (effective portion)
	(in thousands)
Interest rate swaps	$	17	$	(25)	Interest expense

As of March 31,2019, $93 thousand of deferred losses on derivative instruments accumulated in AOCI are expected to be reclassified to earnings during the next twelve months. Transactions and events expected to occur over the next twelve months that will necessitate reclassifying these derivatives’ losses to earnings include the repricing of variable-rate debt.

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Fair Value Measurements

3 Months Ended

Mar. 31, 2019

Fair Value Disclosures [Abstract]

Fair Value Disclosures [Text Block]

16.Fair Value Measurements

Fair value measurement is defined as the price that would be received to sell an asset or paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date. A fair value hierarchy is established, which prioritizes the inputs used in measuring fair value into three broad levels as follows:

Level 1—Quoted prices in active markets for identical assets or liabilities.

Level 2—Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly.

Level 3—Unobservable inputs based on the Company’s own assumptions.

The following tables present the fair value hierarchy for those assets or liabilities measured at fair value on a recurring basis:

	Fair Value as of March 31, 2019
(In thousands)		Level 1		Level 2		Level 3		Total
Assets (Liabilities):
Interest rate swap agreements	$	-	$	(349)	$	-	$	(349)
	Fair Value as of December 31, 2018
(In thousands)		Level 1		Level 2		Level 3		Total
Assets (Liabilities):
Interest rate swap agreements	$	-	$	(170)	$	-	$	(170)

The Company uses the market approach technique to value its financial liabilities. The Company’s financial assets and liabilities carried at fair value include derivative instruments used to hedge the Company’s interest rate risks. The fair value of the Company’s interest rate swap agreements was based on LIBOR yield curves at the reporting date. 

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Revenues

3 Months Ended

Mar. 31, 2019

Revenues Disclosure [Abstract]

Revenues

17. Revenues

The following table represents a disaggregation of revenue from contracts with customers. Revenue from continuing operations originating from the following geographic areas for the three months endedMarch 31,2019 and 2018 consist of:

		Three Months Ended March 31, 2019
		(in thousands)
		United States		United Kingdom		Germany		Rest of the world		Total
Instruments, equipment, software and accessories	$	18,671	$	3,129	$	2,913	$	2,044	$	26,757
Service, maintenance and warranty contracts		1,143		190		97		15		1,445
Total revenues	$	19,814	$	3,319	$	3,010	$	2,059	$	28,202
		Three Months Ended March 31, 2018
		(in thousands)
		United States		United Kingdom		Germany		Rest of the world		Total
Instruments, equipment, software and accessories	$	16,147	$	3,495	$	3,707	$	2,255	$	25,604
Service, maintenance and warranty contracts		896		201		52		6		1,155
Total revenues	$	17,043	$	3,696	$	3,759	$	2,261	$	26,759

Deferred revenue

As of March 31,2019 and December 31, 2018, the Company had approximately $3.7 million and $3.8 million, respectively, in deferred revenue comprised of revenue deferred from service contracts and revenue deferred from advance payments.

Changes in deferred revenue from service contracts and advance payments from customers during the three months endedMarch 31,2019 and 2018 were as follows:

		Three Months Ended March 31, 2019
		(in thousands)
		Service Contracts		Customer Advances		Total
Balance at December 31, 2018	$	1,659	$	2,161	$	3,820
Deferral of revenue		845		111		956
Recognition of deferred revenue		(848)		(223)		(1,071)
Effect of foreign currency translation		10		-		10
Balance at March 31, 2019	$	1,666	$	2,049	$	3,715
		Three Months Ended March 31, 2018
		(in thousands)
		Service Contracts		Customer Advances		Total
Balance at December 31, 2017	$	505	$	-	$	505
Addition due to business combination		849		2,128		2,977
Deferral of revenue		1,193		128		1,321
Recognition of deferred revenue		(758)		(196)		(954)
Effect of foreign currency translation		4		-		4
Balance at March 31, 2018	$	1,793	$	2,060	$	3,853

Allowance for doubtful accounts

Activity in the allowance for doubtful accounts was as follows:

		Three Months Ended March 31,
		2019		2018
		(in thousands)
Balance, beginning of period	$	332	$	193
Bad debt expense (recoveries)		(16)		5
Charged to allowance		27		-
Other		-		36
Effect of foreign currency translation		(2)		-
Balance, end of period	$	341	$	234

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Income Taxes

3 Months Ended

Mar. 31, 2019

Income Tax [Abstract]

Income Taxes Disclosure [Text Block]

18. Income Tax

Income tax expense from continuing operations was approximately $0.6 million for both the three months endedMarch 31,2019 and 2018, respectively. The effective tax rate on continuing operations was (32.1)%for thethree months endedMarch 31,2019compared with (11.5)% for the same period in 2018.

The difference between the Company’s effective tax rates in 2019 and 2018 compared to the U.S. statutory tax rate of 21% is primarily due to the mix of year-to-date and forecasted income or losses in the U.S. and foreign tax jurisdictions, the impact of different tax rates in certain foreign jurisdictions, the impact of the inclusion of foreign income in U.S. taxable income under the GILTI (Global Intangible Low-Taxed Income) tax rules, limitations on interest expense deductions and, in 2018, certain non-deductible acquisition costs.

For the three months ended March 31, 2019, no income tax expense or benefit was recorded for discontinued operations. In the same period in 2018, income tax benefit for discontinued operations was $0.8 million.

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Basis of Presentation and Summary of Significant Accounting Policies (Policies)

3 Months Ended

Mar. 31, 2019

Summary of Significant Accounting Policies [Abstract]

Basis of Presentation Policies [Text Block]

Basis of Presentation

The unaudited consolidated financial statements of Harvard Bioscience, Inc. and its wholly-owned subsidiaries (collectively, Harvard Bioscience or the Company) as of March 31,2019 and for the three months endedMarch 31,2019 and 2018 have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission (SEC). Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. generally accepted accounting principles (U.S. GAAP) have been condensed or omitted pursuant to such rules and regulations. The December 31, 2018 consolidated balance sheet was derived from audited financial statements, but does not include all disclosures required by U.S. GAAP. However, the Company believes that the disclosures are adequate to make the information presented not misleading. These unaudited consolidated financial statements should be read in conjunction with the consolidated financial statements and the notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2018, which was filed with the SEC on March 18, 2019.

In the opinion of management, all adjustments, which include normal recurring adjustments necessary to present a fair statement of financial position as of March 31,2019, results of operations and comprehensive income (loss) for the three months endedMarch 31,2019 and 2018 and cash flows for the three months endedMarch 31,2019 and 2018, as applicable, have been made. The results of operations for the three months endedMarch 31,2019 are not necessarily indicative of the operating results for the full fiscal year or any future periods.

Reclassifications [Policy Text Block]

Reclassifications

As disclosed in Note 5, on January 22, 2018, the Company sold substantially all the assets of its operating subsidiary, Denville Scientific, Inc. (Denville). The sale of Denville represented a strategic shift that had a major effect on the Company’s operations and financial results. As such and pursuant to Accounting Standards Codification (ASC) 205-20 – Presentation of Financial Statements - Discontinued Operations, the operating results of Denville for the three months endedMarch 31,2018 have been presented in discontinued operations in the consolidated statements of operations. These reclassifications and adjustments had no effect on total amounts within the consolidated balance sheet, consolidated statements of operations and comprehensive income (loss), consolidated statements of cash flows for any of the periods presented.

Leases [Policy Text Block]

Leases

The Company accounts for its leases in accordance with ASC 842 Leases. The Company leases office space, manufacturing facilities, automobiles and equipment. The Companyconcludes on whether an arrangement is a lease at inception. This determination as to whether an arrangement contains a lease is based on an assessment as to whether a contract conveys the right to the Company to control the use of identified property, plant or equipment for period of time in exchange for consideration. Leases with an initial term of 12 months or less are not recorded on the balance sheet. The Company recognizes these lease expenses on a straight line basis over the lease term.

As of March 31,2019, the Company has assessed its contracts and concluded that its leases consist of operating leases. Operating leases are included in operating lease right-of-use (ROU) assets, current portion of operating lease liabilities, and operating lease liabilities in the Company’s consolidated balance sheets.

ROU assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As most of the Company’s leases do not provide an implicit rate, the Company determines an incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. The incremental borrowing rate represents a significant judgment that is based on an analysis of the Company’s credit rating, country risk, treasury and corporate bond yields, as well as comparison to the Company’s borrowing rate on its most recent loan. The Company uses the implicit rate when readily determinable. The operating lease ROU asset also includes any lease payments made and excludes lease incentives. Lease expense for lease payments is recognized on a straight-line basis over the lease term.

The Company has lease agreements with lease and non-lease components, which are generally accounted for separately. Additionally, for its leases, the Company applies a portfolio approach to effectively account for the operating lease ROU assets and liabilities.

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Accumulated Other Comprehensive Income (Tables)

3 Months Ended

Mar. 31, 2019

Accumulated Other Comprehensive Income [Abstract]

Accumulated Other Comprehensive Income [Table Text Block]

		Foreign currency		Derivatives
		translation		qualifying as		Defined benefit
(in thousands)		adjustments		hedges		pension plans		Total
Balance at December 31, 2018	$	(12,630)	$	(170)	$	(732)	$	(13,532)
Other comprehensive income (loss) before reclassifications		4		(196)		-		(192)
Amounts reclassified from AOCI		-		17		-		17
Other comprehensive income (loss)		4		(179)		-		(175)
Balance at March 31, 2019	$	(12,626)	$	(349)	$	(732)	$	(13,707)

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Acquisitions (Tables)

3 Months Ended

Mar. 31, 2019

Acquisition Disclosure [Abstract]

Schedule of Business Acquisitions [Table Text Block]

		(in thousands)
Tangible assets	$	34,010
Liabilities assumed		(11,949)
Net assets		22,061
Goodwill and intangible assets:
Goodwill		21,865
Amortizable intangible assets:
Trade name		3,524
Developed technology		25,570
Customer relationships		9,837
In-process research and development		1,387
Total amortizable intangible assets		40,318
Deferred tax liabilities, net		(13,120)
Total goodwill and intangible assets, net of tax		49,063
Acquisition purchase price	$	71,124
Tangible assets and liabilities assumed, as referenced above, consisted of the following:
Cash acquired	$	2,576
Accounts receivable, net		5,069
Inventories		11,512
Other current assets		810
Property, plant and equipment, net		3,574
Deferred income tax assets, net		10,469
Tangible assets	$	34,010
Accounts payable and accrued liabilities	$	6,001
Deferred revenue including customer advances		2,976
Other long term liabilities		2,972
Liabilities assumed	$	11,949

Business Acquisition, Pro Forma Information [Table Text Block]

		Three Months Ended March 31,
		2018
		(in thousands)
Pro Forma
Revenues	$	30,071
Loss from continuing operations		(2,168)

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Discontinued Operations (Tables)

3 Months Ended

Mar. 31, 2019

Discontinued Operations [Abstract]

Disposal Groups, Including Discontinued Operations,Income Loss [Table Text Blcok]

	Three Months Ended
	March 31,
	2019			2018
	(in thousands)
Revenues	$	-	$	893
Cost of revenues		-		(534)
Operating and other expenses		-		(673)
Gain on disposal of discontinued operations		-		1,227
Income from discontinued operations before income taxes	$	-	$	913
Income tax benefit		-		(873)
Income from discontinued operations		-		1,786

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Goodwill and Other Intangible Assets (Tables)

3 Months Ended

Mar. 31, 2019

Goodwill And Other Intangible Assets Disclosure [Abstract]

Schedule of Intangible Assets and Goodwill [Table Text Block]

									Weighted
									Average
		March 31, 2019				December 31, 2018			Life	(a)
		(in thousands)
Amortizable intangible assets:		Gross		Accumulated Amortization		Gross		Accumulated Amortization
Existing technology	$	41,285	$	(17,173)	$	41,268	$	(16,215)	6.9	Years
Trade names		7,786		(3,007)		7,828		(2,861)	7.5	Years
Distribution agreements/customer relationships		22,538		(9,780)		22,657		(9,509)	10.4	Years
In-process research and development		1,387		(45)		1,387		(30)	7.2	Years
Patents		218		(218)		211		(204)	-	Years
Total amortizable intangible assets		73,214	$	(30,223)		73,351	$	(28,819)
Indefinite-lived intangible assets:
Goodwill		57,375				57,304
Other indefinite-lived intangible assets		1,228				1,232
Total goodwill and other indefinite-lived intangible assets		58,603				58,536
Total intangible assets, gross	$	131,817			$	131,887
(a) Weighted average life as of March 31, 2019.

Goodwill Rollforward [Table Text Block]

			(in thousands)
Balance at December 31, 2018		$	57,304
	Effect of change in currency translation		71
Balance at March 31, 2019		$	57,375

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Inventories (Tables)

3 Months Ended

Mar. 31, 2019

Inventories Disclosure [Abstract]

Schedule of Inventory [Table Text Block]

			March 31,		December 31,
			2019		2018
			(in thousands)
Finished goods		$	7,679	$	6,936
Work in process			3,834		3,667
Raw materials			15,044		14,484
	Total	$	26,557	$	25,087

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Property, Plant and Equipment (Tables)

3 Months Ended

Mar. 31, 2019

Property, Plant and Equipment Disclosure [Abstract]

Schedule Of Property Plant And Equipment [Table Text Block]

		March 31,		December 31,
		2019		2018
		(in thousands)
Land, buildings and leasehold improvements	$	2,542	$	2,468
Machinery and equipment		9,907		9,678
Computer equipment and software		9,713		9,685
Furniture and fixtures		1,407		1,390
Automobiles		114		115
		23,683		23,336
Less: accumulated depreciation		(18,101)		(17,438)
Property, plant and equipment, net	$	5,582	$	5,898

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Warranties (Tables)

3 Months Ended

Mar. 31, 2019

Warranties Disclosure [Abstract]

Warranty Rollforward Disclosure [Table Text Block]

		Beginning	(Payments)\			Ending
		Balance	Credits	Additions		Balance
		(in thousands)
Year ended December 31, 2018	$	246	(37)	182	$	391
Three months ended March 31, 2019	$	391	(22)	1	$	370

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Employee Benefit Plans (Tables)

3 Months Ended

Mar. 31, 2019

Employee Benefit Plans Disclosure [Abstract]

Schedule of Changes in Projected Benefit Obligations [Table Text Block]

		Three Months Ended
		March 31,
		2019		2018
		(in thousands)
Components of net periodic benefit cost:
Interest cost	$	132	$	132
Expected return on plan assets		(182)		(204)
Net amortization loss		76		58
Net periodic benefit cost (income)	$	26	$	(14)

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Leases (Tables)

3 Months Ended

Mar. 31, 2019

Leases [Abstract]

Lessee, Operating Lease, Disclosure [Table Text Block]

		Three Months Ended
		March 31, 2019
		(in thousands)
Operating lease cost	$	523
Short term lease cost		76
Sublease income		(102)
Total lease cost	$	497
Supplemental cash flow information related to the Company's operating leases was as follows
		Three Months Ended
		March 31, 2019
		(in thousands)
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from operating leases	$	702
Right-of-use assets obtained in exchange for lease obligations
Operating leases	$	-
Supplemental balance sheet information related to the Company's operating leases was as follows:
		March 31, 2019
		(in thousands)
Operating lease right-of use assets	$	9,106
Current portion, operating lease liabilities	$	2,297
Operating lease liabilities, long term		9,062
Total operating lease liabilities	$	11,359
Weighted average remaining lease term		8.6	years
Weighted average discount rate		9.2%

Future minimum lease payments for operating leases [Table Text Block]

		Operating
		Leases
		(in thousands)
2020	$	2,297
2021		2,268
2022		1,862
2023		1,813
2024		1,795
Thereafter		6,970
Total lease payments		17,005
Less interest		(5,646)
Total operating lease liabilities		11,359

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Capital Stock (Tables)

3 Months Ended

Mar. 31, 2019

Capital Stock Disclosure [Abstract]

Schedule Of Stock Options And Restricted Stock Units Activity Rollforward [Table Text Block]

		Stock Options			Restricted Stock Units			Market Condition RSU's
				Weighted
		Stock		Average	Restricted			Market
		Options		Exercise	Stock Units		Grant Date	Condition RSU's		Grant Date
		Outstanding		Price	Outstanding		Fair Value	Outstanding		Fair Value
Balance at December 31, 2018		1,956,732	$	4.25	1,233,762	$	3.36	116,944	$	4.19
	Granted	559,909		3.80	383,827		3.67	75,514		4.16
	Exercised	(2,500)		3.25	-		-	-		-
	Vested (RSUs)	-		-	(439,875)		3.26	-		-
	Cancelled / forfeited	(75,000)		4.66	(95,509)		2.83	(22,500)		4.19
Balance at March 31, 2019		2,439,141	$	4.13	1,082,205	$	3.56	169,958	$	4.18

Stock Based Compensation Expense Activity By Function [Table Text Block]

		Three Months Ended
		March 31,
		2019		2018
		(in thousands)
Cost of revenues	$	13	$	11
Sales and marketing		(7)		124
General and administrative		551		697
Research and development		34		30
Discontinued operations		-		150
Total stock-based compensation	$	591	$	1,012

Basic and Diluted Shares [Table Text Block]

	Three Months Ended
	March 31,
	2019	2018
Basic	37,644,684	35,462,989
Effect of assumed conversion of employee and director stock options, restricted stock units and Market Condition RSUs	-	-
Diluted	37,644,684	35,462,989

Black-Scholes option pricing model [Member]

Share-Based Compensation Arrangement By Share-Based Payment Award [Line Items]

Table Of Assumptions [Table Text Block]

	Three Months Ended
	March 31,
	2019
Volatility	45.58	%
Risk-free interest rate	2.44	%
Expected holding period (in years)	4.73	years
Dividend yield	-	%

Monte-Carlo valuation simulation [Member]

Share-Based Compensation Arrangement By Share-Based Payment Award [Line Items]

Table Of Assumptions [Table Text Block]

	Three Months Ended
	March 31,
	2019
Volatility	48.00	%
Risk-free interest rate	2.50	%
Correlation coefficient	0.27	%
Dividend yield	-	%

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Long Term Debt (Tables)

3 Months Ended

Mar. 31, 2019

Long Term Debt Disclosure [Abstract]

Schedule of Debt [Table Text Block]

		March 31,		December 31,
		2019		2018
		(in thousands)
Long-term debt:
Term loan	$	57,817	$	62,400
Total unamortized deferred financing costs		(1,475)		(1,605)
Total debt		56,342		60,795
Less: current installments		(2,600)		(6,383)
Current unamortized deferred financing costs		393		401
Long-term debt	$	54,135	$	54,813

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Derivative (Tables)

3 Months Ended

Mar. 31, 2019

Derivatives [Abstract]

Schedule of Derivative Instruments in Statement of Financial Position, Fair Value [Table Text Block]

				March 31, 2019
				Notional Amount		Fair Value (a)
Derivatives designated as hedging instruments under ASC 815		Balance sheet classification		(in thousands)
Interest rate swaps		Other assets (long term liabilities)	$	32,976	$	(349)
				December 31, 2018
				Notional Amount		Fair Value (a)
Derivatives designated as hedging instruments under ASC 815		Balance sheet classification		(in thousands)
Interest rate swaps		Other assets (long term liabilities)	$	34,090	$	(170)
	(a) See Note 16 for the fair value measurements related to these financial instruments.

Schedule of Cash Flow Hedges Included in AOCI [Table Text Block]

Derivatives in Hedging Relationships	Amount of gain (loss) recognized in OCI on derivative (effective portion)
	Three Months Ended March 31,
	2019		2018
	(in thousands)
Interest rate swaps	$	(196)	$	(254)

Reclassification out of Accumulated Other Comprehensive Income [Table Text Block]

Details about AOCI Components	Amount reclassified from AOCI into income (effective portion)
	Three Months Ended March 31,				Location of amount reclassified from AOCI
	2019		2018		into income (effective portion)
	(in thousands)
Interest rate swaps	$	17	$	(25)	Interest expense

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Fair Value Measurements (Tables)

3 Months Ended

Mar. 31, 2019

Fair Value Disclosures [Abstract]

Schedule Of Fair Value Assets And Liabilities Measured On Recurring Basis [Table Text Block]

	Fair Value as of March 31, 2019
(In thousands)		Level 1		Level 2		Level 3		Total
Assets (Liabilities):
Interest rate swap agreements	$	-	$	(349)	$	-	$	(349)
	Fair Value as of December 31, 2018
(In thousands)		Level 1		Level 2		Level 3		Total
Assets (Liabilities):
Interest rate swap agreements	$	-	$	(170)	$	-	$	(170)

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Revenues (Tables)

3 Months Ended

Mar. 31, 2019

Revenues Disclosure [Abstract]

Disaggregation of Revenue [Table Text Block]

		Three Months Ended March 31, 2019
		(in thousands)
		United States		United Kingdom		Germany		Rest of the world		Total
Instruments, equipment, software and accessories	$	18,671	$	3,129	$	2,913	$	2,044	$	26,757
Service, maintenance and warranty contracts		1,143		190		97		15		1,445
Total revenues	$	19,814	$	3,319	$	3,010	$	2,059	$	28,202
		Three Months Ended March 31, 2018
		(in thousands)
		United States		United Kingdom		Germany		Rest of the world		Total
Instruments, equipment, software and accessories	$	16,147	$	3,495	$	3,707	$	2,255	$	25,604
Service, maintenance and warranty contracts		896		201		52		6		1,155
Total revenues	$	17,043	$	3,696	$	3,759	$	2,261	$	26,759

Activity in allowance for doubtful accounts [Table Text Block]

		Three Months Ended March 31,
		2019		2018
		(in thousands)
Balance, beginning of period	$	332	$	193
Bad debt expense (recoveries)		(16)		5
Charged to allowance		27		-
Other		-		36
Effect of foreign currency translation		(2)		-
Balance, end of period	$	341	$	234

Service Contracts [Member]

Deferred Revenue Arrangement [Line Items]

Deferred Revenue, by Arrangement, Disclosure [Table Text Block]

		Three Months Ended March 31, 2019
		(in thousands)
		Service Contracts		Customer Advances		Total
Balance at December 31, 2018	$	1,659	$	2,161	$	3,820
Deferral of revenue		845		111		956
Recognition of deferred revenue		(848)		(223)		(1,071)
Effect of foreign currency translation		10		-		10
Balance at March 31, 2019	$	1,666	$	2,049	$	3,715
		Three Months Ended March 31, 2018
		(in thousands)
		Service Contracts		Customer Advances		Total
Balance at December 31, 2017	$	505	$	-	$	505
Addition due to business combination		849		2,128		2,977
Deferral of revenue		1,193		128		1,321
Recognition of deferred revenue		(758)		(196)		(954)
Effect of foreign currency translation		4		-		4
Balance at March 31, 2018	$	1,793	$	2,060	$	3,853

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Basis of Presentation and Summary of Significant Accounting Policies (Details) $ in Millions	3 Months Ended
	Mar. 31, 2019 USD ($)
Summary of Significant Accounting Policies [Abstract]
Immaterial Error Correction	The immaterial misclassification understated current portion, long term debt and overstated long term debt, less current installments.  This misclassification, in the amount of approximately $4.0 million, related to the classification of the Company’s excess cash flow payment made to its lenders during the quarter ended March 31, 2019 as long term instead of current on its consolidated balance sheet at December 31, 2018.  The misclassification had no impact on total reported debt.
Classification of the Company's excess cash flow payment [Member]
Quantifying Misstatement in Current Year Financial Statements [Line Items]
Miscalculation amount	$ 4

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Recently Issued Accounting Pronouncements (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Jan. 01, 2019	Dec. 31, 2018
Leases [Abstract]
Operating Lease, Right-of-Use Asset	$ 9,106	$ 9,400	$ 0
Operating lease liabilities	$ 11,359	$ 11,700
Accounting Standards Update 2017-12 [Member]
New Accounting Pronouncements Or Change In Accounting Principle [Line Items]
New Accounting Pronouncement or Change in Accounting Principle, Description	In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which amends the impairment model by requiring entities to use a forward-looking approach based on expected losses rather than incurred losses to estimate credit losses on certain types of financial instruments, including trade receivables. This may result in the earlier recognition of allowances for losses. The ASU is effective for public entities for fiscal years beginning after December 15, 2019, with early adoption permitted. In November 2018, the FASB issued ASU No. 2018-19, Codification Improvements to Topic 326, Financial Instruments—Credit Losses, which provided additional implementation guidance on the previously issued ASU. Management has not yet completed its assessment of the impact of the new standard on the Company’s Consolidated Financial Statements. Currently, the Company believes that the most notable impact of this ASU will relate to its processes around the assessment of the adequacy of its allowance for doubtful accounts on trade accounts receivable and the recognition of credit losses. In August 2018, the FASB issued ASU No. 2018-14, Disclosure Framework—Changes to the Disclosure Requirements for Defined Benefit Plans, which amends ASC 715 to add, remove and clarify disclosure requirements related to defined benefit pension and other postretirement plans. The ASU is effective for public entities for fiscal years beginning after December 15, 2020, with early adoption permitted. Management has not yet completed its assessment of the impact of the new standard on the Company’s Consolidated Financial Statements.
Accounting Standards Update 2017-09 [Member]
New Accounting Pronouncements Or Change In Accounting Principle [Line Items]
New Accounting Pronouncement or Change in Accounting Principle, Description	In February 2016, the FASB issued Accounting Standards Update (ASU) 2016-02, Leases, which is intended to improve financial reporting about leasing transactions. The update requires a lessee to record on its balance sheet the assets and liabilities for the rights and obligations created by lease terms of more than 12 months. The update is effective for fiscal years beginning after December 15, 2018. A modified retrospective transition approach is required for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements, with certain practical expedients available. The Company elected to utilize a practical expedient in its method of adoption of the standard and adopted the guidance as of January 1, 2019.  Under this expedient, which is a “current-period adjustment method,” the Company applied ASC 842 as of January 2019 and recognized operating lease liabilities of $11.7 million and right of use assets of $9.4 million for all leases with lease terms of more than 12 months. There was no impact to retained earnings as of that date. In addition, the Company adopted the guidance by electing the following practical expedients: (1) the Company did not reassess whether any expired or existing contracts contained leases, (2) the Company did not reassess the lease classification for any expired or existing leases, and (3) the Company excluded variable payments from the lease contract consideration and recorded those as incurred. The Company’s future commitments under lease obligations and additional disclosures are summarized in Note 12.

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Accumulated Other Comprehensive Income (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Accumulated Other Comprehensive Income (Loss) [Line Items]
Opening Balance	$ (13,532)
Other Comprehensive Income (Loss) before Reclassifications	(192)
Amounts reclassified from AOCI	17
Other Comprehensive Income (Loss), Net of Tax, total	(175)	$ 1,227
Closing Balance	(13,707)
Foreign currency translation adjustments
Accumulated Other Comprehensive Income (Loss) [Line Items]
Opening Balance	(12,630)
Other Comprehensive Income (Loss) before Reclassifications	4
Amounts reclassified from AOCI	0
Other Comprehensive Income (Loss), Net of Tax, total	4
Closing Balance	(12,626)
Derivatives qualifying as hedges
Accumulated Other Comprehensive Income (Loss) [Line Items]
Opening Balance	(170)
Other Comprehensive Income (Loss) before Reclassifications	(196)
Amounts reclassified from AOCI	17
Other Comprehensive Income (Loss), Net of Tax, total	(179)
Closing Balance	(349)
Defined benefit pension plans
Accumulated Other Comprehensive Income (Loss) [Line Items]
Opening Balance	(732)
Other Comprehensive Income (Loss) before Reclassifications	0
Amounts reclassified from AOCI	0
Other Comprehensive Income (Loss), Net of Tax, total	0
Closing Balance	$ (732)

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Acquisitions (Narratives) (Details) - USD ($) $ in Millions		2 Months Ended	3 Months Ended
	Jan. 31, 2018	Mar. 31, 2018	Mar. 31, 2019
Business Acquisition [Line Items]
Business Acquisition, Effective Date of Acquisition			Jan. 31, 2018
Acquisition purchase price	$ 71.1
Business Acquisition, Description of Acquired Entity			DSI, a St. Paul, Minnesota-based life science research company, is a recognized leader in physiologic monitoring focused on delivering preclinical products, systems, services and solutions to its customers.
Business Acquisition Direct Acquisition Costs In Income Statement		$ 2.6	$ 0.0
The results of operations for DSI:
Revenue of Acquiree since Acquisition Date		7.6
Earnings or Loss of Acquiree since Acquisition Date		0.4
Busniess combination purchase accounting inventory fair value step up amortization		1.5
Preliminary amount of inventory fair value step up		3.8
Intangible asset amortization expense		$ 0.7
Data Sciences International, Inc. (DSI) [Member]
Business Acquisition [Line Items]
Finite-Lived Intangible Assets, Weighted Average Useful Life			9 years 3 months 18 days
The results of operations for DSI:
Amortization Period of purchase accounting inventory fair value step up amortization			5 years 6 months
Trade Names [Member]
Business Acquisition [Line Items]
Finite-Lived Intangible Assets, Weighted Average Useful Life			7 years 6 months
Trade Names [Member] | Data Sciences International, Inc. (DSI) [Member]
Business Acquisition [Line Items]
Finite-Lived Intangible Assets, Weighted Average Useful Life			9 years 4 months 24 days
Developed Technology [Member]
Business Acquisition [Line Items]
Finite-Lived Intangible Assets, Weighted Average Useful Life			6 years 10 months 24 days
Developed Technology [Member] | Data Sciences International, Inc. (DSI) [Member]
Business Acquisition [Line Items]
Finite-Lived Intangible Assets, Weighted Average Useful Life			8 years 2 months 12 days
Customer Relationships [Member]
Business Acquisition [Line Items]
Finite-Lived Intangible Assets, Weighted Average Useful Life			10 years 4 months 24 days
Customer Relationships [Member] | Data Sciences International, Inc. (DSI) [Member]
Business Acquisition [Line Items]
Finite-Lived Intangible Assets, Weighted Average Useful Life			12 years 4 months 24 days
In-process research and development [Member]
Business Acquisition [Line Items]
Finite-Lived Intangible Assets, Weighted Average Useful Life			7 years 2 months 12 days
In-process research and development [Member] | Data Sciences International, Inc. (DSI) [Member]
Business Acquisition [Line Items]
Finite-Lived Intangible Assets, Weighted Average Useful Life			7 years 4 months 24 days

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Acquisitions (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2019	Dec. 31, 2018	Jan. 31, 2018
Goodwill and intangible assets
Goodwill		$ 57,375	$ 57,304
Data Sciences International, Inc. (DSI) [Member]
Recognized Identifiable Assets Acquired and Liabilities Assumed [Abstract]
Tangible assets				$ 34,010
Liabilities assumed				(11,949)
Net assets				22,061
Goodwill and intangible assets
Goodwill				21,865
Amortizable intangible assets				40,318
Deferred tax, net				(13,120)
Total goodwill and intangible assets, net of tax				49,063
Acquisition purchase price				71,124
Tangible assets and liabilities assumed, as referenced above, preliminarily consist of the following:
Cash acquired				2,576
Accounts receivable, net				5,069
Inventories				11,512
Other current assets				810
Property, plant and equipment, net				3,574
Deferred income tax assets, net				10,469
Tangible assets				34,010
Accounts payable and accrued liabilities				6,001
Deferred revenue including customer advances				2,976
Other long term liabilities				2,972
Liabilities assumed				11,949
Business Acquisitions Pro Forma Revenue	$ 30,071
Business Acquisitions Pro Forma Net Income Loss	$ (2,168)
Trade Names [Member] | Data Sciences International, Inc. (DSI) [Member]
Goodwill and intangible assets
Amortizable intangible assets				3,524
Developed Technology [Member] | Data Sciences International, Inc. (DSI) [Member]
Goodwill and intangible assets
Amortizable intangible assets				25,570
Customer Relationships [Member] | Data Sciences International, Inc. (DSI) [Member]
Goodwill and intangible assets
Amortizable intangible assets				9,837
In-process research and development [Member] | Data Sciences International, Inc. (DSI) [Member]
Goodwill and intangible assets
Amortizable intangible assets				$ 1,387

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Discontinued Operations (Narrative) (Details) - USD ($) $ in Thousands		3 Months Ended
	Jan. 22, 2018	Mar. 31, 2019	Mar. 31, 2018
Discontinued Operations [Abstract]
Discontinued Operation, Name	Denville
Sale price of of assets Denville	$ 20,000
Earn out provision of discontinued operations	3,000
Proceeds From Divestiture Of Business		$ 0	$ 15,730
Contingent Consideration, Earn-out	$ 3,000
Earn out performance metrics period	2 years

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Discontinued Operations - income (loss) (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Discontinued Operation, Income Statement Disclosures [Abstract]
Revenues	$ 0	$ 893
Cost of revenues	0	(534)
Operating and other expenses	0	(673)
Gain on disposal of discontinued operations	0	1,227
Income (loss) from discontinued operations before income taxes	0	913
Income tax (benefit) expense	0	(873)
Income (loss) from discontinued operations	$ 0	$ 1,786

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Goodwill and Other Intangible Assets (Narratives) (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Goodwill And Other Intangible Assets Disclosure [Abstract]
Amortization of intangible assets	$ 1,430	$ 1,103
Estimated Amortization Expense Next Twelve Months	5,600
Estimated Amortization Expense Year 2	5,600
Estimated Amortization Expense Year 3	5,600
Estimated Amortization Expense Year 4	5,500
Estimated Amortization Expense Year 5	$ 5,400

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Goodwill and Other Intangible Assets (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Dec. 31, 2018
Finite-Lived Intangible Assets [Line Items]
Finite-Lived Intangible Assets, Gross	$ 73,214	$ 73,351
Finite-Lived Intangible Assets, Accumulated Amortization	(30,223)	(28,819)
Goodwill	57,375	57,304
Other indefinite lived intangible assets	1,228	1,232
Total goodwill and other indefinite lived intangible assets	58,603	58,536
Total intangible assets	131,817	131,887
Existing technology [Member]
Finite-Lived Intangible Assets [Line Items]
Finite-Lived Intangible Assets, Gross	41,285	41,268
Finite-Lived Intangible Assets, Accumulated Amortization	$ (17,173)	(16,215)
Finite-Lived Intangible Assets, Weighted Average Useful Life	6 years 10 months 24 days
Trade Names [Member]
Finite-Lived Intangible Assets [Line Items]
Finite-Lived Intangible Assets, Gross	$ 7,786	7,828
Finite-Lived Intangible Assets, Accumulated Amortization	$ (3,007)	(2,861)
Finite-Lived Intangible Assets, Weighted Average Useful Life	7 years 6 months
Distribution agreements/customer relationships [Member]
Finite-Lived Intangible Assets [Line Items]
Finite-Lived Intangible Assets, Gross	$ 22,538	22,657
Finite-Lived Intangible Assets, Accumulated Amortization	$ (9,780)	(9,509)
Finite-Lived Intangible Assets, Weighted Average Useful Life	10 years 4 months 24 days
In-process research and development [Member]
Finite-Lived Intangible Assets [Line Items]
Finite-Lived Intangible Assets, Gross	$ 1,387	1,387
Finite-Lived Intangible Assets, Accumulated Amortization	$ (45)	(30)
Finite-Lived Intangible Assets, Weighted Average Useful Life	7 years 2 months 12 days
Patents [Member]
Finite-Lived Intangible Assets [Line Items]
Finite-Lived Intangible Assets, Gross	$ 218	211
Finite-Lived Intangible Assets, Accumulated Amortization	$ (218)	$ (204)

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Goodwill and Other Intangible Assets - Change in carrying amount of goodwill (Details) $ in Thousands	3 Months Ended
	Mar. 31, 2019 USD ($)
Goodwill And Other Intangible Assets Disclosure [Abstract]
Goodwill, Beginning Balance	$ 57,304
Effect of change in currency translation	71
Goodwill, Ending Balance	$ 57,375

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Inventories (Details) - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018
Inventories Disclosure [Abstract]
Finished Goods	$ 7,679	$ 6,936
Work in Process	3,834	3,667
Raw Materials	15,044	14,484
Total Inventories, Net	$ 26,557	$ 25,087

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Property, Plant and Equipment (Details) - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018
Property, Plant and Equipment [Line Items]
Property, Plant and Equipment, Gross	$ 23,683	$ 23,336
Accumulated Depreciation, Depletion and Amortization, Property, Plant, and Equipment	(18,101)	(17,438)
Property, plant and equipment, net	5,582	5,898
Land, buildings and leasehold improvements [Member]
Property, Plant and Equipment [Line Items]
Property, Plant and Equipment, Gross	2,542	2,468
Machinery and equipment [Member]
Property, Plant and Equipment [Line Items]
Property, Plant and Equipment, Gross	9,907	9,678
Computer equipment and software [Member]
Property, Plant and Equipment [Line Items]
Property, Plant and Equipment, Gross	9,713	9,685
Furniture and Fixtures [Member]
Property, Plant and Equipment [Line Items]
Property, Plant and Equipment, Gross	1,407	1,390
Automobiles [Member]
Property, Plant and Equipment [Line Items]
Property, Plant and Equipment, Gross	$ 114	$ 115

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Related Party Transactions (Narratives) (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Business Acquisition [Line Items]
Operating Leases, Rent Expense, Net		$ 500
Multi Channel Systems MCS GmbH [Member]
Business Acquisition [Line Items]
Operating Leases, Rent Expense, Net	$ 78	79
Triangle BioSystems, Inc. [Member]
Business Acquisition [Line Items]
Operating Leases, Rent Expense, Net	$ 11	$ 11

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Warranties (Details) - USD ($) $ in Thousands	3 Months Ended	12 Months Ended
	Mar. 31, 2019	Dec. 31, 2018
Product Warranty Disclosure [Abstract]
Warranty, Beginning Balance	$ 391	$ 246
Warranty (payments) or credits	(22)	(37)
Warranty additions	1	182
Warranty, Ending Balance	$ 370	$ 391

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Employee Benefit Plans (Narratives) (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018	Dec. 31, 2018
Employee Benefit Plans Disclosure [Abstract]
Expected employer contribution in current remaining fiscal year	$ 0.5
Defined Benefit Plan Payments In Current Fiscal Year	$ 0.2	$ 0.2
Defined Benefit Plans Liabilities Noncurrent			$ 0.9

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Employee Benefit Plans (Details) - USD ($)	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Employee Benefit Plans Disclosure [Abstract]
Interest Cost	$ 132,000	$ 132,000
Expected Return on Plan Assets	(182,000)	(204,000)
Net Amortization Loss	76,000	58,000
Curtailment Gain	0	0
Net Periodic Benefit Cost, Total	$ 26,000	$ (14,000)

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Leases (Narratives) (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018	Jan. 01, 2019	Dec. 31, 2018
Leases [Abstract]
Lease Expiration Date	Dec. 31, 2023
Operating Lease, Right-of-Use Asset	$ 9,106		$ 9,400	$ 0
Operating lease liabilities	$ 11,359		$ 11,700
Operating Leases, Rent Expense, Net		$ 500

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Leases - Components of lease expense and other supplementary information (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Jan. 01, 2019	Dec. 31, 2018
Components of lease expense:
Operating lease cost	$ 523
Short term lease cost	76
Sublease income	(102)
Total lease cost	497
Supplemental cash flow information [Abstract]
Operating cash flows from operating leases	702
Right-of-use assets obtained in exchange for lease obligations, operating leases	0
Supplemental balance sheet information [Abstract]
Operating lease right-of use assets	9,106	$ 9,400	$ 0
Current portion, operating lease liabilities	2,297		0
Operating lease liabilities, long term	9,062		$ 0
Operating lease liabilities	$ 11,359	$ 11,700
Weighted average remaining lease term	8 years 7 months 6 days
Weighted average discount rate	9.20%

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Leases - Maturity (Details) - USD ($) $ in Thousands	Mar. 31, 2019	Jan. 01, 2019
Leases [Abstract]
2020	$ 2,297
2021	2,268
2022	1,862
2023	1,813
2024	1,795
Thereafter	6,970
Total lease payments	17,005
Total operating lease liabilities	$ 11,359	$ 11,700

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Capital Stock (Narratives) (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018	Dec. 31, 2018	Apr. 02, 2018
Common stock
Common Stock- Shares Authorized	80,000,000		80,000,000
Common Stock- Shares Issued	45,433,115		45,124,309
Common Stock- Shares Outstanding	37,687,608		37,378,802
Preferred Stock
Preferred stock issued or outstanding	0
Preferred Stock - Shares Authorized	5,000,000		5,000,000
Employee Stock Purchase Plan (as amended, the ESPP)
Total amount of common stock issued under ESOP	890,762
Employee Stock Purchase Plan Shares Authorized	1,050,000
Share-based Compensation Arrangement by Share-based Payment Award, Discount from Market Price, Offering Date	85.00%
Stock issued during the year, Shares, Employee Stock Purchase Plans	0
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized				20,908,929
Increase In Number Of Shares Authorized For Issuance Under Stock Option And Incentive Plan				3,400,000
Target number of these restricted stock units	383,827
Deferred Compensation Arrangement with Individual, Maximum Contractual Term	10 years
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount	3,691,304	4,899,228
Weighted Average Estimated Black Scholes Value Of Option Grants	$ 1.58
Stock Issued During Period, Value, Restricted Stock Award, Gross	$ (421)	$ (5)
Maximum percentage of target number of restricted stock units	150.00%
Share Based Compensation Arrangement By Share Based Payment Award Options Grants In Period Weighted Average Grant Date Fair Value	$ 3.8
Stock options, Granted	559,909	0
Market Condition Restricted Stock Unit [Member]
Employee Stock Purchase Plan (as amended, the ESPP)
Target number of these restricted stock units	75,514
Stock options, Granted		0
Deferred stock awards of Market Condition RSU, Approved May 2018 [Member]
Employee Stock Purchase Plan (as amended, the ESPP)
Target number of these restricted stock units	94,444
Maximum percentage of target number of restricted stock units	150.00%
Share Based Compensation Arrangement By Share Based Payment Award Options Grants In Period Weighted Average Grant Date Fair Value	$ 4.16
Minimum [Member]
Employee Stock Purchase Plan (as amended, the ESPP)
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period	1 year
Maximum [Member]
Employee Stock Purchase Plan (as amended, the ESPP)
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period	4 years

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Capital Stock - Stock options and restricted stock activity (Details) - $ / shares	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Share-Based Compensation Arrangement By Share-Based Payment Award [Line Items]
Opening Balance Stock Options Outstanding	1,956,732
Stock options, Granted	559,909	0
Stock option, Exercised	(2,500)	(298,000)
Stock options, Cancelled and Forfeited	(75,000)
Closing Balance Stock Options Outstanding	2,439,141
Begining Balance Weighted Average Exercise Price	$ 4.25
Stock Options, Weighted Average Exercise Price, Granted	3.8
Stock Options, Weighted Average Exercise Price, Exercised	3.25
Stock Options, Weighted Average Exercise Price, Cancelled / Forfeited	4.66
Closing Balance Weighted Average Exercise Price	$ 4.13
Begining Balance Restricted Stock Units Outstanding	1,233,762
Restricted stock units, Granted	383,827
Retricted Stock Units, Vested	(439,875)
Restricted Stock Units, Cancelled/ Forfeited	(95,509)
Closing Balance Restricted Stock Units Outstanding	1,082,205
Begining Balance Grant Date Fair Value Of Restricted Stock Units	$ 3.36
Restricted Stock Units Grant Date Fair Value, Granted	3.67
Restricted Stock Unit, Grant Date Fair Value, Vested	3.26
Restricted Stock Unit Grant Date Fair Value, Forfeited	2.83
Closing Balance Grant Date Fair Value Of Restricted Stock Units	$ 3.56
Market Condition Restricted Stock Unit [Member]
Share-Based Compensation Arrangement By Share-Based Payment Award [Line Items]
Stock options, Granted		0
Begining Balance Restricted Stock Units Outstanding	116,944
Restricted stock units, Granted	75,514
Retricted Stock Units, Vested	0
Restricted Stock Units, Cancelled/ Forfeited	(22,500)
Closing Balance Restricted Stock Units Outstanding	169,958
Begining Balance Grant Date Fair Value Of Restricted Stock Units	$ 4.19
Restricted Stock Units Grant Date Fair Value, Granted	4.16
Restricted Stock Unit, Grant Date Fair Value, Vested	0
Restricted Stock Unit Grant Date Fair Value, Forfeited	4.19
Closing Balance Grant Date Fair Value Of Restricted Stock Units	$ 4.18

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Capital Stock - Assumptions Black Scholes and Monte Carlo (Details)	3 Months Ended
	Mar. 31, 2019
Black-Scholes option pricing model [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions and Methodology [Abstract]
Volatility	45.58%
Risk-free interest rate	2.44%
Expected holding period (in years)	4 years 9 months
Dividend yield	0.00%
Monte-Carlo valuation simulation [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions and Methodology [Abstract]
Volatility	48.00%
Risk-free interest rate	2.50%
Correlation coefficient	0.27%
Dividend yield	0.00%

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Capital Stock - Stock-based compensation expense (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Share-based Compensation	$ 591	$ 1,012
Cost of Sales [Member]
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Share-based Compensation	13	11
Selling and Marketing Expense [Member]
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Share-based Compensation	(7)	124
General and Administrative Expense [Member]
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Share-based Compensation	551	697
Research and Development Expense [Member]
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Share-based Compensation	34	30
Discontinued Operations [Member]
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Share-based Compensation	$ 0	$ 150

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Capital Stock - Weighted average number of shares (Details) - shares	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Weighted Average Number Diluted Shares Outstanding Adjustment [Abstract]
Basic	37,644,684	35,462,989
Effect of assumed conversion of employee and director stock options, restricted stock units and Market Condition RSU's	0	0
Diluted	37,644,684	35,462,989

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Long Term Debt (Narratives) (Details) - USD ($) $ in Thousands		3 Months Ended
	Jan. 31, 2018	Mar. 31, 2019	Dec. 31, 2018	Mar. 31, 2018	Jan. 22, 2018
Debt Instrument [Line Items]
Secured Debt		$ 56,342	$ 60,795
Line of Credit Facility, Maximum Borrowing Capacity	$ 25,000
Maturity of debt instrument in years and months		5 years
Debt Instrument, Payment Terms	the outstanding term loans began to amortize in equal quarterly installments equal to $0.4 million per quarter on such date and during each of the next three quarters thereafter, $0.6 million per quarter during the next four quarters thereafter and $0.8 million per quarter thereafter, with a balloon payment at maturity.
Debt Instrument Quarterly Payment Current Year				$ 400
Debt Instrument Quarterly Payment Next Year				600
Debt Instrument Quarterly Payment Thereafter				$ 800
Limitation on pledges of capital stock of foreign subsidiaries		65.00%
Line of Credit Facility, Amount Outstanding					$ 11,900
Line of Credit Facility, Remaining Borrowing Capacity		$ 14,500
Revolving Credit Facility [Member]
Debt Instrument [Line Items]
Line of Credit Facility, Maximum Borrowing Capacity	$ 25,000
Line of Credit Facility, Amount Outstanding	$ 4,800
Revolving Credit Facility [Member] | Base Rate [Member]
Debt Instrument [Line Items]
Debt Instrument, Description Of Variable Rate Basis	a base rate plus 4.75%
Basis Spread on Variable Rate	4.75%
Floor Interest Rate	4.25%
Revolving Credit Facility [Member] | London Interbank Offered Rate (LIBOR) [Member]
Debt Instrument [Line Items]
Debt Instrument, Description Of Variable Rate Basis	London Interbank Offered Rate (LIBOR) rate plus 6.25%
Basis Spread on Variable Rate	6.25%
Floor Interest Rate	1.25%
Term Loan [Member]
Debt Instrument [Line Items]
Secured Debt	$ 64,000
Interest Rate As Of Reporting Date		8.87%

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Long Term Debt - Borrowings (Details) - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018
Debt Instrument
Term Loan	$ 57,817	$ 62,400
Total unamortized deferred financing costs	(1,475)	(1,605)
Total Debt	56,342	60,795
Less: current installments	(2,600)	(6,383)
Current unamortized deferred financing costs	393	401
Long-term debt	$ 54,135	$ 54,813

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Derivative (Narratives) (Details) - USD ($)		3 Months Ended
	Jan. 31, 2018	Mar. 31, 2019	Dec. 31, 2018
Derivative Instruments And Hedging Activities Disclosure [Line Items]
Deferred losses on derivative instruments accumulated in AOCI expected to be reclassified to earnings		$ 93,000
Derivative Interest Rate Swap Effective Percentage		100.00%
Secured Debt		$ 56,342,000	$ 60,795,000
Line of Credit Facility, Maximum Borrowing Capacity	$ 25,000,000
Proceeds from interest rate swaps unwinding		100,000
Other liabilities-non current [Member] | Derivatives qualifying as hedges [Member]
Derivative Instruments And Hedging Activities Disclosure [Line Items]
Notional Amount of Interest Rate Derivatives		$ 32,976,000	$ 34,090,000
Term Loan [Member]
Derivative Instruments And Hedging Activities Disclosure [Line Items]
Notional Amount of Interest Rate Swaps	$ 36,000,000
LIBOR Fixed Rate	2.72%
Secured Debt	$ 64,000,000

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Derivative (Details) - Other liabilities-non current [Member] - Derivatives qualifying as hedges [Member] - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018
Derivatives, Fair Value [Line Items]
Notional Amount of Interest Rate Derivatives	$ 32,976	$ 34,090
Derivative Liability, Fair Value, Net	$ (349)	$ (170)

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Derivative - Other comprehensive income loss (Details) - Derivatives qualifying as hedges [Member] - USD ($)	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments, Gain (Loss) Reclassified from Accumulated OCI into Income, Effective Portion	$ (196,000)	$ (254,000)
Interest Expense [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments, Gain (Loss) Reclassified from Accumulated OCI into Income, Effective Portion	$ 17,000	$ (25,000)

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Fair Value Measurements (Details) - Derivatives qualifying as hedges [Member] - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Derivative Liabilities	$ (349)	$ (170)
Fair Value, Inputs, Level 1 [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Derivative Liabilities	0	0
Fair Value, Inputs, Level 2 [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Derivative Liabilities	(349)	(170)
Fair Value, Inputs, Level 3 [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Derivative Liabilities	$ 0	$ 0

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Revenues - Disaggregation (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Disaggregation of Revenue [Line Items]
Revenues	$ 28,202	$ 26,759
Instruments, equipment software and accessories [Member]
Disaggregation of Revenue [Line Items]
Revenues	26,757	25,604
Service, maintenance and warranty contracts [Member]
Disaggregation of Revenue [Line Items]
Revenues	1,445	1,155
Segment, Geographical, United States [Member]
Disaggregation of Revenue [Line Items]
Revenues	19,814	17,043
Segment, Geographical, United States [Member] | Instruments, equipment software and accessories [Member]
Disaggregation of Revenue [Line Items]
Revenues	18,671	16,147
Segment, Geographical, United States [Member] | Service, maintenance and warranty contracts [Member]
Disaggregation of Revenue [Line Items]
Revenues	1,143	896
Segment, Geographical, United Kingdom [Member]
Disaggregation of Revenue [Line Items]
Revenues	3,319	3,696
Segment, Geographical, United Kingdom [Member] | Instruments, equipment software and accessories [Member]
Disaggregation of Revenue [Line Items]
Revenues	3,129	3,495
Segment, Geographical, United Kingdom [Member] | Service, maintenance and warranty contracts [Member]
Disaggregation of Revenue [Line Items]
Revenues	190	201
Segment, Geographical, Germany [Member]
Disaggregation of Revenue [Line Items]
Revenues	3,010	3,759
Segment, Geographical, Germany [Member] | Instruments, equipment software and accessories [Member]
Disaggregation of Revenue [Line Items]
Revenues	2,913	3,707
Segment, Geographical, Germany [Member] | Service, maintenance and warranty contracts [Member]
Disaggregation of Revenue [Line Items]
Revenues	97	52
Rest Of The World [Member]
Disaggregation of Revenue [Line Items]
Revenues	2,059	2,261
Rest Of The World [Member] | Instruments, equipment software and accessories [Member]
Disaggregation of Revenue [Line Items]
Revenues	2,044	2,255
Rest Of The World [Member] | Service, maintenance and warranty contracts [Member]
Disaggregation of Revenue [Line Items]
Revenues	$ 15	$ 6

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Revenues - Deferred revenue (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Movement in Deferred Revenue [Roll Forward]
Deferred Revenue, beginning balance	$ 3,820	$ 505
Addition due to business combination		2,977
Deferral of revenue	956	1,321
Recognition of deferred revenue	(1,071)	(954)
Effect of foreign currency translation	10	4
Deferred Revenue, ending balance	3,715	3,853
Service Contracts [Member]
Movement in Deferred Revenue [Roll Forward]
Deferred Revenue, beginning balance	1,659	505
Addition due to business combination		849
Deferral of revenue	845	1,193
Recognition of deferred revenue	(848)	(758)
Effect of foreign currency translation	10	4
Deferred Revenue, ending balance	1,666	1,793
Customer Advances [Member]
Movement in Deferred Revenue [Roll Forward]
Deferred Revenue, beginning balance	2,161	0
Addition due to business combination		2,128
Deferral of revenue	111	128
Recognition of deferred revenue	(223)	(196)
Effect of foreign currency translation	0	0
Deferred Revenue, ending balance	$ 2,049	$ 2,060

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Revenues - Allowance for doubtful debts (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
AllowanceForDoubtfulAccountsReceivableRollforward
Balance, beginning of period	$ 332	$ 193
Provision for allowance for doubtful accounts	(16)	5
Charged to allowance	(27)	0
Other	0	36
Effect of foreign currency translation adjustment	(2)	0
Balance, end of period	$ 341	$ 234

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Income Tax (Narratives) (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Income Tax [Abstract]
Effective Income Tax Rate	(32.10%)	(11.50%)
Income tax expense (benefit)	$ 576	$ 605
Discontinued Operation, Tax Effect of Discontinued Operation	$ 0	$ (873)
US Federal Income Tax Rate, based on Tax Cuts And Jobs Act Of 2017	21.00%