Good day, ladies and gentlemen, and thank you for standing by. Welcome to the Fourth Quarter 2012 Harvard Bioscience Earnings Conference Call. [Operator Instructions] As a reminder, this conference is being recorded. I'd now like to introduce your host for today, Mr. Tom McNaughton, CFO. Sir, please begin.

Thank you, Ben, and good morning, everyone. Thank you for joining us to discuss our results for the fourth quarter of 2012. Chane Graziano, our CEO; and David Green, our President are also on the call today. After the Safe Harbor statement, I'll turn the call over to Chane and David, who will present comments on the company's fourth quarter and 2012 full year business performance. Following those comments, we'll open the call for any questions. In our discussion today, we'll make statements that constitute forward-looking statements under the forward -- Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. Our actual actions and results may differ materially from those projected due to risks and uncertainties, including those detailed in our Annual Report on Form 10-K for the fiscal year ended December 31, 2011, and the Form S-1 registration statement filed with the SEC by Harvard Apparatus Regenerative Technology, Inc. and in our other public filings. Any forward-looking statements, including among other things, those related to our future results or actions; the initial public offering that contemplated a subsequent spinoff of Harvard Apparatus Regenerative Technology, Inc.; and with respect to the spinoff, our ability to obtain a private letter ruling from the Internal Revenue Service regarding the distribution's tax retreatment, represent our estimates and expectations as of today and should not be relied upon as representing our estimates of any subsequent day. Further information regarding forward-looking statements and risk factors is included in the press release issued earlier today reporting our fourth quarter results. Harvard Bioscience expresses -- expressly disclaims any obligation or undertaking to release publicly any updates or revisions to such statements to reflect any changes in expectations with regard thereto and any changes in the events, conditions or circumstances on which any such statement is based. Please note that during this call, we will discuss non-GAAP financial measures because we believe those measures provide enhanced understanding of how our businesses are performing. These non-GAAP measures approximate information used by our management to internally evaluate the operating results of the company. For each non-GAAP financial measure discussed, we have made available, as part of our press release or on our website in the Investor Relations section, a reconciliation to the most directly comparable GAAP financial measure. Additionally, any material, financial or other statistical information presented on the call, which is not included in our press release will be archived and available in the Investor Relations section of our website. Look on the Investor Relations section of our website and then click on the Investor Presentations or website icon as appropriate. A replay of this call will also be archived at the same location on our website. Our website is located at www.harvardbioscience.com. Lastly, all financial information presented in this conference call relates to our continuing operations, unless otherwise stated. I will now turn the call over to Chane.

Thank you, Tom, and good morning, everyone. Despite the difficult economic environment and political uncertainty during 2012, we've made significant progress at HBIO towards achieving our long-term goals of providing the best products and services for our customers and maximizing shareholder value. In our Harvard Apparatus Regenerative Technology business, which we now refer to as HART, we achieved several major milestones in 2012, including beginning a clinical trial in Russia with 2 trachea transplant patients treated using our bioreactors. The first clinical trial was filmed and being broadcast on European television today and billed as The Miracle of Krasnodar. The U.S. FDA approved the first trachea transplant surgery in the U.S. We established our own trachea scaffold production facility in Holliston, Massachusetts facility, and last but not least, filing an S-1 registration statement with the SEC in December, to begin an IPO and separate HART from HBIO. While a significant amount of our attention was on the HART business, we also took steps to improve the operations of our core Life Science Research Tools business, and to position us once again to become active in acquiring new product lines or companies that strengthen our position in the research market. Some of the actions we took during 2012 included: hiring a new general manager for the Denville business and restructured its sales team to more effectively train new sales reps to ensure better productivity. In February, we acquired AHN Biotechnologie, a German manufacturer of pipette tips. We restructured the company, repositioned its products to increase gross margins and we expanded sales and marketing efforts. Next, we took steps to increase our gross margins and reduce expenses in our Hoefer electrophoresis business. We reorganized and reduced expenses in our Spanish subsidiary. We launched a new novel patented pending micro volume cuvette that can effectively turn a standard spectrophotometer into a micro volume unit. We launched a new micro volume spectrophotometer in 2012 and we'll introduce and launch additional one in mid-2013. We develop a new family of products for our BTX Electroporation brand that will enable us to compete in a larger segment in that market. Due to the fact that we have filed a registration statement with the SEC for an IPO of HART in connection with the separation of HART from HBIO, we will not be providing guidance for 2013 for either business. However, based on the progress we have made in both our LSRT business and HART businesses, we are excited about the future growth opportunities for both of these companies. I will now turn the call over to David.

Thank you, Chane, and good morning, everyone. In HART, we're very pleased to report continued clinical progress. Our current patients continue to do well. Mr. Beyene is alive at 20 months post the surgery. He was given only 2 weeks to live prior to that surgery. The 2 Russian patients, who were the first to enroll in the clinical trial, are also alive at 8 months post-surgery. Those 2 patients were treated as part of the clinical trial funded under a $5 million Mega-Grant from the Russian government and is taking place in Krasnodar in Russia. The Krasnodar Hospital is one of Russia's top hospitals, having performed over 200 organ transplants in the last 2 years. We expect further tracheal transplant surgeries to take place in Krasnodar in the future. In addition to the Russian clinical trial, a European clinical trial in trachea cancer patients, which is expected to enroll approximately 25 patients, is expected to start next year. Before this formal trial begins, individual patients will continue to be treated on a compassionate case-by-case basis in the same way that Mr. Beyene was treated. This project is a consortium of European companies, hospitals and universities led by Professor Macchiarini. I'm also pleased to report that a sixth patient has been treated. The patient is alive at 6 months but is yet to be released in the hospital. The patient was in very serious condition and was treated on an emergency basis as a last-resort attempt to save the patient's life. The patient's current condition has not been disclosed by the hospital. We expect the seventh patient, a young girl born without a trachea, to be treated in the next month or 2. We also expect additional surgeries this year. At this point, the technique is still experimental and can…

[Operator Instructions] Our first question comes from the line of Chris Higgins [ph] from Harbor Capital.

So very much appreciate the update on the businesses, and I know it’s sort of a question on the LSRT business. And I know that there had been just a number of moving pieces over the last few years, given the investments that you guys have been doing with HART. But I was doing some sort of rough back of the envelope math based on the management's set of targets. You guys just filed in your '11 proxy for the 2010 fiscal year, and I know you sort of these SOX making exercises that are always fraught with risk, but it looked like then you are targeting kind of roughly at 16.5% to a 17.5% non-GAAP operating income margin for the LSRT business. And I know, especially with the last 2 years, given the budget pressures and also just your guys' ongoing investment in HART. I'm trying to figure out sort of what is the -- what is your guys' target for the long-term margin for that LSRT business?

Yes. I mean, I think over the past couple of years, we've -- in the economic environment, it's been less than we would expect it to be. I believe this year, we're around 15%. As we look forward, I believe we have taken steps and some of the steps we outlined that we started to take place in 2012, that will take about $1.5 million worth of expenses out and also margin improvement. But my goal is -- that I believe we can run this business in the 18% operating margin range and that would -- that's my target.

Okay, that's really helpful. And then staying on the LSRT business, you guys -- you mentioned that you're planning on expanding the capacity for the credit facility. And just given your strong cash flow, especially post the spinoff at HART, what are you -- like when you guys have it at $20 million today, are you planning on doubling that?

We negotiated a new facility of $50 million.

Got it. Okay. Very helpful. And especially given the budget pressures in -- for some of the smaller acquisitions you guys might be targeting, are you guys seeing more and more opportunities out there to do sort of these tuck-in deals?

We have several that we're looking at, at this time. We've become a little more active over the last few months to fill the pipeline. Over the last year or so, we've had opportunities. But most of the tuck-unders that we do, typically aren't competitive in the marketplace. They are things that we seek out and we approach the sellers or potential sellers. And so we become more active in that way and I don't believe there's any shortage of opportunity.

[Operator Instructions] And we have a question from Kelly Cardwell from Central Square.

Just following on to the last question on acquisitions. I think, historically, you guys have talked about maybe being able to pick these companies up for something like 4 to 6x EBITDA. Is that -- just remind me, is that right and are those opportunities still available?

Yes, that's correct. And that is still our target, yes. The smaller acquisitions, we've been able to do in that range. As you get to larger acquisitions where there maybe some competitive pressure, it maybe 7x. But we have not stretched to that kind of pricing at this stage.

[Operator Instructions] And I'm showing no additional questions in queue. I would like to turn the conference back to Chane Graziano, Chairman and Chief Executive Officer for closing remarks.

Thanks, Ben. Despite the current economic environment, we're very optimistic about the future success of both HBIO and HART businesses. The significant increase in our stock price since we announced the separation into 2 businesses, I believe validates our excitement about the future growth opportunities of these businesses. I'd like to thank everybody for attending our call today. Thank you.

Ladies and gentlemen, thank you for your attendance in today's conference. This does conclude the program, and you may all disconnect. Have a great rest of the day.