Good day, ladies and Gentlemen, and welcome to the Harvard Bioscience's First Quarter 2014 Financial Results Conference Call. [Operator Instructions] Please note that today's conference is being recorded. I would like to hand the conference over to Cheryl Schneider of Dian Griesel International. Ma'am, please go ahead.

Thank you, Karen, and good morning, everyone. Thank you for joining us today for the Harvard Bioscience First Quarter 2014 Financial Results Conference Call. Leading the call today will be Jeffrey Duchemin, CEO and President; and Robert Gagnon, Chief Financial Officer of Harvard Bioscience. Before I turn the call over to management, I will read Harvard Bioscience's Safe Harbor statement. In its discussion today, the company may make statements that constitute forward-looking statements. The company's actual results and performance may differ materially from what it has projected due to risks and uncertainties, including those detailed in its annual report on Form 10-K for the period ended December 31, 2013, and its other public filings. Any forward-looking statements, including those related to the company's future results and activities represent its estimates as of today and should not be relied upon as representing its estimates as of any subsequent day. At this point, it's my pleasure to turn the call over to Jeffrey Duchemin. Jeff, please go ahead.

Thank you, Cheryl. Good morning, everyone. Thank you, all, for joining us today for our quarterly update. As you read in our press release that we issued this morning and as you will hear during this conference call, we have made significant amount of progress this quarter towards executing our business strategy. And I am pleased to report that we are well on our way and on track to meet our annual guidance and overall goals for 2014. During our fourth quarter conference call, we discussed reinvesting $1 million from our reorganization into areas that we believe will drive organic growth. I am pleased to announce we are on track with key management hires and other investments that we expect will help us deliver our 2014 business objectives. As part of our organic growth strategy, we continue to strengthen our global teams around operations, sales, marketing and IT. During the first quarter, we conducted our first annual global sales meeting. During the meeting, we not only cross-trained our sales and marketing associates, we also launched new compensation plans in line with the company's business objectives. To enhance our global operations, we hired Ron Aplin, an industry veteran with more than 25 years experience to serve as Vice President of Global Operations and Quality. Ron's focus is on operational excellence across our global footprint as we continue to drive efficiencies throughout the organization. To help him execute his mission, he recently hired a director of North American operations. In addition to enhancing our global operations team, we have hired a senior leader of IT to assist us in streamlining and enhancing our global IT systems. Not only will this new position help us complete our functional reorganization, it will also assist us in establishing a platform for integrating future acquisitions. Now…

Thank you, Jeff. I'll begin with an overview of our Q1 performance, discuss our financial position and conclude with a comment on 2014 guidance. Before I dive into the details, I want to mention that much of my focus for this call will be on non-GAAP results, which we believe better represent the ongoing economics of the business, reflects how we set and [ph] measure our incentive compensation plans and how we manage the overall business internally. However, I will also briefly review the GAAP results. The differences between our GAAP and non-GAAP results and the related reconciliations are outlined in our earnings release we issued today, which can be found on our website under Press Releases. 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. A replay of this call will also be archived at the same location on our website at www.harvardbioscience.com. Starting with our overall financial performance. Net income on a GAAP basis was $719,000 compared with $96,000 for Q1 last year. And recall as discussed last quarter, all prior period financial results have been restated to reflect the spinoff of Harvard Apparatus Regenerative Technology or HART as a discontinued operation. As a result, GAAP income from continuing operations was also $719,000, or $0.02 per diluted share, compared with $931,000 or $0.03 per diluted share for Q1 last year on a restated basis. Now onto the non-GAAP results. Our non-GAAP income from continuing operations for Q1 was $1.7 million or $0.05 per diluted share compared with $2.1 million or $0.07 per diluted share for Q1 last year. Now moving to the top line. Revenues for Q1 were $25.9 million compared with $26.1 million…

[Operator Instructions] Our first question comes from the line of Raymond Myers from Alere Financial.

Your backlog discussion may already speak to my first question, but let me ask it. When do you expect to begin achieving new sales or support or manufacturing synergies across the business units as a result of your alignment initiatives?

Ray, I think we're seeing that already. And speaking to the backlog, which I had mentioned was up over 40% versus Q1 of last year, this goes right in line with the functional approach that we've taken for the business. Our commercial teams are doing an excellent job gathering orders. We feel confident as the year progresses. We'll continue to execute on our plan. In regards to some of the other functions of the business, whether it be R&D, whether it be operations, we're pulling the global teams together for the first time acting as one which is going to allow us to release new products faster, streamline our costs, by creating -- many synergies of this business as we've had [ph] in the past. So we feel confident. And we're-- and I'm very proud of the achievements we've made in such a short period of time with our reorganization.

Sounds good. And a follow-up question if I could. Regarding these alignment initiatives. What's the best metrics of their success? Is it more on the side of accelerated revenue growth, expanding margins or something else?

I think it's a combination of everything. But back to our strategy, the main part of our strategy in 2014 is organic growth. We're spending a lot of time focused on stabilizing our base business. That leads in to new product developments. So we have our R&D teams from around the world working together as one now, trying to bring new products to market faster. And the last part is business acquisitions. We continue to be focused on acquiring companies and growing our business on a strategic standpoint with products and companies that we think will help us grow in the future.

Well, picking up on that, you've got nearly $26 million in cash, that's a substantial cash balance. What do you plan on doing to leverage that? Is that part of your acquisition strategy? And if so, what are some of the criteria you have for acquisition?

I'll start off and let Rob jump in. I know he wants to comment on this. We are actively pursuing acquisitions. We've said that all along. We've spent a lot of time looking at a variety of different companies in the industry. We're going to be very conservative in terms of our approach. We're not going to be overly aggressive. We're going to eliminate risks. And with that, we will make acquisitions when the right acquisition comes in front of us. And at this point in time, it hasn't happened. But we feel confident with our portfolio of overall products in companies that we're looking at right now, that later in the year, hopefully we'll see something happen. But once again, we're approaching it from a risk standpoint, we're going to be conservative. But at the same time, looking forward to some of the companies and products that we're looking at, at this time.

And Ray, if I may add, you're right. We do have $26 million of cash. And that is substantial given the size of our balance sheet. In terms of capital deployment, consistent with what we've communicated in the past, it's time [ph] -- we plan to put that capital to work to fulfill that acquisition strategy. We don't intend on dividends or share buybacks or anything like that.

Well is it fair to assume that your cash acquisitions would be accretive either immediately or in a short term?

I think given the interest rate environment that we're in, it would be automatically accretive. I mean we're going to be looking at debt-free type transactions. Accretive is an easier hurdle to get over. It's going to be deals for strategic reasons whether there's good top-line, bottom-line synergies and has an appropriate hurdle rate associated with it. But they will be accretive deals.

[Operator Instructions] Our next question comes from the line of Jack Wallace from Sidoti. Jack Wallace - Sidoti & Company, LLC: Quickly, can you go ahead and quantify the impact of the weather-related loss of work days in the quarter?

I'll start off, and I'll let Rob jump in. So obviously, Q1 weather-related prevented, especially here in the Northeast, many of our customers from going to work. If you look at the overall mix of products that we sell, our consumable products are roughly 30% of our business. Those products were impacted the most. When scientists don't go to work, they're not using consumables, and it's hard to regain that. So any weather-related downside and revenue came from our consumable products.

And Jack, in terms of trying to quantify that impact on the quarter based on our internal estimates, we've looked at a number of different data points and through triangulation where we think it was about 1.5% to 2% of sales in the quarter. Jack Wallace - Sidoti & Company, LLC: Great, thank you. That's helpful. And just to piggyback on the earlier question in regards to seeing some of the synergies from some of the consolidated operations. Just a question, what inning are you in now of the overall consolidation effort?

Well, the functional approach, I mean the functional teams have a strategy in place for 2014. It's really executing on that strategy. And we like what we see so far. So in regards to innings, I think we're a quarter of the way through. And the teams are aligned, the teams are focused. The teams have plans in place, and now it's really coming down to execution. Jack Wallace - Sidoti & Company, LLC: Great, thank you. And then before you've talked about the benefit of having your own distributor in Denville and products they're able to distribute as well as also products they produce. Is there a thought to go ahead and replicate that strategy whether it's organically or through M&A to go ahead and do that across your other product lines?

Yes. At this point in time, we're happy with our Denville business. We're putting a lot of emphasis on that. We're trying extend the portfolio of products that the Denville team is taking to market. But there's really no focus at this point in time for any expansion. Jack Wallace - Sidoti & Company, LLC: And then in regards to the Asian sales team, you mentioned it's fully in place now. What is, I guess, the ramp-up time needed for everyone to kind of, I guess, get full strength there for fully on board, fully trained, et cetera?

Well, the last hire we made was the most important. And that was our vice president, regional vice president of Asia. It's going to take him several months to get his feet on the ground. But this is a person who comes to us with extensive industry experience. He knows the customers, he knows the market. He knows the regions that he'll be responsible for us. So we feel very confident in a short amount of time he's going to have the strategy for us. Not only for the remainder of 2014, but leading off into the next several years.

And our next question comes in line of Eric Miller from Advisory Research.

On the top line, you're maintaining that flat revenue guidance. But obviously, in the process, you're coming out with new products. So that would obviously imply that some of the older products are either just losing some momentum or else, you're actively deemphasizing them. Could you maybe talk about the product portfolio? What percentage of business you sort of expect this year from new products? And what you're looking at, at some of the more problematic products that you've got out there?

Yes. So we're putting a great deal of emphasis on our new product development process. As the year progresses and as we transition into 2015 and '16, we expect a higher percentage of our incremental revenue on a yearly basis coming from new products. I don't think we've broken it down in the past in terms of what the actual percentages are [ph] dollars. I'm going to stay away from that here today. But I can tell you it's an important part of our strategy today, and it will be moving forward. Now on the base products, our current base of products, any downside that you're seeing, the market is relatively soft. Q1, obviously, had a little bit of impact due to weather and things like that. But as you can see from our backlog, up over 40% versus Q1 last year, there's significant opportunity coming forward.

And I have no further questions from the phones at this time. I'd like to hand the conference back to management for any concluding comments.

Well, I'd just like to thank everyone for calling in to our Q1 call today. We appreciate the continued support. We look forward to talking to all of you in the near future. Thank you once again. Have a great day.