SOURCE: Hamilton Thorne

Hamilton Thorne

April 30, 2012 08:00 ET

Hamilton Thorne Announces 2011 Fourth Quarter and Year-End Financial Results

The Company Reports Record Revenues in Q4 and Eight Consecutive Quarters of Year-Over-Year Revenue Growth

BEVERLY, MA and TORONTO--(Marketwire - Apr 30, 2012) - Hamilton Thorne Ltd. (TSX VENTURE: HTL), a leading provider of precision laser devices and advanced image analysis systems for the fertility, stem cell and developmental biology research markets, today reported operational and financial results for the fourth quarter and year-ended December 31, 2011.

"I am pleased to report that Hamilton Thorne performed well in 2011, achieving 19% growth and record sales of over $2 million in Q4, which marks our eighth consecutive quarter of year-over-year revenue growth, and a 15.5% sales increase for the full year, despite a challenging global economy," said David Wolf, President and Chief Executive Officer of Hamilton Thorne Ltd.

Sales growth was driven by Hamilton Thorne's laser products, especially with the highly successful launch of its new LYKOS™ laser system that significantly contributed to both the top and bottom line. The demand for the Company's best-of-breed CASA image analysis systems remained steady for the year, but with additional development efforts planned for 2012, the Company's image analysis products should provide new and exciting sales opportunities for the Company in the coming year.

Mr. Wolf continued, "In 2012, we expect to continue to invest in both R&D and sales and marketing activities, in order to continue our steady growth trajectory while managing overhead, and moving Hamilton Thorne towards profitability and positive cash flow."

2011 Highlights

  • At the European Society of Human Reproduction and Embryology (ESHRE) in July, Hamilton Thorne launched its ground-breaking LYKOS laser system for the clinical and fertility markets in Europe. LYKOS is a significant advance in integrated laser optics, providing additional functionality, improved optics, increased resolution and compatibility with all major microscope models. The LYKOS also offers additional benefits for cutting-edge clinical processes such as trophectoderm biopsy for pre-implantation genetic diagnosis (PGD) and laser-assisted hatching.

  • In 2011, Hamilton Thorne's products were referenced in over 73 new peer-reviewed scientific articles by customers at world-leading research labs and academic institutions. Hamilton Thorne's image analysis products accounted for 57 articles and publications referencing our advanced laser systems appeared in many of the most prestigious scientific journals such as Nature, Cell Reprogramming, and Methods of Cell Biology.

  • Hamilton Thorne advanced its collaboration with partner ISee3D to market their unique single camera, single lens, single chip 3D microscope technology currently under development. Hamilton Thorne has exclusive rights to sell the ISee3D three-dimensional technology with its lasers within certain cell biology and regenerative medical research markets.

  • In 2011, Hamilton Thorne raised $2.7 million in a common share offering, with $1.2 million of proceeds available to fund growth and $1.5 million of proceeds used to reduce its line of credit from $5 million to $3.5 million. Holders of $1.6 million of convertible subordinated debentures also converted their debt to common shares at that time. These transactions substantially strengthened Hamilton Thorne's balance sheet by reducing our debt position and related interest expense, while providing us with the capital to accelerate our investments in research and development.

  • The Company extended the maturity of its $3.5 million line of credit with Commerce Bank and Trust Company through October 1, 2013. The line of credit extension strengthens the Company's balance sheet and working capital by continuing to categorize the debt as long-term, and provides additional time for the Company to execute its growth strategy and refinance the debt on advantageous terms.

Financial Results

All amounts are in US dollars, unless specified otherwise, and results expressed in accordance with the International Financial Reporting Standards ("IFRS"), which replaces Canadian Generally Accepted Accounting Policies ("GAAP") effective January 1, 2010 for all publicly accountable enterprises in Canada.

Full Year 2011

The Company total sales increased 15.5% to $7,159,162 for the year-ended December 31, 2011, an increase of $958,732 from $6,200,430 during the previous year. This increase was attributable to increased demand for our existing products, additional sales derived from our new LYKOS™ laser introduced in the second quarter of 2011 and improved budget availability for capital equipment purchases, particularly in the human clinical market.

Gross profit for the year increased 17.3% to $4,518,797 in the year-ended December 31, 2011, compared to $3,850,723 in the previous year. Gross profit as a percentage of sales increased from 62.1% to 63.1% for the year-ended December 31, 2011, due primarily to product mix and increased sales spread over a relatively constant overhead base.

Operating expenses were $5,889,239 for the year-ended December 31, 2011, up from $5,438,754 for the previous year, but reduced significantly as a percentage of sales, down to 82.3% versus 87.7% for the prior year. The increase in operating expenses represents continued strategic investment in R&D and Sales and Marketing resources, while keeping general and administrative expenses relatively flat. Research and development expenses increased from $985,438 to $1,220,316 for the year-ended December 31, 2011 due to continued development of new products. Sales and marketing expenses increased from $2,372,236 to $2,634,452 for the year-ended December 31, 2011 due to the expansion of our sales and marketing staff, commission expense on higher sales volume, and increased variable costs of selling. General and administrative (G&A) expenses decreased from $2,080,990 to $2,034,471 for the year-ended December 31, 2011 due primarily to strong expense controls, lower share-based compensation, and positive foreign currency valuation adjustments related to the convertible debentures issued in August 2010 and March 2011 issued in Canadian dollars, offset by a one-time severance expense.

Net interest expense increased from $341,422 to $521,178 for the year-ended December 31, 2011. The increase was due primarily to the non-cash interest expense, both coupon and accreted, on the Company's 2010 and 2011 issuances of convertible debentures. Interest expense decreased by $37,000 for the quarter ended December 31, 2011 as a result of the conversion of approximately $1.6 million of debt to equity and the reduction of the Company's bank loan by $1.5 million, both of which were completed in the quarter ended September 30, 2011.

The net loss for the year-ended December 31, 2011 decreased from $1,929,243 to $1,891,620 as a result of lower losses from operations and reduced interest expense in the fourth quarter.

Fourth Quarter Results

The Company total sales increased 19.1% to $2,022,173 during the quarter ended December 31, 2011, which was up $324,314 from $1,697,859 during the previous year quarter, as the Company continued to show substantial growth in the Americas and the Asia Pacific region, offset by a decline in sales in Europe.

Gross profit increased 20.2 % to $1,302,258, and gross profit as a percentage of sales improved to 64.7% from 64.1% in the previous year. Operating expenses decreased 4% to $1,588,111 due primarily to deferred increases in staffing levels and the non-repetition of an expense related to the settlement of a labor claim in the fourth quarter of 2010.

The net loss for the fourth quarter was $329,003, an improvement of 49.5% from the net loss of $651,121 for the same period of the previous year. The decreased loss was due primarily to increased sales, the substantial reduction in operating losses, as well as reduced interest expenses.

As of December 31, 2011, the Company had outstanding 46,616,365 common shares, 5,729,440 warrants, and 4,553,211 options.

The financial statements are available on www.sedar.com.

About Hamilton Thorne Ltd. (www.hamiltonthorne.com)

Hamilton Thorne designs, manufactures and distributes precision laser devices and advanced imaging systems for the fertility, stem cell and development biology research markets. It provides novel solutions for Life Science that reduce cost, increase productivity, improve results and enable research breakthroughs in regenerative medicine, stem cell research and fertility markets. Hamilton Thorne's laser products attach to standard inverted microscopes and operate as robotic micro-surgeons, enabling a wide array of scientific applications and IVF procedures. Its imaging systems improve outcomes in human IVF clinics and animal breeding facilities and provide high-end toxicology analyses.

Hamilton Thorne's growing customer base includes pharmaceutical companies, biotechnology companies, fertility clinics, university research centers, and other commercial and academic research establishments worldwide. Current customers include world-leading research labs such as Harvard, MIT, Yale, McGill, DuPont, Monsanto, Charles River Labs, Jackson Labs, Merck, Novartis, Pfizer, and Oxford and Cambridge.

Neither the Toronto Venture Exchange, nor its regulation services provider (as that term is defined in the policies of the exchange), accepts responsibility for the adequacy or accuracy of this release.

Certain information in this press release may contain forward-looking statements. This information is based on current expectations that are subject to significant risks and uncertainties that are difficult to predict. Actual results might differ materially from results suggested in any forward-looking statements. The Company assumes no obligation to update the forward-looking statements, or to update the reasons why actual results could differ from those reflected in the forward-looking statements unless and until required by securities laws applicable to the Company. Additional information identifying risks and uncertainties is contained in filings by the Company with the Canadian securities regulators, which filings are available at www.sedar.com.

Financial results included below:

Hamilton Thorne Ltd.
Consolidated Statements of Financial Position
As at December 31, 2011 and 2010, and January 1, 2010
(Expressed in U.S. Dollars)
December 31, 2011 December 31, 2010 January 1, 2010 (1)
Assets
Current
Cash and cash equivalents 484,421 714,498 1,356,371
Accounts receivable 1,021,326 971,406 499,875
Inventories 809,731 544,170 512,300
Prepaid expenses and other current assets 67,393 58,241 72,689
Note receivable, officer - - 23,813
Total current assets 2,382,871 2,288,315 2,465,048
Property and equipment 214,204 134,662 90,481
Other assets 110,784 111,968 72,454
Total assets 2,707,859 2,534,945 2,627,983
Liabilities
Current
Accounts payable and accrued liabilities 1,393,090 1,412,831 1,171,562
Notes payable (note 6) 338,961 104,460 83,037
Capital lease obligations, current 30,860 20,250 5,753
Deferred revenue 84,066 91,086 35,881
Total current liabilities 1,846,977 1,628,627 1,296,233
Capital lease obligations, non-current 80,202 37,295 7,904
Deferred revenue, long-term 28,000 79,486 -
Long-term debt 3,500,000 6,121,015 5,050,000
Total liabilities 5,455,179 7,866,423 6,354,137
Shareholders' Equity (Deficiency)
Common shares 28,699,248 24,345,752 24,341,938
Warrants 280,213 349,019 344,949
Contributed surplus 798,623 607,535 291,500
Accumulated deficit (32,525,404 ) (30,633,784 ) (28,704,541 )
Total Shareholders' (deficiency) (2,747,320 ) (5,331,478 ) (3,726,154 )
Total Liabilities and shareholders' equity (deficiency) 2,707,859 2,534,945 2,627,983
(1) Refer to the Hamilton Thorne website, Investor Relations, 2011 Financial Statements for the effect of adoption of IFRS.
Hamilton Thorne Ltd.
Consolidated Statements of Operations and Comprehensive Loss
For the years ended December 31, 2011 and 2010
(Expressed in U.S. Dollars)
2011 2010
Sales 7,159,162 6,200,430
Cost of sales 2,640,365 2,349,707
Gross profit 4,518,797 3,850,723
Expenses
Research and development 1,220,316 985,438
Sales and marketing 2,634,452 2,372,326
General and administrative 2,034,471 2,080,990
Total expenses 5,889,239 5,438,754
Loss from operations (1,370,442 ) (1,588,031 )
Other income (expense)
Interest expense including accretion (521,178 ) (341,422 )
Interest income - 210
Net loss and comprehensive loss for the year (1,891,620 ) (1,929,243 )
Loss per share:
Basic $ (0.06 ) $ (0.08 )
Diluted $ (0.06 ) $ (0.08 )
Weighted average number of common shares outstanding:
Basic 31,069,879 24,415,157
Diluted 31,069,879 24,415,157
Hamilton Thorne Ltd.
Consolidated Statements of Cash Flows
For the years ended December 31, 2011 and 2010
(Expressed in U.S. Dollars)
2011 2010
Cash flows from operating activities:
Net loss for the year (1,891,620 ) (1,929,243 )
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization 71,889 61,702
Non-cash interest expense/accretion 189,146 107,686
Share-based compensation expense 167,254 253,480
Changes in non-cash operating assets and liabilities:
Accounts receivable (49,920 ) (471,531 )
Inventories (265,561 ) (31,870 )
Prepaid expenses and other current assets (9,152 ) 38,261
Other assets 1,184 (39,514 )
Accounts payable and accrued liabilities (19,741 ) 191,380
Deferred revenue (58,506 ) 134,691
Net cash flows used in operating activities (1,865,027 ) (1,684,958 )
Cash flows from investing activities:
Purchase of property and equipment (70,016 ) (55,004 )
Cash flows from financing activities:
Proceeds from notes payable 60,959 2,153,944
Payments on debt (1,579,905 ) (2,189,511 )
Proceeds from issuance of convertible debentures 574,890 1,129,842
Costs of private placement refunded - 3,814
Issuance of common share units - net of expenses 2,649,022 -
Net cash flows provided by financing activities 1,704,966 1,098,089
Net (decrease) in cash and cash equivalents (230,077 ) (641,873 )
Cash and cash equivalents, beginning of year 714,498 1,356,371
Cash and cash equivalents, end of year 484,421 714,498
Supplemental disclosure of cash flow information:
Cash paid during the year for:
Interest 242,451 213,804
Supplemental disclosure of non-cash financing activities:
Equipment acquired under capital lease 81,415 50,879
Conversion of debentures to equity 1,577,359 -
Conversion of subordinated notes to equity 54,145 -

Contact Information

  • For more information, please contact:

    David Wolf
    President and CEO
    Hamilton Thorne Ltd.
    978-921-2050
    Email Contact

    Lisa Rivero
    Director of Corporate Communications
    Hamilton Thorne Ltd.
    978-921-2050
    Email Contact