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Hamilton Thorne, Inc. Announces 2012 First Quarter Financial Results



5/29/2012 9:03:51 AM

BEVERLY, MA and TORONTO--(Marketwire - May 29, 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 first quarter ended March 31, 2012.

"In the first quarter of 2012, revenues increased to $1.6 million, exceeding the prior year by 8.9%, led by a strong quarter for our CASA image analysis products and the continued steady demand for the new LYKOS® laser system," said David Wolf, President and Chief Executive Officer of Hamilton Thorne Ltd. "Hamilton Thorne reported strong North American sales for the first quarter, and also expanded its global penetration into emerging markets such as the Asia-Pacific region with significant sales in that territory. We are also pleased to report that we reduced our net loss for the quarter by over $200,000 through a combination of sales growth, expense controls and reduced interest expense."

Highlights

  • In March 2012, Hamilton Thorne launched its leading-edge XYRCOS™ laser system for advanced research applications. The XYRCOS™ laser offers a significant advance in integrated laser optics, providing additional functionality, increased resolution and compatibility with all major microscope models. The XYRCOS™, which is engineered to have the laser and RED-i ® target locator built directly inside the objective, offers benefits for cutting-edge embryo micromanipulation applications such as the creation of transgenic animals, gene targeting, and stem cell research including blastocyst injection, 8-cell injection, and laser-assisted animal model IVF.

  • Hamilton Thorne appointed Anthony (Tony) McCook as the Company's new Vice President of Sales. Mr. McCook brings over 25 years of sales leadership and a proven track record of success in capital equipment sales in healthcare, imaging and cell biology markets. Mr. McCook has been a key driver of Hamilton Thorne's growth strategy as the Company continues to leverage its dominant position in the laser fertility market, into lucrative markets such as cell biology and stem cell research.

  • The Company expanded its distribution partnership with Leica Microsystems GmbH of Wetzlar, Germany, a leading global producer of innovative high-tech precision optics systems for the analysis of microstructures. This new arrangement provides Leica Microsystems with access to Hamilton Thorne's current portfolio of laser products, as well as select pipeline products including the strongly anticipated IMSI STRICT™ software for the fertility market. The expanded partnership will enable Hamilton Thorne and Leica Microsystems to further penetrate markets that have proven successful and synergistic for both companies such as fertility and cell research markets.

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.

For the three months ended March 31, 2012, the Company achieved a total sales increase of 8.9% to $1,574,025 for the quarter, an increase of $128,611 from $1,445,413 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.

Gross profit for the year increased 8.3% to $953,904 in the quarter-ended March 31, 2012, compared to $880,531 in the previous year. Gross profit as a percentage of sales remained relatively steady at 60.6% versus 60.9% for the quarter-ended March 31, 2011, due primarily to product mix and discounting on volume orders.

Operating expenses were $1,401,585 for the quarter-ended March 31, 2012, reduced $98,300, or 6.6% from $1,499,885 for the previous year, and reduced significantly as a percentage of sales, down to 89% from 104% for the prior year. The reduction in operating expenses represents continued efforts to manage expenses as the company moves towards profitability, while continuing strategic investment in R&D and sales and marketing resources.

Research and development expenses decreased from $299,447 to $268,231 for the quarter-ended March 31, 2012 as certain spending incurred in 2011 related to development of the LYKOS® laser did not recur in 2012 as well as lower patent costs.

Sales and marketing expenses decreased from $634,177 to $615,062 for the quarter-ended March 31, 2012 primarily due to decreased costs of selling, particularly travel and trade show expenses.

General and administrative (G&A) expenses decreased from $566,261 to $518,292 for the quarter-ended March 31, 2012 due primarily to strong expense controls, and the non-repetition of 2011 foreign currency valuation adjustments related to the convertible debentures issued in August 2010 and March 2011 issued in Canadian dollars, all offsetting increased payroll expenses.

Net interest expense decreased from $127,021 to $81,308 for the quarter-ended March 31, 2012. The decrease was due primarily to the significant reduction of the Company's debt as a result of the conversion of approximately $1.6 million of convertible debentures 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 quarter-ended March 31, 2012 was reduced from $746,375 to $528,989 due to revenue and gross profit growth, as well as reduced spending and reduced interest expense in the quarter.

As of March 31, 2012, the Company had 46,616,365 common shares, 5,729,440 warrants, and 4,630,393 options outstanding.

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 image analysis 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 image analysis 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 including the risk that the Company may not be able to obtain the necessary regulatory approvals, as applicable. 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 March 31, 2012 and December 31, 2011                                  
(Expressed in U.S. Dollars - unaudited)                                     
                                                                            
                                                 March 31,     December 31, 
                                                    2012           2011     
                                               -------------  ------------- 
Assets                                                                      
                                                                            
Current                                                                     
  Cash and cash equivalents                          298,272        484,421 
  Accounts receivable                                717,965      1,021,326 
  Inventories                                        846,751        809,731 
  Prepaid expenses and other current assets           52,025         67,393 
                                               -------------  ------------- 
                                                                            
  Total current assets                             1,915,013      2,382,871 
  Property and equipment                             195,234        214,204 
  Other assets                                       110,783        110,784 
                                               -------------  ------------- 
                                                                            
  Total assets                                     2,221,030      2,707,859 
                                               -------------  ------------- 
                                                                            
Liabilities                                                                 
                                                                            
Current                                                                     
  Accounts payable and accrued liabilities         1,433,850      1,393,090 
  Notes payable                                      340,958        338,961 
  Capital lease obligations, current                  30,860         30,860 
  Deferred revenue                                    68,377         84,066 
                                               -------------  ------------- 
                                                                            
  Total current liabilities                        1,874,045      1,846,977 
  Capital lease obligations, non-current              70,694         80,202 
  Deferred revenue, long-term                         28,000         28,000 
  Long-term debt                                   3,500,000      3,500,000 
                                               -------------  ------------- 
  Total liabilities                                5,472,739      5,455,179 
                                               -------------  ------------- 
                                                                            
Shareholders' Equity (Deficiency)                                           
                                                                            
  Common shares                                   28,699,248     28,699,248 
  Warrants                                           280,213        280,213 
  Contributed surplus                                823,223        798,623 
  Accumulated deficit                            (33,054,393)   (32,525,404)
                                               -------------  ------------- 
  Total Shareholders' equity (deficiency)         (3,251,709)    (2,747,320)
                                               -------------  ------------- 
                                                                            
  Total Liabilities and shareholders' equity                                
   (deficiency)                                    2,221,030      2,707,859 
                                               -------------  ------------- 
                                                                            
                                                                            
                                                                            
Hamilton Thorne Ltd.                                                        
Consolidated Statements of Operations and Comprehensive Loss                
For the three months ended March 31, 2012 and 2011                          
(Expressed in U.S. Dollars - unaudited)                                     
                                                                            
                                                    2012           2011     
                                               -------------  ------------- 
Sales                                              1,574,025      1,445,413 
                                                                            
Cost of sales                                        620,121        564,883 
                                               -------------  ------------- 
Gross profit                                         953,904        880,530 
                                               -------------  ------------- 
                                                                            
Expenses                                                                    
                                                                            
  Research and development                           268,231        299,447 
  Sales and marketing                                615,062        634,177 
  General and administrative                         518,292        566,261 
                                               -------------  ------------- 
Total expenses                                     1,401,585      1,499,885 
                                               -------------  ------------- 
                                                                            
Loss from operations                                (447,681)      (619,355)
                                                                            
Other income (expense)                                                      
  Interest expense including accretion               (81,308)      (127,021)
  Interest income                                          -              - 
                                               -------------  ------------- 
                                                                            
Net loss and comprehensive loss                     (528,989)      (746,376)
                                               -------------  ------------- 
                                                                            
Loss per share                                                              
                                                                            
  Basic                                        $       (0.01) $       (0.03)
  Diluted                                      $       (0.01) $       (0.03)
                                                                            
Weighted average number of common shares                                    
 outstanding                                                                
                                                                            
  Basic                                           46,615,365     24,415,157 
  Diluted                                         46,615,365     24,415,157 
                                                                            
                                                                            
                                                                            
Hamilton Thorne Ltd.                                                        
Consolidated Statements of Cash Flows                                       
For the three months ended March 31, 2012 and 2011                          
(Expressed in U.S. Dollars - unaudited)                                     
                                                                            
                                                    2012           2011     
                                               -------------  ------------- 
                                                                            
Cash flows from operating activities                                        
                                                                            
Net loss for the year                               (528,989)      (746,376)
Adjustments to reconcile net loss to net cash                               
 used in operating activities:                                              
  Depreciation and amortization                       20,100         14,460 
  Non-cash interest expense/accretion                 25,627        109,374 
  Share-based payments expense                        24,600         39,750 
  Changes in non-cash operating assets and                                  
   liabilities:                                                             
    Accounts receivable                              303,361        262,195 
    Inventories                                      (37,020)       (77,814)
    Prepaid expenses and other current assets         15,368         10,793 
    Other assets                                           1         (1,585)
    Accounts payable and accrued liabilities          31,680           (309)
    Deferred revenue                                 (15,689)       (14,034)
                                               -------------  ------------- 
Net cash flows used in operating activities         (160,961)      (403,546)
                                               -------------  ------------- 
                                                                            
Cash flows used in investing activities                                     
                                                                            
  Purchase of capital assets                          (1,130)       (20,440)
                                               -------------  ------------- 
                                                                            
Cash flows from financing activities                                        
  Proceeds from debt                                       -        574,890 
  Payments on debt                                   (24,058)       (18,163)
                                               -------------  ------------- 
                                                                            
Net cash flows provided by (used in) financing                              
 activities                                          (24,058)       556,727 
                                               -------------  ------------- 
                                                                            
Net Increase (decrease) in cash and cash                                    
 equivalents                                        (186,149)       132,741 
Cash and cash equivalents, beginning of period       484,421        714,498 
                                               -------------  ------------- 
                                                                            
Cash and cash equivalents, end of period             298,272        847,239 
                                               -------------  ------------- 
                                                                            
Supplemental disclosure of cash flow                                        
 information:                                                               
                                                                            
Cash paid during the period for interest              62,129         61,335 
                                                                            
Supplemental disclosure of non-cash financing                               
 activities:                                                                
                                                                            
  Equipment acquired under capital lease                   -         21,436 
                                                                            

For more information, please contact:

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


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

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