Hamilton Thorne, Inc. Announces 2011 First Quarter Financial Results

June 10, 2011 |

13 min read

BEVERLY, MA and TORONTO--(Marketwire - June 09, 2011) -

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http://www.hamiltonthorne.com/

Hamilton Thorne Ltd. (TSX-V: HTL), a leading provider of advanced laser systems for the regenerative medicine, fertility and stem cell research markets, today reported operational and financial results for the first quarter ended March 31, 2011.

“Hamilton Thorne achieved strong year-over-year growth for the first quarter of 2011, with the Company recording a 22% increase in sales over the same period last year. This growth was primarily driven by robust laser sales, especially in key markets such as cell biology, regenerative medicine and stem cell research,” said Meg Spencer, Chief Executive Officer of Hamilton Thorne Ltd. “Our R & D team continues to innovate on our sleek laser design and increase the efficiency and accuracy of our products, helping our customers unlock the therapeutic potential for treating life-threatening and debilitating diseases.”

Highlights -- The Stiletto™ Laser System continues to perform well at several prestigious beta sites. The Stiletto successfully automates the process of splitting stem cell colonies into equal sections for easy removal of the sections to a new growing environment and the obliteration of thousands of unwanted cells in seconds to purify samples. Beta testers have shown that the non-contact capability of the laser prevents contamination, minimizes damage to the cells and avoids change in gene expression through multiple generations of colony growth. -- Hamilton Thorne has also secured distribution or OEM deals for accessory products including the Tokai Hit stage warmers and the 20/20 stage coolers. As temperature control is very important for many cell procedures, these partnerships should provide Hamilton Thorne customers with better options for cell maintenance. -- In Q1, Hamilton Thorne’s products were referenced in over 14 new peer-reviewed scientific articles by customers at world-leading research labs and academic institutions. Hamilton Thorne’s fertility products and advanced laser systems were published in several prestigious scientific journals such as Methods of Molecular Biology, Human Reproduction and Biology Reproduction. -- The Company completed an offering of 10% convertible unsecured subordinate debentures (“Debentures”) for aggregate gross proceeds of approximately US $650,000. The net proceeds from the sale of the Debentures will be used for potential product line acquisitions and in-licensing, research and development expenses and for general working capital purposes.

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, 2011, the Company recorded sales of $1,445,000 compared to $1,181,000 for the same period last year. The Company’s total sales increased 22% for the quarter over the previous year, and was attributable to increased demand for our existing products and improved budget availability for capital equipment purchases across all customer types and geographic regions.

Operating expenses were $1,500,000 for the quarter ended March 31, 2011, up from $1,211,000 during the previous year, an increase of $289,000, or 24%. This increase in operating expenses represents continued strategic investment in the growth of the Company.

Research and development (R&D) expenses increased 20% to $299,000 due to continued development of new products. Sales and marketing expenses increased 31% to $634,000 due to the expansion of our sales force, commission expense on higher sales volume, and increased variable costs of selling.

General and administrative (G&A) expenses increased 19% to $566,000 due primarily to increases in staffing and a foreign currency valuation adjustment related to the convertible debentures issued in August 2010 and March 2011, which were issued in Canadian dollars.

Net interest expense increased to $127,000 for the quarter ended March 31, 2011 from $70,000 for the prior year period. The increase was due to the interest expense, both coupon and accreted, on the Company’s convertible debentures.

The net loss for the quarter ended March 31, 2011 was $746,000, an increase of 31% over the net loss of $571,000 for the same period of the previous year. The increased loss was due primarily to the additional investments by the Company in research, product development, sales and marketing, additional general and administrative expenses, and additional interest expense, partially offset by increased gross profit resulting from increased sales.

As of March 31, 2011, the Company had 24,415,157 common shares, 6,134,441 warrants, 4,432,022 options, and 440,001 agent compensation options outstanding.

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

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

Hamilton Thorne provides novel solutions for Life Science that reduce cost, increase productivity as much as ten-fold, and enable research breakthroughs in regenerative medicine, stem cell research and fertility markets. The Company’s new Staccato™ and Stiletto™ laser systems also offer significant scientific advantages in the fields of developmental biology, cancer research and advanced cell biology. Hamilton Thorne’s laser products attach to standard inverted microscopes and operate as robotic micro-surgeons, enabling a wide array of scientific applications and procedures. Each member of Hamilton Thorne’s family of products serves a different research purpose. By simply turning the microscope turret, researchers can have a new world of scientific capabilities at their fingertips.

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 University, MIT, Yale, McGill University, DuPont, Monsanto, Charles River Labs, Jackson Labs, Merck, Novartis, Pfizer, Oxford University, 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 For the periods ended March 31, 2011 and December 31, 2010 (Expressed in U.S. Dollars - unaudited) March 31, December 31, January 1, 2011 2010 2010 ----------- ----------- ----------- Assets Current Cash and cash equivalents 847,239 714,498 1,356,371 Accounts receivable 709,211 971,406 499,875 Inventories 621,984 544,170 512,300 Prepaid expenses and other current assets 47,448 58,241 72,689 Note receivable, officer - - 23,813 ----------- ----------- ----------- 2,225,882 2,288,315 2,465,048 Property and equipment 162,078 134,662 90,481 Other assets 113,553 111,968 72,454 ----------- ----------- ----------- Total assets 2,501,513 2,534,945 2,627,983 ----------- ----------- ----------- Liabilities Current Accounts payable and accrued liabilities 1,448,816 1,412,831 1,171,562 Notes payable 93,515 104,460 83,037 Capital lease obligations, current 24,883 20,250 5,753 Deferred revenue 77,052 91,086 35,881 ----------- ----------- ----------- Total current liabilities 1,644,266 1,628,627 1,296,233 Capital lease obligations, non-current 46,926 37,295 7,904 Deferred revenue, long-term 79,486 79,486 - Long-term debt 6,740,942 6,121,015 5,050,000 ----------- ----------- ----------- Total liabilities 8,511,620 7,866,423 6,354,137 ----------- ----------- ----------- Shareholders’ Equity (Deficiency) Common shares 24,345,752 24,345,752 24,341,938 Warrants 353,495 349,019 344,949 Contributed surplus 670,806 607,535 291,500 Accumulated deficit (31,380,160) (30,633,784) (28,704,541) ----------- ----------- ----------- Total Shareholders’ equity (deficiency) (6,010,107) (5,331,478) (3,726,154) ----------- ----------- ----------- Total Liabilities and shareholders’ equity (deficiency) 2,501,513 2,534,945 2,627,983 ----------- ----------- ----------- Hamilton Thorne Ltd. Consolidated Statements of Operations and Comprehensive Loss For the three months ended March 31, 2011 and 2010 (Expressed in U.S. Dollars - unaudited) 2011 2010 ---------- ---------- Sales 1,445,413 1,180,687 Cost of sales 564,883 470,486 ---------- ---------- Gross profit 880,530 710,201 ---------- ---------- Expenses Research and development 299,447 250,307 Sales and marketing 634,177 485,687 General and administrative 566,261 474,878 ---------- ---------- Total expenses 1,499,885 1,210,872 ---------- ---------- Loss from operations (619,355) (500,671) Other income (expense) Interest expense including accretion (127,021) (70,159) Interest income - 210 ---------- ---------- Net loss and comprehensive loss (746,376) (570,620) ---------- ---------- Loss per share Basic $ (0.03) $ (0.02) Diluted $ (0.03) $ (0.02) Weighted average number of common shares outstanding Basic 24,415,157 24,415,157 Diluted 24,415,157 24,415,157 Hamilton Thorne Ltd. Consolidated Statements of Cash Flows For the three months ended March 31, 2011 and 2010 (Expressed in U.S. Dollars - unaudited) 2011 2010 --------- --------- Cash flows from operating activities Net loss for the year (746,376) (570,620) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and amortization 14,460 15,027 Non-cash interest expense/accretion 109,374 - Share-based payments expense 39,750 61,245 Changes in non-cash operating assets and liabilities: Accounts receivable 262,195 (82,091) Inventories (77,814) 309 Prepaid expenses and other current assets 10,793 30,554 Other assets (1,585) (57,000) Accounts payable and accrued liabilities (309) (17,632) Deferred revenue (14,034) 2,917 --------- --------- Net cash flows used in operating activities (403,546) (617,291) --------- --------- Cash flows from investing activities Purchase of capital assets (20,440) (37,096) --------- --------- Cash flows from financing activities Proceeds from debt 574,890 498,043 Payments on debt (18,163) (503,684) --------- --------- Net cash flows provided by (used in) financing activities 556,727 (5,641) --------- --------- Net Increase (decrease) in cash and cash equivalents 132,741 (660,028) Cash and cash equivalents, beginning of period 714,498 1,356,371 --------- --------- Cash and cash equivalents, end of period 847,239 696,343 --------- --------- Supplemental disclosure of cash flow information: Cash paid during the period for interest: 61,335 54,408 Supplemental disclosure of non-cash financing activities: Equipment acquired under capital lease 21,436 0