Hamilton Thorne Announces Financial and Operational Results for the Quarter Ended September 30, 2018
GlobeNewswire • November 20, 2018
BEVERLY, Mass. and TORONTO, Nov. 20, 2018 (GLOBE NEWSWIRE) – Hamilton Thorne Ltd. (HTL.V), a leading provider of precision instruments, consumables, software and services to the Assisted Reproductive Technologies (ART) and developmental biology research markets, today reported financial and operational results for the quarter and nine-months ended September 30, 2018.
- Sales increased 13% year over year to $6.8 million for the quarter; up 42% to $21.1 million for the nine-month period
- Gross profit increased 6% year over year to $3.8 million for the quarter; up 29% to $11.9 million for the nine-month period
- Net loss of $545 thousand for the quarter; net income decreased to $215 thousand for the nine-month period, in each case primarily due to the change in fair value of debenture (see below);
- Adjusted EBITDA increased 1% year over year to $1.43 million for the quarter; up 24% to $4.4 million for the nine-month period
- Sales in constant currency increased 14% for the quarter; 40% for the nine-month period
- Organic growth was 11% for the quarter; 12% in constant currency. Organic growth was 13% for the nine-month period, in reported and constant currency
“The quarter ended September 30 was a solid quarter for us,” stated David Wolf, President and Chief Executive Officer. “Sales into the human clinical market continued to show strong growth driven by the increased consumables sales, including increased sales of consumables through distribution channels. Sales into the animal breeding market grew substantially while sales into research markets were down. Organic growth was 11% for the quarter and 13% for the nine-month period, or 12% and 13% in constant currency. Gross profit margins of 56.4% have been consistent for the year, within a range of approximately 50 basis points, but were down versus the prior year quarter, reflecting the mix between direct sales of our own high-margin products and services and somewhat lower margin sales of our branded products through distribution channels and direct sale of third-party products.”
The Company reported a net loss of $545 thousand for the quarter (net income of $215 thousand for the nine-month period) largely due to the negative effect of an $896 thousand ($1.1 million for the nine months) change in the fair value of a derivative issued in connection with the Gynemed acquisition. Without this non-cash charge, the Company would have reported net income of $330 thousand for the quarter and $1.3 million for the nine-month period. The Company also incurred acquisition related expenses of $68 thousand in the third quarter and nine-month period, versus nil in the prior year quarter and $613 thousand prior year to date. Cash flow from operations was $730 thousand for the quarter; $2.5 million for the nine-month period.
Mr. Wolf added, “In the third quarter we continued investing in expanded sales and marketing, including the expansion of our US and European based sales teams. US results were below expectations for the third quarter, particularly with respect to the direct sales of third-party products, but we expect to see a rebound in the fourth quarter. We also continued to focus our efforts to drive additional cross-selling and marketing synergies across our business lines. Early in the third quarter we completed the acquisition of the ZANDAIRTM air purification products business from Zander Scientific, Inc. which contributed to third quarter sales growth. We continue to see a significant opportunity to grow revenues from the ZANDAIR product line by leveraging our established sales and marketing resources worldwide.”
Michael Bruns, the Company’s Chief Financial Officer added, “In the third quarter we substantially enhanced our cash position by closing a bought deal financing with net proceeds of approximately $7.1 million. In November, we closed an acquisition line of credit with our commercial bank that will expand our ability to complete acquisitions with a relatively lower cost of capital. With continued EBITDA growth, strong cash flows and a healthy cash balance of $13.2 million at the end of the quarter, we believe we are well-positioned to continue our acquisition strategy to complement our organic growth.”
Three and Nine-Month Periods Ending September 30
Three Months Nine Months
Statements of Operations: 2018 2017 2018 2017
Sales $6,833,457 $6,052,566 $21,141,076 $14,940,512
Gross profit 3,850,825 3,639,609 11,928,885 9,266,821
Operating expenses 3,004,252 2,714,958 9,065,280 7,405,271
Net income (544,694 ) 613,900 215,335 1,049,811
Adjusted EBITDA 1,428,959 1,414,325 4,437,010 3,578,328
Basic earnings per share ($0.005 ) $0.006 $0.002 $0.011
Diluted earnings per share ($0.005 ) $0.005 $0.002 $0.010
All amounts are in US dollars, unless specified otherwise, and results, with the exception of Adjusted EBITDA, are expressed in accordance with the International Financial Reporting Standards (“IFRS”).
The Company reported that operating expenses were generally in line with expectations, reflecting added expenses from the Gynemed business (for the nine-month period) and continued investment in R&D, staffing, sales and marketing.