Hamilton Thorne Reports Record Revenue and EBITDA for the Quarter and Year Ended December 31, 2021
Revenue of $52.4 million for the year and $15.6 million for the 4th quarter; Adj. EBITDA of $9.8 million for the year and $3.0 million for the quarter
BEVERLY, Mass. and TORONTO, April 07, 2022 (GLOBE NEWSWIRE) -- Hamilton Thorne Ltd. (TSX-V: HTL), a leading provider of precision instruments, consumables, software and services to the Assisted Reproductive Technologies (ART), research, and cell biology markets, today reported audited financial results for the fourth quarter and year-ended December 31, 2021.
Financial Highlights -- Sales increased 32% to $52.4 million for the year-ended December 31, 2021; up 27% to $15.6 million for the fourth quarter. Sales in constant currency increased 28% for the year; 28% for the quarter. -- Gross profit increased 29% to $26.2 million for the year; up 22% to $7.9 million for the quarter. -- Net income increased 151% to $2.4 million for the year; decreased 15% to $836 thousand for the quarter. -- Adjusted EBITDA increased 48% to $9.8 million for the year; up 17% to $3.0 million for the quarter. -- Organic growth was 23% for the year; 22% in constant currency. Organic growth was 12% for the quarter, 12% in constant currency. -- Cash flow from operations was $5.6 million for the year; total cash at December 31, 2021 was $17.9 million, a decrease of $3.9 million.
David Wolf, President and Chief Executive Officer, of Hamilton Thorne Ltd. commented, "2021 was another successful year for Hamilton Thorne. Despite the challenges presented by Covid, we achieved record sales of $52.4 million. We also grew adjusted EBITDA to a record $9.8 million even as we navigated supply chain issues and continued to invest in sales and support resources, R&D, and enhancing our operations in order to take better advantage of the cross-selling and marketing synergies between our North American and European-based businesses. Sales were up across all of our product categories with consumables sales, which largely represent organic growth, leading the way, ahead of strong, but somewhat lower equipment and services growth. We also completed a significant expansion of our product line, geographic coverage, and scale when we acquired Tek-Event in April and IVFtech in July, expanding our direct sales footprint into Australia and the Nordic countries."
Commenting on the quarter, Mr. Wolf added, "With sales of $15.6 million and adjusted EBITDA of approximately $3.0 million, this was a record quarter for Hamilton Thorne. We increased our gross profit margin and EBITDA margin versus Q3 as we continued to address some of the supply chain issues faced by nearly all industries. Sales of consumables continued to be up substantially, with strong equipment sales, enhanced by the IVFtech and Tek-Event acquisitions, and single digit growth in service sales."
The Company generated $5.6 million of cash from operations for the year despite significant investments in inventory to address supply chain issues. Cash in hand at year end was $17.9 million, versus $21.8 million at December 31, 2020, reflecting cash invested in acquisitions and debt reduction. The Company has $12.5 million available under existing lines of credit to further support its acquisition program. Financial Results Fourth Quarter and Year-Ended December 31 Three Months Year Statements of Operations: 2021 2020 2021 2020 Sales $15,621,524 $12,256,679 $52,352,788 $39,777,886 Gross profit 7,918,760 6,470,718 26,210,572 20,392,350 Operating expenses 6,633,421 5,021,872 22,394,314 17,538,345 Net income 836,489 960,887 2,434,101 971,235 EBITDA 2,972,066 2,539,507 9,773,174 6,608,457 Basic earnings per share $0.01 $0.01 $0.02 $0.01 Diluted earnings per share $0.01 $0.01 $0.02 $0.01 Statements of Financial Position as at: Dec. 31, 2021 Dec. 31, 2020 ------------- ------------- Cash $17,927,391 $21,828,443 Working capital 23,057,296 22,076,872 Total assets 75,062,696 69,808,718 Non-current liabilities 8,639,291 7,008,568 Shareholders' equity 55,956,960 51,065,925
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").
Results of Operations for the Year-ended December 31, 2021
Hamilton Thorne sales increased 32% to $52,352,788 for the year-ended December 31, 2021, an increase of $12,574,902 from $39,777,886 during the previous year. Sales increased primarily due to a return to more normalized operations with many of our customers versus the Covid-19 affected results in the prior year, along with continued growth. Sales were also positively impacted by the addition of revenues from the Tek-Event and IVFtech acquisitions and exchange rate fluctuations. Constant currency sales were up 28%. Organic sales were up 23% on a reported basis and 22% on a constant currency basis.
Sales into the human clinical market were up substantially primarily due to the return to more normalized operations at IVF clinics in 2021 versus the significant reductions in clinic activity in the prior year, particularly during the second quarter of 2020, due to the onset of the Covid-19 pandemic, augmented by revenues from Tek-Event and IVFtech. Sales into the cell biology/research markets also grew substantially, albeit off a smaller base, while sales into the animal breeding market were down.
Gross profit for the year increased 29% or $5,818,222 to $26,210 572 in the year-ended December 31, 2021, compared to $20,392,350 in the previous year, primarily as a function of sales growth. Gross profit as a percentage of sales was down at 50.1% for the year-ended December 31, 2021 versus 51.3% for 2020, primarily due to product mix, particularly the impact of additional direct sales of third-party products, the addition of somewhat lower margin sales of IVFtech products, as well as increased costs of materials and shipping due to supply chain issues, partially offset by increased sales of higher margin proprietary equipment, branded consumables and quality control testing services.
Operating expenses increased 28% or $4,855,969 to $22,394,314 for the year-ended December 31, 2021, up from $17,538,345 for the previous year, primarily due to the addition of IVFtech expenses post-closing, acquisition and integration expenses, continued investments in sales and support resources, increased R&D spending, increased share-based compensation, increased general and administrative spending, and increased travel and tradeshow expense as activity returned to more normalized levels. Without acquisition and integration expenses, operating expenses would have increased 24% for the year.
Net interest expense decreased $322,308 (46%) from $686,667 to $364,358 for the year-ended December 31, 2021 versus the prior year, primarily due to reductions in outstanding convertible debentures due to conversion, and reduction in other term debt due to principal reductions, plus interest earned on the Company's cash balances, partially offset by increased term debt incurred in July 2021 to finance the IVFtech acquisition.
Other Income during 2021 includes gain on extinguishment of debt of $775,340 as a result of the forgiveness of the US Paycheck Protection Program (PPP) loan obtained in May 2020. The change in fair value of derivative was $nil for the year ended December 31, 2021 vs. $594,247 in the prior year. This derivative was fully converted to equity in 2020 and there will be no further valuation charges.
Net income increased 151% to $2,434,101 for the year-ended December 31, 2021, versus $971,235 for the prior year, primarily due to increased sales and related gross profit, debt forgiveness, and the elimination of changes in fair value of derivatives, all partially offset by increased operating expenses and increased income taxes.
Adjusted EBITDA for the year-ended December 31, 2021 increased 48% to $9,773,174 versus $6,608,457 in the prior year, primarily due to more normalized operations in 2021 versus the revenue and gross profit challenges in the previous year attributable to the COVID-19 pandemic, somewhat offset by lower gross profit margins and planned increases in operating expenses in the period.
Results of Operations for the Fourth Quarter ended December 31, 2021
For the three months ended December 31, 2021, sales were up 27% from $12,256,679 to $15,621,524. Gross profit was up 22% to $7,918,760 versus $6,470,718 for the prior year. Sales growth was up 28% in constant currency. Organic sales were up 12% on both a reported and constant currency basis. Gross profit percentage decreased from 52.8% to 50.7% for the quarter, primarily due to the addition of somewhat lower margin sales of IVFtech products, as well as increased costs of materials and shipping due to supply chain issues. Operating expenses increased 32% to $6,633,421 versus $5,021,872 for the prior year primarily due to the addition of IVFtech expenses, increased staffing and increased trade show, travel and sales compensation expenses.