Hamilton Thorne Reports Record Revenue; Operating Leverage Drives Significant Net Income, EBITDA and EPS Growth for Year Ended December 31, 2014

BEVERLY, MA and TORONTO, ON--(Marketwired - Apr 23, 2015) - 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, 2014.

The Company's strategy to focus on its core markets continues to generate strong sales growth and substantial improvements in financial performance.

Sales increased 16% to a record $8.7 million for the year, led by strong growth in sales of IVOS II image analysis products and LYKOS^® clinical laser systems, as well as increased revenues from after-sale services. Fourth quarter sales grew 11% to over $2.5 million versus the same quarter in the prior year, the ninth consecutive quarter of growth. For the year, the Company reported net income of over $856,000, nearly a six-fold increase over $125,000 of net income in the prior year, EBITDA of $1.17 million and EPS of $0.02 per share. Net income and EBITDA were $448,000 and $536,000 respectively for the fourth quarter.

David Wolf, Hamilton Thorne's President and CEO commented, "With six consecutive quarters of positive cash flow from operations, further enhanced by our November equity financing of approximately $650,000, we have improved our year-end cash position from $450,000 to over $1,500,000 and are well positioned to continue investing for growth. As part of an ongoing strategy to expand our product offerings, we are expecting to increase our spending on research and development projects."

Hamilton Thorne recently closed in the acquisition of the Oosight^® product line from a major life sciences instruments manufacturer and is actively seeking to accelerate its growth through additional acquisitions of complementary products or companies in its field. The Oosight acquisition is expected to be accretive to earnings in 2015.

Mr. Wolf added, "We expect continued growth in both revenues and profitability in 2015 but the level of growth will be dependent upon general economic conditions and, given our strong export sales, the US dollar's value versus other major currencies, as well as the performance of acquisitions we complete in the period."

2014 Business Highlights

• Sales of image analysis products for were up substantially for the year with strong growth in the animal breeding and human markets. Laser sales growth remains strong, particularly in the human clinical market. The Company also saw steady growth in the sales of its research products.
  
  
• At the European Society of Human Reproduction and Embryology annual meeting in July, the Company previewed its new, automated, DNA Fragmentation software. The Company also completed work on its new, easy-to-use, CASA Remote Capture System which was released in January 2015.
  
  
• Hamilton Thorne continues to strengthen its IP position. In 2014, the Company received patents covering its LYKOS^® and XYRCOS^® modular objective assembly which incorporate a laser inside a microscope objective, and its RED-i optical indicator, in both China and Japan.
  
  
• In November the Company closed an over-subscribed private placement of units consisting of 7,500,000 common shares and 7,500,000 warrants, yielding proceeds of approximately US $650,000. The Company intends to use the net proceeds of the Offering to fund product development and provide working capital to support its operations and future growth.
  
  
• In 2014, Hamilton Thorne's products were referenced by customers at world-leading research labs and academic institutions in over 150 journals such as Nature, Fertility and Sterility, Cryobiology, Human Reproduction, Transgenic Research, Theriogenology, and Reproductive Biomedicine Online.
  
  

All amounts are in US dollars, unless specified otherwise, and results, with the exception of EBITDA, are expressed in accordance with the International Financial Reporting Standards ("IFRS").

Results of Operations for year ended December 31, 2014 

Hamilton Thorne sales increased 16.5% to $8,707,647 for the year-ended December 31, 2014, an increase of $1,230,350 from $7,477,297 during the previous year. This increase was attributable to substantial sales growth of the Company's imaging and laser systems. 

Gross profit for the year increased 19.9% to $5,647,953 in the year-ended December 31, 2014, compared to $4,625,977 in the previous year. Gross profit as a percentage of sales increased from 61.9% to 63.7% for the year-ended December 31, 2014, due primarily to improved product mix, increased sales volume spread over a relatively constant manufacturing cost base, and reduced discounting on volume orders.

Operating expenses increased 4.1% or $175,332, to $4,455,426 for the year-ended December 31, 2014, up from $4,280,094 for the previous year. These increases in operating expenses are a result of continued strategic investment in R&D and sales and marketing resources, as well as increases in overall staffing costs. Operating expenses as a percentage of revenue were reduced to 51.2% from 57.2% for the prior year.

Net income for the year-ended December 31, 2014 increased 584% to $856,302 versus net income of $125,155 for the prior year, an improvement of $731,147. Net income improved significantly due to the leveraging of revenue and gross profit growth with controlled growth in operating expenses, as well as reduced interest expense.

EBITDA for the year-ended December 31, 2014 increased 175% to $1.17 million versus $426,033 in the prior year, due to revenue and gross profit growth as well as controlled growth in operating expenses.

Fourth Quarter 2014 Results

For the three months ended December 31, 2014, sales were up 11% from $2,270,869 to $2,518,207. Gross profit was up 10% to $1,646,017, and gross profit as a percentage of sales stayed relatively flat at 65.4% versus 65.9% in the previous year. Operating expenses were down $34,122 or 2.9% as a result of strong expense controls and the timing of certain expenses. In the fourth quarter of 2014, the Company generated net income of $448,149, and EBITDA of $536,009, versus net income of $252,217, and EBITDA of $356,349 for the prior year fourth quarter. The substantial improvement was due primarily to increased sales and gross profits as well as reduced operating expenses.

Financial statements and accompanying Management Discussion and Analysis for the periods are available on www.sedar.com and the Hamilton Thorne website.

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 developmental 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.

The Company has included earnings before interest, income taxes, depreciation and amortization, certain non-recurring expenses and certain other non-cash amounts ("EBITDA") as a non-IFRS measure, which is used by management as a measure of financial performance. See section entitled "Non-IFRS Measures" in the Company's Management Discussion and Analysis for the periods covered for further information.

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.