Revenue of $58.2 million for the year and $16.4 million for the 4th quarter; Adj. EBITDA of $10.1 million for the year and $3 million for the quarter
BEVERLY, Mass. and TORONTO, March 30, 2023 (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, 2022.
Financial Highlights
- 2022 sales increased 11% to a record $58.2 million; annual sales increased 19% on a constant currency basis
- 4th quarter sales increased 5% to $16.4 million; sales for the quarter increased 14% on a constant currency basis
- 2022 adjusted EBITDA increased 3% to a record $10.1 million; annual EBITDA increased approximately 12% on a constant currency basis
- 4th quarter adjusted EBITDA increased 2% to $3.0 million; 4th quarter EBITDA increased approximately 11% on a constant currency basis
- Organic growth was 11% for the quarter and for the twelve-month period
- Gross profit margin was 52.5% for the quarter and 50% for the year
- Net income decreased 22% to $1.9 million for the year; net income increased 17% to $980 thousand for the quarter.
David Wolf, President and Chief Executive Officer, of Hamilton Thorne Ltd. commented, “2022 was another successful year for Hamilton Thorne. With well above-market organic growth of 11% for the year and the quarter, we continue to gain market share. Reported sales of $58.2 million for the year and $16.4 million for the quarter continue to be negatively impacted by exchange rate fluctuations at our European and UK operations. These currency fluctuations in translating financial statements into the presentation currency (US dollar), reduced reported revenues by approximately 9% for the quarter and 7% for the year.
“Sales were up across all of our product categories on a constant currency basis with equipment sales, leading the way with strong organic growth, augmented by the addition of IVFtech sales for a full year,” Mr. Wolf added. “We also completed a significant expansion of our product line, geographic coverage, and scale when we acquired Microptic at the end of November, expanding our product lines and establishing a direct sales footprint in Spain. I was particularly pleased to see our gross profit margins improving, primarily due to economies of scale, product mix and increased direct sales of our own products, augmented by the addition of higher-margin Microptic sales for one month. We also grew adjusted EBITDA to record levels, even as we navigated supply chain and inflation issues and continued to invest in sales and support resources, R&D, and enhancing our operations.”
The Company generated approximately $1.8 million of cash from operations for the year despite significant investments in inventory to address supply chain issues, ending the year with cash on hand of $16.7 million and $3 million available under existing lines of credit, with an $8 million line of credit under renewal to further support its acquisition program.
Financial Results
|
Fourth Quarter and Year-Ended December 31 |
|
Three Months |
Year |
| Statements of Operations: |
2022 |
2021 |
2022 |
2021 |
| Sales |
$16,427,917 |
$15,621,524 |
$58,178,067 |
$52,352,788 |
| Gross profit |
8,618,316 |
7,918,739 |
29,080,130 |
26,210,572 |
| Operating expenses |
7,701,277 |
6,633,419 |
26,788,919 |
22,394,314 |
| Net income |
980,392 |
836,488 |
1,910,594 |
2,434,101 |
| EBITDA |
3,039,477 |
2,972,066 |
10,085,600 |
9,773,174 |
| Basic earnings per share |
$0.01 |
$0.00 |
$0.01 |
$0.02 |
| Diluted earnings per share |
$0.01 |
$0.00 |
$0.01 |
$0.02 |
Statements of Financial Position as at: |
|
Dec. 31, 2022 |
Dec. 31, 2021 |
| Cash |
|
|
$16,673,401 |
$17,927,391 |
| Working capital |
|
|
23,750,886 |
23,057,296 |
| Total assets |
|
|
86,667,258 |
75,062,696 |
| Non-current liabilities |
|
|
16,849,584 |
8,639,291 |
| Shareholders' equity |
|
|
56,222,162 |
55,956,960 |
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, 2022
Hamilton Thorne sales increased 11% to $58,178,067 for the year-ended December 31, 2022, an increase of $5,825,279 from $52,352,788 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 impacted by unfavorable exchange rate fluctuations. Constant currency sales were up 19%. Organic growth was 11% for the year.
Sales of equipment were up 21% due to the return to more normal operations and logistic in 2022 plus a full year of sales from the IVFtech acquisition. Service and consumable sales, which were up 4%, were significantly impacted, on a reported basis, by currency fluctuations.
Gross profit for the year increased 11% or $2,868,558 to $29,080,130 in the year-ended December 31, 2022, compared to $26,210 572 in the previous year, primarily as a function of sales growth. Gross profit as a percentage of sales was in line with prior year at 50%, due to increased sales of higher margin proprietary equipment, branded consumables and additional direct sales of products, partially offset by the increase of costs caused by the global situation that generated logistics bottlenecks and material shortages. We expect this might continue to a lesser extent over the coming quarters.
Operating expenses increased 20% or $4,394,605 to $26,788,919 for the year-ended December 31, 2022, up from $22,394,314 for the previous year, primarily due to the addition of IVFtech expenses for the full year, to M&A related expenses, integration expenses, continued investments in sales and support resources, increased share-based compensation, and increased travel and tradeshow expense as activity continued to return to pre-pandemic levels. The global situation that impacted our cost of goods sold during 2022, also impacted operating expenses and salary increases in particular.
Net interest expense increased $69,476 (19%) from $364,358 to $433,834 for the year-ended December 31, 2022 versus the prior year, primarily due to increased term debt to finance the IVFtech (July 2021) and Microptic acquisitions (November 2022), and the higher use of bank line of credit to fund working capital, partially offset by reduction in other term debts due to principal repayment, and interest earned on the Company’s cash balances.
Net income decreased 22% to $1,910,594 for the year-ended December 31, 2022, versus $2,434,101 for the prior year, primarily due to increased operating expenses partially offset by a decrease in income taxes.
Adjusted EBITDA for the year-ended December 31, 2022 increased 3% to $10,085,600 (or 17% of Sales) versus $9,773,174 in the prior year, primarily due to more normalized operations in 2022 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, 2022
For the three months ended December 31, 2022, sales were up 5% from $15,621,524 to $16,427,917, or up 14% on constant currency, organic sales were up 11%. Gross profit was up 9% to $8,618,316 versus $7,918,738 for the prior year. Gross profit percentage increased from 50.7% to 52.5% for the quarter, primarily due to economies of scale, product mix and increased direct sales of our own products, augmented by the addition of higher-margin Microptic sales for one month. Operating expenses increased 16% to $7,701,277 versus $6,633,419 for the prior year primarily due to, increased staffing and increased trade show, travel and sales compensation expenses.
In the fourth quarter of 2022 the Company’s net income increased 17% to $980,392 while Adjusted EBITDA increased 2% to $3,039,477 versus net income of $836,488 and Adjusted EBITDA of $2,972,066 for the prior year fourth quarter. These changes were due primarily to increased sales and gross profits offset by increased operating expenses.
See the Company’s Management Discussion and Analysis for the periods covered for further information and a reconciliation of Adjusted EBITDA to Net Income.
Outlook
Mr. Wolf continued, “Looking forward into 2023, we continue to feel that our company is in a strong position. We expect solid sales performance, based on the positive trends in our field and as demand and growth in local currencies have returned to pre-pandemic levels in nearly every market that we serve. Q1 sales continued to be strong and supply chain issues appear to have lessened in recent months. We believe that we are well positioned to continue to execute on our strategy of driving long-term growth and EBITDA expansion by investing in our organic growth, while building scale, enhancing our product offerings, and expanding our geographic and direct sales footprint through acquisitions.”
Francesco Fragasso, the Company’s Chief Financial Officer added, “Based on year-to-date trends in exchange rates, we see foreign currency headwinds easing in Q1 to somewhere between a 4% and 5% impact on reported results versus the 9% impact in Q4, and if this trend continues it should provide some tailwinds in the second half of the year.”
Commenting on the Company’s M&A activities, Mr. Wolf stated, “We have an extensive pipeline and are actively working on multiple acquisition opportunities. With significant cash on hand, our unused line of credit, and further debt capacity, we are well positioned to continue to execute on our acquisition program.”
Conference Call
The Company has scheduled a conference call on Thursday, March 30, 2023 at 9:00 a.m. EDT to review highlights of the results. All interested parties are welcome to join the conference call by dialing toll free 1-833-630-1956 in North America, or 1-412-317-1837 from other locations, and requesting the “Hamilton Thorne Call.” The Company’s updated investor presentation and a recording of the call will be available on Hamilton Thorne’s website shortly after the call.
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.ltd)
Hamilton Thorne is a leading global provider of precision instruments, consumables, software and services that reduce cost, increase productivity, improve results and enable breakthroughs in Assisted Reproductive Technologies (ART), research, and cell biology markets. Hamilton Thorne markets its products and services under the Hamilton Thorne, Gynemed, Planer, Tek-Event, IVFtech, Microptic, and Embryotech Laboratories brands, through its growing sales force and distributors worldwide. Hamilton Thorne’s customer base consists of fertility clinics, university research centers, animal breeding facilities, pharmaceutical companies, biotechnology companies, and other commercial and academic research establishments.
Neither the TSX 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 Adjusted EBITDA, Organic Growth, and Constant Currency as non-IFRS measures, which are used by management as measures of financial performance. See sections entitled “Use of Non-IFRS Measures” and “Results of Operations” in the Company’s Management Discussion and Analysis for the periods covered for further information and a reconciliation of Adjusted EBITDA to Net Income.
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.
