Hamilton Thorne Announces 2011 Second Quarter Financial Results

BEVERLY, MA and TORONTO--(Marketwire - Aug 26, 2011) - Hamilton Thorne Ltd. (TSX-V: HTL) ("Hamilton Thorne" or the "Company"), 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 second quarter and six months year to date ended June 30, 2011.

"Hamilton Thorne's second quarter sales increased 14% over the prior year, and 27% over the first quarter, as we experienced growth across all of our product lines. Sales were bolstered by a strong market adoption of our newly introduced LYKOS™ laser system, while our Stiletto™ laser continues to open up new and exciting research areas in the stem cell field," said Meg Spencer, Chief Executive Officer of Hamilton Thorne Ltd. "The first half of 2011 brought the launch of several exciting products for our Company, and as we move into the second half of the year, we are excited to unveil additional products that will help our customers to discover and develop life-saving treatments for patients."

Second Quarter Highlights

• The Company launched its ground-breaking LYKOS™ laser system for the clinical and fertility markets during the 27th Annual Meeting of the European Society of Human Reproduction and Embryology (ESHRE) in July 2011. The LYKOS™ is a significant advance in integrated laser optics, providing additional functionality, improved optics, increased resolution and compatibility with all major microscope models. The LYKOS™ has been well received by customers, and has contributed to growth of laser sales in the second quarter 2011.
  
  
• Hamilton Thorne also unveiled an advanced preview of its new IMSI STRICT™ morphology analysis software at ESHRE 2011. IMSI STRICT™ is an imaging analysis product that provides fertility clinicians with the ability to select optimum sperm and thus improve outcomes during advanced fertility procedures. Intracytoplasmic morphologically selected sperm injection (IMSI) is becoming a key procedure to improve outcomes in fertility treatments, and IMSI STRICT™ will provide scientists and patients with better solutions for their conception goals.
  
  
• Hamilton Thorne continues to advance their collaboration with ISee3D Inc. to market their unique single camera, single lens, single chip 3D microscope technology, which is currently under development. Under this agreement, Hamilton Thorne has exclusive rights to sell the ISee3D three-dimensional technology with its lasers within certain cell research and regenerative medical research markets. The product will support both inverted and upright configurations, and is expected to be previewed in the fall of 2011.
  
  
• The Company secured a distribution deal with Sutter Instrument Company, a company focused on delivering premium micro- manipulation and micro-injection devices to the research market. The agreement will provide Hamilton Thorne with the opportunity to sell Sutter's complementary products to the Company's customers.
  
  

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 June 30, 2011, the Company reported a total sales increase of 14% to $1,833,242 for the quarter, an increase of $224,722 from $1,608,520 during the previous year, and an increase of 27% over the first quarter of 2011. Six months sales for 2011 of $3,278,655 were up 18%, from sales of $2,789,207 in 2010. This increase was attributable to increased demand for our existing products and improved budget availability for capital equipment purchases across all customer types and geographic regions. The Company's customers in the regenerative medicine field primarily use the Company's products in research applications.

Gross profit for the quarter increased 16% to $1,172,842 in the quarter ended June 30, 2011, compared to $1,009,321 in the previous year and increased to $2,053,372 versus $1,719,522 for the comparable six month periods. Gross profit as a percentage of sales were slightly higher at 64.0% for the quarter and 62.6% for the six months ended June 30, 2011, versus 62.7% and 61.6% for the comparable periods in 2010, due primarily to product mix and increased sales spread over a relatively constant overhead base.

Operating expenses were $1,460,591 and 2,960,476 for the quarter and six-months ended June 30, 2011, up from $1,332,421 and $2,543,293 for comparable periods during the previous year. This increase in operating expenses represents continued strategic investment in the growth of the Company.

Research and development expenses increased from $228,947 to $320,281 for the quarter ended June 30, 2012 and from $479,254 to $619,728 for the six-month period due to continued development of new products. Sales and marketing expenses increased from $595,107 to $675,063 for the quarter ended June 30, 2012 and from $1,080,794 to $1,309,240 for the six-month period due to the expansion of our sales and marketing staff, commission expense on higher sales volume, and increased variable costs of selling.

General and administrative (G&A) expenses decreased from $508,367 to $465,247. for the quarter ended June 30, 2011 versus the prior quarter and increased from $983,245 to $1,031,508 for the six-month period due primarily to increases in staffing, as well as foreign currency valuation adjustments related to the convertible debentures issued in August 2010 and March 2011 issued in Canadian dollars.

Net interest expense increased from $62,165 to $155,489 for the quarter ended June 30, 2011 and from $132,114 to $282,510 for the six-month period. The increase was due primarily to the non-cash interest expense, both coupon and accreted, on the Company's convertible debentures.

The net loss for the quarter ended June 30, 2011 increased from $385,265 to $443,328 and from $955,885 to $1,189,614 for the six-month 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 interest expense, partially offset by increased gross profit resulting from increased sales.

As of June 30, 2011, the Company had 24,415,157 common shares. As of June 30, 2011, there were 5,694,440 warrants outstanding to purchase common shares: 5,500,005, at a price of Cdn $0.60 which originally were set to expire in April 2011 but were extended by eighteen months to October 2012; and 194,435 warrants to acquire one common share at an exercise price of Cdn$0.50, expiring in August 2012 and March 2013, issued to its financial advisors in connection with the August 2010 and March 2011 sales of the convertible debentures.

Stock options issued to employees and directors outstanding at June 30, 2011 totaled 4,071,480 at exercise prices ranging from Cdn $0.205 to Cdn $0.7712. Options for 2,357,351 shares are exercisable as of June 30, 2011. Options expire at varying times from July 2012 through January 2021.

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 LYKOS™, Staccato™ and Stiletto™ laser systems 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.

Hamilton Thorne Ltd.
Consolidated Statements of Financial Position
For the periods ended June 30, 2011 and December 31, 2010
(Expressed in U.S. Dollars - unaudited)
		June 30, 2011			December 31, 2010
Assets
Current
	Cash and cash equivalents	229,705			714,498
	Accounts receivable	986,633			971,406
	Inventories	701,286			544,170
	Prepaid expenses and other current assets	99,648			58,241
		2,017,272			2,288,315
	Property and equipment	195,606			134,662
	Other assets	112,996			111,968
	Total assets	2,325,874			2,534,945
Liabilities
Current
	Accounts payable and accrued liabilities	1,617,071			1,412,831
	Notes payable	107,910			104,460
	Capital lease obligations, current	30,621			20,250
	Deferred revenue	54,985			91,086
	Total current liabilities	1,810,587			1,628,627
	Capital lease obligations, non-current	60,989			37,295
	Deferred revenue, long-term	79,486			79,486
	Long-term debt	6,793,598			6,121,015
	Total liabilities	8,744,660			7,866,423
Shareholders' Equity (Deficiency)
	Common shares	24,345,752			24,345,752
	Warrants	353,495			349,019
	Contributed surplus	705,366			607,535
	Accumulated deficit	(31,823,399	)		(30,633,784	)
	Total Shareholders' equity (deficiency)	(6,418,786	)		(5,331,478	)
	Total Liabilities and shareholders' equity (deficiency)	2,325,874			2,534,945

Hamilton Thorne Ltd.
Consolidated Statements of Operations and Comprehensive Loss
For the three and six months ended June 30, 2011 and 2010
(Expressed in U.S. Dollars - unaudited)
		Three Months ended June 30								Six Months ended June 30
		2011				2010				2011				2010
Sales			1,833,242				1,608,520				3,278,655				2,789,207
Cost of sales			660,400				599,199				1,225,283				1,069,685
			1,172,842				1,009,321				2,053,372				1,719,522
Expenses
	Research and development		320,281				228,947				619,728				479,254
	Sales and marketing		675,063				595,107				1,309,240				1,080,794
	General and administrative		465,247				508,367				1,031,508				983,245
Total expenses			1,460,591				1,332,421				2,960,476				2,543,293
Loss from operations			(287,749	)			(323,100	)			(907,104	)			(823,771	)
Other income (expense)
	Interest expense, net, including accretion		(155,489	)			(62,165	)			(282,510	)			(132,114	)
Net loss and comprehensive loss			(443,238	)			(385,265	)			(1,189,614	)			(955,885	)
Loss per share
	Basic	$	(0.02	)		$	(0.02	)		$	(0.05	)		$	(0.04	)
	Diluted	$	(0.02	)		$	(0.02	)		$	(0.05	)		$	(0.04	)
Weighted average number of common shares outstanding
	Basic		24,415,157				24,415,157				24,415,157				24,415,157
	Diluted		24,415,157				24,415,157				24,415,157				24,415,157

Hamilton Thorne Ltd
Consolidated Statements of Cash Flows
For the three and six months ended June 30, 2011 and 2010
(Expressed in U.S. Dollars - unaudited)
			Three Months ended June 30				Six Months ended June 30
			2011		2010		2011		2010
Cash flows from operating activities
Net loss for the year			(443,238	)	(385,265	)	(1,189,614	)	(955,885	)
Adjustments to reconcile net loss to net cash used in operating activities:
	Depreciation and amortization		14,460		16,164		28,920		31,191
	Non-cash interest expense/accretion		103,897		-		213,271		-
	Share-based payments expense		34,560		61,245		74,310		122,490
	Changes in non-cash operating assets and liabilities:
		Accounts receivable	(277,422	)	(502,981	)	(15,227	)	(585,072	)
		Inventories	(79,302	)	(57,891	)	(157,116	)	(57,582	)
		Prepaid expenses and other assets	(52,200	)	12,921		(41,407	)	43,475
		Other assets	557		-		(1,028	)	(57,000	)
		Accounts payable and accrued liabilities	117,014		342,087		116,705		324,455
		Deferred revenue	(22,067	)	127,971		(36,101	)	130,888
Net cash flows used in operating activities			(603,741	)	(385,749	)	(1,007,287	)	(1,003,040	)
Cash flows from investing activities
	Purchase of capital assets		(22,814	)	(11,101	)	(43,254	)	(48,197	)
Cash flows from financing activities
	Proceeds from debt		25,585		256,411		600,475		754,454
	Costs of private placement refunded				3,814		-		3,814
	Payments on debt		(16,564	)	(553,015	)	(34,727	)	(1,056,699	)
Net cash flows provided by (used in) financing activities			9,021		(292,790	)	565,748		(298,431	)
Net Increase (decrease) in cash and cash equivalents			(617,534	)	(689,640	)	(484,793	)	(1,349,668	)
Cash and cash equivalents, beginning of period			847,239		696,343		714,498		1,356,371
Cash and cash equivalents, end of period			229,705		6,703		229,705		6,703
Supplemental disclosure of cash flow information:
Cash paid during the period for:
	Interest		70,942		53,058		132,277		107,466
Supplemental disclosure of non-cash financing activities:
	Equipment acquired under capital lease		21,436		0		46,619		0