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Welcome to the Hamilton Thorne Ltd. Second Quarter 2021 Earnings Conference Call.Before turning the call over to your host today, please be reminded of our standard public company policy on forward-looking information and use of non-IFRS measures. Certain information presented or otherwise discussed on this call may contain forward-looking statements. These statements may involve, but are not limited to, comments relating to strategies, expectations, planned operations, product announcements, scientific advances or future actions. This information is based on current expectations that are subject to significant risks and uncertainties that are difficult to predict. Should one or more risks or uncertainties materialize or should assumptions underlying the forward-looking statements prove incorrect, actual results, performance or achievements could vary materially from those expressed or implied by these forward-looking statements.These factors should be considered carefully and prospective investors and other parties should not place undue reliance on these forward-looking statements. The company assumes no obligation to update such 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 the filings by the company with the Canadian securities regulators, including without limitation, the company's management discussion and analysis for the quarter and 6 months ended June 30, 2021, which filings are available under the company's profile at www.sedar.com.During this call, the company may reference adjusted EBITDA, organic growth and constant currency as non-IFRS measures, which are used by management as measures of financial performance. See section 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.Now let me turn the call over to Hamilton Thorne's CEO, David Wolf.
Thank you, and good morning and welcome to the Hamilton Thorne Ltd. second quarter 2021 earnings conference call. I'd like to introduce myself. I'm David Wolf, President and CEO of Hamilton Thorne. On the call with me today is Michael Bruns, our Chief Financial Officer. This morning's call will have the following format. First, I will provide a summary of operational and financial results for the quarter and 6 months ended June 30, 2021, with a focus on our sales, markets and operational performance. Michael will follow with a more detailed discussion of the financial results for the periods as well as a review of our financial position and liquidity. I will then return for a few minutes to provide an update on our outlook for the balance of the year. We will then open up the line for questions. I'd like to remind all participants that we do not provide financial guidance, so I'd ask you to limit your questions to either historical periods or general trends in the business.I'll begin with our sales results. I'm pleased to report that our solid start to the year continued in the second quarter as the majority of our customer base returned to more normalized operations. Sales of $12.5 million was a record quarter for us and was up over 70% versus the second quarter of 2020, which we all know was meaningfully impacted by slowdowns related to COVID-19. Sales of $24 million for the 6 months increased 36% over the prior year.Let me give you some of the highlights from our performance. As I mentioned, sales increased 71% year-over-year at $12.5 million and 36% to $24 million for the 6-month period. Sales in constant currency increased 62% for the quarter and 29% for the 6-month period. Gross profit increased 69% to $6.4 million for the quarter and increased 36% to $12.3 million for the 6-month period, generally tracking sales growth. Net income was $482,000 for the quarter and $1.35 million for the 6-month period versus net losses of $594,000 and $449,000 in the prior year period.Adjusted EBITDA [indiscernible] to $2.45 million for the quarter and 99% to $4.77 million for the 6-month period. Organic growth in U.S. dollars was 70%, 61% in constant currency and 35% for the 6-month period, 29% in constant currency. Cash generated from operations was very strong at $1.7 million for the quarter and $3.2 million for the 6-month period. Total cash on hand at June 30, 2021, was $20.6 million.From a mix perspective, sales of consumables and services, which closely correlate to increased activity at our customer sites, augmented by our market share gains, were up over 80%, while equipment sales, which have been taking longer to recover, showed some strong growth in this period, up over 55% for the quarter.Looking at field of use, sales into the human clinical market were up substantially for the quarter and first half, driven by strong demand for all of our products and services. Sales into the cell biology and research markets also grew substantially for both periods, albeit off a much smaller base, while sales into the animal breeding market were down for both periods. On geographic basis, we saw growth in all regions for the quarter and for the first half, with the Americas showing the most growth in both periods.Our gross profit margins were down slightly to 51.1%, primarily due to product mix, but were slightly up versus Q1 this year. Our operating expenses were generally in line with expectations, with travel returning to historical levels and increased cost associated with maintaining investments in research and development and sales and support personnel. We made some significant equity grants in the second quarter to reward and retain employees who did tremendous work over the year, which we know was a very difficult period, so we did have increased share-based comp during that period certainly versus the prior year.We were also pleased to see that our adjusted EBITDA results rebounded to 19.6% of sales in Q2, which ends at 19.8% of sales for the 6-month period. During the quarter, we closed on the acquisition of Tek-Event based just outside of Sydney, Australia. Tek-Event is the manufacturer of Cell-Tek Microscope Chamber, which is a somewhat niche specialized product for controlling temperature, air flow, humidification and air quality as used in ART and laboratory markets worldwide. Tek-Event is also a value-added reseller of a select range of capital equipment and consumable products, including those manufactured by Hamilton Thorne, therefore, providing us with a direct sales presence in Australia. Tek-Event serves approximately 90% of the IVF clinics in Australia. While this was a relatively small transaction, it is strategic and accretive.I'll now turn the call over to Michael to provide a more detailed discussion on the numbers.
Thank you, David. Good morning, everyone. I am Michael Bruns, the CFO of Hamilton Thorne. I will briefly highlight the second quarter and first half 2021 P&L performance as well as the cash flow and liquidity of the company as of June 30.Hamilton Thorne revenues, as you've read, increased 71% to $12.5 million, an increase of $5.1 million over the COVID-impacted previous year Q2. Sales of consumables and services increased 81% to $7.8 million in Q2, reflecting the continued recovery from the pendent. First half 2021 year-to-date sales increased 55%. Total equipment sales increased 56% to $4.8 million, reflecting the somewhat slower recovery of capital equivalent post pandemic. First half year-to-date equipment sales increased 12%. We completed a few small lab build-outs in the quarter, which do not occur every quarter, and we have several more in our 2021 pipeline. For 2021 year-to-date, consumables and services sales represent 64% of HTL's total enterprise sales, up from 56% in 2020. Equipment sales comprised 36% of sales in 2021, reduced from 44% in the prior year.Gross profit for the year increased 69% or $2.6 million to $6.4 million due to sales growth and relatively consistent margin rates. Gross profit, as a percentage of sales, was down slightly to 51.1% for the quarter versus 51.7% last year, attributable to both product and channel mix. Year-to-date, gross profit increased 36% or $3.3 million, and gross profit as a percentage of sales increased modestly to 51.0% versus 15.8%, again, attributed to both product and channel mix in the year-to-date.Operating expenses increased 37% for the quarter and 23% for the 6 months ended June 30, which included $346,000 of acquisition-related expenses in Q2 and $476,000 of acquisition expenses 6 months year-to-date versus no spending for acquisitions in the prior year same periods. Excluding those acquisition costs, comparable expenses increased 28% for the quarter and 17% year-to-date. Expense increases are attributable to increased share-based compensation, which was the result of substantial grants to our dedicated employees and management team, as David noted. Expenses also increased due to volume-related increase in variable cost of sales as we return to more normal levels as well as continued investments in R&D, sales and support resources.Net interest expense again decreased 69% and 67%, respectively for the quarter and year-to-date, saving $163,000 and $326,000 for the quarter and the year-to-date, primarily due to reductions in outstanding convertible debentures after the final April 2020 conversion to equity as well as our scheduled reductions in term debt. Income tax expense increased to $238,000 for the quarter ended June 30 and $541,000 for the 6-month period due entirely to the return to overall profitability in Q2. Current expense is applicable to various states in the U.S. as well as Germany and the U.K. The 2021 deferred tax expense is primarily applicable to U.S. federal tax and as a deferred non-cash expense due to the continuing utilization of prior year's net operating losses in the U.S.Net income for the quarter improved to $482,000 versus the net loss of $594,000 in the prior year Q2 and $1.348 million, up from a net loss of $449,000 in the prior year year-to-date, primarily due to the substantial increase in gross profit and reduced interest and somewhat offset by increased operating expenses and increased income taxes. Adjusted EBITDA, which were considered an important metric for our financial performance, increased 334%, to $2.45 million, and 99% year-to-date to $4.77 million versus the COVID-impacted prior year of $573 million in the quarter and $2.4 million year-to-date last year. This is all primarily due to more normalized operations in the first half of 2021 versus the substantial revenue and gross profit decreases in the second quarter of 2020.Adjusted EBITDA is a non-IFRS measure. Please see the reconciliation of adjusted EBITDA to net income for the quarter and year-to-date in our MD&A report filed today on both SEDAR and on our own HTL website, as well as our expanded definitions of adjusted EBITDA, organic revenue and constant currency.Turning now to the company's cash flow and balance sheet. The company generated cash from operations of $1.7 million in the second quarter and $3.2 million for the 6 months year-to-date. The turnaround from the prior year COVID-19-impacted actual use of cash from operations in Q2 of $1.5 million and $791,000 year-to-date. This increased cash flow is attributed to substantial revenue and gross profit turnaround as well as the gradual return of the company's inventory levels and other working capital components, returning to more normalized quarterly activity and business operations. Cash used in investing activities was $2.0 million, increased due to the net cash payment of $846,000 made in connection with the Tek-Event acquisition in April, in addition to the normal expenditures for ongoing investments in capitalized intangible development costs by our R&D teams for next-generation and new product development, as well as our normal CapEx for equipment and demo units for production and sales teams.Cash used in financing activities was $2.4 million as scheduled term loan and lease obligations and continued measures reductions in the company's line of credit. Company's resulting cash balance at June 30, 2021, decreased slightly to $20.6 million for the 6 months year-to-date, a decrease of $1.2 million, which included the Tek-Event acquisition. Working capital increased to $22.8 million. In addition, we have increased the availability in the acquisition line of credit with our senior lender to $8 million, up from the $5 million line utilized in July for the acquisition of IVFtech and K4, as well as another $3.5 million of availability in our normal revolving line of credit. This combined $11.5 million of bank lending availability is an important additional resource in our ability to complete acquisitions with a relatively low cost of capital. This availability, combined with our cash on hand of approximately $20 million after the July 15, 2021 acquisition of IVFtech, makes us well positioned to support our operations in the coming months, including the continuation of our acquisition program and financing further growth as the business climate continues to improve.Now let me turn the call back over to David to comment on the HTL outlook.
Thanks, Michael. Our outlook for the balance of the year continues to be impacted by the COVID-19 pandemic. Our planning assumption when we prepared our budgets last fall and winter was that we would see a somewhat choppy first half 2021 with activities pretty much normalized in the second half. In fact, during the first half of the year, we were clearly seeing normalized sales activity in the U.S. and many of other major markets, particularly in the second quarter. However, the resurgence of COVID-19 cases in certain parts of the world based on new variants has added substantial uncertainty to the short and midterm outlook.Also, as we mentioned on our last call, one area that has come to greater focus are certain supply chain issues. We continue to experience shortages and lead times and extended lead times and in some cases, higher prices for some finished goods that we sell, as well as components incorporated into the products that we manufacture. While we have been managing through these disruptions, and of course, while we do not want to be overly cautious, we are concerned that we may see an impact on sales and profitability in the second half of the year, which could continue for a period of time, that is uncertain and obviously affect our ability to meet both our growth plans and acquisition objectives.On a more positive note, in July, following the end of the quarter, we acquired IVFtech, a leading manufacturer of very much mainstream laminar flow workstations for controlling temperature, air flow and air quality in ART and the laboratory markets worldwide. They're also manufacturer of flatbed incubators and number of accessories and related products. We also acquired IVFtech's affiliated direct sales business, K4 Technology. This acquisition, along with the Tek-Event acquisition, adds a number of high-quality product lines with significant growth potential to our product portfolio and establishes direct sales presence for the entire Hamilton foreign product range in Australia as well as the entire Nordic regions, which includes Denmark, Sweden, Norway, Finland and Iceland. In addition to these transactions, we continue to have an active pipeline and are working on multiple opportunities. Finally, with approximately $20 million in cash and our $8 million acquisition line of credit, I feel we are well positioned to execute on additional acquisition opportunities.We'll now open the line up for questions. Operator, please have the first call from queue.
Our first question will come from the line of David Martin with Bloom Burton.
David and Michael, you mentioned that the equipment sales have taken longer to recover than consumables and services. I'm wondering, first, are consumables and services back to normal, and then how much more revenue do you estimate you would have got if all of your product lines were back to normal this quarter?
Sure. So I'm going to dodge the second question, but I'll certainly -- maybe the first one as well by giving a much more general answer in the sense that it's very difficult to know what is normal, if you see what I mean. And certainly, we're not going to speculate on what sort of as-if numbers are COVID-adjusted sales, which I've seen in China, just don't think have a lot of credibility. In terms of the consumable side, the services side of our business, they certainly showed really significant growth. It's frankly very hard to know whether that is, in fact, normal growth, maybe above normal because of the pent-up demands that everybody has talked about and potentially our ability to win market share because of difficult times for some other vendors, or in fact, this is the new normal. We certainly don't expect to see 80% growth, 70% growth continuing forever. And maybe just one thing that might be helpful. We also did a comparison versus 2019 numbers to show you a sense of what our progression was, and we were up 56% for Q2 versus 2019, which is obviously well above-market growth and well above our historical averages. That does include some period of the Planer acquisition. On an organic basis, we were up over 30%. So again, very strong, much -- again, spread over 2 years, but very strong, more than what we had historically seen as typical growth. So again, I think we're going to have to go through a few more quarters, whether we see this as, in fact, a new growth trend for us, or as I said earlier, perhaps a little bit of the pent-up demand leaking through the market.
So speaking about pent-up demand, when it comes to capital equipment, that's been slower to recover. Do you think there is a lot of pent-up demand? Or do you think your customer base has skipped a replacement cycle and you may not get back that -- what you missed, you may not get that back going forward?
Yes, again, calls for a little bit of speculation, but I would say that we do not view -- it's, again, our opinion, so we take [indiscernible], but we do not view that we're going to -- that we have lost sales during this period. Certainly, not to others or more than -- and its competitive market, so we don't -- everything, we have to accept that or the people are wholesale skipping replacement cycles or not upgrading equipment that needs upgrade. So again, while we didn't grow at the, I think, really almost phenomenal levels that we saw in the consumables and services business during this quarter, and over 50% growth in our equipment business is actually pretty strong. So again, my view is, hard to know exactly, again, what normal is, that is showing more normalized approaches versus, let's say, Q1, where we had much more modest growth on the equipment side. That being said, we'll have to see how things develop as -- again, not to be overly cautious, but people are and we are concerned about what the resurgence of COVID means. And as we've said on multiple occasions, if you -- nevertheless, your lab is open and you're doing procedures, you have to buy the consumables. But if you're cautious and concerned, you may, in fact, decide to defer some capital equipment. Conversely, as Michael had mentioned, we have a number of lab builds. As I think I said in our last call, it's strangely interestingly, relatively small lab builds this year. So we are seeing people continue to invest. It's just -- it's a little bit more -- varies from maybe certainly region to region and perhaps company the company.
Your next question will come from the line of Justin Keywood with Stifel.
Just a follow-up question on the supply chain disruptions. Is this for a particular geographic region? Or is it generally widely spread? And any indication on the time line when some of these supply chain headwinds could subside?
Yes. So thank you for the question. So I would just like to add that as everything that I said was our cautionary notes. I don't think these are specific to our company or our field. I think they're just kind of macroeconomic trends or macro trends in terms of, again, whether it's a resurgence of COVID potentially affecting lockdowns and people's behavior or supply chain issues. Drilling down a little bit more directly, we are seeing the supply chain issues impacting. Again, we have manufacturing and reselling operations primarily in Europe and the U.S. and we're seeing those in both territories. They manifest themselves a little bit differently depending upon what it is that we're either manufacturing in that area or are reselling. But we are clearly seeing -- again, I don't want to overstate it in the sense that it has not yet had any meaningful impact or major impact on the business, and we're managing through it, and we are certainly seeing continued issues.
And by continued issues, is there just longer lead times as far as your manufacturing suppliers? Or any additional color that could be helpful?
So it's yes and yes. It's longer lead times and pricing. So for example, again, a huge component of what we do because most of our products are primarily tech oriented, but we see -- just saw last quarter really significant increases in sheet metal pricing, as an example. And the sheet metal is coverings for our instruments. So not a huge part of our cost of goods for most of our instruments, but nevertheless, every little bit adds up. And in those both cases, we're seeing exactly the same; longer lead times and maybe that's -- maybe the problem is to solve longer lead times by increasing prices.
And what's the ability to pass on those increased costs?
So historically, we have done more general price increases on our consumables business and our capital equipment business. This year, we are, in fact, going, not in every case, but increase our capital equipment prices. Again, it's a competitive market, so we have to be mindful of the market, but our competitors are going to be facing the same issues that we are. So I don't believe -- I believe we'll be able to pass on at least some, if not all of these price increases.
And with this disruption potentially affecting some of your smaller competitors in a more material way, is there an opportunity to acquire, just given some of the challenges for your less well-capitalized competitors out there?
Yes. So again, I think, first and foremost, I think from an operational basis, it's an opportunity to build market share, compete on our relatively larger ability, our larger balance sheet. We obviously are mindful about building inventories beyond what we need, but we have the ability to solve some of these partners to address some of these supply chain issues by bulking up on inventory, which is harder for somebody who's either smaller or just an answer that's capable. So I think that's, first and foremost what we think. It clearly could create an opportunity for us to -- from an acquisition perspective to acquire somebody who's having more trouble managing the various institutes of what COVID has brought, whether it's supply chain, ups and downs in consumer demand or the ultimate lab demand or the variety of things. But I do want to emphasize, we have always focused on buying really strong businesses, buying very good businesses and while I think we pay a pretty reasonable price for these businesses when we can, we're not necessarily bargain hunters. So we're not going to go out and buy a troubled business that is having a lot of issues whether it's internal, external or completely macroeconomic. They have a great issues and a great control over just because it's a [indiscernible] quota bargain. I've lot of experience in doing acquisitions, including the integration part of it and those bargains prices can be at least very at best or at least very competitive once you really figure out what the acquisition and integration costs are.
Your next question comes from the line of Stefan Quenneville with Echelon Capital.
From Echelon Capital. Congrats on the quarter and thanks for taking my questions. I just wanted to get from you guys a take on your recent acquisitions. Anything to say about the integration and how those acquisitions are looking obviously in your hand? And secondly, I wanted to get your take on the recent large acquisition that Vitrolife made in the genetic testing space. I know you've been reticent in the part to do something in that segment because we are seeing direct competition with some of your clients. Is that thinking changing in any way now?
Sure. So thanks for the call. I guess it's a 2-parter. Let me address the first part. In terms of the acquisitions that we've done, the ones most recently in the last couple of quarters, so we bought the Tek-Event business in Australia and the IVFtech business in -- based in Denmark and more of a worldwide business. So in terms of the IVFtech -- I'm sorry, the Tek-Event business, it's had some -- well, or it has or had, will have potentially some ups and downs in terms of performance. The first quarter that is included in our financials was actually very, very strong. As you see, we do report on an organic basis. So I think you can just -- the reverse engineering and figure out how much of that sales are attributable to Tek-Event. It was a very strong quarter for us. That being said, Australia has gone back into really significant lockdown. Our people who are mostly based in Sydney are actually prohibited from traveling more than a few kilometers from their home for anything except for medical supplies and food. So it's going to -- it's clearly not going to -- it's going to impact our ability to address our customer needs. And I think the clinics are that's going to impact the customers -- clients' abilities to go to the patient, ability to go to their customers. That being said, that's why we like to think that we have a strong worldwide business where there's a little bit of ups and downs. And so this is probably going to be a down for the next quarter or 2. We can still sell products on a worldwide basis and have other businesses because they are in areas for whatever reason are not as impacted can still be up. The IVFtech business, a little too early to tell. We just closed in July. So it's been -- it's only really been under our belts for a month. And we haven't disclosed -- we don't disclose hour by hour numbers. From an integration perspective, I will tell you the IVFtech business is very similar to our typical integration path where we view that we buy great businesses because they're run by great people and run properly. And that while we try to focus on just cost savings that are potentially available, we don't buy businesses with the idea of cutting costs, cutting people or reducing activities. To us, it's all about how do we take that platform that we've now bought and put more products and services through it, expand distribution, invest more in that business and get sales and marketing synergies. So that's obviously early days, but we'll see as this plays out over the next year or so. So I feel very confident that's a lot of -- again, sales and marketing synergies that we've clearly proven we can obtain out of the other acquisitions that we've done whether it's Gynemed or Planer. Those are available. In terms of your second question, I prefer not to comment too much on exactly what our -- both our competition is up to and what our strategic plan is, but clearly, we have looked at and thought about the idea of getting more involved in the genetic side of the business, it's clearly an important part of it. And that being said, I think you characterized it correctly. We've concluded that providing patient -- essential patient-facing services, cosmetic services and those kinds of things, A, is competitive with some of our larger clinics who do that themselves and want to keep that in-house and B, it's really a very different business than what we're in today. So you never want to say -- never is a long time. So you don't want to say we would never get involved in that business, but it's not, certainly not in our short-term planning list.
[Operator Instructions] Your next question will come from the line of Chelsea Stellick with IA Capital Markets.
Congratulations on the quarter. I just have one question that wasn't previously asked. Could you just give me a little bit more color on the earnout for Tek-Event and sort of the financial targets that need to be hit for that?
Sure. So the earnout is based on hitting primarily -- well, they're sales-oriented targets, but really profitability targets. So we looked at gross -- increase in gross profit dollars over prior periods, which obviously translate to profitability. We focused on that versus EBITDA because we continue -- as I said earlier, we expect to actually make investments in the business and we don't want to feel constrained by a dualism where on the one hand if we make more investments, it can affect some of these earnouts and the other hand, we -- so therefore people behave in a way that's not aligned. So by focusing on gross profit targets, everybody's aligned. All want to increase sales and increase the profitability of their sales that we make, so increase our gross profit. We -- so, that's how we look at it. In general, I will say that we try to stay away from earnouts because they can, as I said, kind of implied have mixed results because the management team is trying to hit one set of numbers that have been baked into a contract that you put together, it can be as about a year or 2 ago versus, let's say, the dynamic nature of the business. But in this case, it makes sense because it helped us to bridge valuation gaps and bridge some uncertainties in COVID.
Your next question comes from the line of Devin Schilling with PI Financial.
Congrats on a great quarter here. I believe last quarter you mentioned a record number of new labs in your active pipeline. Has the resurgence of COVID put any of these thoughts on hold or maybe delayed some or for the most part should we anticipate this work to continue as originally planned?
Yes. So we have -- it goes back to the supply chain issue. So we have seen some of the labs having delays based on our ability to pull everything together and whether it's manufacturing the product ourselves or bring in the third-party products. Those, I'd have to actually look at them because now there's a reasonable number of them whether how many of those, but if any, will slip from quarter-to-quarter versus month to month. I know, for example, a lot we were planning to deliver and install in August just slipped to September. Again, those all in the quarter probably it's invisible to you and less important to us. We haven't seen any people -- back to the more macro comments and the economic comments for COVID, we haven't seen any scheduled labs deferred because of people's concerns or major capital investments people can defer because of people's concerns about either the micro or macroeconomic environments. But again, we're paid to be cautious. So we are cautious if that's possible.
Your next question will come from the line of David Martin with Bloom Burton.
Do you have any color on the Gynemed cell culture media launch in the U.S.? Have you got any large long-term contracts or all the products now approved that you want to get approved for the U.S., any other comments?
Sure. So I would tell you that -- I'll start with the last one. So in terms of the products approved, we have approval -- we don't have approval to every single product that we offer in Europe, in part because there's slightly different markets and in part because we're actually coming up with some next-generation products and it seems not all that's sensible to spend a lot of effort on improved -- getting the clearance of the last generation, where we said more focused on the next products. So we're a little bit out of sync on that. That being said, I feel that we have a broad product line with enough products that are desirable that we can, in fact, be successful with that product line. We have certainly captured business in the U.S., including some very, I would say, kind of main brand clinics. Like everything else, I think, we've tried to be cautious about this. It's starting small and will start small, but we are seeing more growth each period whether it's month-to-month and quarter-to-quarter. Numbers are still so small. It's hard to -- they're not material -- still not material to our results. And again, it's hard to draw too many trends out of very small numbers. So I would say that kind of moving up a layer, we clearly continue to be optimistic about that and continue to put the effort that it merits. But I would say it's been a little slower than -- in my perfect world, it's been a little slower coming off the market than I would have liked.
When you say you've had some success in some main brand clinics, would they switch all of their media use over to yours or are they picking and choosing a few of yours and still using some of their previous vendors?
Yes. So it's clearly the latter, certainly in the States thus far and that's pretty much the behavior of most labs. The media products cover a variety of procedures and actually even different labs or their andrology products that go on in the andrology, sperm lab or rheology products that work in the classic embryologists lab, we're culturing embryos and then there's cryopreservation products. So typically, clinics view their job as choosing the best-of-breed products that -- and then -- so I think I've mentioned in the past, it's not always a normative best product. Sometimes it's the best product or the processes that you use in your lab. So the lab directors feel their job is to choose those best-of-breed products. And again, we're seeing some success either when they're trying us out or, in fact, have now started -- they're buying and reordering the products. But again, it would be on a fairly selected product-by-product basis versus somebody that's saying moving entirely to our new -- to our product lines.
Okay. My last question is, can you quantify both how much revenue you got from lab and workstation buildout this quarter? And also quantify the impact of the shortages, the longer lead times, the higher prices of the finished goods and components in the quarter?
Yes. So the quick answer is no. It's hard on both because on the second one, it's not material. When we have had significant delays, which we did, I think it was this quarter, second quarter last year, where we had a different supply chain issue. Obviously, in that case, it was on COVID-related or completely COVID-related and we deferred some sales. It was a material number and we disclosed it. And so clearly, we don't -- we want to be mindful and be open, but we're not going to -- it's hard to condone those numbers. I would say, again, they're not material numbers. In terms of the lab buildouts as well, again, we historically have tried to stay away from getting that granular around every individual product. I think we've been more comfortable talking about trends that we're seeing, again, this year, a trend that we've seen is more lab buildouts in number and relatively smaller in scope. So sorry to bob and weave on that question, but I think that's consistent with what we've disclosed in the past.
And there are no further questions at this time. I'll turn the conference back over to management.
Okay. Well, thank you very much for everybody's participation. I think, obviously, we thought we had a very strong quarter and I appreciate the questions and the insight. Hopefully the answers when I give them directly were insightful. And look forward to having a call this time in -- this similar time in the month in about 3 months. So thank you very much.
Ladies and gentlemen, that will conclude today's call. Thank you all for joining, and you may now disconnect.