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Trinity Biotech Announces Quarter 3 Financial Results

DUBLIN, Oct. 22, 2015 (GLOBE NEWSWIRE) -- Trinity Biotech plc (Nasdaq:TRIB), a leading developer and manufacturer of diagnostic products for the point-of-care and clinical laboratory markets, today announced results for the quarter ended September 30, 2015.

Quarter 3 Results

Total revenues for Q3, 2015 were $25.8m which compares to $27.2m in Q3, 2014, a decrease of 5.2%. However, when the impact of foreign exchange movements, due to the strength of the US dollar against a range of other currencies is removed, revenues on a like-for-like basis would have been $27.6m this quarter, thus representing an increase of almost 2% versus the equivalent quarter in 2014.

Point-of-Care revenues for Q3, 2015 increased slightly when compared to Q3, 2014. This increase was attributable to increased rapid syphilis sales offset by slightly lower HIV revenues.

Clinical Laboratory revenues increased to $22.1m, which represents an increase of over 2% compared to Q3, 2014. This increase was primarily attributable to increased Premier reagent and Immco revenues partly offset by lower Premier instrument and Lyme revenues.

Revenues for Q3, 2015 were as follows:

2014
Quarter 3
2015
Quarter 3
2015
Quarter 3
FX
adjusted*
Increase/
(decrease)
US$’000US$’000US$’000%
Point-of-Care5,4635,4185,472 0.2%
Clinical Laboratory21,69820,34322,148 2.1%
Total27,16125,76127,620 1.7%

* Q3, 2015 revenues have been recalculated on a constant currency basis using the exchange rates prevailing in Q3, 2014

Gross profit for Q3, 2015 amounted to $12.0m representing a gross margin of 46.5%, which is lower than the 47.9% achieved in Q3, 2014, though similar to that reported in Q2, 2014. This decrease is due to the impact of a lower level of higher margin Lyme revenues and the impact of foreign currency movements.

Research and Development expenses have increased to $1.3m from $1.1m when compared to the equivalent quarter last year. Meanwhile, Selling, General and Administrative (SG&A) expenses have increased from $7.0m to $7.5m over the same period. This increase is attributable to higher sales and marketing costs, largely due to expenditure on Meritas.

Operating profit for the quarter has decreased from $4.6m to $3.0m, thus reflecting the lower gross margin and higher indirect costs incurred this quarter.

Financial income for the quarter was $0.2m, an increase of $0.2m versus Q3, 2014 due to the higher level of funds on deposit following the issuance of the 30 Year Exchangeable Loan Notes (“the Loan Notes”) in Q2, 2015. Meanwhile, financial expenses increased to $1.1m mainly relating to the cash element of interest associated with these notes. The non-cash elements of the Loan Notes represented income of $10.5m which is attributable to revaluation gains on the derivatives embedded in the Loan Notes of $10.7m, partly offset by non-cash interest charges of $0.2m.

The following table summarises the impact of the Exchangeable Loan Notes on the Income Statement for Q3, 2015.

Exchangeable Loan Notes – Income Statement impactQ3 2015
US$’000
Cash element
Cash based interest charge* (1,064)
Non-cash element
Non-cash interest charge (208)
Revaluation gains on embedded derivatives 10,720
Total non-cash items 10,512
Net financing income relating to the Exchangeable Loan notes 9,448

* this is included in financial expenses in the Income Statement – the remaining element ($21,000) arises
on items not related to the exchangeable note.

Profit before tax for the period was $12.6m though this was largely impacted by non-cash gains related to the Loan Notes. Excluding the non-cash elements of the Loan Notes, the profit before tax for the quarter was $2.1m.

The tax charge for Q3, 2015 was $0.3m, largely in line with the equivalent quarter in 2014.

Profit after tax for the period was $12.3m. However, excluding the non-cash elements of the Loan Notes, this would have been $1.8m, which equates to an adjusted EPS of 7.5 cents. Diluted EPS for the quarter amounted to 9.7 cents.

Cash generated from operations during the quarter was $3.7m, though this was offset by capital expenditure of $4.3m and interest and tax payments of $0.1m, resulting in a net cash outflow for the quarter of $0.7m. In addition, the company made dividend payments amounting to $5.1m with the result that the cash balance at the end of the quarter was $104.3m.

Earnings before interest, tax, depreciation, amortisation and share option expense for the quarter was $4.7m.

Other Recent Developments

Cardiac Update

The following is an update on the three main components of the Meritas Troponin-I Clinical Program:

  • The most substantial component of this clinical program is the Acute Coronary Syndrome (ACS) Study for the evaluation of subjects presenting to the Emergency Departments with symptoms suggestive of ACS. As reported on the Q2 earnings call, enrolment for this study was completed in late July with the next step being the adjudication of each result by a panel of Emergency and Cardiology physicians. Thus far, this adjudication process, which conforms to the Third Universal Definition of Myocardial Infarction guidance document, has been more involved and time consuming than initially expected. Whilst an adjudication of clear positives or negatives can be performed in a relatively short time frame, some more complex or borderline cases are taking significantly longer – in some cases as long as 2 weeks. The adjudication process is now expected to conclude by the end of November.

    Based on our review of the data which has been adjudicated so far, we are pleased to report that the data is significantly better than observed in our own CE Marking trial and is closer to the superior results contained in the independent study carried out at Hennepin County Emergency Department by Dr. Fred Apple.

  • Enrolment for the URL (99th Percentile Upper Reference Limit) Study, was completed in July and since then the data collected has been used to determined the URL or “normal level” of Troponin for inclusion in the FDA submission. We were very pleased to observe that the results of this study at three US trial sites show excellent correlation with the URL determinations from our European CE-marking clinical studies.

  • The Precision Study is currently in the process of being completed at 3 trial sites and will be completed in the coming weeks.

From a timing perspective, the completion of the adjudication analysis of the ACS Study will be the final component to be completed and based on the timelines outlined above, we expect to submit to the FDA during December 2015.

Dividend

During Q3, following approval at the company’s AGM in June 2015, an annual dividend payment of 22 US cents per ADR was made, which resulted in a total payment of $5.1m.

Comments

Commenting on the results, Kevin Tansley, Chief Financial Officer, said “The profit this quarter was $12.3m. However, this was impacted by significant non-cash gains related to the company’s Loan Notes. Consequently, a better way of assessing the performance this quarter is to look at operating profit, which decreased from $4.6m to $3m compared to the equivalent quarter last year. Our gross margins continue to remain under pressure due to lower Lyme revenues and currency factors. Meanwhile, indirect costs have increased due increased sales and marketing costs including continued investment in Meritas. Also, for the first time, overall profitability has been adversely impacted by exchange rate movements. Prior to this quarter, the impact of exchange rate movements had been neutral on the income statement as each of the currencies in which the company operates tended to move in tandem with each other versus the US dollar. However, in Q3 this was no longer the case with the significant weakening of the Brazilian Real and to a lesser extent the Canadian Dollar having an adverse impact on overall profitability.”

Ronan O’Caoimh, CEO of Trinity said “Completion of our Meritas Troponin trial constitutes an extremely important milestone for the company. We are confident that cardiologist adjudication will be completed within the next four weeks and that will enable FDA submission by the middle of December. Although the adjudication process is not yet completed, based on the results to date, we are extremely pleased with the performance of the product and in particular with its high sensitivity and specificity levels.”

Litigation Reform Act of 1995. Investors are cautioned that such forward-looking statements involve risks and uncertainties including, but not limited to, the results of research and development efforts, the effect of regulation by the United States Food and Drug Administration and other agencies, the impact of competitive products, product development commercialisation and technological difficulties, and other risks detailed in the Company's periodic reports filed with the Securities and Exchange Commission.

Trinity Biotech develops, acquires, manufactures and markets diagnostic systems, including both reagents and instrumentation, for the point-of-care and clinical laboratory segments of the diagnostic market. The products are used to detect infectious diseases and to quantify the level of Haemoglobin A1c and other chemistry parameters in serum, plasma and whole blood. Trinity Biotech sells direct in the United States, Germany, France and the U.K. and through a network of international distributors and strategic partners in over 75 countries worldwide. For further information please see the Company's website: www.trinitybiotech.com.

Trinity Biotech plc
Consolidated Income Statements
(US$000’s except share data)Three Months
Ended
September 30,
2015
(unaudited)
Three Months
Ended
September 30,
2014
(unaudited)
Nine Months
Ended
September 30,
2015
(unaudited)
Nine Months
Ended
September 30,
2014
(unaudited)
Revenues 25,761 27,161 75,258 78,191
Cost of sales (13,776) (14,150) (39,780) (40,510)
Gross profit 11,985 13,011 35,478 37,681
Gross profit % 46.5% 47.9% 47.1% 48.2%
Other operating income 73 91 222 339
Research & development expenses (1,293) (1,138) (3,560) (3,329)
Selling, general and administrative expenses (7,467) (6,995) (20,467) (19,726)
Indirect share based payments (327) (326) (1,357) (1,223)
Operating profit 2,971 4,643 10,316 13,742
Financial income 204 9 299 93
Financial expenses (1,085) (15) (2,279) (79)
Non-cash financial income 10,512 - 11,490 -
Net financing income / (expense) 9,631 (6) 9,510 14
Profit before tax 12,602 4,637 19,826 13,756
Income tax expense (339) (276) (858) (667)


Profit for the period



12,263


4,361


18,968


13,089
Earnings per ADR (US cents) 52.9 19.0 82.0 57.7
Earnings per ADR excluding non-cash financial income (US cents) 7.5 19.0 32.3 57.7
Diluted earnings per ADR (US cents) 9.7 18.4 35.7 55.2


Weighted average no. of ADRs used in computing basic earnings per ADR


23,202,228


22,907,333


23,128,287


22,693,552
Weighted average no. of ADRs used in computing diluted earnings per ADR 28,766,691 23,674,859 27,059,058 23,719,930

The above financial statements have been prepared in accordance with the principles of International Financial Reporting Standards and the Company’s accounting policies but do not constitute an interim financial report as defined in IAS 34 (Interim Financial Reporting).

Trinity Biotech plc
Consolidated Balance Sheets
September 30,
2015
US$ ‘000
(unaudited)
June 30,
2015
US$ ‘000
(unaudited)
March 31,
2015
US$ ‘000
(unaudited)
Dec 31,
2014
US$ ‘000
(audited)
ASSETS
Non-current assets
Property, plant and equipment 19,198 19,212 17,760 17,877
Goodwill and intangible assets 156,326 152,338 147,568 145,024
Deferred tax assets 10,370 10,117 9,528 9,798
Other assets 1,040 1,091 1,249 1,194
Total non-current assets 186,934 182,758 176,105 173,893
Current assets
Inventories 36,882 38,193 37,064 33,516
Trade and other receivables 27,153 28,344 27,640 25,976
Income tax receivable 119 212 221 351
Cash and cash equivalents 104,289 110,257 5,745 9,102
Total current assets 168,443 177,006 70,670 68,945
TOTAL ASSETS 355,377 359,764 246,775 242,838
EQUITY AND LIABILITIES
Equity attributable to the equity holders of the parent
Share capital 1,216 1,216 1,215 1,204
Share premium 14,560 14,533 14,393 12,422
Accumulated surplus 198,882 191,368 188,094 183,375
Other reserves (3,661) (2,056) (2,463) (29)
Total equity 210,997 205,061 201,239 196,972
Current liabilities
Income tax payable 951 497 467 785
Trade and other payables 18,694 19,756 20,116 21,197
Provisions 75 75 75 75
Total current liabilities 19,720 20,328 20,658 22,057
Non-current liabilities
Exchangeable senior note payable 99,069 109,124 - -
Other payables 3,569 3,180 3,205 2,370
Deferred tax liabilities 22,022 22,071 21,673 21,439
Total non-current liabilities 124,660 134,375 24,878 23,809
TOTAL LIABILITIES 144,380 154,703 45,536 45,866
TOTAL EQUITY AND LIABILITIES 355,377 359,764 246,775 242,838

The above financial statements have been prepared in accordance with the principles of International Financial Reporting Standards and the Company’s accounting policies but do not constitute an interim financial report as defined in IAS 34 (Interim Financial Reporting).

Trinity Biotech plc
Consolidated Statement of Cash Flows
(US$000’s)Three Months
Ended
September 30,
2015
(unaudited)
Three Months
Ended
September 30,
2014
(unaudited)
Nine Months
Ended
September 30,
2015
(unaudited)
Nine Months
Ended
September 30,
2014
(unaudited)
Cash and cash equivalents at beginning of period 110,257 15,153 9,102 22,317
Operating cash flows before changes in working capital 3,851 6,068 14,279 16,979
Changes in working capital (166) (538) (8,504) (10,108)
Cash generated from operations 3,685 5,530 5,775 6,871
Net Interest and Income taxes received/(paid) (108) (324) (440) 290
Capital Expenditure & Financing (net) (4,290) (6,380) (15,623) (15,499)
Free cash flow (713) (1,174) (10,288) (8,338)
30 year Convertible Note proceeds, net of fees (156) - 110,574 -
Dividend payment (5,099) (5,030) (5,099) (5,030)
Cash and cash equivalents at end of period 104,289 8,949 104,289 8,949

The above financial statements have been prepared in accordance with the principles of International Financial Reporting Standards and the Company’s accounting policies but do not constitute an interim financial report as defined in IAS 34 (Interim Financial Reporting).

Contact: Trinity Biotech plc Kevin Tansley 353)-1-2769800 E-mail: kevin.tansley@trinitybiotech.com Lytham Partners LLC Joe Diaz, Joe Dorame & Robert Blum 602-889-9700

Source:Trinity Biotech plc