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Trinity Biotech Announces Results for Q1, 2016

DUBLIN, April 19, 2016 (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 March 31, 2016.

Quarter 1 Results

Total revenues for Q1, 2016 were $23.5m which compares to $25.2m in Q1, 2015, a decrease of 7%. 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 $24.3m this quarter, thus representing a decrease of 4% versus the equivalent quarter in 2015.

2015
Quarter 1
2016
Quarter 1
2016
Quarter 1
FX
adjusted*
Increase/
(decrease)
US$’000US$’000US$’000%
Point-of-Care4,5853,2683,287 (28%)
Clinical Laboratory20,65520,24821,037 2%
Total25,24023,51624,324 (4%)

* Q1, 2016 revenues have been recalculated on a constant currency basis using the exchange rates prevailing in Q1, 2015

Point-of-Care revenues for Q1, 2016 fell by $1.3m compared to Q1, 2015. This was attributable to lower than expected HIV sales in Africa. Such fluctuations are a feature of the African HIV market which exhibits irregular ordering patterns from customers. Meanwhile, Clinical Laboratory revenues increased from $20.7m to $21.0m, an increase of 2% compared to Q1, 2015 mainly due to higher Premier and Immco revenues.

Gross margins for the quarter were 43.1%. This is lower than the gross margin reported in Q1, 2015 of 47.9% though was similar to the 43.2% reported in Q4, 2015. Production levels were lower in response to this quarter’s lower revenues – thus resulting in an underabsorption of fixed labour and overhead costs and hence resulting in lower gross margins. It was also impacted by lower HIV sales, which tend to have higher than average margins.

Research and Development expenses increased from $1m to $1.1m. Meanwhile Selling, General and Administrative (SG&A) expenses increased from $6.3m to $7.0m, mainly due to non-cash foreign currency retranslation charges.

Operating profit for the quarter decreased from $4.3m to $1.8m – largely due to the lower revenues and gross margin this quarter.

Financing expenses for the quarter amounted to $3m. Of this, $0.2m consisted of deposit interest income and $1.2m of interest payable on the Company’s exchangeable notes. A further non-cash charge of $2m was recognised in the quarter mainly due an increase in the fair value of the embedded derivatives associated with these exchangeable notes.

The Company recorded a loss of $1.3m for the quarter which equated to a loss per share of 5.8 cents. However, excluding non-cash items the profit for the quarter was $0.7m or an EPS of 2.9 cents. Fully diluted EPS for the quarter was 6.4 cents.

EBITDA before share option expense for the quarter was $3.4m.

Cardiac Update

Trinity submitted a 510(k) application for its high sensitivity cardiac Troponin-I assay and Meritas Point-of-Care Analyzer to the FDA at the end of 2015. The application is being reviewed according to the FDA’s published review process, and is currently in the substantive review phase. We are happy that the review process and our interactions with the FDA are proceeding well and in accordance with our expectations. As part of this review process, the Company has received a detailed list of questions and comments from the FDA. We are now working through this list and are confident that comprehensive responses can be provided to satisfactorily address all of the FDA’s questions.

The US clinical validation studies in support of a 510(k) submission to the FDA for a second cardiac marker assay, B-type Natriuretic Protein (BNP), are progressing well. There are 10 clinical sites, geographically dispersed across the US, that are actively enrolling. Enrolment is currently 70% complete and is on track to be fully completed by the end of Q2, 2016. Consequently, we are anticipating submission of our BNP 510(k) application to the FDA by the end of Q3, 2016.

Share Buyback

The Company announced the commencement of a share repurchase program in March, 2016. During the quarter, the Company repurchased 132,000 ADRs at an average price of $11.41. The total value of the repurchases was $1.5m, of which $1.3m was settled during the quarter.

Comments

Commenting on the results, Kevin Tansley, Chief Financial Officer, said “Results this quarter were adversely impacted by lower HIV sales in Africa. However these lower sales were driven by the variable sales patterns that characterise this market, rather than by any deterioration in the underlying business. The decrease of the relatively higher margin HIV sales, resulted in both lower gross margins and operating profit being reported this quarter. Notwithstanding this, the Company achieved operating profits of over $1.8m. Meanwhile, excluding non-cash items relating to the Company’s exchangeable notes, profit after tax for the quarter amounted to $0.7m.”

Ronan O’Caoimh, CEO of Trinity said “At the end of 2015 we submitted our Meritas Troponin product to the FDA. We recently received the FDA’s formal review document relating to this submission and we are pleased to state that we are confident of addressing all of their queries by the end of July. We are also making excellent progress with our BNP trials and we remain on target to submit this product to the FDA during quarter 3, this year.

We recently announced the commencement of a share buyback program as we felt that this represented the best deployment of the Company’s capital, particularly given its current share price. During the quarter a total of 132,000 shares with a value of $1.5m were repurchased. We intend to continue repurchasing in the months ahead, though the exact number of shares that will be repurchased will depend on market conditions, whilst being subject to applicable securities laws and regulations.”

Forward-looking statements in this release are made pursuant to the "safe harbor" provision of the Private Securities 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
Mar 31,
2016
(unaudited)
Three Months
Ended
Dec 31,
2015
(unaudited)
Three Months
Ended
Mar 31,
2015
(unaudited)
Revenues 23,516 24,937 25,240
Cost of sales (13,385) (14,170) (13,140)
Gross profit 10,131 10,767 12,100
Gross profit % 43.1% 43.2% 47.9%
Other operating income 69 65 78
Research & development expenses (1,147) (1,508) (998)
Selling, general and administrative expenses (6,961) (6,009) (6,287)
Indirect share based payments (267) (184) (558)
Operating profit 1,825 3,131 4,335
Financial income 220 132 1
Financial expenses (1,181) (1,189) (24)
Non-cash financial (expense) / income (2,029) 975 -
Net financing (expense) / income (2,990) (82) (23)
Profit / (loss) before tax (1,165) 3,049 4,312
Income tax expense (182) (223) (304)
Profit / (loss) for the period (1,347) 2,826 4,008
Earnings per ADR (US cents) (5.8) 12.1 17.0
Earnings per ADR excluding non-cash financial income (US cents) 2.9 8.0 17.0
Diluted earnings per ADR (US cents) 6.4* 10.5 17.4
Weighted average no. Of ADRs used in computing basic earnings per ADR 23,287,867 23,259,669 22,985,234
Weighted average no. Of ADRs used in computing diluted earnings per ADR 28,656,394 28,690,599 23,604,244

* Under IAS 33 Earnings per Share, diluted earnings per share cannot be anti-dilutive. Therefore, diluted earnings per ADR in accordance with IFRS would be a loss of 5.8 cents (i.e. equal to basic earnings per ADR).

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
Mar 31,
2016
US$ ‘000
(unaudited)
Dec 31,
2015
US$ ‘000
(unaudited)

ASSETS
Non-current assets
Property, plant and equipment 21,460 20,659
Goodwill and intangible assets 165,157 161,324
Deferred tax assets 13,096 12,792
Other assets 860 954
Total non-current assets 200,573 195,729
Current assets
Inventories 35,709 35,125
Trade and other receivables 26,260 25,602
Income tax receivable 664 550
Cash and cash equivalents 96,829 101,953
Total current assets 159,462 163,230
TOTAL ASSETS 360,035 358,959
EQUITY AND LIABILITIES
Equity attributable to the equity holders of the parent
Share capital 1,220 1,220
Share premium 15,521 15,526
Accumulated surplus 199,453 201,951
Other reserves (3,723) (4,809)
Total equity 212,471 213,888
Current liabilities
Income tax payable 1,026 1,163
Trade and other payables 19,195 18,874
Provisions 75 75
Total current liabilities 20,296 20,112
Non-current liabilities
Exchangeable senior note payable 100,073 98,044
Other payables 2,057 2,096
Deferred tax liabilities 25,138 24,819
Total non-current liabilities 127,268 124,959
TOTAL LIABILITIES 147,564 145,071
TOTAL EQUITY AND LIABILITIES 360,035 358,959

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
March 31,
2016
(unaudited)
Three Months
Ended
March 31,
2015
(unaudited)

Cash and cash equivalents at beginning of period 101,953 9,102
Operating cash flows before changes in working capital 2,503 6,298
Changes in working capital (628) (4,322)


Cash generated from operations


1,875


1,976
Net Interest and Income taxes (paid)/received (241) (108)
Capital Expenditure & Financing (net) (5,431) (4,113)
Free cash flow (3,797) (2,245)
Payment of HIV-2 licence fee - (1,112)
Share buyback (1,327) -
Cash and cash equivalents at end of period 96,829 5,745

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