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Trinity Biotech Announces Results for Q2, 2017

DUBLIN, Ireland, July 20, 2017 (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 June 30, 2017.

Quarter 2 Results

Total revenues for Q2, 2017 were $25.4m compared to $26.3m in Q2, 2016.

2016
Quarter 2
2017
Quarter 2
Increase/
(decrease)
US$’000US$’000%
Point-of-Care4,7864,350(9.1%)
Clinical Laboratory21,50221,098(1.9%)
Total26,28825,448(3.2%)

Point-of-Care revenues for Q2, 2017 decreased from $4.8m to $4.4m. This was attributable to lower sales of HIV products in Africa. Due to the nature of the African HIV market, these sales tend to fluctuate significantly and this quarter’s decrease is well within the normal range for such fluctuations.

Meanwhile, Clinical Laboratory sales for the quarter were $21.1m versus $21.5m for the corresponding period last year, thus representing a decrease of 1.9%. However, when the impact of recently culled products is taken into account, underlying Clinical Laboratory sales rose by approximately 2%. This growth was mainly driven by higher Premier revenues, including new placements of the Premier Resolution version of this instrument, which specifically targets the haemoglobin variant market.

The gross margin for the quarter was 42.5% which compares to 45% in Q2, 2016. This decrease was due to lower distributor pricing due to the strength of the US dollar against a range of currencies and a less favourable sales mix i.e. lower higher margin point-of-care revenues coupled with higher instrument sales which tend to have significantly lower than average margins. However, this quarter’s gross margin was higher than the two previous quarters of 40% (Q4 2016) and 42% (Q1 2017).

Research and Development expenses remained constant at $1.3m. Meanwhile Selling, General and Administrative (SG&A) expenses fell from $7.8m to $7.6m in Q2 2017, due to lower discretionary sales and marketing expenses, particularly Meritas related costs incurred in Q2, 2016 which were not replicated in the current quarter.

Operating profit for the quarter decreased from $2.4m to $1.8m. This was due to the combined impact of the lower revenues and gross margin though these factors were partially offset by lower indirect costs incurred during the quarter.

Financial income for the quarter remained constant at $0.2m whilst interest payable, mainly arising on the Company’s exchangeable notes, was static at $1.2m. Further non-cash income of $0.2m was also recognised in this quarter’s income statement. This was due to a gain of $0.4m arising on a decrease in the fair value of the embedded derivatives associated with the exchangeable notes as offset by a non-cash interest charge of $0.2m.

The Company recorded a profit of $0.9m for the quarter which equates to earnings per share of 4.1 cents. However, excluding non-cash items the profit for the quarter was $0.7m or an EPS of 3.1 cents. Fully diluted EPS for the quarter was 6.8 cents compared to 8.5 cents in Q2, 2016.

EBITDA before share option expense for the quarter was $3.3m.

Share Buyback

During the quarter, the Company repurchased 554,000 ADRs at an average price of $5.59 and with a total value of $3.1m. A further 67,000 ADRs at an average price of $5.65 have been repurchased since quarter end. This brings the total purchased since the beginning of the program to approximately 1.9m shares with a total value of $14.6m.

Comments

Commenting on the results, Kevin Tansley, Chief Financial Officer, said “Our operating profit for the quarter of $1.8m represented a decrease when compared to the equivalent quarter last year. This was due to the combination of lower revenues and a lower gross margin, though the impact of these factors was partially offset by lower indirect costs. This resulted in an EPS (before non-cash items) of 3.1 cents which, whilst lower than the equivalent quarter last year, was higher than the 1 cent per ADR reported in quarter one of this year.”

Ronan O’Caoimh, CEO of Trinity said “This quarter’s revenues were down 3% when compared to Q2, 2016. However, this was due to the impact of culling older non-economic products in late 2016 and to the normal fluctuations which impact our HIV sales, particularly in Africa. The remainder of our business remains strong and demonstrated underlying revenue growth this quarter. We were particularly pleased with the increase in sales of our new Premier Resolution instrument. This instrument, which is a sister product of the Premier Hb9210 A1c instrument, specifically addresses the haemoglobin variant market. Though it has only been launched relatively recently, it has been very positively received by customers and I am confident that in common with the Premier Hb9210, it will serve as a growth driver for the company in the years ahead. Meanwhile, we bought back over 500,000 shares during the quarter and at current share price levels it is our intention to continue to be active purchasers in the market.”

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
June 30,
2017
(unaudited)
Three Months
Ended
June 30,
2016
(unaudited)
Six Months
Ended
June 30,
2017
(unaudited)
Six Months
Ended
June 30,
2016
(unaudited)
Revenues 25,448 26,288 48,984 49,804
Cost of sales (14,629)(14,472)(28,274)(27,856)
Gross profit 10,819 11,816 20,710 21,948
Gross margin % 42.5%45.0%42.3%44.1%
Other operating income 26 72 49 141
Research & development expenses (1,322)(1,267)(2,651)(2,414)
Selling, general and administrative expenses (7,561)(7,797)(14,588)(14,758)
Indirect share based payments (130)(468)(380)(735)
Operating profit 1,832 2,356 3,140 4,182
Financial income 196 223 373 443
Financial expenses (1,169)(1,185)(2,339)(2,366)
Net financing expense (973)(962)(1,966)(1,923)
Profit before tax & non-cash financial income / (expense) 859 1,394 1,174 2,259
Income tax expense (176)(131)(275)(313)
Profit for the period before non-cash financial income / (expense)
683
1,263
899
1,946
Non-cash financial income / (expense) 219 841 1,249 (1,188)
Profit after tax and once-off items 902 2,104 2,148 758
Earnings per ADR (US cents)
4.1 9.1 9.8 3.3
Earnings per ADR excluding non-cash financial income (US cents) 3.1 5.5 4.1 8.4
Diluted earnings per ADR (US cents) 6.8* 8.5 11.7* 14.9*
Weighted average no. of ADRs used in computing basic earnings per ADR 21,847,528 23,016,169 21,974,369 23,152,018
Weighted average no. of ADRs used in computing diluted earnings per ADR 27,104,994 28,409,024 27,231,931 28,526,486

* Under IAS 33 Earnings per Share, diluted earnings per share cannot be anti-dilutive. In a reporting period where it is anti-dilutive, diluted earnings per ADR should be constrained to equal 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
June 30,
2017
US$ ‘000
(unaudited)
March 31,
2017
US$ ‘000
(unaudited)
Dec 31,
2016
US$ ‘000
(audited)
ASSETS
Non-current assets
Property, plant and equipment14,462 14,163 13,403
Goodwill and intangible assets90,438 88,996 87,275
Deferred tax assets15,352 14,669 14,556
Other assets873 828 870
Total non-current assets121,125 118,656 116,104
Current assets
Inventories33,620 32,659 32,589
Trade and other receivables24,856 22,683 22,586
Income tax receivable1,220 1,290 1,205
Cash and cash equivalents63,977 69,851 77,108
Total current assets123,673 126,483 133,488
TOTAL ASSETS244,798 245,139 249,592
EQUITY AND LIABILITIES
Equity attributable to the equity holders of the parent
Share capital1,176 1,176 1,224
Share premium16,122 16,122 16,187
Accumulated surplus90,977 93,171 93,004
Other reserves(1,409)(1,193)(1,688)
Total equity106,866 109,276 108,727
Current liabilities
Income tax payable582 181 175
Trade and other payables22,572 20,893 25,028
Provisions75 75 75
Total current liabilities23,229 21,149 25,278
Non-current liabilities
Exchangeable senior note payable95,245 95,462 96,491
Other payables640 698 735
Deferred tax liabilities18,818 18,554 18,361
Total non-current liabilities114,703 114,714 115,587
TOTAL LIABILITIES137,932 135,863 140,865
TOTAL EQUITY AND LIABILITIES244,798 245,139 249,592

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
June 30,
2017
(unaudited)
Three Months
Ended
June 30,
2016
(unaudited)
Six Months
Ended
June 30,
2017
(unaudited)
Six Months
Ended
June 30,
2016
(unaudited)
Cash and cash equivalents at beginning of period69,851 96,829 77,108 101,953
Operating cash flows before changes in working capital3,739 5,282 6,006 7,786
Changes in working capital(367)(3,234)(2,575)(3,862)
Cash generated from operations3,372 2,048 3,431 3,924
Net Interest and Income taxes (paid)/received62 149 239 (92)
Capital Expenditure & Financing (net)(3,185)(5,995)(6,832)(11,427)
Free cash flow249 (3,798)(3,162)(7,595)
Share buyback(3,096)(4,699)(4,929)(6,026)
Payment of HIV-2 licence fee- (1,112)(1,112)(1,112)
30 year Exchangeable Note interest payment(2,300)(2,300)(2,300)(2,300)
Once-off items(727)- (1,628)-
Cash and cash equivalents at end of period63,977 84,920 63,977 84,920

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