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, 2019.
Quarter 2
Results
Total revenues for Q2, 2019 were $22.5m compared to $25.0m in Q2,
2018.
|
|
2018Quarter 2 |
2019Quarter 2 |
Increase/ (decrease) |
|
|
US$’000 |
US$’000 |
% |
|
Point-of-Care |
4,019 |
2,146 |
(46.6%) |
|
Clinical Laboratory |
20,983 |
20,351 |
(3.0%) |
|
Total |
25,002 |
22,497 |
(10.0%) |
Point-of-Care revenues for Q2, 2019 decreased by
$1.9m when compared to Q2, 2018. This reflects lower sales in the
Company’s two key markets of Africa and the USA. In the case of
Africa, the lower revenues reflect the haphazard nature of ordering
patterns which characterise this market and that a number of Q2
orders were collected by customers’ carriers in the early days of
Q3. Whilst the lower revenues in the USA have been a feature
in each of the last number of quarters due to lower federal
government spending in this area.
Meanwhile, Clinical Laboratory sales for the
quarter were $20.4m versus $21.0m for the corresponding period last
year, representing a decrease of 3.0%. However, if the
currency headwinds attributable to the strong USA dollar were
eliminated, Clinical Laboratory revenues were broadly level quarter
on quarter. This is attributable to lower Lyme and Fitzgerald
revenues being offset by the continued growth in Diabetes and
Autoimmunity revenues.
The gross margin for the quarter was 42.0%,
compared to 43.2% achieved in Q2, 2018. This decrease was a result
of the lower overall revenues due to the highly fixed nature of the
company’s cost base and was accentuated by the fact that the
reduction arose largely in HIV revenues – one of the company’s
higher margin product lines.
Research and Development expenses for the
quarter remained constant at $1.4m, whilst Selling, General and
Administrative (SG&A) expenses decreased from $7.4m to $6.6m in
the same period. The reduction in SG&A expenses was due to the
company’s ongoing efforts to control indirect costs. Meanwhile, the
share option expense for the quarter decreased from $0.3m to $0.2m
with the result that total indirect costs decreased from $9.1m to
$8.3m.
Operating profit during Q2, 2018 was $1.7m
compared to $1.2m this quarter due to the decrease in revenues and
associated gross profit, though this was partly offset by the
decrease in indirect costs.
Financial income for the quarter was $0.1m
whilst cash based interest expense amounted to $1.2m. Of this, $1m
related to the interest payable on the Company’s exchangeable
notes, with the remaining $0.2m representing financing charges
arising on the leased assets following the introduction of the new
accounting standard, IFRS 16 during 2019. Non-cash income of
$0.1m has been recognised further down the income statement. This
represents a gain of $0.3m arising on a decrease in the fair value
of the embedded derivatives associated with the exchangeable notes
net of a non-cash interest charge of almost $0.2m.
During the quarter the company recorded a tax
charge of $5.7m. This included a once-off tax charge of
$5.5m in respect of a tax audit carried out in one of the
jurisdictions in which the company operates. The charge
relates to a payment due in respect of historic payroll taxes and
has been agreed with the relevant tax authority.
The Company recorded a loss, before non-cash
items of $5.6m for the quarter, which equates to a loss per share
of 26.6 cents or 17.9 cents on a fully diluted bases.
However, excluding the impact of the once-off tax charge during the
quarter the basic loss per EPS amounted to 0.2 cents compared to an
EPS of 2.9 cents in the equivalent period last year. Meanwhile, on
the same basis the diluted EPS for the quarter was 3.7 cents
compared to 6.7 cents in Q2, 2018.
EBITDA before share option expense for the
quarter was $2.9m.
Comments
Commenting on the results, Kevin Tansley, Chief
Financial Officer, said, “Operating profit this quarter fell from
$1.7m to $1.2m due to the combined impact of lower revenues and
gross margin. However, the impact of these factors was
significantly lessened by the reduction in indirect costs from
$9.1m to $8.3m during the quarter. This was attributable to
the continued impact of the cost saving program which the company
has implemented. This quarter’s results were also impacted by
a once-off tax charge arising from the settlement of historic tax
liabilities in one of the company’s subsidiaries.”
Ronan O’Caoimh, CEO of Trinity, said, “Revenues
were down by $2.5m this quarter and whilst this was disappointing
it was largely due to the fluctuating nature of our HIV revenues
and to a lesser extent the reduction in the level of public health
expenditure being allocated to HIV testing in the USA. On a
more positive note our Clinical Laboratory revenues were broadly
flat on a constant currency basis. As has been the case in
all of our most recent quarters we have continued to see strong
growth in our Diabetes and Autoimmunity product lines, although
this growth was offset by lower Lyme and Fitzgerald revenues.
“I would like to highlight the company’s strong
R&D product pipeline which will be key to driving future
revenue growth. In particular, our TrinScreen product, which will
mark the company’s entry into the $140m African HIV screening
market, has the clear potential to transform the company from both
a revenue and profitability perspective. Development of our new
automated slide reader is progressing well and when launched will
be a major boost to our already growing autoimmunity
franchise. These come on the back of the Premier
Resolution and Tri-Stat 2 product launches, which are already
generating incremental haemoglobin revenues.”
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 plcConsolidated Income
Statements |
| |
|
|
|
|
|
|
(US$000’s except share data) |
|
Three
MonthsEndedJune
30,2019(unaudited) |
|
Three
MonthsEndedJune
30,2018(unaudited) |
|
Six
MonthsEndedJune
30,2019(unaudited) |
|
Six
MonthsEndedJune
30,2018(unaudited) |
|
|
|
|
|
|
|
|
|
Revenues |
|
22,497 |
|
25,002 |
|
44,523 |
|
48,801 |
|
|
|
|
|
|
|
|
| Cost of sales |
|
(13,060 |
) |
(14,194 |
) |
(25,747 |
) |
(27,565 |
) |
| |
|
|
|
|
|
| Gross
profit |
|
9,437 |
|
10,808 |
|
18,776 |
|
21,236 |
|
| Gross margin % |
|
42.0 |
% |
43.2 |
% |
42.2 |
% |
43.5 |
% |
| |
|
|
|
|
|
| Other operating income |
|
24 |
|
24 |
|
46 |
|
48 |
|
| |
|
|
|
|
|
|
Research & development expenses |
|
(1,449 |
) |
(1,419 |
) |
(2,760 |
) |
(2,691 |
) |
| Selling, general and
administrative expenses |
|
(6,626 |
) |
(7,358 |
) |
(13,180 |
) |
(14,298 |
) |
| Indirect share based
payments |
|
(181 |
) |
(329 |
) |
(357 |
) |
(763 |
) |
| |
|
|
|
|
|
| Operating
profit |
|
1,205 |
|
1,726 |
|
2,525 |
|
3,532 |
|
| |
|
|
|
|
|
| Financial income |
|
133 |
|
196 |
|
273 |
|
401 |
|
| Financial expenses |
|
(1,237 |
) |
(1,158 |
) |
(2,480 |
) |
(2,317 |
) |
| Net financing
expense |
|
(1,104 |
) |
(962 |
) |
(2,207 |
) |
(1,916 |
) |
| |
|
|
|
|
|
| Profit before tax &
non-cash items |
|
101 |
|
764 |
|
318 |
|
1,616 |
|
| |
|
|
|
|
|
| Income tax expense |
|
(5,656 |
) |
(158 |
) |
(5,761 |
) |
(290 |
) |
| |
|
|
|
|
|
|
|
|
|
| (Loss)/Profit after tax
before non-cash items |
|
(5,555 |
) |
606 |
|
(5,443 |
) |
1,326 |
|
| |
|
|
|
|
|
|
|
|
|
| Non-cash financial
income/(expense) |
|
150 |
|
(12 |
) |
(173 |
) |
(354 |
) |
| |
|
|
|
|
|
|
|
|
|
| (Loss)/Profit after tax
and non-cash items |
|
(5,405 |
) |
594 |
|
(5,616 |
) |
972 |
|
| |
|
|
|
|
|
|
|
|
|
| (Loss)/Earnings per ADR (US
cents) |
|
(25.9 |
) |
2.8 |
|
(26.9 |
) |
4.7 |
|
| |
|
|
|
|
|
|
|
|
|
| (Loss)/Earnings per ADR before
non-cash financial (expense) / income (US cents) |
|
(26.6 |
) |
2.9 |
|
(26.0 |
) |
6.3 |
|
| |
|
|
|
|
|
| Diluted earnings per ADR (US
cents)* |
|
(17.9 |
) |
6.7 |
|
(13.5 |
) |
13.9 |
|
| |
|
|
|
|
|
| Weighted average no. of ADRs used
in computing basic earnings per ADR |
|
20,901,703 |
|
20,901,703 |
|
20,901,703 |
|
20,904,777 |
|
| |
|
|
|
|
|
| Weighted average no. of ADRs used
in computing diluted earnings per ADR |
|
25,467,516 |
|
26,157,644 |
|
25,467,539 |
|
26,166,077 |
|
| |
|
|
|
|
|
* 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 plcConsolidated Balance
Sheets |
| |
|
|
|
|
|
|
| |
June 30,2019US$
‘000(unaudited) |
|
Mar 31,2019US$
‘000(unaudited) |
|
Dec 31,2018US$
‘000(unaudited) |
|
| ASSETS |
|
|
|
| Non-current
assets |
|
|
|
| Property, plant and
equipment |
26,293 |
|
26,586 |
|
5,362 |
|
| Goodwill and intangible
assets |
56,079 |
|
54,377 |
|
52,951 |
|
| Deferred tax assets |
6,744 |
|
5,996 |
|
5,703 |
|
| Other assets |
591 |
|
535 |
|
558 |
|
| Total non-current
assets |
89,707 |
|
87,494 |
|
64,574 |
|
| |
|
|
|
| Current
assets |
|
|
|
| Inventories |
31,487 |
|
30,942 |
|
30,359 |
|
| Trade and other receivables |
24,333 |
|
23,568 |
|
24,441 |
|
| Income tax receivable |
1,187 |
|
1,209 |
|
1,584 |
|
| Cash and cash equivalents |
24,990 |
|
29,433 |
|
30,277 |
|
| Total current
assets |
81,997 |
|
85,152 |
|
86,661 |
|
| |
|
|
|
| TOTAL
ASSETS |
171,704 |
|
172,646 |
|
151,235 |
|
| |
|
|
|
| EQUITY AND
LIABILITIES |
|
|
|
| Equity attributable to
the equity holders of the parent |
|
|
|
| Share capital |
1,213 |
|
1,213 |
|
1,213 |
|
| Share premium |
16,187 |
|
16,187 |
|
16,187 |
|
| Accumulated surplus |
50,151 |
|
55,341 |
|
55,342 |
|
| Other reserves |
(28,479 |
) |
(28,573 |
) |
(28,688 |
) |
| Total
equity |
39,072 |
|
44,168 |
|
44,054 |
|
| |
|
|
|
| Current
liabilities |
|
|
|
| Income tax payable |
5,885 |
|
125 |
|
210 |
|
| Trade and other payables |
18,472 |
|
19,639 |
|
17,344 |
|
| Provisions |
50 |
|
50 |
|
50 |
|
| Total current
liabilities |
24,407 |
|
19,814 |
|
17,604 |
|
| |
|
|
|
| Non-current
liabilities |
|
|
|
| Exchangeable senior note
payable |
81,793 |
|
81,942 |
|
81,620 |
|
| Other payables |
18,351 |
|
18,994 |
|
526 |
|
| Deferred tax liabilities |
8,081 |
|
7,728 |
|
7,431 |
|
| Total non-current
liabilities |
108,225 |
|
108,664 |
|
89,577 |
|
| |
|
|
|
| TOTAL
LIABILITIES |
132,632 |
|
128,478 |
|
107,181 |
|
| |
|
|
|
| TOTAL EQUITY AND
LIABILITIES |
171,704 |
|
172,646 |
|
151,235 |
|
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 plcConsolidated Statement
of Cash Flows |
| |
|
|
|
|
|
(US$000’s) |
Three
MonthsEndedJune
30,2019
(unaudited) |
|
Three
MonthsEndedJune
30,2018
(unaudited) |
|
Six
MonthsEndedJune
30,2019
(unaudited) |
|
Six
MonthsEndedJune
30,2018
(unaudited) |
|
| |
|
|
|
|
| Cash and cash equivalents
at beginning of period |
29,433 |
|
53,895 |
|
30,277 |
|
57,607 |
|
| |
|
|
|
|
| Operating cash flows before
changes in working capital |
3,104 |
|
3,204 |
|
6,312 |
|
6,462 |
|
| Changes in working capital |
(1,578 |
) |
(1,466 |
) |
(2,106 |
) |
(4,145 |
) |
| Cash generated from
operations |
1,526 |
|
1,738 |
|
4,206 |
|
2,317 |
|
| |
|
|
|
|
| Net Interest and Income taxes
(paid)/received |
(133 |
) |
(30 |
) |
215 |
|
175 |
|
| |
|
|
|
|
| Capital Expenditure &
Financing (net) |
(3,080 |
) |
(3,877 |
) |
(6,195 |
) |
(7,939 |
) |
| |
|
|
|
|
| Payments for Leases (IFRS
16) |
(758 |
) |
- |
|
(1,515 |
) |
- |
|
| |
|
|
|
|
| Free cash flow |
(2,445 |
) |
(2,169 |
) |
(3,289 |
) |
(5,447 |
) |
| |
|
|
|
|
| Share buyback |
- |
|
- |
|
- |
|
(434 |
) |
| |
|
|
|
|
| 30 year Exchangeable Note
interest payment |
(1,998 |
) |
(2,300 |
) |
(1,998 |
) |
(2,300 |
) |
| |
|
|
|
|
| Cash and cash equivalents
at end of period |
24,990 |
|
49,426 |
|
24,990 |
|
49,426 |
|
| |
|
|
|
|
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 plcKevin
Tansley(353)-1-2769800E-mail: kevin.tansley@trinitybiotech.com
Lytham Partners LLC Joe Diaz, Joe Dorame &
Robert Blum 602-889-9700
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