Trinity Biotech Announces Results for Q3, 2018

Bray Co Wicklow, IRELAND

DUBLIN, Ireland, Oct. 23, 2018 (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, 2018.

Quarter 3 Results

Total revenues for Q3, 2018 were $23.7m, which is broken down as follows:

Quarter 3
Quarter 3

Clinical Laboratory21,00620,707-1.4%   

Point-of-Care revenues for Q3, 2018 decreased from $4.6m to $3.0m. This was due to lower HIV sales in Africa due to normal fluctuations in ordering patterns in this market. The decrease is accentuated by the fact that Q3, 2017 point-of-care revenues were higher than average for the same reason.

Meanwhile, Clinical Laboratory sales for the quarter were $20.7m compared to $21.0m for the corresponding period last year, thus representing a decrease of 1.4%.  However, excluding the impact of currency movements and primarily the weak Brazilian Real, Q3 Clinical Laboratory revenues would have increased by 0.4%. During the quarter both Premier and autoimmunity revenues continued to increase, though this was offset by lower infectious diseases revenues in the USA, including Lyme revenues. 

The gross margin for the quarter was 42.1%, which compares to 43% in Q3, 2017. This decrease is largely due to lower overall revenues, particularly in the case of point-of-care, which are higher margin products. It was also significantly impacted by currency factors, in particular the weakness of the Brazilian Real. Meanwhile, the decrease was partially offset by cost reductions introduced as part of the company’s recent cost saving program.  Whilst the gross margin was lower this quarter, the year-to-date gross margin has increased from 42.5% to 43.0%. 

Research and Development expenses decreased from $1.5m in Q3, 2017 to $1.3m in Q3, 2018. Meanwhile, Selling, General and Administrative (SG&A) expenses decreased from $7.8m to $7.1m in Q3, 2018. SG&A costs had already been trending downwards, in the first half of 2018 and this further decrease in Q3, 2018 reflects the impact of the recently announced cost savings program and as well as the gain which arose on the exchangeable notes repurchased during the quarter.

Operating profit for the quarter decreased from $1.5m to $1.2m. This was due to the combined impact of lower revenues and gross margins partially offset by the lower indirect costs incurred during the quarter.

The interest expense, which arises mainly on the Company’s exchangeable notes, reduced by $107,000 to $1,061,000.  This reduction was due to the repurchase of $15m of exchangeable notes during the quarter (see below). Further non-cash income of $0.6m was recognised in this quarter’s income statement, again in relation to the exchangeable notes.  This was due to a non-cash interest charge of $0.2m which was offset by a gain of $0.8m arising on a decrease in the fair value of the derivatives embedded in these notes.

Meanwhile, financial income reduced by $37,000 to $175,000 due to the lower level of cash deposits.

Overall, the Company recorded a profit of $0.9m for the quarter, which equates to earnings per share of 4.3 cents.  However, excluding non-cash items the profit for the quarter was $0.3m or an EPS of 1.3 cents. Fully diluted EPS for the quarter was 5.1 cents compared to 6.3 cents in Q3, 2017.

EBITDA before share option expense for the quarter was $2.8m.

Exchangeable Notes Repurchase

On 1 August 2018, the company repurchased $15.1m of its exchangeable notes in the open market for $12m representing a price of 79.75% of nominal value. This resulted in a net gain of approximately $0.4m in the income statement this quarter relating to this buyback. This comprises a cash gain of $3.1m on the repurchase, partly offset by non-cash items - acceleration of non-cash accretion interest and the write-off of the value of the embedded derivative portion of the repurchased notes.

Following this repurchase, $99.9m of exchangeable notes remain outstanding and the annual cash interest expense on the exchangeable notes has now reduced from $4.6m to $4.0m p.a.

FDA Approvals

Trinity Biotech has received two FDA approvals for HEp-2 Elite and Immulisa RNA Polymerase III, both of which were developed at our Buffalo facility.  These products are an enhancement to our already extensive autoimmunity product and laboratory testing range. Our HEp-2 Elite provides a superior screening method for antinuclear antibodies. Meanwhile, RNA Polymerase III is a highly specific biomarker for the diagnosis of systemic sclerosis.


Commenting on the results, Kevin Tansley, Chief Financial Officer, said “This quarter we saw a decrease in revenues and gross margins.  Margins were lower due to the decrease in overall revenues given the fixed nature of our cost base and also due to the reduction in higher margin Point-of-Care sales. It was also heavily impacted by a significant fall in the value of the Brazilian Real. However, margins for the year to date are running at a higher level than at this point last year. Also from a positive perspective, indirect costs were $0.7m lower than the comparative quarter. This was due to the combination of our recent cost savings measures and the profit on the repurchase of our exchangeable notes during the quarter.  Our improved margin profile and lower cost base puts us in an enhanced financial position going into 2019.”

Ronan O’Caoimh, CEO said “Whilst our revenues were lower this quarter we are continuing to see revenue growth in our key haemoglobins and autoimmune revenues lines. With the rollout of Premier Resolution and a new version of our haemoglobin point-of-care device Tri-stat, as well as a greater emphasis on autoimmunity product sales, we expect that this revenue growth will accelerate in 2019. Whilst it was obviously disappointing that HIV revenues were weaker this quarter, we are pleased to be able to say that this is due to the unpredictable nature of NGO purchasing rather than any underlying loss of market share. 

During the quarter, we repurchased $15.1m of our exchangeable notes for cash consideration of $12m.  In so doing, we were taking advantage of the discount versus nominal values at which the notes have been trading, thus achieving an effective cash saving of $3.1m in the process. It will also result in a reduction in the interest charge on the notes of $0.6m p.a.  Following the transaction the nominal value of our notes now stands at just under $100m.”

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: 

Trinity Biotech plc

Consolidated Income Statements

(US$000’s  except share data) Three Months Ended September 30, 2018 (unaudited)Three Months Ended September 30, 2017
Nine Months Ended September 30, 2018
Nine Months Ended September 30, 2017 (unaudited)
Revenues 23,712 25,604 72,512 74,588 
Cost of sales (13,731)(14,606)(41,296)(42,889)
Gross profit  9,981 10,998 31,216 31,699 
Gross margin % 42.1%43.0%43.0%42.5%
Other operating income 27 25 76 73 
Research & development expenses (1,292)(1,469)(3,983)(4,119)
Selling, general and administrative expenses (7,113)(7,761)(21,412)(22,341)
Indirect share based payments (367)(265)(1,130)(644)
Operating profit  1,236 1,528 4,767 4,668 
Financial income 175 212 577 584 
Financial expenses (1,061)(1,168)(3,378)(3,506)
Net financing expense  (886)(956)(2,801)(2,922)
Profit before tax & non-cash financial income / (expense) 350 572 1,966 1,746 
Income tax expense (76)(56)(366)(331)
Profit for the period before non-cash financial income / (expense) 274 5161,600 1,415 
Non-cash financial income / (expense) 622 (71)268 1,178 

Profit after tax and once-off items




Earnings per ADR (US cents)  4.3 2.1 8.9 11.9 
Earnings per ADR excluding non-cash financial income/expense (US cents) 1.3 2.4 7.6 6.5 
Diluted earnings per ADR (US cents)* 5.1 6.3 18.9 18.0 
Weighted average no. of ADRs used in computing basic earnings per ADR 20,901,703 21,379,422 20,902,386 21,773,874 
Weighted average no. of ADRs used in computing diluted earnings per ADR 26,157,644 26,636,857 26,158,326 27,031,396 

* 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

 September 30,
US$ ‘000
June 30,
US$ ‘000
March 31,
US$ ‘000
Dec 31,
US$ ‘000
Non-current assets    
Property, plant and equipment10,0467,7697,0335,800
Goodwill and intangible assets69,80468,26366,47464,754
Deferred tax assets9,3429,0478,9688,698
Other assets656701779771
Total non-current assets89,84885,78083,25480,023
Current assets    
Trade and other receivables23,38023,13822,11820,740
Income tax receivable1,5321,2871,2341,440
Cash and cash equivalents35,67949,42653,89557,607
Total current assets93,479108,669111,426112,592
TOTAL ASSETS183,327194,449194,680192,615
Equity attributable to the equity holders of the parent    
Share capital1,2241,2241,2241,224
Share premium16,18716,18716,18716,187
Accumulated surplus48,32547,43046,83746,157
Other reserves2,3471,8531,5291,628
Total equity68,08366,69465,77765,196
Current liabilities    
Income tax payable135252344310
Trade and other payables20,68220,49421,76120,870
Total current liabilities20,86720,79622,15521,230
Non-current liabilities    
Exchangeable senior note payable82,05195,17995,16794,825
Other payables498341453532
Deferred tax liabilities11,82811,43911,12810,832
Total non-current liabilities94,377106,959106,748106,189
TOTAL LIABILITIES115,244127,755128,903127,419
TOTAL EQUITY AND LIABILITIES183,327194,449194,680192,615

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, 2018

Three Months Ended September 30, 2017

Nine Months Ended September 30, 2018

Nine Months Ended September 30, 2017

Cash and cash equivalents at beginning of period49,426 63,977 57,607 77,109 
Operating cash flows before changes in working capital3,445 3,672 9,907 9,679 
Changes in working capital(512)313 (4,656)(2,262)
Cash generated from operations2,933 3,985 5,251 7,417 
Net Interest and Income taxes (paid)/received(125)86 49 324 
Capital Expenditure & Financing (net)(4,308)(3,727)(12,247)(10,559)
Free cash flow(1,500)344 (6,947)(2,818)
Share buyback- (1,543)(434)(6,472)
Payment of HIV-2 licence fee- - - (1,112)
30 year Exchangeable Note interest payment(205)- (2,505)(2,300)
Once-off items- (249)- (1,878)
Purchase of Exchangeable Notes(12,042)- (12,042)- 
Cash and cash equivalents at end of period35,679 62,529 35,679 62,529 

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).

Lytham Partners LLC
Joe Diaz, Joe Dorame & Robert Blum

Contact Data