Trinity Biotech Announces Results for Q3, 2020

Bray Co Wicklow, IRELAND


DUBLIN, Ireland, Nov. 17, 2020 (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, 2020.

Quarter 3 Results

Total revenues for Q3, 2020 were $32.0m, which is broken down as follows:

 2019
Quarter 3
2020
Quarter 3

Change
 US$’000US$’000%
Point-of-Care3,8802,065(46.8)%
Clinical Laboratory20,71429,94944.6%
Total24,59432,01430.2%

Point-of-Care revenues for Q3, 2020 decreased from $3.9m to $2.1m. Whilst $2.1m represents a 63% increase compared to Q2, 2020, HIV revenues continue to be impacted by logistical and testing constraints arising from Covid-19. The reduction compared with last year also reflects that Q3, 2019 was an unusually high quarter for point-of-care revenues.

Meanwhile, Clinical Laboratory sales for the quarter increased from $20.7m to $29.9m, an increase of 45%. During the quarter, all of the Company’s product lines recovered significantly from Q2, 2020 levels which had reflected the most severe impact of Covid-19. However, as expected revenues in Q3, 2020 did not return fully to pre-Covid levels mainly due to the temporary deferral of Diabetes instrument purchases and lower testing volumes at our Autoimmunity laboratory in Buffalo. Meanwhile, this was more than offset by strong sales of Covid-19 related products which includes our FDA approved PCR Viral Transport Media product, Covid-19 IgG ELISA antibody test, monoclonal antibodies (through our life science supply business, Fitzgerald) in addition to the boost in demand for the Company’s rapid respiratory products, Strep Pneumoniae and Legionella Urinary Antigen.

The gross margin for the quarter was 52.4%, which compares to 41.0% in Q3, 2019. This increase was largely due to the impact of Covid-19 related sales, fewer instrument placements and lower depreciation.

Research and Development expenses increased slightly from $1.2m in Q3, 2019 to $1.3m in Q3, 2020. Meanwhile, Selling, General and Administrative (SG&A) expenses decreased from $7.3m to $6.3m in Q3, 2020. The decrease in SG&A expenses was due to cost saving measures which were implemented in response to the pandemic, and included reduced travel costs and cancellation of trade shows and other marketing activities.

Operating profit increased from $1.3m to $9.1m for the quarter, representing close to a sevenfold increase compared to the same period last year. This was due to the impact of higher revenues and improved gross margin combined with the reduction in indirect expenses during the quarter.

Financial income for the quarter showed a reduction reflecting the lower level of cash deposits and reduced interest rates. Meanwhile, Financial Expenses amounted to $1.2m, which was in line with Q3, 2019. Of this, $1.0m related to interest payable on the Company’s Exchangeable Notes, with the remaining $0.2m representing notional financing charges arising on leased assets (IFRS 16). Meanwhile, a non-cash expense of $0.2m was recognised in this quarter’s income statement, in relation to a non-cash interest charge on the Exchangeable Notes.

Overall, the Company recorded a profit of $7.3m for the quarter, which equates to an earnings per share of 35.0 cents. Fully diluted EPS for the quarter was 32.2 cents compared to 4.3 cents in Q3, 2019.

EBITDA before share option expense (EBITDASO) for the quarter was $10m.

 $m
Operating Profit9.1
Depreciation0.4
Amortisation0.3
Share Option Expense0.2
EBITDASO10.0

Covid-19 Update

ELISA Antibody Test

During the quarter the Company filed its submission to the FDA for an Emergency Use Authorization (EUA) for its Covid-19 IgG ELISA antibody test and is currently awaiting authorisation. However, as permitted under EUA regulations the Company has already launched this product for sale in the USA pending authorisation being granted. Meanwhile, the Company expects to obtain a CE Mark for the product during November thus allowing sales to commence in the European Union.

This test determines which individuals within the population have been exposed to the SARS-CoV-2 virus (Covid-19) and demonstrates impressive performance with specificity in excess of 98% and sensitivity in excess of 95%, in samples of 14 days or more from symptom onset.

The product is being manufactured at our ELISA production facility in Jamestown, New York and is capable of being run on a wide range of instrumentation platforms allowing access to virtually every testing laboratory in the world.

Rapid Antibody Test

The Company is continuing to develop a rapid Point-of-Care Covid-19 test to detect antibodies to the virus that can be run in 12 minutes using one drop of blood procured by finger prick. Development of this product is expected to be completed by the middle of Q1, 2021 at which point it is intended to avail of the FDA’s EUA pathway in order allow its sale in the USA. As in the case of the ELISA antibody test this will be followed by seeking a CE mark for the product in order to provide access to EU markets.

Viral Transport Media

Sales of the Company’s Viral Transport Media product, Flextrans, which is used in the Covid-19 sample collection process for PCR molecular testing, remains very strong. Demand for this product is expected to continue for the remainder of 2020 and into 2021 as PCR testing volumes remain significant. Consequently, the Company has scaled up the manufacturing of this product at a number of its facilities.

Cost Saving Measures

As demand for the Company’s products is now returning towards pre-Covid levels, the vast majority of the Company’s employees have returned to work following extensive furloughing during Q2, 2020 and all plants are now operating normally. In the light of the continuation of the pandemic, the Company is keeping in place a range of cost-cutting measures designed to minimize discretionary expenditure. Meanwhile, the Company has commenced the process of seeking forgiveness for the $4.5m of loans received under the U.S. government’s Paycheck Protection Program. This process is expected to take a number of weeks and be finalized in late 2020 or early 2021. Whilst the Company expects that the loans will be forgiven in full, this has not yet been recognized in the financial statements pending completion of the forgiveness process.

Appointment of Chief Financial Officer

The Company is pleased to announce the appointment of John Gillard as Chief Financial Officer of the Company. John qualified as a Chartered Accountant with PWC and has since gained a wealth of financial experience across a number of industry sectors including senior positions in Alphabet Inc./Google, SSE Plc and ION Investment Group.

Kevin Tansley will remain with the Company until the end of the year in order to allow for an effective transition.

Comments

Commenting on the results, Kevin Tansley, Chief Financial Officer, said “Very strong revenues and higher gross margins combined to deliver a sevenfold increase in operating profit this quarter. Whilst sales of Covid related products were the principal driving force behind this increase, we are also seeing the impact of the closure of our Carlsbad facility as well as the benefit of lower indirect costs due to cost control measures. Meanwhile EBITDASO also increased strongly to $10m for the quarter. This resulted in an increase of $4.3m in our cash balances though cash inflows were partly impacted by adverse working capital movements associated with the step change in our revenues.”

Ronan O’Caoimh, CEO said “Revenues were very strong this quarter, particularly our Clinical Laboratory revenues which grew by 45%. This was driven by strong demand for our Covid-19 related products which includes our Viral Transport Media product, ELISA antibody test, monoclonal antibodies sold by Fitzgerald as well as our rapid respiratory products, demand for which have increased during the pandemic.

In addition to the strong growth in Covid related products, our remaining business rebounded strongly from Q2, 2020 levels which had been severely impacted by the first wave of the pandemic. However, during Q3, 2020 we still experienced the continuation of some these adverse impacts particularly in relation to fewer Diabetes instrument sales and lower levels of Autoimmunity testing. In addition, whilst HIV testing in Africa continues to be affected by the pandemic, the decrease in HIV revenues this quarter was more attributable to the particularly strong sales in Q3, 2019.

We expect that Q4, 2020 revenues will show a further return towards pre-Covid levels combined with continued strong demand for Covid related products, demand for which is anticipated to continue well into 2021 and potentially beyond.”

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

September 30,
2020
(unaudited)
 Three Months
Ended

September 30,
2019
(unaudited)
 Nine Months
Ended
September 30,
2020
(unaudited)
 Nine Months
Ended
September 30,
2019
(unaudited)
 
      
Revenues 32,014 24,594 69,215 69,117 
      
Cost of sales (15,238) (14,523) (36,292) (40,270) 
      
Gross profit  16,776 10,071 32,923 28,847 
Gross margin % 52.4% 41.0% 47.6% 41.7% 
      
Other operating income 3 21 20 67 
      
Research & development expenses (1,265) (1,233) (3,796) (3,994) 
Selling, general and administrative expenses (6,273) (7,274) (17,364) (20,455) 
Indirect share based payments (156) (252) (504) (609) 
      
Operating profit  9,085 1,333 11,279 3,856 
      
Financial income 3 104 37 376 
Financial expenses (1,215) (1,226) (3,668) (3,703) 
Net financing expense  (1,212) (1,122) (3,631) (3,327) 
      
Profit before tax & non-cash financial income / (expense) 7,873 211 7,648 529 
      
Income tax expense (387) (114) (549) (5,875) 
          
Profit/(Loss) for the period before non-cash financial income / (expense) 7,486 97 7,099 (5,346) 
Non-cash financial (expense)/income (161) (72) (1,038) (245) 
Once-off items – plant closure costs - - (2,425) - 
          
Profit/(Loss) after tax and once-off items 7,325 25 3,636 (5,591) 
Earnings/(Loss) per ADR (US cents)
 35.0 0.1 17.4 (26.8) 
Earnings/(Loss) per ADR excluding once-off charges & non-cash financial items (US cents) 35.8 0.5 34.0 (25.6) 
      
Diluted earnings per ADR (US cents)* 32.2 4.3 39.0 (9.2) 
      
Weighted average no. of ADRs used in computing basic earnings per ADR 20,901,703 20,901,703 20,901,703 20,901,703 
      
Weighted average no. of ADRs used in computing diluted earnings per ADR 26,321,307 25,467,517 25,894,218 25,467,517 
      

* 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. Diluted EPS is calculated excluding once-off charges & non-cash financial items.

 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,
2020
US$ ‘000
(unaudited)
 June 30,
2020
US$ ‘000
(unaudited)
 Mar 31,
2020
US$ ‘000
(unaudited)
 Dec 31,
2019
US$ ‘000
(unaudited)
 
ASSETS    
Non-current assets    
Property, plant and equipment9,462 9,297 9,210 9,290 
Goodwill and intangible assets47,876 46,751 45,498 43,654 
Deferred tax assets5,981 6,613 6,465 6,252 
Other assets387 378 485 485 
Total non-current assets63,706 63,039 61,658 59,681 
     
Current assets    
Inventories29,607 31,473 32,671 32,021 
Trade and other receivables21,658 17,048 19,982 20,987 
Income tax receivable1,194 1,598 1,572 1,982 
Cash and cash equivalents19,910 15,570 13,244 16,400 
Total current assets72,369 65,689 67,469 71,390 
     
TOTAL ASSETS136,075 128,728 129,127 131,071 
     
EQUITY AND LIABILITIES    
Equity attributable to the equity holders of the parent    
Share capital1,213 1,224 1,224 1,224 
Share premium16,187 16,187 16,187 16,187 
Accumulated surplus15,665 8,194 9,431 11,514 
Other reserves(25,994) (26,317) (26,074) (24,212) 
Total equity7,071 (712) 768 4,713 
     
Current liabilities    
Income tax payable765 373 374 48 
Trade and other payables22,281 22,327 21,639 19,351 
Provisions50 50 50 50 
Total current liabilities23,096 22,750 22,063 19,449 
     
Non-current liabilities    
Exchangeable senior note payable83,063 82,902 82,185 82,025 
Other payables16,786 16,531 17,039 17,745 
Deferred tax liabilities6,059 7,257 7,072 7,139 
Total non-current liabilities105,908 106,690 106,296 106,909 
     
TOTAL LIABILITIES129,004 129,440 128,359 126,358 
     
TOTAL EQUITY AND LIABILITIES136,075 128,728 129,127 131,071 

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,
2020
(unaudited)
 Three Months
Ended
September 30,
2019
(unaudited)
 Nine Months
Ended
September 30,
2020
(unaudited)
 Nine Months
Ended
September 30,
2019
(unaudited)
 
     
Cash and cash equivalents at beginning of period15,570 24,990 16,400 30,277 
     
Operating cash flows before changes in working capital9,722 3,184 13,501 9,495 
Changes in working capital(2,551) 1,631 (2,476) (475) 
Cash generated from operations7,171 4,815 11,025 9,020 
     
Net Interest and Income taxes (paid)/received(141) (181) 256 34 
     
Capital Expenditure & Financing (net)(1,900) (3,776) (6,820) (9,970) 
     
Payments for leases (IFRS 16)(790) (758) (2,361) (2,273) 
     
Free cash flow4,340 100 2,100 (3,189) 
     
Payment of HIV/2 License Fee- - (1,112) - 
     
30 year Exchangeable Note interest payment- - (1,998) (1,998) 
     
Proceeds received under Paycheck Protection Program- - 4,520 - 
     
Cash and cash equivalents at end of period19,910 25,090 19,910 25,090 
     

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).



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