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Trinity Biotech Announces Results for Q2, 2017

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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$'000 US$'000 %
Point-of-Care 4,786 4,350 (9.1 %)
Clinical Laboratory 21,502 21,098 (1.9 %)
Total 26,288 25,448 (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 equipment 14,462   14,163   13,403  
Goodwill and intangible assets 90,438   88,996   87,275  
Deferred tax assets 15,352   14,669   14,556  
Other assets 873   828   870  
Total non-current assets 121,125   118,656   116,104  
       
Current assets      
Inventories 33,620   32,659   32,589  
Trade and other receivables 24,856   22,683   22,586  
Income tax receivable 1,220   1,290   1,205  
Cash and cash equivalents 63,977   69,851   77,108  
Total current assets 123,673   126,483   133,488  
       
TOTAL ASSETS 244,798   245,139   249,592  
       
EQUITY AND LIABILITIES      
Equity attributable to the equity holders of the parent      
Share capital 1,176   1,176   1,224  
Share premium 16,122   16,122   16,187  
Accumulated surplus 90,977   93,171   93,004  
Other reserves (1,409 ) (1,193 ) (1,688 )
Total equity 106,866   109,276   108,727  
       
Current liabilities      
Income tax payable 582   181   175  
Trade and other payables 22,572   20,893   25,028  
Provisions 75   75   75  
Total current liabilities 23,229   21,149   25,278  
       
Non-current liabilities      
Exchangeable senior note payable 95,245   95,462   96,491  
Other payables 640   698   735  
Deferred tax liabilities 18,818   18,554   18,361  
Total non-current liabilities 114,703   114,714   115,587  
       
TOTAL LIABILITIES 137,932   135,863   140,865  
       
TOTAL EQUITY AND LIABILITIES 244,798   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 period 69,851   96,829   77,108   101,953  
         
Operating cash flows before changes in working capital 3,739   5,282   6,006   7,786  
Changes in working capital (367 ) (3,234 ) (2,575 ) (3,862 )
Cash generated from operations 3,372   2,048   3,431   3,924  
         
Net Interest and Income taxes (paid)/received 62   149   239   (92 )
         
Capital Expenditure & Financing (net) (3,185 ) (5,995 ) (6,832 ) (11,427 )
         
Free cash flow 249   (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 period 63,977   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

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