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Trinity Biotech Announces Quarter 4 and Fiscal Year 2020 Financial Results

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DUBLIN, Ireland, March 25, 2021 (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 December 31, 2020 and fiscal year 2020.

Fiscal Year 2020 Results

Total revenues for fiscal year 2020 were $102m versus $90.4m in 2019, an increase of 12.8% year on year and were broken down as follows:

  Full Year
2019
Full Year
2020
Increase/
(decrease)
  US$'000 US$'000 %
Point-of-Care 11,393 9,215 (19.1%)
       
Clinical Laboratory 79,042 92,765 17.4%
       
Total 90,435 101,980 12.80%

Point-of-Care revenues decreased from $11.4m in 2019 to $9.2m in 2020, which represents a decrease of 19.1%. This was driven by lower HIV sales in both the USA and Africa. The decline in the USA was attributable to the decision to exit this market in 2019, which had been in decline for a number of years, whilst African sales were lower due to logistical and testing constraints arising from Covid-19 in the second and third quarters, with normal trading patterns only being restored in Q4 2020.

Clinical Laboratory revenues increased from $79.0m in 2019 to $92.8m, which represents an increase of 17.4%. The increase is mainly due to strong sales within our Covid-19 related portfolio of products, with our PCR Viral Transport Media product being the most significant contributor to revenue within that portfolio.

Due mainly to the impact of Covid-19, revenues for Haemoglobins, Autoimmune and Infectious Disease products all recorded decreases in 2020 compared to 2019. In our Haemoglobins business, revenues were affected by the deferral of Diabetes instrument purchases as healthcare resources were stretched by the pandemic. Our Autoimmune business was also impacted by Covid-19, experiencing lower testing volumes at its New York reference laboratory. Infectious Diseases revenues were impacted not only by pandemic factors but also by lower Lyme sales attributable to the continued migration away from Western Blot to other testing formats.

The gross margin for the year was 47.6% compared to 42.2% in 2019. This increase was largely due to the impact of strong sales within our Covid-19 related portfolio of products, fewer instrument placements, lower depreciation and a range of cost saving measures put in place during the year.

Other operating income increased from $0.1m in 2019 to $1.9m in 2020. The $1.9m income in 2020 mainly relates to funding received under the U.S. government's Cares Act, principally its Paycheck Protection Program. Two out of six Paycheck Protection Program ("PPP") loans received by the Company were forgiven during the year. We are in the process of seeking forgiveness for the remaining four PPP loans totalling $2.9m and we expect them to be forgiven in 2021. These four remaining loans are treated as short term liabilities at December 31, 2020.

Research and Development expenses showed a slight reduction from $5.3m to $5.1m year on year. Meanwhile, Selling General and Administrative (SG&A) expenses decreased from $26.9m to $24.2m, a decrease of 10.0%. The decrease in SG&A expenses was mainly driven by cost saving measures which were implemented in response to the pandemic, and included the furloughing of some employees, reduced travel costs and cancellation of trade shows and other marketing activities. These savings were partially offset by increased performance-related pay due to higher revenues and profits.

Operating profit (before the impact of once-off items) for the year increased from $5.3m reported in 2019 to $20.3m in 2020. This increase was mainly attributable to higher revenues and gross margin, a reduction in indirect costs and the receipt of government financial aid.

The net financing expense for the year increased from $4.5m to $4.9m mainly due to lower deposit interest income on account of lower amounts held on deposit and lower prevailing interest rates.

Profit before tax (before the impact of once-off items & non-cash financial expense) for 2020 was $15.5m, an increase of $14.7m versus the $0.8m reported 2019. In 2020 the Company recorded an overall tax credit of $0.2m due to the impact of R&D tax credits in USA, Canada and Ireland.

Meanwhile, there was a profit after tax (before the impact of once-off items & non-cash financial income) of $15.7m in 2020 compared to a reported loss of $4.1m in 2019.

A non-cash financial expense of $1.9m was recognised in relation to the Exchangeable Notes. This was due to a non-cash interest charge of $0.7m and a non-cash charge of $1.2m arising due to an increase in the fair value of the derivatives embedded in these notes.

The basic earnings per ADR (our equivalent to EPS) (excluding once-off charges & non-cash financial items) for the year was 75.0 cents versus a loss per ADR of 19.4 cents in 2019. Meanwhile, there was an unconstrained diluted earnings (excluding once-off charges & non-cash financial items) per ADR of 74.9 cents compared to a loss per ADR of 0.3 cents in 2019.

Earnings before interest, tax, depreciation, amortisation and share option expense (EBITDASO) for the year was $24.2m. This is made up as follows:

  $m
Operating Profit (before non-cash and once-off items) 20.3
Depreciation 1.7
Amortisation 1.4
Share option expense 0.8
EBITDASO 24.2

The above measures exclude the impact of an impairment charge of $17.8m net of tax, more information about which is provided below and a provision of $2.4m relating to the closure of our Carlsbad, CA facility in Q2 2020.

Quarter 4 Results

Total revenues for Q4, 2020 were $32.8m, which compares to $21.3m in Q4, 2019 and were broken down as follows:

  2019
Quarter 4
2020
Quarter 4
Increase/
(decrease)
  US$'000 US$'000 %
Point-of-Care 2,172 2,548 17.3%
Clinical Laboratory 19,146 30,217 57.8%
Total 21,318 32,765 53.70%

Point-of-Care revenues in Q4, 2020 were higher than Q4, 2019 and in both quarters are largely comprised of sales of our Unigold HIV test in Africa. There was a strong recovery in HIV revenues in Africa this quarter following two successive quarters that were adversely affected by Covid-19 restrictions.

Clinical Laboratory revenues increased from $19.1m to $30.2m, which represents an increase of 57.8% compared to Q4, 2019. This increase is mainly due to strong sales within our Covid-19 related portfolio of products, with our PCR Viral Transport Media continuing to be the most significant contributor to revenue within that portfolio. The recovery in the Company's other product lines that we reported in Q3 2020 continued into Q4 2020. However, as expected revenues in Q4, 2020 did not return fully to pre-Covid levels mainly due to lower testing volumes at our Autoimmunity reference laboratory in New York and lower demand for some infectious disease testing outside of Covid-19.

Gross profit for Q4, 2020 amounted to $15.7m equating to a gross margin of 47.8%, which represents an improvement compared to the 43.5% reported in the equivalent quarter last year. This increase was largely due to the sales mix (more Covid-19 related revenues and fewer instrument placements) and cost saving measures.

Other operating income increased from $0.02m in Q4 2019 to $1.9m in Q4 2020. The $1.9m income in 2020 mainly relates to funding received under the U.S. government's Cares Act, principally its Paycheck Protection Program. Two out of six Paycheck Protection Program ("PPP") loans received by the Company were forgiven during the year. As mentioned above, we are in the process of seeking forgiveness for the remaining four PPP loans totalling $2.9m and we expect them to be forgiven in 2021. These four remaining loans are treated as short term liabilities at December 31, 2020.

Research and Development expenses remained stable at $1.3m whilst Selling, General and Administrative (SG&A) expenses were higher for the quarter at $6.9m, which represents an increase of just under $0.5m compared to Q4, 2019. The increase in SG&A expenses was mainly driven by higher performance-related pay and unrealised foreign exchange losses on non-US Dollar denominated lease liabilities.

Operating profit (before the impact of once-off items) increased from $1.4m to $9.1m for the quarter, representing more than six times the operating profit for the same period last year. This was due to the impact of higher revenues, improved gross margin and Paycheck Protection Program loans forgiven, partially offset by higher indirect expenses during the quarter.

Financial income for the quarter showed a reduction due to lower average cash on deposit and interest rates. Meanwhile, Financial Expenses amounted to $1.2m, which was broadly in line with Q4, 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. A further non-cash expense of $0.8m 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 and a loss of $0.6m arising due to an increase in the fair value of the derivatives embedded in these notes.

The profit after tax, before impairment and non-cash financial expense, for the quarter was $8.6m compared to $1.3m for the equivalent period last year.

The basic earnings per ADR (our equivalent to EPS) (excluding once-off charge and non-cash financial items) for the quarter was 41.0 cents versus 6.1 cents in Q4, 2019. Unconstrained diluted earnings (excluding once-off charges & non-cash financial items) per ADR for the quarter amounted to 35.9 cents, which compares to 9.0 cents in the equivalent quarter in 2019.

Earnings before interest, tax, depreciation, amortisation and share option expense for the quarter was $10.1m. This is made up as follows:

  $m
Operating Profit (before non-cash and once-off items) 9.1
Depreciation 0.5
Amortisation 0.2
Share option expense 0.3
EBITDASO 10.1

The above measures exclude the impact of impairment charges amounting to $17.8m net of tax. More details on the impairment are provided below.

Cash generated from operations during the quarter was $17.3m. Meanwhile the Company paid $2m interest on the Exchangeable Notes. Other major cash outflows for the quarter included taxes and other interest of $1.1m, capital expenditure of $3.6m and payments for property leases of $0.7m. Overall, this resulted in an increase in cash from $19.9m to $27.3m, an increase of $7.4m during the quarter.

Impairment

In accordance with the provisions of accounting standards under IFRS, a company is required to carry out annual impairment reviews in order to determine the appropriate carrying value of its net assets.  This year's review has resulted in a non-cash impairment charge of $17.8m net of tax being recognised. A number of factors impacted this calculation including the Company's share price at 31 Dec 2020, cost of capital, cash flow projections and net asset values across each of the Company's individual main business lines.

New Product Update

HIV Point of Care Screening – TrinScreen

Despite the impact of Covid-19 on HIV testing in Africa, the Company has successfully completed the necessary clinical trials for submission to the World Health Organisation ("WHO") for pre-qualification of our HIV screening product, TrinScreen. This product, once approved, will allow the Company to build on its strong presence in HIV testing in Africa, with the Company having been the main confirmatory test provider over many years. The Company expects to submit the pre-qualification application to the WHO before the end of March 2021. While it is expected that the WHO will take several months to consider the approval, the Company intends to use that time to prepare for manufacturing of the test at our highly-automated facility in Ireland.

Covid-19 Rapid Antibody Test

Development of the Company's Covid-19 rapid anti-body test has been completed. The Company has begun to manufacture product for final validation in advance of an Emergency Use Authorisation ("EUA") submission to the FDA. The Company expects to submit an EUA application to the FDA during quarter 2, 2021 to allow for its sale in the USA.

Covid-19 Rapid Antigen Test

The Company is developing a rapid Covid-19 antigen test. The Company intends to leverage its existing rapid infectious disease test design to expedite the development and validation timeframe and also generate scale efficiencies in manufacture & distribution.

Comments

Commenting on the results John Gillard, Chief Financial Officer stated, "The Company delivered another strong quarter with an operating profit, excluding impairment charges, of $9.1m, compared to $1.4m in Q4 2019. Gross margin for the quarter increased to 47.8% compared to 43.5% in Q4 2019, with the company benefiting from a positive sales mix and cost control measures put in place during the year."

Commenting, Ronan O'Caoimh, Chief Executive Officer stated, "We are pleased to have such a profitable quarter with a 54% increase in sales compared to Q4 2019, largely driven by strong sales within our Covid-19 related portfolio of products. It is also encouraging to see the continued rebound of our core business into Q4 2020. This strong financial performance has translated into a closing cash balance of $27.3m, an increase of over $7m in the quarter. We are also excited to have completed the necessary clinical trials for our new HIV screening test, TrinScreen and look forward to an expected pre-qualification submission to the WHO by the end of this month. We expect that once the product is approved by the WHO, the Company is ideally positioned to take a significant share of the HIV screening market in Africa given the excellent clinical performance of the product and the Company's strong existing reputation in the HIV testing market in Africa, earned over many years."

Once-off charges and some items included in income tax are non-GAAP accounting presentations. The above mentioned numbers are unaudited.

Certain statements made in this release that are not historical are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. The words "estimate", "project", "intend", "expect", "believe" and similar expressions are intended to identify forward-looking statements. These forward-looking statements involve known and unknown risks and uncertainties. Many factors could cause the actual results, performance or achievements of Trinity Biotech to be materially different from any future results, performance or achievements that may be expressed or implied by such forward-looking statements, including, but not limited to, the results of research and development efforts, risks associated with the outbreak and global spread of the coronavirus (COVID-19), the effect of regulation by the U.S. Food and Drug Administration and other agencies, the impact of competitive products, product development commercialization and technological difficulties. For additional information regarding these and other risks and uncertainties associated with Trinity Biotech's business, reference is made to our reports filed from time to time with the U.S. Securities and Exchange Commission. We undertake no obligation to update or revise any forward-looking statements for any reason.

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
Dec 31,
2020
(unaudited)
  Three Months
Ended
Dec 31,
2019
(unaudited)
  Year
Ended
Dec 31,
2020
(unaudited)
  Year
Ended
Dec 31,
2019
(unaudited)
 
           
Revenues   32,765   21,318   101,980   90,435  
           
Cost of sales   (17,108 ) (12,044 ) (53,400 ) (52,315 )
           
Gross profit   15,657   9,274   48,580   38,120  
Gross profit %   47.8 % 43.5 % 47.6 % 42.2 %
           
Other operating income   1,841   24   1,860   91  
           
Research & development expenses   (1,284 ) (1,332 ) (5,080 ) (5,325 )
Selling, general and administrative expenses   (6,872 ) (6,399 ) (24,234 ) (26,852 )
Indirect share based payments   (276 ) (123 ) (780 ) (732 )
           
Operating profit   9,066   1,444   20,346   5,302  
           
Financial income   -   88   36   464  
Financial expenses   (1,224 ) (1,239 ) (4,892 ) (4,945 )
Net financing expense   (1,224 ) (1,151 ) (4,856 ) (4,481 )
           
Profit before tax, non-cash & once-off items   7,842   293   15,490
  821
 
                   
Income tax credit/(expense)   730   988   182   (4,887 )
                   
Profit / (loss) after tax before non-cash & once-off items   8,572   1,281   15,672   (4,066 )
                   
Non-cash financial expense   (820 ) (160 ) (1,859 ) (405 )
Impairment & once-off items (net of tax)   (17,776 ) (24,443 ) (20,201 ) (24,443 )
                   
Loss after tax and once-off items   (10,024 ) (23,322 ) (6,388 ) (28,914 )
           
Earnings/(Loss) per ADR (US cents)   (48.0 ) (111.6 ) (30.6 ) (138.3 )
           
Earnings/(Loss) per ADR (US cents)**   41.0   6.1   75.0   (19.4 )
           
Diluted earnings/(loss) per ADR (US cents)   (30.8 )* (87.0 )* (2.0 )* (96.2 )*
           
Diluted earnings/(loss) per ADR (US cents)**   35.9   9.0 * 74.9   (0.3 )*
           
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   26,663,066   25,467,516   26,256,183   25,467,516  

* Under IAS 33 Earnings per Share, diluted earnings per share cannot be anti-dilutive. Therefore, diluted loss per ADR in accordance with IFRS would be equal to basic earnings per ADR.
** Excluding impairment, 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). Once-off charges and some items included in income tax are non-GAAP accounting presentations.

 
Trinity Biotech plc
Consolidated Balance Sheets
                 
  Dec 31,
2020
US$ ‘000
(unaudited)
  Sept 30,
2020
US$ ‘000
(unaudited)
  June 30,
2020
US$ ‘000
(unaudited)
  Dec 31,
2019
US$ ‘000
(unaudited)
 
ASSETS        
Non-current assets        
Property, plant and equipment 8,547   9,462   9,297   9,290  
Goodwill and intangible assets 33,860   47,876   46,751   43,654  
Deferred tax assets 4,185   5,981   6,613   6,252  
Other assets 355   387   378   485  
Total non-current assets 46,947   63,706   63,039   59,681  
         
Current assets        
Inventories 30,219   29,607   31,473   32,021  
Trade and other receivables 22,668   21,658   17,048   20,987  
Income tax receivable 3,086   1,194   1,598   1,982  
Cash and cash equivalents 27,327   19,910   15,570   16,400  
Total current assets 83,300   72,369   65,689   71,390  
         
TOTAL ASSETS 130,247   136,075   128,728   131,071  
         
EQUITY AND LIABILITIES        
Equity attributable to the equity holders of the parent        
Share capital 1,224   1,213   1,224   1,224  
Share premium 16,187   16,187   16,187   16,187  
Accumulated surplus 5,918   15,665   8,194   11,514  
Other reserves (25,548 ) (25,994 ) (26,317 ) (24,212 )
Total equity (2,219 ) 7,071   (712 ) 4,713  
         
Current liabilities        
Income tax payable 154   765   373   48  
Trade and other payables 26,488   22,281   22,327   19,351  
Provisions 416   50   50   50  
Total current liabilities 27,058   23,096   22,750   19,449  
         
Non-current liabilities        
Exchangeable senior note payable 83,884   83,063   82,902   82,025  
Other payables 16,619   16,786   16,531   17,745  
Deferred tax liabilities 4,905   6,059   7,257   7,139  
Total non-current liabilities 105,408   105,908   106,690   106,909  
         
TOTAL LIABILITIES 132,466   129,004   129,440   126,358  
         
TOTAL EQUITY AND LIABILITIES 130,247   136,075   128,728   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). Some items included in equity are non-GAAP accounting presentations.

 
Trinity Biotech plc
Consolidated Statement of Cash Flows
                 
(US$000's) Three Months
Ended
Dec 31,
2020
(unaudited)
  Three Months
Ended
Dec 31,
2019
(unaudited)
  Year
Ended
Dec 31,
2020
(unaudited)
  Year
Ended
Dec 31,
2019
(unaudited)
 
         
Cash and cash equivalents at beginning of period 19,910   25,090           16,400           30,277  
         
Operating cash flows before changes in working capital 7,103   2,703   20,604   12,198  
Changes in working capital 10,164   (321 ) 7,688   (796 )
Cash generated from operations 17,267   2,382   28,292   11,402  
         
Net Interest and Income taxes received/(paid) (1,142 ) (5,962 ) (886 ) (5,928 )
         
Capital Expenditure & Financing (net)

(3,615 ) (2,325 ) (10,435 ) (12,295 )
Payments for leases (IFRS 16)
(670
)
(787
)
(3,031 ) (3,060 )
                 
Free cash flow 11,840   (6,692 ) 13,940   (9,881 )
         
         
Payment of HIV/2 License Fee -   -   (1,112 ) -  
         
         
Once-off items (2,425 ) -   (2,425 ) -  
         
30 year Exchangeable Note interest payment (1,998 ) (1,998 ) (3,996 ) (3,996 )
         
Proceeds received under Paycheck Protection Program -   -   4,520   -  
         
         
Cash and cash equivalents at end of period 27,327   16,400   27,327   16,400  

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
John Gillard
(353)-1-2769800
E-mail: investorrelations@trinitybiotech.com


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