Trinity Biotech plc
NASDAQ : TRIB

Trinity Biotech plc

July 21, 2011 06:58 ET

Trinity Biotech Announces Quarter 2 Financial Results

EPS increases by 16.8% to 18.1 cents per ADR

DUBLIN, IRELAND--(Marketwire - July 21, 2011) - 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, 2011.

Quarter 2 Results

Total revenues for Q2, 2011 were $19.5m which compares to $18.2m in Q2, 2010 (excluding Coagulation revenues), an increase of 7.0%.

Point-of-care revenues for Q2, 2011 increased by 3.6% when compared to Q2, 2010, with increased revenues being achieved in both of our key markets of Africa and the USA.

Continuing Clinical Laboratory (i.e. excluding Coagulation) revenues increased from $14.2m to $15.3m, which represents an increase of 7.9% compared to Q2, 2010. This increase is mainly due to higher infectious diseases and diabetes sales in the USA.

Revenues for Q2, 2011 by key product area were as follows:

2010
Quarter 2
2011
Quarter 2
Increase/
Decrease
US$'000 US$'000 %
Point-of-Care 4,011 4,157 3.6 %
Continuing Clinical Laboratory 14,178 15,298 7.9 %
Continuing operations* 18,189 19,455 7.0 %
Coagulation 4,437 0
Total 22,626 19,455
* Continuing operations reflects the company's divestiture of its coagulation product line (shown separately)

Gross profit for Q2, 2011 amounted to $10.0m representing a gross margin of 51.4% which compares favourably to the gross margin of 49.3% for the same period in 2010. This improvement of 2.1% is partly attributable to the inclusion of one month of lower margin Coagulation revenues in the comparative period. The remainder of the increase is due to improved operational efficiencies.

Selling, General and Administrative (SG&A) expenses decreased by 22.9% to $5.2m compared to Q2, 2010. As in previous quarters, this was largely attributable to the transfer of sales and administrative personnel to Stago as part of the Coagulation divestiture. The decrease this quarter is less pronounced than in previous quarters as the Coagulation costs were only in place for one month of Q2, 2010.

Operating profit for Q2, 2011 was $3.9m, which is a 10.8% increase compared with Q2, 2010. Operating margin for Q2, 2011 has increased to 20.0%, which represents a significant improvement compared to 15.5% in Q2, 2010.

Net financial income for Q2, 2011 was $0.6m which compares to net financial income of $0.2m in Q2, 2010. This improvement is attributable to the elimination of bank debt and the increase in cash balances to $71.4m. The tax charge for Q2, 2011 was $0.7m which represents an effective tax rate of 14.5%.

Profit After Tax was $3.9m which is an increase of 18.2% over Q2, 2010. Meanwhile, EPS for Q2, 2011 increased by 16.8% from 15.5 cents to 18.1 cents.

Free Cash Flows for Q2, 2011 were $3.0m which is in line with our target of generating at least $1m per month. During the quarter there were other significant cash movements as follows:

  • the receipt of the first tranche of deferred consideration from Stago of $11.25m;
  • the payment of our first annual dividend of $2.1m; and
  • the payment of the first tranche of deferred consideration of $0.5m in respect of our acquisition of Phoenix Biotech.

The net result of these movements has been to increase our cash position by $11.6m to $71.4m.

Recent Developments

  • The Company received CE marking for the new Premier Hb9210 instrument, which represents regulatory approval in Europe. We have also filed our 510k regulatory submission with the FDA.
  • The Company paid a dividend of 10 cents per ADR. This was the first dividend in the Company's history and it is intended that a dividend will be paid on an annual basis going forward.
  • In April, the Company received the first deferred consideration payment of $11.25m from Stago in relation to the divestiture of the Coagulation business in May 2010. The second, and final, deferred consideration payment of $11.25m is due to be received on 30 April, 2012 and similarly is unconditional and bank guaranteed.
  • During the quarter we paid the first tranche of deferred consideration ($0.5m) in relation to the acquisition of Phoenix Biotech Corp. Phoenix manufactures and sells a syphilis total antibody (IgG and IgM) test and is the only such FDA approved ELISA test on the market.

Comments

Commenting on the results, Kevin Tansley, Chief Financial Officer said "This quarter's results were very strong. Revenues have grown by 7% and operating profits by 11%. Meanwhile our EPS of 18.1 cents represents growth of over 16% and for the fifth quarter in a row we have established a new record for quarterly earnings. We also continue to generate significant cash with our free cash flows reaching close to $7m for the first six months of the year."

Ronan O'Caoimh, CEO stated "This quarter's results have re-emphasised Trinity's strong growth trajectory. Revenues have grown by 7% and this is before we see the impact of our new Premier instrument which has just been launched in Europe and our new range of point-of-care products, the first of which will enter production later this year. It is now just over a year since we divested our coagulation business and in that short time we have repositioned Trinity into a company with robust earnings growth and an extensive product development pipeline."

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,
2011
(unaudited)
Three
Months
Ended
June 30,
2010
(unaudited)
Six
Months
Ended
June 30,
2011
(unaudited)
Six
Months
Ended
June 30,
2010
(unaudited)
Revenues 19,455 22,626 38,109 51,639
Cost of sales (9,451 ) (11,469 ) (18,548 ) (26,953 )
Gross profit 10,004 11,157 19,561 24,686
Gross profit % 51.4 % 49.3 % 51.3 % 47.8 %
Other operating income 233 527 530 583
Research & development expenses (800 ) (1,198 ) (1,487 ) (2,992 )
Selling, general and administrative expenses (5,217 ) (6,766 ) (10,263 ) (14,705 )
Indirect share based payments (332 ) (211 ) (754 ) (387 )
Operating profit 3,888 3,509 7,587 7,185
Non-recurring items - 47,061 - 47,061
Financial income 631 268 1,273 278
Financial expenses (3 ) (116 ) (7 ) (357 )
Net financing income/(expense) 628 152 1,266 (79 )
Profit before tax 4,516 50,722 8,853 54,167
Income tax expense on operating activities (654 ) (394 ) (1,239 ) (682 )
Income tax credit on non-recurring items - 354 - 354
Profit for the period 3,862 50,682 7,614 53,839
Profit for the period (excluding non-recurring items)
3,862

3,267

7,614

6,424
Earnings per ADR (US cents) 18.1 240.1 35.6 255.2
Earnings per ADR (US cents) – excluding non-recurring items 18.1 15.5 35.6 30.4
Diluted earnings per ADR (US cents) 17.3 235.0 34.2 251.2
Diluted earnings per ADR (US cents) – excluding non-recurring items 17.3 15.1 34.2 30.0

Weighted average no. of ADRs used in computing basic earnings per ADR

21,352,012

21,109,023

21,369,919

21,098,574

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,
2011
US$ '000
(unaudited)
March 31,
2011
US$ '000
(unaudited)
Dec 31,
2010
US$ '000
(audited)
ASSETS
Non-current assets
Property, plant and equipment 7,260 6,630 5,999
Goodwill and intangible assets 41,799 40,267 37,248
Deferred tax assets 4,158 4,385 4,680
Other assets 534 11,729 11,623
Total non-current assets 53,751 63,011 59,550
Current assets
Inventories 18,971 18,636 17,576
Trade and other receivables 23,686 24,078 25,529
Income tax receivable 199 91 217
Cash and cash equivalents 71,422 59,818 58,002
Total current assets 114,278 102,623 101,324
TOTAL ASSETS 168,029 165,634 160,874
EQUITY AND LIABILITIES
Equity attributable to the equity holders of the parent
Share capital 1,097 1,094 1,092
Share premium 2,055 1,743 161,599
Accumulated surplus/(deficit) 139,928 137,705 (25,412 )
Other reserves 4,008 4,008 4,008
Total equity 147,088 144,550 141,287
Current liabilities
Interest-bearing loans and borrowings 176 174 162
Income tax payable 770 890 597
Trade and other payables 12,153 12,680 11,447
Provisions 50 50 50
Total current liabilities 13,149 13,794 12,256
Non-current liabilities
Interest-bearing loans and borrowings 34 74 111
Other payables 62 52 30
Deferred tax liabilities 7,696 7,164 7,190
Total non-current liabilities 7,792 7,290 7,331
TOTAL LIABILITIES 20,941 21,084 19,587
TOTAL EQUITY AND LIABILITIES 168,029 165,634 160,874

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,
2011
(unaudited)
Three Months
Ended
June 30,
2010
(unaudited)
Six Months
Ended
June 30,
2011
(unaudited)
Six Months
Ended
June 30,
2010
(unaudited)
Cash and cash equivalents at beginning of period 59,818 6,222 58,002 6,078
Operating cash flows before changes in working capital 5,165 4,415 9,938 9,326
Changes in working capital (876 ) 1,468 104 1,689
Cash generated from operations 4,289 5,883 10,042 11,015
Net Interest and Income taxes received/(paid) 808 (352 ) 1,046 (577 )
Capital Expenditure & Financing (net) (2,094 ) (1,111 ) (4,199 ) (3,435 )
Free cash flow 3,003 4,420 6,889 7,003
Proceeds from sale of Coagulation product line 11,250 66,517 11,250 66,517
Cash paid to acquire Phoenix Bio-tech (500 ) - (1,500 ) -
Repurchase of own company shares - - (1,070 ) -
Dividend Payment (2,149 ) - (2,149 ) -
Repayment of bank debt - (27,117 ) - (29,556 )
Cash and cash equivalents at end of period 71,422 50,042 71,422 50,042

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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