SOURCE: Trinity Biotech

Trinity Biotech

March 03, 2011 08:53 ET

Trinity Biotech Announces Quarter 4 Financial Results EPS of 17.1 Cent per Share -- an Increase of 10.3%

DUBLIN, IRELAND--(Marketwire - March 3, 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 December 31, 2010.

Quarter 4 Results

Total revenues for the quarter were $19.2m which compares to $30.8m in quarter 4, 2009, a decrease of 37.5%. This decrease is principally due to the divestiture of the coagulation product line in quarter 2 2010.

Point-of-care revenues for the quarter decreased by 4.2% when compared to quarter 4, 2009. This level of fluctuation, which is within the normal range that can be expected in this product line, reflects the timing of the shipment of certain large orders. However, this will have a corresponding positive impact on revenues in quarter 1, 2011 and this is being borne out by the strong level of HIV sales being seen in the first 2 months of 2011.

Continuing clinical laboratory (i.e. excluding coagulation) revenues were $15.7m, which represents an increase of 0.2% compared to quarter 4, 2009. However, when the impact of the slower lyme season, lower Fitzgerald sales and the move to a distribution selling model in France and Germany are taken into account the underlying increase in revenues from our core infectious diseases and diabetes business is 8.3% year on year. When compared to quarter 3, 2010 continuing laboratory sales have increased by 8.2%.

Revenues for quarter 4 by key product area were as follows:


                                              2009       2010       2010
                                            Quarter 4  Quarter 3  Quarter 4
                                            ---------  ---------  ---------
                                              US$'000    US$'000    US$'000
                                            ---------  ---------  ---------
Point-of-Care                                   3,659      4,202      3,507
                                            ---------  ---------  ---------
Continuing Clinical Laboratory                 15,708     14,547     15,740
                                            ---------  ---------  ---------
Continuing operations*                         19,367     18,749     19,247
                                            ---------  ---------  ---------

                                            ---------  ---------  ---------
Coagulation                                    11,427          0          0
                                            ---------  ---------  ---------

Total                                          30,794     18,749     19,247
                                            ---------  ---------  ---------


* Continuing operations reflects the company's divestiture of its
coagulation product line (shown separately)


Gross profit for the quarter amounted to $9.8m, representing a gross margin of approximately 50.8%. This compares favourably to the gross margin of 44.5% for the same period in 2009. The improvement in gross margin of 6.3% is largely attributable to the divestiture of coagulation, which traditionally had been our lowest gross margin product line. At 50.8%, the gross margin is in line with the 50.6% reported in quarter 3, 2010 -- which was the first full quarter without coagulation.

Research and Development (R&D) expenses for the quarter amounted to $0.9m, which represents a decrease of 56.1% compared to quarter 4, 2009. In the same period, Selling, General and Administrative (SG&A) expenses decreased by 33.7% from $8.2m in quarter 4 of 2009 to $5.4m in the current quarter. In both cases the principal driver for the reduction has been the transfer of R&D, sales and administrative personnel to Stago as part of the coagulation divestiture. When compared to quarter 3, 2010, R&D and SG&A expenses in aggregate have decreased by 3.1%. This decrease was achieved notwithstanding increased fees associated with the preparations for the share buyback.

Operating profit was $3.6m for the quarter, compared to $3.5m for quarter 4, 2009. However, the operating margin for the quarter has increased to 18.6%, which represents a significant improvement compared to 11.3% in quarter 4, 2009.

Net financial income for the quarter was $0.5m which compares to a net financial expense of $0.3m in quarter 4, 2009. This improvement is attributable to the elimination of bank debt and the increase in cash balances to $58.0m.

Profit after tax increased by 12.3% from $3.3m in quarter 4, 2009 to $3.7m this quarter. Similarly, EPS for the quarter increased from 15.5 cent per share to 17.1 cent per share, an increase of 10.3%. The tax charge for the quarter was $0.4m which represents an effective tax rate of 10%.

Free cash flows for the quarter increased by 81.6% from $2.4m to $4.4m. This was largely due to a 30.1% increase in cash from operations and the receipt of interest income from cash deposits.

2010 Results

The following are the key highlights with respect to the financial performance of the Company in 2010:

--  EPS (excluding non-recurring items) has increased from 56.5 cents to
    64.1 cents, an increase of over 13%;
--  When non-recurring items are included, the EPS for the year was $2.85;
--  The divestiture of the company's coagulation business resulted in a
    once-off profit of over $46m;
--  Operating margin has improved from 11.2% to 15.7%;
--  The Company has moved from a net debt position of $25.8m to a net cash
    position of $57.7m.  In addition, the Company is due to receive further
    deferred consideration payments from Stago which will increase the net
    cash position by a further $22.5m over the next 14 months.
--  The level of working capital in the Company has been reduced from
    $49.3m to $20.9m.

Recent Developments

--  The Company was pleased to announce that it had entered into an
    agreement to exclusively supply Menarini Diagnostics with the new
    Premier Hb9210 (PDx) instrument for distribution in European
    territories.  As one of Europe's leading pharmaceutical and diagnostics
    companies, Menarini, with a turnover of EUR 2.6 billion and 12,000
    employees, is the market leader in HbA1c measurement in Europe.
    Menarini has a market share of 40% in the European HbA1c market, a
    large installed base of equipment and over 20 years experience in HbA1c
    measurement. The launch of this instrument in April, 2011 will allow us
    to target a rapidly growing global market estimated to be worth $272m
    by 2012 with a best in class product.  In addition, we will file a US
    FDA submission in April and simultaneously we will file for
    registration in China, Brazil and other significant markets.

--  The Company completed the acquisition of Phoenix Biotech Corp. for
    $2.5m. Phoenix manufactures and sells a syphilis total antibody
    (IgG and IgM) test and is the only such FDA approved elisa test on the
    market.  With the incidence of syphilis growing significantly in both
    the USA and in international markets, this will be a major growth
    opportunity for Trinity.

--  In recent weeks, the Company has received approval from the Irish
    courts to restructure its balance sheet in order to facilitate a share
    buyback program.  As the Company has been in a blackout period since
    that date, no buyback of shares has taken place yet.  It is the Board's
    intention to commence buying back shares during this quarter.  In
    carrying this out, the Company will pay particular attention to the
    prevailing share price and volumes whilst at the same time adhering to
    the strict SEC rules governing such buybacks.

Dividend Policy

Trinity has now established a track record of reliable and growing profitability. This has been accompanied by strong free cash flows which have allowed the Company to fund its development activities, whilst at the same time increasing its cash reserves. For this reason, the Board of Trinity has determined that it is now an appropriate time to commence a dividend policy, to be paid once a year. The Board is proposing a final dividend of 10 cent per ADR in respect of 2010. This proposal will be submitted to shareholders for approval at the Company's next Annual General Meeting which is expected to take place in May of this year.

Comments

Commenting on the results, Kevin Tansley, Chief Financial Officer, said, "We are very pleased with this quarter's results. Profit before tax has increased by over 26% and EPS has increased by 10.3% when compared with quarter 4, 2009. We have also grown operating profits versus quarter 4, 2009. This is significant as this is the first quarter in which we have achieved this since the divestiture of our coagulation business. We have also continued to generate very healthy cash flows of $4.4m. In this quarter we achieved an increase in free cash flows of over 81%, even after the investment that we are making in our R&D pipeline."

Ronan O'Caoimh, CEO, stated, "We are pleased with our progress in 2010. We were successful in growing our EPS every quarter versus the comparable quarter in 2009 resulting in an annual increase in EPS of over 13%. We divested our coagulation business for what we believe was a very good price for shareholders and in so doing have greatly strengthened our balance sheet. From a strategic point of view we have repositioned the Company with an emphasis on growth, particularly in the A1c and point-of-care markets. The development of our new A1c instrument is now completed and we are extremely pleased with the distribution agreement we have entered into with Menarini. The development of our new range of point-of-care products is proceeding well and will form the bedrock of future growth for our company.

Given the reliable and growing nature of its profits and strong future growth prospects, the Board now feels it is appropriate for the Company to initiate a dividend policy for the first time in its history. The Board of the Company will submit a proposal to pay a dividend of 10 cent per ADR at the AGM. In addition to this, we have now received all of the authorisations necessary to commence a share buyback process. This process will commence once we have exited the current blackout period."

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

                 Three Months    Three Months
(US$000's        Ended Dec 31,   Ended Dec 31,   Year Ended    Year Ended
 except share        2010            2009       Dec 31, 2010  Dec 31, 2009
 data)            (unaudited)     (unaudited)   (unaudited)     (audited)

Revenues                19,247          30,794        89,635       125,907

Cost of sales           (9,475)        (17,102)      (45,690)      (68,891)
                --------------  --------------  ------------  ------------

Gross profit             9,772          13,692        43,945        57,016
Gross profit %            50.8%           44.5%         49.0%         45.3%

Other operating
 income                    382              22         1,616           437

Research &
 development
 expenses                 (853)         (1,941)       (4,603)       (7,341)
Selling,
 general and
 administrative
 expenses               (5,423)         (8,178)      (25,849)      (35,519)
Indirect share
 based payments           (301)           (110)       (1,080)         (494)
                --------------  --------------  ------------  ------------

Operating
 profit                  3,577           3,485        14,029        14,099

Non-recurring
 items                       -               -        46,474             -

Financial
 income                    560               4         1,352             8
Financial
 expenses                  (69)           (263)         (495)       (1,192)
                --------------  --------------  ------------  ------------
Net financing
 income/(expense)          491            (259)          857        (1,184)
                --------------  --------------  ------------  ------------

Profit before
 tax                     4,068           3,226        61,360        12,915

Income tax
 (expense)/credit
 on operating
 activities               (408)             32        (1,296)       (1,091)
Income tax
 credit on
 non-recurring
 items                       -               -           354             -
                --------------  --------------  ------------  ------------
Profit for the
 period                  3,660           3,258        60,418        11,824
                --------------  --------------  ------------  ------------
Profit for the
 period
 (excluding
 non-recurring
 items)                  3,660           3,258        13,590        11,824
                --------------  --------------  ------------  ------------

Earnings per
 ADR (US cents)           17.1            15.5         285.2          56.5
Earnings per
 ADR (US cents)
 - excluding
 non-recurring
 items                    17.1            15.5          64.1          56.5

Diluted
 earnings per
 ADR (US cents)           16.6            15.4         278.9          56.5
Diluted
 earnings per
 ADR (US cents)
 - excluding
 non-recurring
 items                    16.6            15.4          62.7          56.5


 Weighted
 average no. of
 ADRs used in
 computing
 basic earnings
 per ADR            21,348,986      21,080,998    21,183,594    20,934,471

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

                           Dec 31, 2010    Sept 30, 2010  December 31, 2009
                             US$ '000         US$ '000         US$ '000
                            (unaudited)      (unaudited)      (audited)
ASSETS
Non-current assets
Property, plant and
 equipment                         5,999            5,535           12,174
Goodwill and intangible
 assets                           37,248           36,120           44,822
Deferred tax assets                4,680            4,490            5,801
Other assets                      11,623           11,738            1,212
                          --------------   --------------   --------------
Total non-current assets          59,550           57,883           64,009
                          --------------   --------------   --------------

Current assets
Inventories                       17,576           18,758           39,198
Trade and other
 receivables                      25,529           27,371           22,931
Income tax receivable                217              168              229
Cash and cash
 equivalents                      58,002           53,802            6,078
                          --------------   --------------   --------------
Total current assets             101,324          100,099           68,436
                          --------------   --------------   --------------

                          --------------   --------------   --------------
TOTAL ASSETS                     160,874          157,982          132,445
                          ==============   ==============   ==============

EQUITY AND LIABILITIES
Equity attributable to
 the equity holders of
 the parent
Share capital                      1,092            1,087            1,080
Share premium                    161,599          161,220          160,683
Accumulated deficit              (25,412)         (29,483)         (87,070)
Translation reserve                 (544)            (544)             206
Other reserves                     4,552            4,463            4,445
                          --------------   --------------   --------------
Total equity                     141,287          136,743           79,344
                          --------------   --------------   --------------

Current liabilities
Interest-bearing loans
 and borrowings                      162              265           12,625
Income tax payable                   597              366               24
Trade and other payables          11,447           12,831           12,844
Derivative Financial
 Instruments                           -               88               58
Provisions                            50               50               50
                          --------------   --------------   --------------
Total current
 liabilities                      12,256           13,600           25,601
                          --------------   --------------   --------------

Non-current liabilities
Interest-bearing loans
 and borrowings                      111              205           19,231
Other payables                        30              519               59
Deferred tax liabilities           7,190            6,915            8,210
                          --------------   --------------   --------------
Total non-current
 liabilities                       7,331            7,639           27,500
                          --------------   --------------   --------------

                          --------------   --------------   --------------
TOTAL LIABILITIES                 19,587           21,239           53,101
                          --------------   --------------   --------------

                          --------------   --------------   --------------
TOTAL EQUITY AND
 LIABILITIES                     160,874          157,982          132,445
                          ==============   ==============   ==============

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

                                            Three Months     Three Months
                                            Ended Dec 31,    Ended Dec 31,
                                                2010             2009
(US$000's)                                   (unaudited)      (unaudited)

Cash and cash equivalents at beginning of
 period                                            53,802            3,697

Operating cash flows before changes in
 working capital                                    4,668            5,282
Changes in Working Capital                          1,607             (459)
                                           --------------   --------------
Cash generated from operations                      6,275            4,823

Net Interest and Income taxes
 received/(paid)                                      330              (12)

Capital Expenditure & Financing (net)              (2,211)          (2,391)

                                           --------------   --------------
Free cash flow                                      4,394            2,420

Repayment of bank debt                               (194)             (39)

                                           --------------   --------------
Cash and cash equivalents at end of
 period                                            58,002            6,078
                                           --------------   --------------

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 Information

  • Contact:
    Trinity Biotech plc
    Kevin Tansley
    (353)-1-2769800
    E-mail: Email Contact

    Lytham Partners LLC
    Joe Diaz
    Joe Dorame & Robert Blum
    602-889-9700