SOURCE: Trinity Biotech

Trinity Biotech

March 11, 2010 07:28 ET

Trinity Biotech Announces Quarter 4 Financial Results EPS Increases From 7.1 Cent to 15.5 Cent and Disposal of Coagulation Business Line to Stago

DUBLIN, IRELAND--(Marketwire - March 11, 2010) - 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, 2009 and the disposal of its coagulation business to the Stago Group.

Quarter 4 Results

Total revenues for the quarter were $30.8m which compares to $34m in quarter 4, 2008, a decrease of 9.5%.

Clinical Laboratory revenues were $27.1m which represents a decrease of 1.6% when compared to $27.6m in quarter 4 2008. For the year as a whole Clinical Laboratory revenues fell by 11%. This decrease was mainly attributable to the decline in coagulation revenues in advance of the worldwide launch of Destiny Max.

Whilst point-of-care revenues for the quarter decreased by 43.1% when compared to quarter 4, 2008, the year on year decrease was 4.6%. The decline was largely attributable to the company's decision not to ship to a major HIV customer due to the credit related issues in the second half of 2009. This was partly offset by the continued growth of HIV sales in the USA which increased by 17% in 2009.

Revenues for the quarter 4 and full year, 2009 by key product area were as follows :

                                  2008       2009       2008       2009
                                Quarter 4  Quarter 4  Full year  Full Year
                                ---------- ---------- ---------- ----------
                                 US$'000    US$'000     US$000     US$000
                                ---------- ---------- ---------- ----------

                                ---------- ---------- ---------- ----------
Total Clinical Laboratory           27,579     27,135    121,143    107,778
                                ---------- ---------- ---------- ----------
Point-of-Care                        6,429      3,659     18,996     18,129
                                ---------- ---------- ---------- ----------
Total                               34,008     30,794    140,139    125,907
                                ---------- ---------- ---------- ----------

Gross profit for the quarter amounted to $13.7m representing a gross margin of approximately 45%, which is an improvement of almost 1% over the same period in 2008. Excluding instrument service costs for the quarter, the gross margin would be 48.5%.

Research and Development expenses for the quarter amounted to $1.9m, representing an increase of 4.2% compared to quarter 4, 2008. SG&A expenses have fallen by 27% from $11.2m in quarter 4 of 2008 to $8.2m in the current quarter. The fall in SG&A expenses is due to a number of factors including:

--  the impact of the rationalisation of the French sales and US finance
    functions undertaken during 2009;
--  cost base management across a wide range of costs such as
    communications, utilities and travel; and
--  lower amortisation charges.

There was a tax credit for the quarter of $32k, which is as a result of profits arising in jurisdictions where there were tax losses forward and other deferred tax movements.

In quarter 4, 2008 Trinity recognised significant once-off charges in relation to restructuring and impairment. The following table shows a comparison of the profits of the company for quarter 4 and full year after excluding the impact of these once-off charges in 2008:

                                  2008       2009       2008       2009
                                Quarter 4* Quarter 4  Full year*  Full Year
                                ---------- ---------- ---------- ----------
                                (US$'000)  (US$'000)  (US$'000)  (US$'000)
                                ---------- ---------- ---------- ----------

                                ---------- ---------- ---------- ----------
Operating Profit                     2,199      3,485      8,307     14,099
                                ---------- ---------- ---------- ----------
Profit Before Tax                    1,756      3,226      6,212     12,915
                                ---------- ---------- ---------- ----------
Profit After Tax                     1,474      3,258      5,353     11,824
                                ---------- ---------- ---------- ----------
Earnings per ADR (US cents)            7.1       15.5       26.3       56.5
                                ---------- ---------- ---------- ----------

* excludes the impact of restructuring and impairment charges.

Comparing the performance of quarter 4, 2009 and the full year 2009, with the corresponding periods in 2008 (excluding the impact of once-off charges):

--  Operating profit for the quarter increased by over 58%, and for the
    year by over 69%.
--  Profit before tax for the quarter increased by $1.5m, which represents
    an increase of almost 84%.  Meanwhile profit before tax for the year
    increased by 108%.
--  Profit after tax for the quarter and for the year each increased
    by 121%.
--  EPS increased by over 118% in the quarter, from 7.1 cents to 15.5 cents
    per ADR. Similarly the EPS for the year also more than doubled, rising
    from 26.3 cents to 56.5 cents per ADR.

The strong increase in profitability in the quarter and for the year as a whole is attributable to the improved gross margin combined with the positive impact of strict control over indirect costs.

From a cash perspective the Company generated more than $4.8m of cash from operations and approximately $2.4m of free cash flow during the quarter.

Commenting on the results, Kevin Tansley, Chief Financial Officer, said, "With profit after tax of $3.3m, which equates to EPS of 15.5 cent per ADR, quarter 4, 2009 represented another quarter of strong profitability and earnings growth for Trinity.

During 2009 we increased our profits each quarter giving us an EPS of 56.5 cent per ADR. This is more than double the profits achieved in 2008 and exceeds all market expectations. 2009 was also a strong year from a cash perspective as we increased our cash balances whilst at the same time significantly reducing our level of debt. "

Disposal of the Coagulation business

Trinity Biotech has entered into a binding agreement for the sale of its worldwide Coagulation business to the Stago Group for $90m. Of the consideration, $67.5m will be paid on closing, $11.25m on the first anniversary of closing and the remaining $11.25m on the second anniversary of closing. No conditions or earn out provisions will apply to this deferred element of the consideration which is supported by a bank guarantee. The transaction is expected to close during quarter 2, 2010. A further $4m will be released to working capital following the collection of existing accounts receivables.

In total, 320 Trinity employees will transfer to Stago and all their contractual rights and benefits under their existing employment arrangements will be honoured. Stago has committed to continue manufacturing coagulation reagents in Bray, Ireland and will invest in upgrading this facility. They will also take over the German factory where they will continue to manufacture the Destiny range of instruments. In addition, a number of Trinity sales and marketing personnel in the USA, UK, Germany and France will transfer to Stago. Consequently, the active contracts with customers and distributors will be assigned to Stago under their existing terms and arrangements.

Although our Coagulation revenues have decreased over the past 3 years, with the launch of the new Destiny Max instrument, that level of decrease had reduced during the past year and we were confident that we could succeed in growing our market share over the coming years. However, we felt that the price, which represents over 100% of our average market capitalisation over the past 3 months was a good one and represented excellent shareholder value.

Following this transaction, which will reduce revenues by approximately 40%, Trinity expects annualised revenues of $72m. Our goal is to achieve EPS of between 90% and 100% of existing levels.

Ronan O'Caoimh CEO of Trinity Biotech stated "While we were committed to Coagulation and believe we would have been successful in significantly increasing our market share, the offer received from Stago makes sense for our shareholders and employees. Moreover, Stago's expertise and commitment in this domain, will allow a more rapid market penetration of the coagulation franchise we developed over time.

Following this transaction we are confident of immediately recommencing on the path of revenue growth. Our goal is to immediately achieve EPS of between 90% and 100% of existing levels and then aggressively grow earnings from that point onwards.

The company will now focus on developing its point-of-care business (POC). Our focus in the POC area will be on Infectious Diseases, HbA1c and Coagulation, which all have double digit growth rates and each have a market size exceeding $300m.

Infectious diseases POC

Our concentration will be on developing qualitative tests in the sexually transmitted disease, enteric and respiratory fields utilising lateral flow technology for which we hold the required Inverness Medical licences. We are well experienced in this area and currently have in excess of 20% of the HIV POC market.

Following this transaction we will significantly increase our point-of-care R&D activity in Ireland and will also open a new point-of-care R&D facility in our Carlsbad, San Diego facility.

HbA1c POC

Our Tri-stat Diabetes HbA1c rapid system has been FDA approved and is currently awaiting a CLIA waiver. The combination of the Tri-stat and the new PDX instrument positions us strongly in this high growth market.

Coagulation POC

Under our agreement with the Stago Group we are free to participate in the POC segment of the coagulation market. We intend to develop a range of coagulation tests and will immediately commence the development of a lateral flow assay for D-dimer.

The proceeds of the transaction will enable us to repay our bank debt in full thereby moving us from a net debt position of $1 per ADR to a positive cash position of $3.50 per ADR, thus providing the financial resources to implement our growth strategy".

Conference Call Details

The Company has scheduled a conference call for today, Thursday, March 11, 2010, at 11:00am EDT (4:00pm GMT) to discuss the results of the quarter.

Interested parties can access the call by dialing:
    USA:              1-800-860-2442
    International:    1-412-858-4600
    Conference ID #:  438847

A simultaneous webcast of the call can be accessed at: http://www.videonewswire.com/event.asp?id=67187

A replay of the call can be accessed until March 15, 2010 by dialing:

    USA:              1-877-344-7529
    International:    1-412-317-0088
    Conference ID #:  438847

The webcast of the call will be available for 30 days at: http://www.videonewswire.com/event.asp?id=67187

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 blood coagulation disorders, 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        Three
                          Months       Months     Year Ended   Year Ended
                         Ended Dec    Ended Dec     Dec 31,      Dec 31,
(US$000's  except share   31, 2009     31, 2008      2009         2008
 data)                  (unaudited)  (unaudited)  (unaudited)   (audited)


Revenues                     30,794       34,008      125,907      140,139

Cost of sales
 (excluding service
 costs)                     (15,871)     (17,610)     (63,783)     (71,144)
                        -----------  -----------  -----------  -----------

Gross profit (excluding
 service costs)              14,923       16,398       62,124       68,995
Gross profit %
 (excluding service
 costs)                        48.5%        48.2%        49.3%        49.2%
                        -----------  -----------  -----------  -----------
Cost of sales -
 instrument servicing
 costs                       (1,231)      (1,573)      (5,108)      (6,501)
Gross profit (including
 service costs)              13,692       14,825       57,016       62,494
Gross profit %
 (including service
 costs)                        44.5%        43.6%        45.3%        44.6%

Other operating income           22          622          437        1,173

Research & development
 expenses                    (1,941)      (1,862)      (7,341)      (7,544)
Selling, general and
 administrative
 expenses                    (8,178)     (11,183)     (35,519)     (46,885)
Restructuring expenses
 and impairment                   -      (87,882)           -      (87,882)
Indirect share based
 payments                      (110)        (203)        (494)        (931)
                        -----------  -----------  -----------  -----------


Operating profit/(loss)       3,485      (85,683)      14,099      (79,575)
Operating profit before
 restructuring
 expenses, impairment &
 inventory write off              -        2,199            -        8,307

Financial income                  4           12            8           65
Financial expenses             (263)        (455)      (1,192)      (2,160)
                        -----------  -----------  -----------  -----------
Net financing costs            (259)        (443)      (1,184)      (2,095)
                        -----------  -----------  -----------  -----------


Profit/(loss) before
 tax                          3,226      (86,126)      12,915      (81,670)
Profit before tax,
 restructuring
 expenses, impairment &
 inventory write off              -        1,756            -        6,212

Income tax
 (expense)/credit                32        4,469       (1,091)       3,892
                        -----------  -----------  -----------  -----------

Profit/(loss) for the
 period                       3,258      (81,657)      11,824      (77,778)

Earnings/(loss) per ADR
 (US cents)                    15.5       (391.6)        56.5       (382.2)

Diluted earnings/(loss)
 per ADR (US cents)            15.4       (391.6)        56.5       (382.2)

Weighted average no. of
 ADR's used in           21,080,998   20,854,395   20,934,471   20,348,519
 Computing 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

                                       Dec 31,     Sept 30,      Dec 31,
                                        2009         2009         2008
                                       US$'000      US$'000      US$'000
                                     (unaudited)  (unaudited)   (audited)
ASSETS
Non-current assets
Property, plant and equipment             12,174       12,143       11,836
Goodwill and intangible assets            44,822       42,866       38,544
Deferred tax assets                        5,801        2,926        3,051
Other assets                               1,212          636          877
                                     -----------  -----------  -----------
Total non-current assets                  64,009       58,571       54,308
                                     -----------  -----------  -----------

Current assets
Inventories                               39,198       41,254       42,317
Trade and other receivables               22,931       26,192       27,418
Derivative Financial Instruments               -          284            -
Income tax receivable                        229          345          282
Cash and cash equivalents                  6,078        3,697        5,184
                                     -----------  -----------  -----------
Total current assets                      68,436       71,772       75,201
                                     -----------  -----------  -----------

                                     -----------  -----------  ----------- 
TOTAL ASSETS                             132,445      130,343      129,509
                                     ===========  ===========  ===========

EQUITY AND LIABILITIES
Equity attributable to the equity
 holders of the parent
Share capital                              1,080        1,079        1,070
Share premium                            160,683      160,641      159,864
Accumulated deficit                      (87,071)     (90,522)     (99,493)
Translation reserve                          206          199           (9)
Other reserves                             4,446        4,781        4,473
                                     -----------  -----------  -----------
Total equity                              79,344       76,178       65,905
                                     -----------  -----------  -----------

Current liabilities
Interest-bearing loans and
 borrowings                               12,625       14,164       12,656
Income tax payable                            24           64            5
Trade and other payables                  12,844       16,907       22,969
Derivative Financial Instruments              58            -           27
Provisions                                    50           50           50
                                     -----------  -----------  -----------
Total current liabilities                 25,601       31,185       35,707
                                     -----------  -----------  -----------

Non-current liabilities
Interest-bearing loans and
 borrowings                               19,231       17,683       23,465
Other payables                                59           59           59
Deferred tax liabilities                   8,210        5,238        4,373
                                     -----------  -----------  -----------
Total non-current liabilities             27,500       22,980       27,897
                                     -----------  -----------  -----------

                                     -----------  -----------  -----------
TOTAL LIABILITIES                         53,101       54,165       63,604
                                     -----------  -----------  -----------

                                     -----------  -----------  -----------
TOTAL EQUITY AND LIABILITIES             132,445      130,343      129,509
                                     ===========  ===========  ===========

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         Ended
                                                     Dec 31,       Dec 31,
                                                       2009          2008
                                                    US$'000       US$'000
                                                 (unaudited)   (unaudited)


Cash and cash equivalents at beginning of
 period                                                3,697         3,502

Operating cash flows before changes in working
 capital                                               5,282         3,228
Changes in Working Capital                              (459)        1,728
                                                ------------  ------------
Cash generated from operations                         4,823         4,956

Net Interest and Income taxes paid                       (12)          (67)

Capital Expenditure (Net)                             (2,391)       (3,207)

Repayment of bank debt                                   (39)            -

                                                ------------  ------------
Cash and cash equivalents at end of period             6,078         5,184
                                                ------------  ------------

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