SOURCE: Trinity Biotech UK

March 14, 2008 08:50 ET

Trinity Biotech Announces Quarter 4 Results

Operating Profits Increase 77%

DUBLIN, IRELAND--(Marketwire - March 14, 2008) - 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, 2007.

Revenues for 2007 increased 21% to US$143.6m compared to US$118.7m in 2006, in part reflecting the acquisition of the haemostasis product line from bioMerieux in June 2006. Operating profit (before the once-off charges associated with the restructuring, inventory write off and impairment) for the same period increased to US$10.6m from US$7.7m, representing an increase of 37%. EBITDA and share option expense for the year increased from US$15.0m in 2006 to US$19.8m in 2007, before the impact of once-off charges.

Revenues for the year by key product area were as follows:

                          2006      2007
                         US$000    US$000  % Increase

Clinical Laboratory     103,395    119,113    15.2%
Point of Care            15,279     24,504    60.4%
Total                   118,674    143,617    21.0%


Revenues for the year by geographic location were as follows:

                          2006      2007
                         US$000     US$000 % Increase

Americas                 60,748     68,481    12.7%
Europe                   34,452     43,630    26.6%
Asia / Africa            23,474     31,506    34.2%
Total                   118,674    143,617    21.0%

Revenues for the quarter were US$35.7m compared to US$33.7m in quarter 3, 2007, an increase of 6% quarter on quarter. Excluding the impact of once-off charges, operating profit for the quarter was US$2.3m which represents an increase of 77% over the previous quarter's operating profit of US$1.3m. On a similar basis, profit before tax more than doubled to US$1.5m when compared to the quarter 3, 2007 profit before tax of US$0.6m.

Gross profit before once-off charges for the quarter amounted to US$17.3m representing a gross margin of 48.3%. This compares favourably to the gross margin of 46.8% for the same period in 2006 and 45.3% for quarter 3, 2007.

Research and development expenditure remains at approximately 5% of revenues whilst the increase in selling, general and administrative expenses from US$12.5m in quarter 4, 2006 to US$13.3m in the current quarter is primarily attributable to the impact of foreign exchange movements and higher professional fees associated with the first year of compliance with the full provisions of the Sarbanes Oxley Act.

Group restructuring and impairment -- quarter 4, 2007 once-off charges

As announced on December 7, 2007 a charge arising from the restructuring of the Group's activities and the impairment of goodwill, amounting to US$39.9m, was recognized in the quarter. This consists of the following items:

                                                   US$ million
Inventory write-off - instrumentation                 7.5
Inventory write-off - non-instrument related          4.2
Intangible assets write-off                           6.7
Closure costs - Sweden manufacturing facility         0.7
Redundancy costs                                      1.7
Impairment of goodwill                               19.1
Total                                                39.9*
* before the impact of taxation

The cash elements of the above charge amount to US$2.2m and consist of the redundancy costs and certain costs associated with the closure of the group's manufacturing facility in Sweden.

The impairment of goodwill was triggered largely as a consequence of the market capitalisation of the Company being below the carrying amount of its net assets.

In addition to the above, the Company recognized a tax credit of US$1.6m directly associated with the restructuring. This was offset by a once-off charge of US$3.8m due to the derecognition of deferred tax assets previously recognized, which primarily arose on tax losses carried forward in the Group's US operations. The derecognition of these deferred tax assets was considered appropriate in the light of the increased tax losses caused by the restructuring and uncertainty over the timing of the utilisation of the tax losses. Excluding the impact of the restructuring and the derecognition of the deferred tax assets, the tax charge would have been US$1.1m for the year and US$0.3m for the quarter giving an effective tax rate of 14% and 20% respectively.

Earnings per ADR

The loss per ADR was US$1.86 for the year with a loss per ADR of US$2.15 for the quarter. Excluding the impact of the once-off charges associated with restructuring, impairment and the once-off tax amounts mentioned above the earnings per ADR would be 35.6 US cents for the year and 6.4 US cents for quarter 4. On a similar basis the diluted earnings per ADR would be 34.8 US cents for the year and 6.2 US cents for quarter 4.

Commenting on the results, Kevin Tansley, Chief Financial Officer, said "Quarter 4 represented a strong quarter for the Company. Revenues increased by 6% over the previous quarter and more importantly we achieved a 77% growth in operating profits. In addition, EBITDA and share option expense for the quarter increased from US$3.7m to US$4.5m in the period. The growth in profit is particularly satisfying given the adverse currency movements during the period and higher professional fees associated with the implementation of Sarbanes Oxley."

Brendan Farrell, CEO, commented, "We are pleased with our continued growth in revenues year on year. In particular our point of care revenues have significantly outperformed industry growth rates. We are also pleased with the progress made implementing our group restructuring plan announced in late 2007. To date all elements of this plan are on schedule and expected to be completed within the timeframe envisaged.

We believe that Trinity Biotech is very well positioned to achieve strong growth in the coming quarters during which time we will see the impact of the launch of our Tri-stat point of care HbA1c product, our HIV Incidence Assay, our new product for the detection of neo-natal haemoglobin variant analysis and our Destiny Max haemostasis analyzer."

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

(US$000's  except
  share data)           Three Months Three Months   Year         Year
                           Ended        Ended       Ended        Ended
                        December 31, December 31, December 31, December 31,
                            2007         2006        2007         2006
                         (unaudited)  (unaudited) (unaudited)   (audited)

Revenues                     35,725       33,328      143,617      118,674

Cost of sales               (18,423)     (17,703)     (75,572)     (62,001)
Cost of sales -
 restructuring expenses     (12,725)           -      (12,725)           -
Cost of sales -
 inventory write off              -            -            -       (5,800)
Cost of sales - share
 based payments                 (18)         (17)         (71)         (89)
                        -----------  -----------  -----------  -----------

Gross profit                  4,559       15,608       55,249       50,784
Gross profit before
 restructuring expenses
 &  inventory write off      17,284       15,608       67,974       56,584

Other operating income          157          115          413          275

Research & development
 expenses                    (1,667)      (1,964)      (6,761)      (6,660)
Selling, general and
 administrative
 expenses                   (13,272)     (12,503)     (49,719)     (41,406)
Restructuring expenses
 & goodwill impairment      (27,222)           -      (27,222)           -
Indirect share based
 payments                      (226)        (136)      (1,332)      (1,052)
                        -----------  -----------  -----------  -----------

Operating (loss)/
 profit                     (37,671)       1,120      (29,372)       1,941

Operating profit before
 restructuring
 expenses, goodwill
 impairment &
 inventory write off          2,276        1,120       10,575        7,741

Financial income                 57          368          457        1,164
Financial expenses             (821)        (929)      (3,148)      (2,653)
                        -----------  -----------  -----------  -----------
Net financing costs            (764)        (561)      (2,691)      (1,489)
                        -----------  -----------  -----------  -----------

(Loss)/ profit before
 tax                        (38,435)         559      (32,063)         452
(Loss)/ profit before
 tax before
 restructuring
 expenses, goodwill
 impairment &
 inventory write off          1,512          559        7,884        6,252

Income tax (expense) /
 credit                      (2,494)       1,038       (3,309)       2,824
                        -----------  -----------  -----------  -----------

(Loss)/ profit for the
 period                     (40,929)       1,597      (35,372)       3,276
                        ===========  ===========  ===========  ===========

Earnings per ADR (US
 cents)                      (215.0)         8.5       (186.1)        18.5

Diluted earnings per
 ADR (US cents)              (215.0)         8.5       (186.1)        18.5

Weighted average no.
 of ADR shares used in
 computing earnings per
 share                   19,037,989   18,736,751   19,009,145   17,673,438


The above financial information has been prepared in accordance with
International Financial Reporting Standards and the Company’s accounting
policies but does not constitute full statutory financial statements of the
Company.


                           Trinity Biotech plc
                        Consolidated Balance Sheets


                                                     December   December
                                                     31, 2007   31, 2006
                                                     US$ '000   US$ '000
                                                   (unaudited)  (audited)
ASSETS
Non-current assets
Property, plant and equipment                          26,409       22,255
Goodwill and intangible assets                        104,928      121,768
Deferred tax assets                                     3,937        7,656
Other assets                                              896          515
                                                  -----------  -----------
Total non-current assets                              136,170      152,194
                                                  -----------  -----------

Current assets
Inventories                                            44,420       45,572
Trade and other receivables                            25,683       32,676
Income tax receivable                                     782          368
Derivative financial instruments                          224            -
Financial assets - restricted cash                          -       15,500
Cash and cash equivalents                               8,700        2,821
                                                  -----------  -----------
Total current assets                                   79,809       96,937
                                                  -----------  -----------

                                                  -----------  -----------
TOTAL ASSETS                                          215,979      249,131
                                                  ===========  ===========

EQUITY AND LIABILITIES
Equity attributable to the equity holders of the
 parent
Share capital                                             991          978
Share premium                                         153,961      151,774
Retained earnings                                     (22,908)      10,818
Translation reserve                                       797         (275)
Other reserves                                          4,004        3,967
                                                  -----------  -----------
Total equity                                          136,845      167,262
                                                  -----------  -----------

Current liabilities
Interest-bearing loans and borrowings                  15,821       10,382
Convertible notes - interest bearing                        -        1,836
Income tax payable                                         86           44
Trade and other payables                               24,779       20,459
Other financial liabilities                             2,725        3,120
Provisions                                                100          100
                                                  -----------  -----------
Total current liabilities                              43,511       35,941
                                                  -----------  -----------

Non-current liabilities
Interest-bearing loans and borrowings                  26,312       33,076
Other financial liabilities                                 -        2,568
Other payables                                             74          838
Deferred tax liabilities                                9,237        9,446
                                                  -----------  -----------
Total non-current liabilities                          35,623       45,928
                                                  -----------  -----------

                                                  -----------  -----------
TOTAL LIABILITIES                                      79,134       81,869
                                                  -----------  -----------

                                                  -----------  -----------
TOTAL EQUITY AND LIABILITIES                          215,979      249,131
                                                  ===========  ===========


The above financial information has been prepared in accordance with
International Financial Reporting Standards and the Company’s accounting
policies but does not constitute full statutory financial statements of the
Company.

Contact Information

  • Contact :
    Trinity Biotech plc
    Brendan Farrell
    (353)-1-2769800
    E-mail: Email Contact