Trinity Biotech Announces Quarter 3 Results; Revenues Increase to $35.6M; Operating Profit Increases 56%
Quarter 3 Results
Revenues for quarter 3, 2008 amounted to US$35.6m compared to US$33.7m for the same period last year, an increase of 5.4%. Clinical Laboratory revenues increased by 4.3%, whilst Point of Care revenues increased by 12.4%. In addition, revenues increased in each geographical market segment with the strongest growth arising in Europe.
Operating profit and net profit for the quarter amounted to US$2.0m and US$1.3m respectively. EBITDA & share option expense for the quarter was US$4.3m and US$12.9m for the year to date.
Gross profit for the quarter amounted to US$15.7m, representing a gross margin of 44%, which is broadly in line with a gross margin of 45% for the same period in 2007. The decrease in gross margin partly reflects the impact of the weaker US dollar year on year.
Research and development expenditure remains at approximately 5% of revenues. Selling, general and administrative expenses of US$11.8m represents a decrease from US$12.1m in quarter 2, 2007. SG&A costs for the year to date are $35.7m which is approximately 2% lower than for the same period last year. This reflects the impact of the Group restructuring announced in December 2007 which has been partly mitigated by the impact of the weaker dollar.
The Company also wishes to announce that it is switching auditors to Grant Thornton. This decision has been made on solely commercial grounds. Grant Thornton is a top 6 worldwide auditing firm and has a strong presence in each of the markets in which the Company operates.
Comments
Commenting on the results, Kevin Tansley, Chief Financial Officer, said, "Revenues have increased this quarter compared to the corresponding quarter last year. We have seen increases in our Clinical Laboratory Division of 4% and of over 12% in Point-of-Care sales. The fact that this growth has been spread across all markets is particularly encouraging. The growth in revenues this quarter has translated into an operating profit of over $2m, representing a 56% increase over the same period last year. "
Ronan O'Caoimh, CEO, commented, "At this juncture the prospects for the Company are looking extremely positive.
The launch of Destiny Max, our new high throughput haemostasis instrument, in all markets outside the USA is imminent. Over the last number of weeks a number of key customers in the USA and United Kingdom have being carrying out formal evaluations of the instrument. The feedback from these evaluations has been excellent and has even exceeded our own expectations. We are now fully confident that the Destiny Max will represent the best high throughput haemostasis instrument available on the market. We are extremely proud that we will be able to offer a cutting edge product with the most advanced features at a highly competitive price. With the launch of Destiny Max in the USA in the first half of 2009 Trinity will, for the first time, be competing in all segments of the haemostasis market in each major geographic market and this will transform our haemostasis business. By enabling us to sell into the high throughput segment, which represents 50% of the market, Trinity will have access to new customers not previously open to us.
From a Point of Care perspective, with the substantial increase in funding being channelled into the fight against HIV/AIDS, particularly the increase in funding of the PEPFARS programme from $15bn to $50bn, worldwide sales of HIV diagnostic kits can be expected to grow exponentially in the years ahead. Those market participants with the highest quality tests will be in the best position to capitalize on such growth. As has been proven in over 10 years of sales and supported by third party studies, Trinity's Unigold product range represents the highest quality products available in both the U.S. and African markets.
While our haemoglobin A1c point-of-care test, Tri-stat, has taken longer to launch than originally envisaged, the enhancements currently being incorporated into the product are such that we are confident that the product will be better positioned to capture a significant share of the rapid A1c market.
Due to the recession resilient nature of our business, Trinity Biotech, like many healthcare companies, will be less affected by the current turmoil in the global economy. In fact, the recent strengthening of the US dollar will benefit our profitability going forward. Notwithstanding this, we are acutely aware of the need to control costs at this time in order to remain competitive and I have identified this as a priority going forward.
The Company is now well positioned to grow strongly in the years ahead and I am confident that this growth will drive increased shareholder value."
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.