DUBLIN, IRELAND--(Marketwire - July 29, 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 June 30, 2010.
Quarter 2 Results
Total revenues for the quarter were $22.6m which compares to $32.3m in quarter 2, 2009, a decrease of 30%. This decrease is principally due to the divestiture of the coagulation product line which was effective from 30 April 2010.
Point-of-care revenues for the quarter decreased by 32.1% when compared to quarter 2, 2009. This was due to particularly high sales in quarter 2, 2009 and the continued impact of the company's decision to restrict shipments to a major HIV customer due to credit related issues. Compared to quarter 1, 2010 point-of-care revenues were down 8% which represents a normal level of fluctuation and were in line with our expectations for the quarter.
Continuing clinical laboratory (i.e. excluding coagulation) revenues were $14.2m which represents a decrease of 5.9% when compared to $15.1m in quarter 2, 2009. However, if the impact of no longer selling fully direct in UK, France and Germany and the impact of foreign exchange are excluded, there would have been organic growth of approximately 2% for the quarter. Compared to quarter 1, 2010 continuing clinical laboratory sales have increased by 6.8%.
Lower coagulation revenues reflect the divestiture of this product line at the end of the first month of the quarter -- 30 April 2010.
Revenues for quarter 2 by key product area were as follows:
2009 2010 Increase/ 2010
Quarter 2 Quarter 2 Decrease Quarter 1
---------- ---------- --------- ----------
US$'000 US$'000 % US$'000
---------- ---------- --------- ----------
Point-of-Care 5,908 4,011 -32.1% 4,362
---------- ---------- --------- ----------
Continuing Clinical Laboratory 15,062 14,178 -5.9% 13,274
---------- ---------- --------- ----------
Continuing operations* 20,970 18,189 -13.3% 17,636
---------- ---------- --------- ----------
---------- ---------- --------- ----------
Coagulation 11,332 4,437 -60.8% 11,377
---------- ---------- --------- ----------
---------- ---------- --------- ----------
Total 32,302 22,626 -30.0% 29,013
---------- ---------- --------- ----------
* Continuing operations reflects the company's divestiture of its
coagulation product line (shown separately)
Gross profit for the quarter amounted to $11.2m representing a gross margin
of approximately 49.3%. This represents an increase of 3.7% over the same
period in 2009. The improvement in gross margin is largely attributable to
the divestiture of coagulation, which traditionally had been our lowest
gross margin product line. Excluding instrument service costs for the
quarter, the gross margin would be 52.1%.
Research and Development expenses for the quarter amounted to $1.2m, which represents a decrease of 32.7% compared to quarter 2, 2009. Similarly SG&A expenses have fallen by 24.9% from $9.0m in quarter 2 of 2009 to $6.8m 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.
Net financial income for the quarter was $152,000 which compares to an expense of $348,000 in quarter 2, 2009. This improvement is attributable to the increase in cash balances to $50m and the elimination of bank debt during the quarter.
Operating profit decreased from $3.8m in quarter 2, 2009 to $3.5m in the current quarter due to the coagulation divestiture. However, the operating margin for the quarter has increased to 15.5% which represents a significant improvement compared to 11.9% in quarter 2, 2009.
During the quarter the company recognised a profit on the sale of its coagulation product line of $47.4m. This reflects the sales proceeds of $90m less the carrying value of the assets divested and associated costs. This is partly offset by a once-off charge of $0.3m in relation to the restructuring of the company's HIV manufacturing activities, which will result in improved profitability from early 2011 onwards.
Excluding non-recurring items, profit after tax increased from $3m in quarter 2, 2009 to $3.3m, an increase of 8.7%. Similarly, EPS for the quarter increased from 14.4 cent per share to 15.5 cent per share, an increase of 7.6%.
The tax charge for the quarter was $40,000 which includes a tax credit of $354,000 relating to the coagulation divestiture and a tax charge of $394,000 relating to ongoing activities. The latter represents an effective tax rate of 10.8%.
The following table excludes the impact of the non-recurring items:
2009 2010 Increase
Quarter 2 Quarter 2 %
US$'000 US$'000
------------ ------------ -----------
Profit before tax 3,493 3,661 4.8%
------------ ------------ -----------
Income Tax expense 488 394
------------ ------------ -----------
Profit after tax 3,005 3,267 8.7%
------------ ------------ -----------
Basic EPS - US cents 14.4 15.5 7.6%
------------ ------------ -----------
Diluted EPS - US cents 14.4 15.1 4.9%
------------ ------------ -----------
From a cash perspective the Company generated $5.9m of cash from operations which is an increase of almost 40% compared with the same period in 2009. In quarter 2, 2010 the company generated free cash flows of $4.4m, compared to $2.2m for the corresponding quarter in 2009.
Coagulation Divestiture
During the quarter the company completed the divesture of its coagulation product line to Stago. At the time of divestiture, coagulation represented approximately 40% of the company's revenues. The principal impacts of this divestiture have been as follows:
-- The recognition of a profit on the sale of $47.4m.
-- The receipt of cash (net of expenses) to date of $66.5m. The company
will receive a further $22.5m in deferred consideration over the next 2
years. This has allowed the company to eliminate all bank debt and
increase cash reserves to $50m.
-- A significant reduction in the company's cost base following the
transfer of 320 employees to Stago.
-- A reduction in property, plant and equipment of $6.8m and goodwill and
intangible assets of $12.2m.
-- A reduction in working capital of $23.5m.
Notwithstanding the above, the company's on-going earnings are expected to be 100-110% of pre-divestiture levels.
Comments
Commenting on the results, Kevin Tansley, Chief Financial Officer, said, "This was a very significant quarter for the company. We divested our coagulation product line for a profit of over $47m. This enabled us to fully eliminate our bank debt and build up significant cash reserves. We also posted EPS before non-recurring items of 15.5 cent in the quarter which represents an increase of 7% over quarter 2 last year. With cash from operations of $5.9m and free cash flows of $4.4m the company is now generating significant cash. With the improved profitability and strong cash flows the company is performing very strongly."
Ronan O'Caoimh, CEO of Trinity Biotech, stated, "The results this quarter show that we are continuing to succeed in our stated goal of EPS growth. We have shown that without coagulation we have been able to continue our growth in profitability and I can confirm our expectation that earnings will be 100-110% of pre-divestiture levels. We have no debt, cash of $3.43 per share, with cash per share increasing at over 5 cents per month.
"Our new diabetes A1c instrument will launch before year end. We have aggressively implemented our new point-of-care strategy and have created a large R&D team in San Diego and expanded our Irish R&D team. They are working on 9 new point-of-care products with the first launches expected in approximately 18 months."
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 Three Three Six Six
share data) Months Months Months Months
Ended Ended Ended Ended
June 30, June 30, June 30, June 30,
2010 2009 2010 2009
(unaudited) (unaudited) (unaudited) (unaudited)
Revenues 22,626 32,302 51,639 63,408
Cost of sales
(excluding service
costs) (10,849) (16,306) (25,283) (31,729)
----------- ----------- ----------- -----------
Gross profit (excluding
service costs) 11,777 15,996 26,356 31,679
Gross profit %
(excluding service
costs) 52.1% 49.5% 51.0% 50.0%
Cost of sales -
instrument servicing
costs (620) (1,256) (1,670) (2,626)
----------- ----------- ----------- -----------
Gross profit (including
service costs) 11,157 14,740 24,686 29,053
Gross profit %
(including service
costs) 49.3% 45.6% 47.8% 45.8%
Other operating income 527 68 583 272
Research & development
expenses (1,198) (1,781) (2,992) (3,557)
Selling, general and
administrative
expenses (6,766) (9,011) (14,705) (18,612)
Indirect share based
payments (211) (175) (387) (273)
----------- ----------- ----------- -----------
Operating profit 3,509 3,841 7,185 6,883
Non-recurring items 47,061 - 47,061 -
Financial income 268 3 278 4
Financial expenses (116) (351) (357) (640)
----------- ----------- ----------- -----------
Net financing
income/(expense) 152 (348) (79) (636)
----------- ----------- ----------- -----------
Profit before tax 50,722 3,493 54,167 6,247
Income tax expense on
operating activities (394) (488) (682) (738)
Income tax credit on
non-recurring items 354 - 354 -
----------- ----------- ----------- -----------
Profit for the period 50,682 3,005 53,839 5,509
----------- ----------- ----------- -----------
Profit for the period
(excluding non-recurring
items) 3,267 3,005 6,424 5,509
----------- ----------- ----------- -----------
Earnings per ADR (US
cents) 240.1 14.4 255.2 26.4
Earnings per ADR (US
cents) - excluding
non-recurring items 15.5 14.4 30.4 26.4
Diluted earnings per
ADR (US cents) 235.0 14.4 251.2 26.4
Diluted earnings per
ADR (US cents) -
excluding
non-recurring items 15.1 14.4 30.0 26.4
Weighted average no.
of ADRs used in
computing basic
earnings per ADR 21,109,023 20,856,868 21,098,574 20,855,638
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, March 31, December
2010 2010 31, 2009
US$ '000 US$ '000 US$ '000
(unaudited) (unaudited) (audited)
ASSETS
Non-current assets
Property, plant and equipment 5,339 12,131 12,174
Goodwill and intangible assets 35,127 46,247 44,822
Deferred tax assets 4,073 5,627 5,801
Other assets 11,762 1,330 1,212
----------- ----------- -----------
Total non-current assets 56,301 65,335 64,009
----------- ----------- -----------
Current assets
Inventories 18,064 40,033 39,198
Trade and other receivables 28,592 20,415 22,931
Income tax receivable 257 260 229
Cash and cash equivalents 50,042 6,222 6,078
----------- ----------- -----------
Total current assets 96,955 66,930 68,436
----------- ----------- -----------
----------- ----------- -----------
TOTAL ASSETS 153,256 132,265 132,445
=========== =========== ===========
EQUITY AND LIABILITIES
Equity attributable to the equity
holders of the parent
Share capital 1,083 1,080 1,080
Share premium 160,817 160,739 160,683
Accumulated deficit (32,811) (83,717) (87,070)
Translation reserve (544) (385) 206
Other reserves 4,144 4,241 4,445
----------- ----------- -----------
Total equity 132,689 81,958 79,344
----------- ----------- -----------
Current liabilities
Interest-bearing loans and
borrowings 246 13,429 12,625
Income tax payable 148 207 24
Trade and other payables 12,241 11,732 12,844
Derivative Financial Instruments 406 279 58
Provisions 50 50 50
----------- ----------- -----------
Total current liabilities 13,091 25,697 25,601
----------- ----------- -----------
Non-current liabilities
Interest-bearing loans and
borrowings 294 16,409 19,231
Other payables 607 38 59
Deferred tax liabilities 6,575 8,163 8,210
----------- ----------- -----------
Total non-current liabilities 7,476 24,610 27,500
----------- ----------- -----------
----------- ----------- -----------
TOTAL LIABILITIES 20,567 50,307 53,101
----------- ----------- -----------
----------- ----------- -----------
TOTAL EQUITY AND LIABILITIES 153,256 132,265 132,445
=========== =========== ===========
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
(US$000's) Three Three Six Six
Months Months Months Months
Ended Ended Ended Ended
June 30, June 30, June 30, June 30,
2010 2009 2010 2009
(unaudited) (unaudited) (unaudited) (unaudited)
Cash and cash
equivalents at
beginning of period 6,222 2,589 6,078 5,184
Operating cash flows
before changes in
working capital 4,415 4,928 9,326 9,009
Changes in Working
Capital 1,468 (707) 1,689 (2,476)
----------- ----------- ----------- -----------
Cash generated from
operations 5,883 4,221 11,015 6,533
Net Interest and Income
taxes paid (352) (133) (577) (393)
Capital Expenditure
(net) (1,111) (1,886) (3,435) (4,387)
Repayment of bank debt (27,117) - (29,556) (2,146)
Proceeds from sale of
Coagulation Product
Line 66,517 - 66,517 -
----------- ----------- ----------- -----------
Cash and cash
equivalents at end of
period 50,042 4,791 50,042 4,791
----------- ----------- ----------- -----------
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:
Trinity Biotech plc
Kevin Tansley
(353)-1-2769800
E-mail: Email Contact
Lytham Partners LLC
Joe Diaz
Joe Dorame
Robert Blum
602-889-9700
