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:
Trinity Biotech plc
Kevin Tansley
(353)-1-2769800
E-mail: Email Contact
Lytham Partners LLC
Joe Diaz, Joe Dorame & Robert Blum
602-889-9700
