During the second quarter, we continued to work with the FDA to establish a plan around revised release specifications for the Triage products manufactured in San Diego. During the quarter, we began tightening our release specifications in accordance with the plan agreed to with the FDA and, while the adjustments are still generating supply issues, we continue to be increasingly confident that once our manufacturing processes are optimized we will be able to cost-effectively meet market demand in the U.S. for our Triage panels.
Nonetheless, despite having more than doubled our production capacity, with further increases planned, we do expect supply issues mainly in the U.S. with certain tests, primarily the Cardiology panels. This situation is likely to persist through the remainder of the third quarter and into the fourth quarter, as we continue to work through our manufacturing process changes.
An additional challenge for us in the second quarter was Europe. On nearly every quarterly call for the last several years we’ve highlighted macroeconomic risks in Europe, and have occasionally experienced difficult quarters in the region. While Europe performed relatively well in the first quarter, revenues were low in the second quarter, down approximately $10 million from Q1.
In addition, margin pressures which have persisted for more than a year continued to reduce profits in Europe. With the continuation of budgetary problems in many countries, we expect difficulties in Europe to continue through the remainder of this year, with the actual impact on any given quarter difficult to predict.Read the rest of this transcript for free on seekingalpha.com
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