DUBLIN, Ireland, July 21, 2016 (GLOBE NEWSWIRE) -- 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, 2016.

Quarter 2 Results

Total revenues for Q2, 2016 were $26.3m compared to $24.3m in Q2, 2015 which is an increase of 8%. However, when the impact of foreign exchange movements, due to the strength of the US dollar against a range of other currencies, is removed revenues would have been $26.6m this quarter, thus representing an increase of 10%.

Point-of-Care revenues for Q2, 2016 were $4.8m, which represents an increase of $1.4m or 41% compared with the same quarter last year. This increase was due to higher sales of HIV kits in Africa.

Clinical Laboratory revenues for the quarter were $21.5m.  However, on a constant currency basis revenues would have been $21.8m compared to $20.9m in Q2, 2015, an increase of 5%. This increase was principally due to higher sales of diabetes and autoimmune products.

Revenues for Q2, 2016 by key product area were as follows:
         
  2015 Quarter 2 2016 Quarter 2 2016 Quarter 2 FX adjusted* Increase/ (decrease)
  US$'000 US$'000 US$'000 %
Point-of-Care 3,371 4,786 4,769   41.5 %
Clinical Laboratory 20,886 21,502 21,844   4.6 %
Total 24,257 26,288 26,613   9.7 %
* quarter 2, 2016 revenues have been recalculated on a constant currency basis using the exchange rates prevailing in Q2, 2015
 

Gross profit for Q2, 2016 amounted to $11.8m, representing a gross margin of 45.0%. Whilst this is lower than the 47.0% achieved in Q2, 2015, it does represent an improvement on the 43.1% reported in Q1 of this year and this is mainly attributable to the impact of higher margin HIV revenues.

Research and Development expenses have remained consistent with the equivalent quarter last year at $1.3m. Meanwhile, Selling, General and Administrative (SG&A) expenses have increased over the same period from $6.7m to $7.8m. This increase is due to the combination of foreign exchange rate factors and increased discretionary sales and marketing expenditure which includes pre-launch cardiac costs.

The net financing expense for the quarter was $121,000 versus $98,000 in the equivalent quarter in 2015. This expense can be broken down into its component parts as follows:
     
Net financing expense Q2 2016 Q2 2015
  US$'000 US$'000
Financial income   223     93  
     
Financial expense - Exchangeable note   (1,150 )   (1,134 )
Other financial expenses   (35 )   (35 )
    (1,185 )   (1,169 )
     
Non-cash financial income   1,020     1,150  
Non-cash financial expense - accretion interest   (179 )   (172 )
    841     978  
     
Net financial expense   (121 )   (98 )
             

Financial income increased to $223,000 from $93,000 in the equivalent quarter last year. This was primarily due to improved interest rates and a different time profile of deposits. 

Financial expenses primarily consist of the cash interest payable on the Company's exchangeable notes, which is $1.15m per quarter. The equivalent expense in 2015 is slightly lower than this due to the fact that the note offering closed on April 9, 2015 and so a full quarter of interest was not incurred.

Non-cash financial income represents adjustments required to the fair value of the derivatives embedded in the exchangeable notes along with an amount to accrete the fair value of the debt liability back to its nominal value ($115 million) over the term of the debt using an effective interest rate methodology. For Q2, 2016, the fair value adjustment was a gain to the income statement of $1m.

The tax charge for Q2, 2016 was $0.1m which equates to an effective tax rate of approximately 6% and is broadly in line with the effective rate of 7% in Q2, 2015.

Profit before tax for the quarter was $2.2m compared to $2.9m in Q2, 2015.  Meanwhile, profit after tax for the quarter was $2.1m versus $2.7m for the comparative quarter.  EPS for the quarter was 9.1 cents which compares to 11.6 cents for the equivalent period last year. The fully diluted EPS for the quarter was 8.5 cents.

Earnings before interest, tax, depreciation, amortisation and share option expense for the quarter was $4.4m.

Cardiac Update

In December, 2015 Trinity submitted a 510(k) application for its Meritas Troponin I Test and the Meritas Point-of-Care Analyzer to the FDA. The FDA's review of the application is proceeding according to our expectations.  As previously announced, as part of this review process, additional clinical data were requested, and this clinical work will be completed within the next two weeks enabling us to provide a response to the FDA during August, 2016.

The US clinical validation studies in support of a 510(k) submission to the US FDA for a second cardiac marker assay, B-type Natriuretic Protein (BNP), are progressing well. There are 10 clinical sites, across the US, that have been actively enrolling patient samples. Overall enrolment is currently at 90% of study target, with completion of enrolment anticipated by the end of July, 2016. We are anticipating submission of our BNP 510(k) application to the FDA by the end of Q3, 2016.

Share Buyback

The Company announced the commencement of a share repurchase program in March, 2016. During the quarter, the Company repurchased 406,000 ADRs at an average price of $11.14, representing a total value of $4.5m.

For the year to date, the Company has repurchased 538,000 ADRs, at an average price of $11.20. The total spent on share repurchases for the year to date has been $6.0m.

Comments

Commenting on the results, Kevin Tansley, Chief Financial Officer, said "Operating profit for the quarter was $2.4m. This was lower than that achieved in Q2, 2015 partly due to tighter gross margins - which is partly due to the impact of exchange rate movements.  In addition we are seeing the impact of higher indirect costs again due to exchange rate factors as well as higher sales and marketing costs.  However, when compared to Q1 this year, operating profits and EPS have increased by approximately 30%, with the key factor being the growth in revenues this quarter."

Ronan O'Caoimh, CEO, stated "We were very pleased with the revenue growth of 10% achieved this quarter. This was due to higher HIV sales in Africa and strong growth in our diabetes and autoimmune product lines.

In terms of our cardiac products we have made very significant progress. We have almost completed the patient enrolment to support the additional data requested by the FDA following its initial review of our Troponin submission.  This data will form part of a full and comprehensive response document, which will be submitted to the FDA in August, in order to address all of its queries. Meanwhile, we are on the verge of completing our clinical trials for our BNP product and remain on target to make our 510(k) submission to the FDA by the end of Q3, 2016. Both of these products are key to our strategic development and we are very pleased to be reaching these regulatory milestones on the road to obtaining FDA approvals."

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 share data)   Three Months Ended June 30, 2016 (unaudited) Three Months Ended June 30, 2015 (unaudited) Six Months Ended June 30, 2016 (unaudited) Six Months Ended June 30, 2015 (unaudited)
           
Revenues     26,288       24,257       49,804       49,267  
           
Cost of sales     (14,472 )     (12,864 )     (27,856 )     (25,869 )
           
Gross profit     11,816       11,393       21,948       23,398  
Gross profit %     45.0 %     47.0 %     44.1 %     47.5 %
           
Other operating income     72       72       141       150  
           
Research & development expenses     (1,267 )     (1,269 )     (2,414 )     (2,267 )
Selling, general and administrative expenses     (7,797 )     (6,713 )     (14,758 )     (12,905 )
Indirect share based payments     (468 )     (473 )     (735 )     (1,031 )
           
Operating profit     2,356       3,010       4,182       7,345  
           
Financial income     223       93       443       94  
Financial expenses     (1,185 )     (1,169 )     (2,366 )     (1,193 )
Non-cash financial income     841       978       (1,188 )     978  
Net financing expense     (121 )     (98 )     (3,111 )     (121 )
           
Profit before tax     2,235       2,912       1,071       7,224  
           
Income tax expense     (131 )     (218 )     (313 )     (522 )
Profit for the period     2,104       2,694         758       6,702  
           
Earnings per ADR (US cents)     9.1       11.6       3.3       29.0  
           
Earnings per ADR excluding non-cash financial income (US cents)     5.5       7.4       8.4       24.8  
           
Diluted earnings per ADR (US cents)     8.5       9.9       14.9*       26.1  
           
Weighted average no. of ADRs used in computing basic earnings per ADR     23,016,169       23,195,016       23,152,018       23,090,704  
Weighted average no. of ADRs used in computing diluted earnings per ADR     28,409,024       28,812,187       28,526,486       26,285,071  

* Under IAS 33 Earnings per Share, diluted earnings per share cannot be anti-dilutive. Therefore, diluted earnings per ADR in accordance with IFRS would be 3.3 cents (i.e. equal to basic 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
       
  June 30, 2016 US$ '000 (unaudited) March 31, 2016 US$ '000 (unaudited) Dec 31, 2015 US$ '000 (audited)
ASSETS      
Non-current assets      
Property, plant and equipment   21,760     21,460     20,659  
Goodwill and intangible assets   169,049     165,157     161,324  
Deferred tax assets   13,312     13,096     12,792  
Other assets   932     860     954  
Total non-current assets   205,053     200,573     195,729  
       
Current assets      
Inventories   39,253     35,709     35,125  
Trade and other receivables   27,832     26,260     25,602  
Income tax receivable   712     664     550  
Cash and cash equivalents   84,920     96,829     101,953  
Total current assets   152,717     159,462     163,230  
       
TOTAL ASSETS   357,770     360,035     358,959  
       
EQUITY AND LIABILITIES      
Equity attributable to the equity holders of the parent      
Share capital   1,221     1,220     1,220  
Share premium   15,575     15,521     15,526  
Accumulated surplus   197,588     199,453     201,951  
Other reserves   (3,721 )   (3,723 )   (4,809 )
Total equity   210,663     212,471     213,888  
       
Current liabilities      
Income tax payable   657     1,026     1,163  
Trade and other payables   19,384     19,195     18,874  
Provisions   75     75     75  
Total current liabilities   20,116     20,296     20,112  
       
Non-current liabilities      
Exchangeable senior note payable   99,232     100,073     98,044  
Other payables   1,986     2,057     2,096  
Deferred tax liabilities   25,773     25,138     24,819  
Total non-current liabilities   126,991     127,268     124,959  
       
TOTAL LIABILITIES   147,107     147,564     145,071  
       
TOTAL EQUITY AND LIABILITIES   357,770     360,035     358,959  
                   

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 Months Ended June 30, 2016 (unaudited)  Three Months Ended June 30, 2015 (unaudited)  Six Months Ended June 30, 2016 (unaudited)  Six Months Ended June 30, 2015 (unaudited)
         
Cash and cash equivalents at beginning of period   96,829         5,744     101,953     9,102  
         
Operating cash flows before changes in working capital   5,282         4,130     7,786     10,428  
Changes in working capital   (3,234 )       (2,906 )   (3,862 )   (7,225 )
Cash generated from operations   2,048         1,224     3,924     3,203  
         
Net Interest and Income taxes (paid)/received   149         (223 )   (92 )   (332 )
         
Capital Expenditure & Financing (net)   (5,995 )       (7,218 )   (11,427 )   (11,334 )
         
Free cash flow   (3,798 )       (6,217 )   (7,595 )   (8,463 )
         
Share buyback   (4,699 )       -     (6,026 )   -  
         
Payment of HIV-2 licence fee   (1,112 )       -     (1,112 )   (1,112 )
         
30 year Convertible Note interest payment   (2,300 )       -     (2,300 )   -  
         
30 year Convertible Note proceeds, net of fees   -         110,730     -     110,730  
         
Cash and cash equivalents at end of period   84,920         110,257     84,920     110,257  
         

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 plcKevin Tansley(353)-1-2769800		                E-mail: kevin.tansley@trinitybiotech.comLytham Partners LLCJoe Diaz, Joe Dorame & Robert Blum602-889-9700

Primary Logo