SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM 6-K

 

 

REPORT OF FOREIGN PRIVATE ISSUER

PURSUANT TO RULE 13a-16 OR 15d-16

UNDER THE SECURITIES EXCHANGE ACT OF 1934

For the month of October, 2014

 

 

TRINITY BIOTECH PLC

(Name of Registrant)

 

 

IDA Business Park

Bray, Co. Wicklow

Ireland

(Address of Principal Executive Office)

 

 

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.

Form 20-F  x             Form 40-F  ¨

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): ¨

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): ¨

Indicate by check mark whether by furnishing the information contained in this Form, the registrant is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.

Yes  ¨            No    x

If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): 82-                    

 

 

 


 

LOGO

Press Release dated October 23, 2014

 

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

Trinity Biotech announces Quarter 3 Financial Results

and temporary suspension of Meritas Troponin trials

DUBLIN, Ireland (October 23, 2014)…. 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 September 30, 2014. In addition, it announced that it was temporarily suspending its FDA trials for its Meritas Troponin test.

Quarter 3 Results

Total revenues for Q3, 2014 were $27.2m which compares to $24.1m in Q3, 2013, an increase of 12.6%.

Point-of-Care revenues for Q3, 2014 increased by 2.8% when compared to Q3, 2013. This increase was attributable to growth in HIV revenues in the USA.

Clinical Laboratory revenues increased from $18.8m to $21.7m, which represents an increase of 15.4% compared to Q3, 2013. This increase was primarily attributable to continued growth in the Premier business plus the impact of acquisitions.

Revenues for Q3, 2014 were as follows:

 

     2013
Quarter 3
     2014
Quarter 3
     Increase  
     US$’000      US$’000      %  

Point-of-Care

     5,315         5,463         2.8

Clinical Laboratory

     18,806         21,698         15.4

Total

     24,121         27,161         12.6

Gross profit for Q3, 2014 amounted to $13.0m representing a gross margin of 47.9%, which is lower than the 49.7% achieved in Q3, 2013. This decrease is mainly due to the impact of lower margins on the higher level of Premier instrument sales coupled with a lower level of higher margin Lyme revenues. It was also impacted by final closure costs in relation to the blood bank screening manufacturing facilities in the United Kingdom. These costs included building restitution, disposal of hazardous waste and transport costs for production equipment and inventories.

Research and Development expenses have increased to $1.1m from $0.9m when compared to the equivalent quarter last year. Meanwhile, Selling, General and Administrative (SG&A) expenses have increased from $5.9m to $7.0m over the same period. This is partly due to the impact of the Immco acquisition which was made during Q3 last year plus additional sales and marketing costs associated with the national roll-out of our new test for Sjögren’s syndrome in addition to Meritas related sales and marketing expenses.


Operating profit has decreased from $4.8m to $4.6m for the quarter. However, if UK related closure costs and Meritas sales and marketing expenses are excluded, operating profit would have increased from $4.8m in Q3, 2013 to $5.0m this quarter.

Similar to Q2, 2014 financial income was broadly offset by financial expenses resulting in a negligible net expense for the quarter. This compares to net financial income of approximately $0.2m earned in Q3, 2013. This is due to lower funds being placed on deposit following the utilisation of funds for acquisitions and lower prevailing deposit interest rates.

Profit before tax was $4.6m compared to $5.0m in the equivalent period last year. The tax charge for Q3, 2014 was $0.3m which represents an effective tax rate of 6.0% compared to 10.2% in Q3, 2013.

Profit after tax for the period was $4.4m which, after excluding the impact of UK and Meritas costs, equates to approximately $4.8m – an increase of 7% compared to Q3, 2013. Earnings per ADR were 19 cents for the quarter.

The abovementioned comparative numbers are before the impact of the once-off charges and related tax credits recognised in Q3, 2013.

Earnings before interest, tax, depreciation, amortisation and share option expense for the quarter was $6.2m.

Other Recent Developments

Cardiac Update

Today Trinity Biotech is announcing that it is temporarily suspending enrolment into its Troponin clinical trials. The reason for this temporary suspension is that in the past number of days, the company became aware of increased scatter (higher CV’s) in whole blood data. Immediately, an investigation was initiated to determine the cause. The failure has now been positively identified as being attributable to a format change in a chemical raw material which is purchased from a third party supplier. This change caused instability in the product’s performance, which only became apparent over a period of time.

The offending version of the chemical was first introduced into manufacturing during the week of July 14, 2014. All clinical trial sites which have received batches of product manufactured since that date have been instructed to discontinue their use. Any clinical data generated using the impacted batches has now been identified and will be excluded from the clinical trial. Trial sites which did not receive the problem batches continue to recruit patients, although these sites will run out of product shortly.

Meanwhile, having identified the source of the problem, we have now manufactured a pilot batch of product using the original format of the chemical. This pilot batch demonstrates performance characteristics identical to product batches previously made and successfully used in our CE marking trials and in the independent USA study presented at AACC last July. The supplier has now committed to supplying new batches of the chemical in its original format. This material will be received in four weeks time, upon which, new batches of the Meritas Troponin product will be manufactured. The production cycle for the new batches will then take eight weeks to complete.


Enrolment to the trials will then recommence in mid-February, 2015. The clinical trials will be conducted at multiple US hospital sites during the months of February, March, April and May. Data compilation and cardiologist adjudication will be completed during the months of June and July and it is anticipated that a final submission will be made in August, 2015. We confidently believe that the product will receive FDA clearance thereafter.

Premier Sales

Sales of Trinity’s diabetes instrument, Premier, continued to perform strongly during Q3 when 120 instruments were sold or placed with customers. This compares to 106 in Q2, 2014 and 81 in Q3, 2013. Whilst all markets performed well, Brazil was exceptionally strong with 41 instruments being placed during the quarter.

On a cumulative basis, sales of Premier instruments for the year to date are 327 which is 43% higher than the 228 instruments sold in the same period last year. Management remains confident of meeting its target of 460 instruments for the year as a whole.

Immco Update

One of the principal rationales underpinning the Immco acquisition was its access to its own reference laboratory in Buffalo. As well as the extensive range of autoimmune testing being carried out in the facility, it was also identified as an ideal platform for launching laboratory-developed tests in the autoimmune field. The first such test to be launched is for Sjögren’s syndrome, a very prevalent though widely under-diagnosed debilitating condition, of which dry eye is one of the primary symptoms. This test is being sold under the name Sjö™ and marketed in conjunction with our partner, Nicox, a French-based ophthalmic specialist. Following a successful partial launch in a number of test markets earlier this year, it received its nationwide launch late in June, 2014 thus making Q3, 2014 effectively the first full quarter of sales. To date the test has been well received in the market and revenues to date have been exceeding expectations.

Comments

Commenting on the results, Kevin Tansley, Chief Financial Officer, said “Profits this quarter were $4.4m which equates to an EPS of 19 cents. These profits were impacted by two principal factors. Firstly, we closed two manufacturing facilities in the UK associated with our blood bank screening business at the end of July. As a direct result, we incurred premises restitution fees, transportation costs for production equipment and inventories as well as disposal costs for hazardous and other unusable production materials. Secondly, we recorded an increase in sales and marketing expenses as we continue to build up our sales and marketing function for Meritas and incur expenses for our new test for Sjögren’s syndrome which has recently been fully launched on a nationwide basis in the USA. The impact of these factors during the quarter was approximately $0.4m, which if they were to be excluded would have resulted in profits of $4.8m and EPS of 21 cents”.

Ronan O’Caoimh, CEO of Trinity said “From an operations point of view we had a very solid quarter. We shipped a record number of Premier instruments (120) this quarter and remain on course to meet our target of 460 units for 2014. We closed our two blood bank screening facilities in the UK and transferred production to our other facilities in Jamestown, New York and Bray, Ireland on schedule. We will benefit from the resultant operating efficiencies from next quarter onwards. Meanwhile, in conjunction with our partner, Nicox, we have now rolled-out our test for Sjögren’s syndrome nationwide in the USA. Prior to this, it had only been sold in a limited number of test markets and already revenues are exceeding expectations.


While we are disappointed at the temporary suspension of our Troponin trials, the positive is that we caught the problem early, identified the source of the problem and fixed it. The trials will recommence in mid-February and we will submit to the FDA in August, 2015. At the point-of-care, our product has unrivalled precision and unrivalled time-zero high sensitivity (with attaching very high specificity) – thereby giving the product great clinical utility”.

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

September 30,

2014

(unaudited)

   

Three Months

Ended

September 30,

2013

(unaudited)

   

Nine Months

Ended

September 30,

2014

(unaudited)

   

Nine Months

Ended

September 30,

2013

(unaudited)

 

Revenues

     27,161        24,121        78,191        65,761   

Cost of sales

     (14,150     (12,143     (40,510     (33,169
  

 

 

   

 

 

   

 

 

   

 

 

 

Gross profit

     13,011        11,978        37,681        32,592   

Gross profit %

     47.9     49.7     48.2     49.6

Other operating income

     91        90        339        285   

Research & development expenses

     (1,138     (876     (3,329     (2,655

Selling, general and administrative expenses

     (6,995     (5,885     (19,726     (16,420

Indirect share based payments

     (326     (519     (1,223     (1,457
  

 

 

   

 

 

   

 

 

   

 

 

 

Operating profit

     4,643        4,788        13,742        12,345   

Financial income

     9        226        93        1,169   

Financial expenses

     (15     (23     (79     (75
  

 

 

   

 

 

   

 

 

   

 

 

 

Net financing income

     (6     203        14        1,094   
  

 

 

   

 

 

   

 

 

   

 

 

 

Profit before tax

     4,637        4,991        13,756        13,439   

Income tax expense

     (276     (509     (667     (961
  

 

 

   

 

 

   

 

 

   

 

 

 

Profit for the period before once off charges

     4,361        4,482        13,089        12,478   

Once off charges

Tax credit on once off charges

    

 

—  

—  

  

  

   

 

(8,187

716


  

   

 

—  

—  

  

  

   

 

(8,187

716


  

  

 

 

   

 

 

   

 

 

   

 

 

 

Profit/(loss) for the period after once off charges

     4,361        (2,989     13,089        5,007   
  

 

 

   

 

 

   

 

 

   

 

 

 

Earnings per ADR (US cents)

     19.0        (13.6     57.7        22.9   

Diluted earnings per ADR (US cents)

     18.4        (12.8     55.2        21.8   

Earnings per ADR excluding once off charges (US cents)

     19.0        20.4        57.7        57.2   

Diluted earnings per ADR excluding once off charges (US cents)

     18.4        19.2        55.2        54.2   

Weighted average no. of ADRs used in computing basic earnings per ADR

     22,907,333        22,012,412        22,693,552        21,827,150   

Weighted average no. of ADRs used in computing diluted earnings per ADR

     23,674,859        23,369,678        23,719,930        23,007,085   

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

 

    

September 30,

2014

US$ ‘000

(unaudited)

    

June 30,

2014

US$ ‘000

(unaudited)

    

March 31,

2014

US$ ‘000

(unaudited)

    

Dec 31,

2013

US$ ‘000

(audited)

 

ASSETS

           

Non-current assets

           

Property, plant and equipment

     15,782         14,784         13,841         12,991   

Goodwill and intangible assets

     141,815         137,848         133,881         128,547   

Deferred tax assets

     10,066         9,082         7,570         7,044   

Other assets

     1,276         1,222         1,131         1,162   
  

 

 

    

 

 

    

 

 

    

 

 

 

Total non-current assets

     168,939         162,936         156,423         149,744   
  

 

 

    

 

 

    

 

 

    

 

 

 

Current assets

           

Inventories

     33,779         33,109         30,864         29,670   

Trade and other receivables

     25,190         27,163         24,130         24,268   

Income tax receivable

     139         88         493         487   

Cash and cash equivalents

     8,949         15,153         17,008         22,317   
  

 

 

    

 

 

    

 

 

    

 

 

 

Total current assets

     68,057         75,513         72,495         76,742   
  

 

 

    

 

 

    

 

 

    

 

 

 

TOTAL ASSETS

     236,996         238,449         228,918         226,486   
  

 

 

    

 

 

    

 

 

    

 

 

 

EQUITY AND LIABILITIES

           

Equity attributable to the equity holders of the parent

           

Share capital

     1,203         1,202         1,187         1,170   

Share premium

     12,295         12,097         9,731         8,842   

Accumulated surplus

     178,960         179,137         174,023         168,670   

Other reserves

     2,321         3,672         4,073         4,329   
  

 

 

    

 

 

    

 

 

    

 

 

 

Total equity

     194,779         196,108         189,014         183,011   
  

 

 

    

 

 

    

 

 

    

 

 

 

Current liabilities

           

Income tax payable

     555         1,036         998         770   

Trade and other payables

     15,151         16,106         15,679         20,131   

Provisions

     75         75         75         75   
  

 

 

    

 

 

    

 

 

    

 

 

 

Total current liabilities

     15,781         17,217         16,752         20,976   
  

 

 

    

 

 

    

 

 

    

 

 

 

Non-current liabilities

           

Other payables

     4,676         4,665         4,634         4,596   

Deferred tax liabilities

     21,760         20,459         18,518         17,903   
  

 

 

    

 

 

    

 

 

    

 

 

 

Total non-current liabilities

     26,436         25,124         23,152         22,499   
  

 

 

    

 

 

    

 

 

    

 

 

 

TOTAL LIABILITIES

     42,217         42,341         39,904         43,475   
  

 

 

    

 

 

    

 

 

    

 

 

 

TOTAL EQUITY AND LIABILITIES

     236,996         238,449         228,918         226,486   
  

 

 

    

 

 

    

 

 

    

 

 

 

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

September 30,

2014

(unaudited)

   

Three Months

Ended

September 30,

2013

(unaudited)

   

Nine Months

Ended

September 30,

2014

(unaudited)

   

Nine Months

Ended

September 30,

2013

(unaudited)

 

Cash and cash equivalents at beginning of period

     15,153        66,164        22,317        74,947   

Operating cash flows before changes in working capital

     6,068        5,823        16,979        15,887   

Changes in working capital

     (538     (2,290     (10,108     (7,634
  

 

 

   

 

 

   

 

 

   

 

 

 

Cash generated from operations

     5,530        3,533        6,871        8,253   

Net Interest and Income taxes received/(paid)

     (324     (125     290        673   

Capital Expenditure & Financing (net)

     (6,380     (4,641     (15,499     (14,569
  

 

 

   

 

 

   

 

 

   

 

 

 

Free cash flow

     (1,174     (1,233     (8,338     (5,643

Cash paid to acquire Immco and Blood Bank Screening Business

     —          (39,217     —          (39,217

Net cash acquired on acquisition

     —          1,092        —          1,092   

Dividend payment

     (5,030     —          (5,030     (4,373
  

 

 

   

 

 

   

 

 

   

 

 

 

Cash and cash equivalents at end of period

     8,949        26,806        8,949        26,806   
  

 

 

   

 

 

   

 

 

   

 

 

 

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).


SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

TRINITY BIOTECH PLC

                (Registrant)
By:  

/s/ Kevin Tansley

  Kevin Tansley
  Chief Financial Officer

Date: October 23, 2014.

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