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, 2013 and the acquisition of Immco
Diagnostics Inc.
Quarter 2 Results
Total revenues for Q2, 2013 were $21.3m which compares to $20.8m
in Q2, 2012, an increase of 2.4%.
Point-of-Care revenues for Q2, 2013 increased by 4% when
compared to Q2, 2012. This increase was mainly attributable to
continued strong demand for HIV products in Africa.
Clinical Laboratory revenues increased from $16.4m to $16.7m,
which represents an increase of 2% compared to Q2, 2012. However,
due to an unprecedented cold winter and late snowfalls in
north-eastern USA, Lyme sales were approximately $750k lower year
on year. Meanwhile, non-Lyme sales for the quarter increased by
approximately 8%.
Revenues for Q2, 2013 by key product area were as follows:
|
|
2012 |
2013 |
|
|
Quarter 2 |
Quarter 2 |
Increase |
|
US$'000 |
US$'000 |
% |
Point-of-Care |
4,410 |
4,586 |
4.0% |
Clinical Laboratory |
16,399 |
16,726 |
2.0% |
Total |
20,809 |
21,312 |
2.4% |
Gross profit for Q2, 2013 amounted to $10.6m representing a
gross margin of 49.8%, which is lower than the 51.6% achieved in
Q2, 2012. This decrease is attributable primarily to the impact of
lower margins on Premier instrument sales but also due to lower
sales of higher margin Lyme products.
Research and Development expenses have increased from $0.8m to
$0.9m when compared to the equivalent quarter last
year. Meanwhile, Selling, General and Administrative
(SG&A) expenses have increased over the same period from $5.2m
to $5.5m. This increase was due to the acquisition costs of $0.4m
associated with the Immco acquisition.
Operating profit has decreased from $4.3m to $3.8m for the
quarter, again reflecting the impact of the Immco acquisition
costs. If such costs were excluded, the operating margin in the
quarter would have been 19%.
Net financial income was approximately $0.4m and represents a
decrease compared to Q2, 2012 due to lower prevailing deposit
interest rates.
The tax charge for Q2, 2013 was $0.3m which represents an
effective tax rate of approximately 6.5%.
Profit After Tax before the Medical Device Excise Tax (MDET)
decreased from $4.3m to $4.0m. However, excluding the impact of the
Immco acquisition costs, profits increased from $4.3m to
$4.4m. EPS (excluding MDET) for the quarter was 18.5
cents. However, if the impact of the Immco acquisition costs
were excluded, this would increase to 20.5 cents compared to 20
cents in Q2, 2012.
Earnings before interest, tax, depreciation, amortisation and
share option expense for the quarter was $5.1m.
Recent Developments
Cardiac Update
The development of our new cardiac point-of-care tests is
progressing very well and our projected launch dates remain on
target. Last quarter, we announced that we had reached design
freeze on our high sensitivity Troponin I test and that we were
commencing the clinical trials necessary to obtain CE marking. As
part of this process, our Troponin I test is currently
participating in the FASTEST study currently being undertaken in
Sweden. This study, under the sponsorship and guidance of Professor
Bertil Lindal and Uppsala Clinical Research, is designed to measure
Troponin I levels in serial early samples in patients with symptoms
suggestive of ACS (Acute Coronary Syndrome). Six emergency
rooms at major hospitals are participating in this multi-site
study. In parallel, a study of normal subjects is being conducted
by Scandinavian CRO AB. Consequently, we expect to obtain CE
marking in December, 2013 at which point the product will be
authorised for sale throughout the European Union. We are
currently appointing distributors throughout the EU and expect
first sales of the Troponin test in early 2014.
In terms of the US market, protocols have now been completed for
the FDA clinical trials for which Professor Fred Apple,
Minneapolis, will be the Principal Investigator. Five
nationwide sites have been selected and we are currently completing
the necessary contractual and ethical approval processes in order
for the US trials to commence. These trials will commence in
October/November and will be completed by the end of quarter 1,
2014, with FDA approval anticipated by the end of 2014.
Meanwhile, work on our BNP assay also continues to progress very
well and the product is expected to be ready to commence CE trials
later this year with a view to obtaining CE marking in Q1, 2014
with sales commencing shortly thereafter.
Finally, during the quarter, the company hired Mr. Tom Parenteau
to head up our Cardiovascular Sales Division. Tom, who has more
than 20 years of commercial experience in the diagnostics industry,
most recently worked with Alere/Biosite as Senior Director of
Global Marketing, heading up Alere's Cardiovascular Products
Division. Tom brings to the company the requisite knowledge
and experience of the cardiovascular market required for a
successful launch of Trinity's Troponin and BNP products.
Premier sales
Sales of our diabetes instrument, Premier, continue to perform
strongly. During quarter 2, 80 instruments were sold compared to 67
instruments in quarter 1, 2013. This included the first sales of
instruments to China following the receipt of Chinese regulatory
approval. With total sales of 147 instruments for the first half of
2013, the Company is confident of meeting its target of 320
instruments for the year as a whole.
Dividend
In June 2013, the company paid a dividend of 20 US cents per
ADR, which represents an increase of 33% compared with 15 US cents
per ADR paid in 2012.
Acquisition of Immco Diagnostics Inc.
Trinity Biotech is pleased to announce the acquisition of Immco
Diagnostics Inc. (Immco) on July 26, 2013, for a consideration of
$32.75m. Headquartered in Buffalo, New York, and employing 90
people, Immco is a diagnostic company specializing in the
development, manufacture and sale of autoimmune test kits on a
worldwide basis. This product line is complemented by specialized
reference laboratory services in diagnostic immunology, pathology
and immunogenetics, marketed to US-based reference laboratories and
hospitals. Immco is currently generating revenues of $12.5m, ($8.5m
of product revenues and $4m of laboratory revenues) and following
acquisition and initial integration costs, will become immediately
earnings accretive.
It is Trinity Biotech's intention to retain Immco's existing
management team which, led by Mr. Bill Maggio, has a proven track
record and expertise in growing a successful autoimmune
business.
Currently, over 50 million Americans are affected by more than
80 different autoimmune diseases. Autoimmune diseases are now the
second leading cause of chronic illness and the leading cause of
death amongst women over 65. The autoimmune market is divided into
two main segments, the first of which is the automated, high volume
segment for standard analytes such as thyroid markers. This segment
is dominated by the large diagnostic players such as Abbott, Roche
and Beckman Coulter, is growing slowly and is one where Immco does
not participate.
Instead, Immco's position is in the $250m, high growth (over 10%
p.a.), lower throughput, speciality autoimmune segment, where the
competition is limited to a small number of key players,
principally Bio-Rad, Werfen-Inova and Phadia. The principal
autoimmune conditions in this segement are Rheumatoid Arthritis,
Vasculitis, Lupus, Celiac and Crohn's disease, Ulcerative Colitis,
Neuropathy, Hashimoto's and Graves disease. Meanwhile, the two key
technologies employed are Immunoflourescence (IFA) and Immunoassay
(EIA). Immco offers a comprehensive range of more than 120 products
across all the main autoimmune segments with its EIA product range
running on the DSX/DS2 Instrument platform while the IFA products
are capable of being read manually or on Immco's proprietary IFA
reading system, iSight. In terms of range, breadth and
technical performance, the Immco IFA range is best on the market,
while the EIA range is of the highest quality and very competitive
with the market leaders.
Immco currently sells its products through a network of
distributors, mainly outside the USA. In Europe, Immco's main
distribution partner is Menarini, a company with which Trinity
already has deep distribution ties. The broadening of the
relationship between Menarini and Trinity through the additional
distribution of the Immco product is viewed very positively by all
parties. To date Immco has had very low product sales in the
USA due to a lack of FDA product approvals and sales force.
However, over the past 24 months, Immco has been successful in
harmonizing its complete IFA and EIA product ranges, virtually all
of which have now been FDA 510K cleared. Through Trinity
Biotech's existing US based sales force (which already sells
approximately $2m of Trinity's own autoimmune products) and
installed base of EIA instrumentation, Trinity expects to
immediately launch Immco's products in the USA. Moreover, as the
Immco autoimmune product range complements Trinity's existing
infectious disease EIA range, we intend that our large range of
installed DSX and DS2 instruments which currently run our
infectious disease product line will now also run the entire Immco
autoimmune EIA range. We believe that this in turn will help
drive growth in both ranges of products due to the synergistic
effect of a broader menu offering.
Immco is further driving expansion with the development of a
number of new diagnostic kits, such as the ImmuLisa™ Enhanced
Cardiolipin Antibody ELISAs recently cleared by the FDA, and there
is a robust pipeline of novel assays in development.
Meanwhile, the Immco reference laboratory is in the process of
launching exclusive panels of tests for Sjögren's Syndrome and
Chronic Rhinosinusitus, both of which are significantly
underdiagnosed conditions with high incidence.
In summary, Trinity expects to grow Immco's revenues by
- harnessing the breadth, quality and uniqueness of Immco's
product range, in the context of only recently having obtained FDA
approval;
- leveraging Trinity's sales force and in particular, installed
instrument base in the USA;
- leveraging Trinity's international distributor network;
- introducing new innovative autoimmune products which are now
beginning to emerge from the development phase; and
- exploiting the synergies that exist between Trinity's existing
infectious diseases and Immco's autoimmune product ranges.
Based on these factors it is believed that this business can
grow at a rate in excess of 20% per annum.
Comments
Commenting on the results, Kevin Tansley, Chief Financial
Officer, said "On a like for like basis, profits for this quarter
increased from $4.3m to $4.4m. This equates to an increase in
EPS from 20 cents to 20.5 cents. This was achieved despite
significantly lower sales of Lyme test kits in the USA due to
weather related
conditions."
Ronan O'Caoimh, CEO, stated "'Firstly, we are pleased to have
completed the acquisition of Immco which has a truly excellent and
complete range of autoimmune products with, in our opinion, the
best IFA range in the world and an ELISA range that matches the
quality of the market leaders. In addition, it also has a very
exciting and innovative product development pipeline. The
autoimmune market is currently growing at a rate well above the
overall diagnostics market and this product range fits very well
with our existing infectious diseases product offering. Trinity
already has a large installed base of DSX instruments which run our
infectious diseases product range and it is expected that these
instruments will now also run the Immco range of autoimmune
products. Further synergies will be achieved by leveraging
Trinity's existing US sales force and international distributor
network. Due to these factors we expect the Immco product
line to be a significant driver of growth for Trinity, both from a
revenue and profitability point of view.
I would also like to point out that this quarter the Company has
made excellent progress in its key strategic areas. Our high
sensitivity Troponin I test is currently participating in CE
marking trials in Europe, with a view to obtaining its CE mark in
December this year. Our BNP test will follow closely after,
with its CE marking trials expected to commence in Q4, 2013.
Meanwhile, from a diabetes perspective, we were successful in
placing 80 new Premier instruments during the quarter including our
first sales to China."
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 |
Three Months |
Six Months |
Six Months |
|
Ended |
Ended |
Ended |
Ended |
|
June 30, |
June 30, |
June 30, |
June 30, |
|
2013 |
2012 |
2013 |
2012 |
|
(unaudited) |
(unaudited) |
(unaudited) |
(unaudited) |
|
|
|
|
|
Revenues |
21,312 |
20,809 |
41,640 |
40,835 |
|
|
|
|
|
Cost of sales |
(10,691) |
(10,071) |
(20,681) |
(19,754) |
|
|
|
|
|
Gross profit |
10,621 |
10,738 |
20,959 |
21,081 |
Gross profit % |
49.8% |
51.6% |
50.3% |
51.6% |
|
|
|
|
|
Other operating income |
85 |
114 |
195 |
289 |
|
|
|
|
|
Research & development expenses |
(924) |
(753) |
(1,779) |
(1,598) |
Selling, general and administrative
expenses |
(5,502) |
(5,240) |
(10,535) |
(10,444) |
Indirect share based payments |
(440) |
(563) |
(938) |
(900) |
|
|
|
|
|
Operating profit |
3,840 |
4,296 |
7,902 |
8,428 |
|
|
|
|
|
Financial income |
466 |
605 |
943 |
1,151 |
Financial expenses |
(26) |
(35) |
(52) |
(36) |
Net financing income |
440 |
570 |
891 |
1,115 |
|
|
|
|
|
Profit before tax |
4,280 |
4,866 |
8,793 |
9,543 |
|
|
|
|
|
Income tax expense |
(278) |
(564) |
(452) |
(1,131) |
|
|
|
|
|
Profit for the period before
MDET |
4,002 |
4,302 |
8,341 |
8,412 |
|
|
|
|
|
Medical device excise tax (MDET) |
(174) |
-- |
(345) |
-- |
|
|
|
|
|
Profit for the period after
MDET |
3,828 |
4,302 |
7,996 |
8,412 |
|
|
|
|
|
Earnings per ADR (US cents) |
17.7 |
20.0 |
36.8 |
39.4 |
|
|
|
|
|
Diluted earnings per ADR (US cents) |
16.9 |
19.2 |
34.9 |
37.7 |
|
|
|
|
|
Earnings per ADR excluding MDET (US
cents) |
18.5 |
20.0 |
38.4 |
39.4 |
|
|
|
|
|
Diluted earnings per ADR excluding MDET (US
cents) |
17.6 |
19.2 |
36.4 |
37.7 |
|
|
|
|
|
Weighted average no. of ADRs used in
computing basic earnings per ADR |
21,665,259 |
21,465,047 |
21,732,983 |
21,341,365 |
Weighted average no. of ADRs used in
computing diluted earnings per ADR |
22,711,752 |
22,439,332 |
22,935,565 |
22,307,429 |
|
|
|
|
|
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, |
Dec 31, |
|
2013 |
2013 |
2012 |
|
US$ '000 |
US$ '000 |
US$ '000 |
|
(unaudited) |
(unaudited) |
(audited) |
ASSETS |
|
|
|
Non-current assets |
|
|
|
Property, plant and equipment |
10,189 |
9,331 |
8,883 |
Goodwill and intangible assets |
80,489 |
76,748 |
73,046 |
Deferred tax assets |
4,872 |
4,533 |
4,073 |
Other assets |
1,065 |
945 |
908 |
Total non-current
assets |
96,615 |
91,557 |
86,910 |
|
|
|
|
Current assets |
|
|
|
Inventories |
22,923 |
23,110 |
20,757 |
Trade and other receivables |
17,426 |
15,299 |
14,457 |
Income tax receivable |
315 |
322 |
336 |
Cash and cash equivalents |
66,164 |
73,095 |
74,947 |
Total current assets |
106,828 |
111,826 |
110,497 |
|
|
|
|
TOTAL ASSETS |
203,443 |
203,383 |
197,407 |
|
|
|
|
EQUITY AND LIABILITIES |
|
|
|
Equity attributable to the equity
holders of the parent |
|
|
|
Share capital |
1,158 |
1,143 |
1,134 |
Share premium |
5,858 |
5,449 |
5,138 |
Accumulated surplus |
163,338 |
163,886 |
158,973 |
Other reserves |
4,463 |
4,128 |
4,135 |
Total equity |
174,817 |
174,606 |
169,380 |
|
|
|
|
Current liabilities |
|
|
|
Income tax payable |
1,234 |
1,261 |
1,092 |
Trade and other payables |
13,344 |
12,955 |
11,824 |
Provisions |
50 |
50 |
50 |
Total current
liabilities |
14,628 |
14,266 |
12,966 |
|
|
|
|
Non-current liabilities |
|
|
|
Other payables |
2,325 |
3,344 |
4,318 |
Deferred tax liabilities |
11,673 |
11,167 |
10,743 |
Total non-current
liabilities |
13,998 |
14,511 |
15,061 |
|
|
|
|
TOTAL LIABILITIES |
28,626 |
28,777 |
28,027 |
|
|
|
|
TOTAL EQUITY AND
LIABILITIES |
203,443 |
203,383 |
197,407 |
|
|
|
|
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 |
Three Months |
Six Months |
Six Months |
|
Ended |
Ended |
Ended |
Ended |
|
June 30, |
June 30, |
June 30, |
June 30, |
|
2013 |
2012 |
2013 |
2012 |
|
(unaudited) |
(unaudited) |
(unaudited) |
(unaudited) |
|
|
|
|
|
Cash and cash equivalents at
beginning of period |
73,095 |
65,499 |
74,947 |
71,085 |
|
|
|
|
|
Operating cash flows before changes in
working capital |
4,887 |
5,610 |
10,064 |
10,725 |
Changes in working capital |
(2,793) |
(770) |
(5,344) |
(2,591) |
Cash generated from operations |
2,094 |
4,840 |
4,720 |
8,134 |
|
|
|
|
|
Net Interest and Income taxes received |
367 |
26 |
799 |
501 |
|
|
|
|
|
Capital Expenditure & Financing
(net) |
(5,019) |
(2,770) |
(9,929) |
(5,157) |
|
|
|
|
|
Free cash flow |
(2,558) |
2,096 |
(4,410) |
3,478 |
|
|
|
|
|
Proceeds from sale of Coagulation product
line |
-- |
11,250 |
-- |
11,250 |
|
|
|
|
|
Cash paid to acquire Fiomi Diagnostics |
-- |
-- |
-- |
(5,624) |
|
|
|
|
|
Cash paid to acquire Phoenix Bio-tech |
-- |
-- |
-- |
(333) |
|
|
|
|
|
Dividend payment |
(4,373) |
(3,223) |
(4,373) |
(3,223) |
|
|
|
|
|
Repurchase of own company shares |
-- |
(2,017) |
-- |
(3,028) |
|
|
|
|
|
Cash and cash equivalents at end of
period |
66,164 |
73,605 |
66,164 |
73,605 |
|
|
|
|
|
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: kevin.tansley@trinitybiotech.com
Lytham Partners LLC
Joe Diaz, Joe Dorame & Robert Blum
602-889-9700
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