Trinity Biotech Announces Quarter 2 2022 Financial Results And Preliminary Q3 2022 Revenue Guidance
Trinity Biotech (Nasdaq: TRIB) reported Q2 2022 revenues of $18.5 million, a 28.6% decline from Q2 2021. Excluding COVID-related PCR products, revenues were flat year-over-year but increased 7% from Q1 2022. Notable increases include a 25% growth in diabetes A1c product line revenues. Q3 2022 revenue guidance is between $19 million and $20 million, driven by anticipated growth in HIV point of care revenue. The company's early debt repayments saved approximately $2.3 million in interest. Gross profit decreased to $6.5 million, reflecting lower-margin product sales.
- Q3 2022 revenue guidance of $19 to $20 million, driven by a 30% increase in HIV PoC revenue.
- Diabetes A1c product line revenues increased over 25% year-over-year.
- Successful closing of a $45.2 million investment from MiCo.
- Partial early repayment of term loan saved $2.3 million in cash interest expenses.
- Continued focus on operational efficiency to enhance gross margin.
- Total revenues down 28.6% from Q2 2021, primarily due to reduced demand for legacy infectious disease products.
- Gross profit decreased to $6.5 million, with a gross margin drop of 7.4% year-over-year.
- Operating loss of $1.4 million, a decrease in profitability of $1.6 million year-over-year.
- Financial expenses surged to $8.3 million, primarily due to early repayment penalties.
- Loss after tax for continuing operations was $9.7 million, compared to $0.8 million last year.
DUBLIN, Ireland, Nov. 03, 2022 (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 the Company’s results for the quarter ended June 30, 2022 and preliminary guidance with respect to Q3 revenues.
Summary Highlights:
- Total revenues for Q2 2022 were
$18.5m . - Excluding our Covid focused PCR Viral Transport Media (“VTM”) products, Q2 2022 revenues of
$18.0m were broadly flat compared to Q2 2021 and were up7% compared to Q1 2022. A strong YoY increase in revenues in our diabetes A1c product line revenues of over25% offset a decline in legacy infectious disease product demand in Asia due to continuing COVID-19 lockdowns. - Preliminary estimates for Q3 2022 indicate expected revenues of between
$19m to$20m . Q3 Global Health HIV orders for Africa, which are often difficult to predict, increased compared to Q2 2022 and we expect our HIV point of care (“PoC”) revenue to grow over30% on a QoQ basis. Fitzgerald continues to perform well with a25% QoQ revenue growth profile expected. - In May 2022, the Company announced the closing of a
$45.2m investment from MiCo Ltd (“MiCo”). The investment consists of an equity investment of$25.2m acquired for$2.25 per ADS and a seven-year, unsecured junior convertible note of$20.0m with an interest rate of1.5% and mandatory conversion price of$3.24 . - As part of its ongoing balance sheet restructuring, the Company made a partial early repayment of its term loan with the Perceptive group in May 2022. To date, this partial repayment has saved the Company cash interest expense of
$2.3m . - In late August 2022 the Company submitted its 510k submission to the FDA seeking US regulatory approval of its Premier Resolution Haemoglobin Variants instrument. Subject to FDA approval, commercial sales are expected to begin by Q2 2023.
- The Company is finalising the development of a lower cost, mid throughput A1c instrument that leverages the core consumables technology from our existing Premier 9210 instrument, targeting developing markets. We are also working on the launch of a clinical laboratory reader/processor range to complement our autoimmune products for a 2023 launch.
- Since World Health Organisation approval in February 2022 of our TrinScreen HIV product, the relevant Kenyan Ministry of Health task force recommended TrinScreen as the first line screening test for Kenya’s new HIV testing algorithm.
- Platform optimisation actions to date have resulted in a more efficient workforce. Our average headcount in the six months ended June 30, 2022 was approximately 410 compared to over 500 in the six months ended June 30, 2021 and we expect total headcount to be under 400 by the end of 2022. Trinity Biotech continues to focus on improving gross margin, earnings, and cash contribution from existing operations through focusing on operational efficiency.
- The Company is undertaking a portfolio wide capital and talent allocation review emphasising maximizing return on capital and cash contribution.
- Supply chain and commercial actions are underway to significantly optimise margins in our haemoglobins operation, including insourcing key elements of our consumable column manufacturing. We are also expanding manufacturing capacity at our Jamestown facility to address demand growth for our autoimmune products while also offsetting excess production capacity from the expected run off in demand for our legacy infectious disease products.
- We have launched a strategic review of expansion opportunities in the Point of Care and decentralised testing markets to take advantage of rapidly evolving patient expectations and technology, new non-traditional market entrants and payor focus on controlling healthcare costs. We are actively exploring acquisition and partnership strategies in these areas aimed at accessing channel distribution, product innovation and user experience expertise and intend to make a substantial investment toward this effort over the next 18 months in our Buffalo, NY lab which is well positioned to serve the decentralised testing market because, unlike many other US labs, it is certified to process samples from all 50 US states.
- The Company continues to focus on attracting and incentivising a world class leadership team with the recent appointment of Aris Kekedjian as CEO and Chairman, and by making further experienced hires to drive excellence in supply chain, regulatory compliance, business intelligence, corporate development and technology.
- Trinity Biotech will be a presenter at the 2022 Piper Sandler Healthcare Conference on Thursday, December 1, 2022. Aris Kekedjian, Chairman and Chief Executive Officer, and John Gillard, Chief Financial Officer, will represent the Company and will also host a number of 1-on-1 meetings with investors.
Details
Quarter 2 Unaudited Results
Total revenues for Q2, 2022 were
2021 Quarter 2 | 2022 Quarter 2 | (Decrease) | |
US$’000 | US$’000 | % | |
Clinical Laboratory | 23,885 | 16,624 | ( |
Point-of-Care | 1,958 | 1,840 | ( |
Total | 25,843 | 18,464 | (28.6%) |
Clinical Laboratory revenues were
Our diabetes A1c revenues continue to grow with a
PoC revenues for Q2, 2022 decreased from
Gross profit for Q2, 2022 decreased from
Research and development expenses declined from
An impairment charge of
Operating loss for the quarter was
Financial income for Q2, 2022 was zero compared to
Financial expenses in Q2, 2022 were
US$m | Q2 2022 | Q2 2021 | |||||
Penalty for early partial settlement of term loan | 3.5 | - | |||||
Term loan accretion interest | 2.1 | - | |||||
Term loan cash interest | 1.9 | - | |||||
Fair value movement for derivative balances related to term loan | 0.4 | - | |||||
Accretion interest on IFRS 16 leases | 0.2 | 0.2 | |||||
Convertible Note interest | 0.2 | - | |||||
Exchangeable Notes interest | 0.0 | 1.2 | |||||
Total financial expense | 8.3 | 1.4 |
In May 2022 the Company made an early partial settlement of the senior secured term loan of
In Q2, 2022, accretion interest of
The loss after tax for continuing operations for the quarter was
Loss before interest, tax, depreciation, amortisation and share option expense for the year and excluding impairment charges for Q2 2022 (Adjusted EBITDASO) was
$m | |
Operating loss | (1.4) |
Impairment charge | 0.5 |
Depreciation | 0.1 |
Amortisation | 0.2 |
Adjusted EBITDA | (0.6) |
Share option expense | 0.1 |
Adjusted EBITDASO | (0.5) |
The basic loss per ADS for Q2, 2022 was 28.6 cents versus 3.7 cents in Q2, 2021. For both Q2, 2022 and Q2, 2021, the diluted loss per ADS was the same as the basic loss per ADS as potential issuances of ordinary shares were anti-dilutive as their conversion to ADSs would not increase the loss per ADS.
Use of Non-IFRS Financial Measures
The Company reports financial results in accordance with IFRS. To supplement the consolidated financial statements presented in accordance with IFRS, the Company presents the non-IFRS presentation of Adjusted EBITDA and Adjusted EBITDASO. The Company uses these non-IFRS measures to evaluate and manage the Company’s operations internally. The Company is also providing this information to assist investors in performing additional financial analysis. Reconciliation between the Company's results on a IFRS and non-IFRS basis is provided in a table above.
Investment by MiCo Group
In May 2022, the Company announced the successful closure of a
The convertible loan is accounted for as a compound financial instrument containing both an equity and liability element. The debt component is accounted for at amortised cost in accordance with IFRS 9. At June 30, 2022, the carrying value of the convertible note’s debt component was
Liquidity
The Group’s cash balance increased from
Cash used by operations during Q2, 2022 was
Q3 2022 Revenue Guidance
Preliminary estimates of revenues for Q3 2022 indicate that revenues are expected to be within the range of approximately
TrinScreen HIV Update
- Since Trinity Biotech received World Health Organisation approval in February 2022 for our new HIV screening product, TrinScreen HIV, we have submitted the product for inclusion on the HIV screening programme of the national HIV rapid algorithm in Kenya. In addition, the pre-submission process has been started in several other African countries.
- Trinity Biotech chose Kenya as the first country to submit TrinScreen HIV for inclusion in the national HIV algorithm given its large market size, estimated at 5 to 6 million tests per year, and its prestigious and leadership role as an innovator in HIV management in Africa.
- In Kenya, a technical taskforce appointed by the Ministry of Health to undertake a review of Kenya’s HIV testing algorithm recommended TrinScreen HIV as the first line HIV screening test for Kenya’s new HIV testing algorithm 2022.
- That Kenya has recommended TrinScreen HIV as the HIV screening test is a significant vote of confidence in TrinScreen HIV and our Africa Team.
- The use of the new HIV algorithm has been delayed due to (1) the change of government in Kenya following the election in August 2022 and (2) legal objections by competitors regarding the overall HIV algorithm evaluation process.
- The new government is now in place and we understand they are motivated to scale up the HIV rapid testing programme to pre-COVID-19 levels.
- We understand the implementation of the new HIV testing algorithm will begin before the end of the year and expect the first order to arrive shortly.
- Target countries for TrinScreen HIV for active evaluation in 2023 have a combined estimated market size of 30 million tests annually.
Premier Resolution FDA 510k Submission
- In late August 2022, the Company submitted its 510k submission to the FDA for US regulatory approval of its Premier Resolution Haemoglobin Variants instrument.
- This product has already been launched in Europe under the CE mark but requires FDA approval in order to be sold in the US and certain other key markets globally.
- The Company expects to receive 510k approval for the Premier Resolution by Q2 2023 and this should drive further revenue and earnings growth in our Haemoglobins business.
Comments
Commenting, Aris Kekedjian, Chief Executive Officer and Chairman stated “I’m delighted to lead Trinity Biotech at such an exciting time of change and transformation with the shift to decentralised diagnostics. The company has many of the capabilities, and the experience, to become a key platform in this evolving ecosystem. In addition, our prospects in the autoimmune segment are particularly enticing and likely an area of further investment. We continue to enhance our team and streamline our operations to drive agility and efficiency to maximise shareholder value. I look forward to engaging with shareholders in the coming weeks to lay out our strategy for growth and profitability.”
Commenting, John Gillard, Chief Financial Officer stated “The Company made further substantial progress in strengthening its balance sheet and reducing the cash cost of its debt during Q2 2022. Given the hardening of debt markets over the course of 2022 this action has been shown to be timely and beneficial. The Company continues to invest in future growth, especially with the submission for FDA approval for our Premier Resolution and progress in the adoption of our WHO approved TrinScreen HIV product in Africa.”
Forward-Looking Statements
Certain statements made in this release that are not historical are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. The words “estimate”, “project”, “intend”, “expect”, “believe” and similar expressions are intended to identify forward-looking statements. These forward-looking statements involve known and unknown risks and uncertainties. Many factors could cause the actual results, performance or achievements of Trinity Biotech to be materially different from any future results, performance or achievements that may be expressed or implied by such forward-looking statements, including, but not limited to, the results of research and development efforts, risks associated with the outbreak and global spread of the coronavirus (COVID-19), the effect of regulation by the U.S. Food and Drug Administration and other agencies, the impact of competitive products, product development commercialization and technological difficulties. For additional information regarding these and other risks and uncertainties associated with Trinity Biotech’s business, reference is made to our reports filed from time to time with the U.S. Securities and Exchange Commission. We undertake no obligation to update or revise any forward-looking statements for any reason.
About Trinity Biotech
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 | Three Months Ended June 30, 2022 (unaudited) | Three Months Ended June 30, 2021 (unaudited) | Six Months Ended June 30, 2022 (unaudited) | Six Months Ended June 30, 2021 (unaudited) | |||||||||||
Revenues | 18,464 | 25,843 | 37,240 | 51,437 | |||||||||||
Cost of sales | (11,937 | ) | (14,816 | ) | (23,443 | ) | (29,497 | ) | |||||||
Gross profit | 6,527 | 11,027 | 13,797 | 21,940 | |||||||||||
Gross margin % | 35.3 | % | 42.7 | % | 37.0 | % | 42.7 | % | |||||||
Other operating income | 1 | 2,906 | 1 | 2,907 | |||||||||||
Research & development expenses | (984 | ) | (1,056 | ) | (1,949 | ) | (2,493 | ) | |||||||
Selling, general and administrative expenses | (6,459 | ) | (6,591 | ) | (13,190 | ) | (12,990 | ) | |||||||
Impairment charges | (519 | ) | (6,068 | ) | (519 | ) | (6,068 | ) | |||||||
Operating (Loss)/Profit | (1,434 | ) | 218 | (1,860 | ) | 3,296 | |||||||||
Financial income | 0 | 1,018 | 0 | 1,019 | |||||||||||
Financial expenses | (8,300 | ) | (1,364 | ) | (20,303 | ) | (2,736 | ) | |||||||
Net financing expense | (8,300 | ) | (346 | ) | (20,303 | ) | (1,717 | ) | |||||||
(Loss)/Profit before tax | (9,734 | ) | (128 | ) | (22,163 | ) | 1,579 | ||||||||
Income tax credit/(expense) | 29 | (655 | ) | 180 | (760 | ) | |||||||||
Profit/(Loss) for the period on continuing operations | (9,705 | ) | (783 | ) | (21,983 | ) | 819 | ||||||||
Profit/(Loss) for the period on discontinued operations | (1 | ) | - | (2 | ) | - | |||||||||
Profit/(Loss) for the period (all attributable to owners of the parent) | (9,706 | ) | (783 | ) | (21,985 | ) | 819 | ||||||||
(Loss)/ Earnings per ADS (US cents) | (28.6 | ) | (3.7 | ) | (75.1 | ) | 3.9 | ||||||||
Diluted (loss)/ earnings per ADS (US cents) | (28.6 | ) | (3.7 | ) | (75.1 | ) | 3.9 | ||||||||
Weighted average no. of ADSs used in computing basic and diluted earnings per ADS | 33,952,095 | 20,901,703 | 29,289,617 | 20,901,703 |
Trinity Biotech plc
Consolidated Balance Sheets
June 30, 2022 US$ ‘000 (unaudited) | March 31, 2022 US$ ‘000 (unaudited) | December 31, 2021 US$ ‘000 | |||||||||
ASSETS | |||||||||||
Non-current assets | |||||||||||
Property, plant and equipment | 6,261 | 5,634 | 5,918 | ||||||||
Goodwill and intangible assets | 38,743 | 37,320 | 35,981 | ||||||||
Deferred tax assets | 4,553 | 4,478 | 4,101 | ||||||||
Derivative financial asset | 140 | 219 | - | ||||||||
Other assets | 207 | 175 | 207 | ||||||||
Total non-current assets | 49,904 | 47,826 | 46,207 | ||||||||
Current assets | |||||||||||
Inventories | 29,109 | 29,627 | 29,123 | ||||||||
Trade and other receivables | 15,913 | 16,898 | 16,116 | ||||||||
Income tax receivable | 1,762 | 1,734 | 1,539 | ||||||||
Cash, cash equivalents and deposits | 10,453 | 10,012 | 25,910 | ||||||||
Total current assets | 57,237 | 58,271 | 72,688 | ||||||||
TOTAL ASSETS | 107,141 | 106,097 | 118,895 | ||||||||
EQUITY AND LIABILITIES | |||||||||||
Equity attributable to the equity holders of the parent | |||||||||||
Share capital | 1,963 | 1,445 | 1,213 | ||||||||
Share premium | 53,297 | 21,874 | 16,187 | ||||||||
Treasury shares | (24,922 | ) | (24,922 | ) | (24,922 | ) | |||||
Accumulated surplus/(deficit) | (9,103 | ) | 481 | 12,559 | |||||||
Translation reserve | (5,439 | ) | (5,186 | ) | (5,379 | ) | |||||
Other reserves | 23 | 23 | 23 | ||||||||
Total equity/(deficit) | 15,819 | (6,285 | ) | (319 | ) | ||||||
Current liabilities | |||||||||||
Income tax payable | 21 | 40 | 22 | ||||||||
Trade and other payables | 13,600 | 15,637 | 17,107 | ||||||||
Exchangeable senior note payable | 210 | 210 | 83,312 | ||||||||
Provisions | 50 | 50 | 50 | ||||||||
Total current liabilities | 13,881 | 15,937 | 100,491 | ||||||||
Non-current liabilities | |||||||||||
Senior secured term loan | 43,990 | 76,246 | - | ||||||||
Derivative financial liability | 2,002 | 1,671 | - | ||||||||
Convertible Note | 13,372 | - | - | ||||||||
Other payables | 12,723 | 13,279 | 13,865 | ||||||||
Deferred tax liabilities | 5,354 | 5,249 | 4,858 | ||||||||
Total non-current liabilities | 77,441 | 96,445 | 18,723 | ||||||||
TOTAL LIABILITIES | 91,322 | 112,382 | 119,214 | ||||||||
TOTAL EQUITY AND LIABILITIES | 107,141 | 106,097 | 118,895 |
Trinity Biotech plc
Consolidated Statement of Cash Flows
Three Months Ended June 30, 2022 (unaudited) | Three Months Ended June 30, 2021 (unaudited) | Six Months Ended June 30, 2022 (unaudited) | Six Months Ended June 30, 2021 (unaudited) | ||||||||||||
Cash flows from operating activities | |||||||||||||||
Profit/(loss) for the period | (9,706 | ) | (783 | ) | (21,985 | ) | 819 | ||||||||
Adjustments to reconcile net profit/(loss) to cash provided by operating activities: | |||||||||||||||
Depreciation | 47 | 577 | 479 | 1,136 | |||||||||||
Amortisation | 214 | 240 | 442 | 458 | |||||||||||
Income tax (credit)/expense | (29 | ) | 655 | (180 | ) | 760 | |||||||||
Financial income | - | (1,018 | ) | - | (1,019 | ) | |||||||||
Financial expense | 8,300 | 1,364 | 20,303 | 2,736 | |||||||||||
Share-based payments | 122 | 312 | 319 | 693 | |||||||||||
Foreign exchange gains on operating cash flows | (191 | ) | (276 | ) | (149 | ) | (67 | ) | |||||||
Impairment charge | 519 | 6,068 | 519 | 6,068 | |||||||||||
Other non-cash items | 995 | (2,774 | ) | 305 | (3,144 | ) | |||||||||
Net movement on working capital | (2,217 | ) | (3,155 | ) | (3,481 | ) | (1,326 | ) | |||||||
Cash (used)/generated from operations | (1,946 | ) | 1,210 | (3,428 | ) | 7,114 | |||||||||
Interest paid | (1 | ) | (21 | ) | (3 | ) | (25 | ) | |||||||
Interest received | 2 | 1 | 2 | 2 | |||||||||||
Income taxes received/(paid) | 13 | (72 | ) | 1 | 120 | ||||||||||
Net cash (used)/generated by operating activities | (1,932 | ) | 1,118 | (3,428 | ) | 7,211 | |||||||||
Cash flows from investing activities | |||||||||||||||
Payments to acquire intangible assets | (1,658 | ) | (1,742 | ) | (3,211 | ) | (3,288 | ) | |||||||
Acquisition of property, plant and equipment | (143 | ) | (389 | ) | (305 | ) | (969 | ) | |||||||
Net cash used in investing activities | (1,801 | ) | (2,131 | ) | (3,516 | ) | (4,257 | ) | |||||||
Cash flows from financing activities | |||||||||||||||
Issue of ordinary share capital including share premium (net of issuance costs) | 25,019 | - | 25,019 | - | |||||||||||
Net proceeds from new senior secured term loan | - | - | 80,014 | - | |||||||||||
Proceeds for convertible note issued | 20,000 | - | 20,000 | ||||||||||||
Expenses paid in connection with debt financing | (40 | ) | - | (2,356 | ) | - | |||||||||
Repayment of senior secured term loan | (34,500 | ) | - | (34,500 | ) | - | |||||||||
Penalty for early settlement of term loan | (3,450 | ) | - | (3,450 | ) | - | |||||||||
Purchase of exchangeable notes | - | - | (86,730 | ) | - | ||||||||||
Interest paid on senior secured term loan | (1,920 | ) | - | (3,706 | ) | - | |||||||||
Interest paid on convertible note | (49 | ) | - | (49 | ) | - | |||||||||
Proceeds from Paycheck Protection loans | - | - | - | 1,764 | |||||||||||
Interest payment on exchangeable notes | (4 | ) | (1,998 | ) | (1,289 | ) | (1,998 | ) | |||||||
Payment of lease liabilities | (729 | ) | (743 | ) | (1,500 | ) | (1,472 | ) | |||||||
Net cash generated/(used) in financing activities | 4,327 | (2,741 | ) | (8,547 | ) | (1,706 | ) | ||||||||
Increase/(decrease) in cash and cash equivalents and short-term investments | 594 | (3,754 | ) | (15,491 | ) | 1,248 | |||||||||
Effects of exchange rate movements on cash held | (153 | ) | 95 | 34 | 43 | ||||||||||
Cash and cash equivalents and short-term investments at beginning of period | 10,012 | 32,277 | 25,910 | 27,327 | |||||||||||
Cash and cash equivalents and short-term investments at end of period | 10,453 | 28,618 | 10,453 | 28,618 | |||||||||||
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 | Lytham Partners, LLC |
John Gillard | Joe Diaz | |
(353)-1-2769800 | (1)-602-889-9700 | |
E-mail: investorrelations@trinitybiotech.com |
FAQ
What are Trinity Biotech's Q2 2022 financial results?
What is the revenue forecast for Trinity Biotech in Q3 2022?
What caused the decline in Trinity Biotech's Q2 2022 revenues?
How is Trinity Biotech addressing its debt situation?