Q4 2020 Trinity Biotech PLC Earnings Call
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Joseph
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The T and welcome to the Trinity biotech Q4 and fiscal year 2020 Financial results conference calls. All participants will be in a listen-only should you need assistance, please signal a conference specialist by pressing start and 0 after today's presentation. There will be an opportunity to ask questions to ask a question, please press * then 1 on a touch-tone phone to draw a question, please. Press * then two please note this event is being recorded. I would not like to turn the conference over to mister Ronin, please. Go ahead.
Thank you very much and good afternoon up here in the morning to everybody in the United States. I'm joined by John Gillard are our Chief Financial Officer. And who is the first we go walk you through the results for the for the quarter then I'm going to give you an outline of progress in sales and marketing and and give you a revenue review and they will open the call to a question answered. So if I could have time to go ahead please good morning everyone or afternoon depending on where you are and thank you for participating in our earnings conference call.
before we begin
I must inform you that the statements made in this earnings calls may be deemed forward-looking statements within the meaning of the Federal Security Zone.
These statements are subject to known and unknown risks and uncertainties that may cause actual results to differ from those expressed or implied in two states.
These include but are not limited to those set forth in the risk factors section of our annual report on form 20-f pilot.
We undertake no obligation to publicly update or revise and forward-looking statements to reflect events or circumstances after the date or the occurrences of unanticipated.
Now, let me take you to the results for Q4 2020 and then the results for the 48 2020.
You will notice from a press release that a non-cash impairment charge has been recognized this quarter. I have been the case in recent and this is the score at the end of the income statement coming from The Press Room. I would give us the details on display recall.
In addition earlier and 20/20 the company recognized one-off costs relating to the closure of our Carlsbad, California system.
Income statement metrics, I would quote exclude the impact of these two charts.
I will Begin by outlining the results for $20 and then I will move on to discuss the results for the whole year average. I think with revenues total revenues for the quarter were $32,000 compared to 21.3 each year for 2019.
As our typical approach room was discussed revenues and further details later on the cost as such I will move on to the other aspects of being consumed.
what's emerging for the quarter was 47.8% compared with 43.5% in June 2019, which is a significant Improvement this Improvement in marriages allergic as a result of Tears make changes including continued strong COVID-19 related revenues lower levels of instrument places and the impact of cost-saving issue for a 20 20 20
our gross margin remains susceptible to public changes Geographic spread currency fluctuations and product level variations.
That's such while. The improved. Margin is welcome. I would caution that is not necessarily when you based.
Order operating income increase was $24,000 in Q4 2019. So 1.9 million into 420.
1.9 million income and 20/20 manually to fully receive under the US government's terrorist act principally. It's paycheck Protection Program.
026 paycheck Protection Program loans received by the company were forgiven during the year.
We are in the process of seeking forgiveness for the remaining four.
Paycheck Protection Program long reporting 2.9 Million and we expect them to be forgiven in 2021.
knees for remaining loan increases short-term liabilities December 31st 2020
Moving on to Orange the expenditure just remained relatively flat compared to quarter for 2019 at one point three million.
Meanwhile sg&a has increased by approximately $500,000 6.9 minutes.
This increase is primarily driven by increased performance-related pay as a result of the companies increase sales and profitability compared to the prior-year and foreign exchange charges on the free translation of non-wage US dollar denominated.
These results in an operating profit of 9.1 million tonnes compared to 1.4 reported in quarter for 2018.
An analysis of the 7.6 million increase in operating properly indicates that it's primarily driven by increased revenues which contributed almost 5 minutes operating profits with divorce marriage improved of 1.4 MI.
PPP loan forgiveness also added that increasing
moving on to financial expenses. This includes the quarterly cash interest costs for our exchange bundles of 1 million dollars and $200,000 related to normal finance charges associated with
These Notions of these finance charges are required by the relevant account suspended by a brisket.
You will know that there are further non-cash Financial expenses of age of the thousand dollars which are made up of non-cash appreciation in the accounting carrying value of exchangeable and non-cash fair value adjustments to the convertible a sense of you as required by the relevant attention span.
Profit after tax for impairment and non-cash financial space with eight point six million compared to one point three million poor poor community.
Baxter the quarter is a credit of $700,000, which is mainly related to the benefit of orange secret with current quarter operating profits expected to be largely centered by tax classes ended up very forward from fire. For which no deferred tax assets had been recognized.
As in Prior. Instead of the press release we caught earnings per ADR expected the equivalent of these yet on Sandra basis and also before the impact of impairment charges on a one-off items in non-cash finance expenses.
You think that modified measure or need for you or has increased to 41% from 6.1% in June 4th, 2019 wise eluz earnings have also improved in the sixties 35.9% from $35.09.
in this case the 35
for $0.09 from 9:10 to 4:29.
earnings
For interest taxes depreciation and sharing options from the post reporter for 20/20 were ten minutes.
But now address the full year results for 2020 starting with Revenue called revenues for the year. We're 102 million dollars compared with ninety million for the prior-year.
I already mentioned the owner was it supposed to revenues the further details later on the car and switch over again move on to the other aspects of
Bose margin for the year was 47.6% compared to 42.2% last year, which is a significant Improvement.
Similar to Porter for this Improvement in margins is largely as a result sales make changes including continued strong COVID-19 remains revenues lower level of insurance claim on a lower depreciation charges and the impact of cost is initiative put in place during physical.
Again by the improved margins welcome, I would caution that is not necessarily an easy.
Well, they're operating income increased from 0.1 million and 2019 to 1.9 million and twenty twenty and as I already mentioned the 1.9 income and 20/20 mainly relates to funding received materials that are married paycheck protection.
Moving on to R&D expenditure this show the slight reduction to 5.1 million dollars twenty twenty compared to 5.3 million until B&B.
Sg&a expenses decreased from 26.9 million dollars to fourteen to twenty four point two million a decrease the 10%
Did you place in sg&a expenses but priority due to cost-saving measures which are implemented in response to COVID-19 damaged and included the furthering of some employees reduce travel pass on a cancellation of creatures and other Americans.
These savings were partially offset for the aforementioned increase performance related page you to higher Revenue.
CR option cost for me broadly flat $720,000.
This resulted in an operating profit for 20 20 20 point three million dollars compared to 5.3 million reported for the for the community.
The main drivers of the increase in operating profit will increase revenues increase course marriages no rest you need, and the Forgiveness of the paycheck Protection Program.
Moving on to finance costs this includes the annual cash interest cost of our exchange of a note of 4 million and $900,000 relation to Notre finance charges associated with infinity home again is required by the relevant standard standardized.
Can you will note that there are further non-cash Financial expenses in this case 1.9 minutes are the 2028 home which is made up of non-cash accretion in the accounting value of the exchange but no money on cash provided the converter for that and required by the Red Mountain Standard.
Profit after tax before impairment and non-cash financing.
2020 with 15.7 minutes on it compared to a lot of 4.1 before to the 2019.
Again in our press release we caught even earnings crazy or the sender basis and also before the impact of non-cash financial crisis.
That modified measure earnings. You're for twenty twenty seven priests seventy-five cents from a last of 19.4 sentences see saluted earnings. I've also bought this case the 74.9% from the last 0.3%
Earnings before interest taxes depreciation options for places between 2.3 to 4.2 minutes.
As I mentioned previously the above metrics are before the non-cash impairment Insurance of 17.8 million dollars and the provision for one off charger cost relation to our cars back specifically for an hour.
I want to provide you with more information on that impairment charge now.
This charge would go to the accounting standards driven impairment cuz we were required to carry out under arrest as we have carried over prior year. There are a number of factors taken into account in calculating impairments faith in the company. You're in share price calculation of the companies cost cap, then they have society and future projects capsule for individual cash generation units in the business.
in addition the company examines individual project cost for indicators of
the non-cash impairment has been recognized against the following categories intangible assets 15.4 million tangible assets of all contained in current tax system depends.
I know move on to address some of the main balance sheet movements was for 6:20.
Property plant and equipment to click by nine hundred times, which is Larry the accumulation of the aforementioned impairment charge of one point eight million dollars and appreciation of 0.5 minute. This is our staff by Capital expenditures. You should appointment by 14 minutes which is made up of amortization of 0.2 million the aforementioned impairment of 15.4 offset by a pack of 1.6 create another receivables have increased by 1 billion reflecting the higher says quarter.
Moving on to inventories you would need the information broadly faster for Millions meanwhile our trade and other payables have increased by 4.2 minutes. This is driven by a number of items including working off of my credit terms of changing the tires the third Revenue code performance rate of pay for parking offset by the paycheck Protection Program rolls with dinner and approved before
Visions increased by almost four million dollars mainly reflecting outstanding obligations relation to the closure of the carriage breakfast ability and other contingent Library.
Find me I was supposed to a cash flow for the quarter past generation from operations during the quarter was 17.3 million daughters. The company paid too many interests on the same note. I thought well, they're major cash flow for the porter include the taxes and other interests of all Point woman is on tablet expenditure a 3.6 million and payments.
Overall this resulted in a strong cash balance.
27.3 million daughters at the end of 2024 to the net increase of 7.4 million.
We now have my Coronas Movie package on.
I'm going to review have revenues for court of four and their revenues for the year before opening the call to question our possession.
Revenue for were thirty two point eight million dollars compared with twenty one point three million dollars in the car funding quarter last year, which is an increase of 54% 28th Avenue in four or two point five million dollars compared with two point two million in corresponding quarter, which is an increase of 17% for the strong recovery in HIV revenues in June, okay.
Have now returned to normalize levels following two courses, which were adversely impacted by COVID-19.
As you know for many years twenty-five has been the dominant supplier of HIV confirmatory tests in Africa.
I just and I went to the screening market for HIV in Africa, which is a 12-fold bigger Market by value. We are very pleased to have completed the clinicaltrials in Africa on a new product with my covert headwinds open up here and we'll be making the final submission the World Health Organization within the next two weeks. Thereby enabling of enter the home screen and market for the first time and on receipt of they'll be okay. So a group of which we anticipate will occur over the next number of months results of the clinical trial where absolutely excellent.
Who's not that kind of goes to the barfi? I refuse to the quarter increased to 30.2 million from 19.1 million which represents an increase of 58% compared to the corresponding with this increase is primarily explained by strong COVID-19 related product revenues with our PC or fire transport media products being the most significant contributor, but took to the current quarter being courted one of 20 21 We are continuing with our practice of not getting guidance despite being late in the quarter because of fluid situation with Colby related products, but we will say is security court for was a very strong quarter and we saw many of our customers stockpiling product related products and other Comforts of this month another constant also of evidence of a slightly lower level of covert testing in the market our revenues in quarter. One twenty Twenty-One. Well not be as strong as in court for 2012.
We have developed and continue to develop that strong suite of COVID-19 related products are FDA-approved PCR biotransport. Media product called sex trans performed Thursday during the quarter is the sample collection device for COVID-19 PC or molecular testing, which is used to store the nasal pharyngeal swap, which contains the patient sample allow me to return a stable environment the transport medium stabilizes the time for and prevents bacterial growth and maintains its Integrity until such time of the test is run to the Barclays the cup of its manufacturing capabilities of this product to meet drunk man.
Meanwhile, we received.
Mark Amerika COVID-19. I GT a live body test during the quarter and are now free sell the product throughout the European Union in addition to the United States. The product has best home and it's got the 98% and sensitive and accepting 95% sample drawn at least fourteen days of symptom onset these percentages comfortably exceed the requirements of the FDA emerging also that they should populate the product is not a factor in our facility Jamestown New York and capable of being run on a wide range between taken cared for access to virtually every testing of our world.
Moving back to the development of COVID-19 10 we have previously indicated that the company is also developing a rapid point of Terror COVID-19. Test detect IGG antibodies. I think of the blood samples will test running in 12 minutes. The development of this has has now been completed with excellent sensitivity and specificity possibly within FDA requirement ranging from the company is now not factoring probably prefer an invalidation in advance of an emergency use authorization sufficient cfda, which we expect to be completed during the current quarter following which month.
Libre to sell the product to meet you know when it's supposed to be doing something before the end of June.
In addition the company developing a COVID-19 rapid antigen tests using nasal pharyngeal swap with runs in 12 minutes. The test will be manufactured in our automated manufacturing facility in our life with a cassette which is virtually identical started both hid Unicode I'm transferring. Meanwhile, the company has also experienced significant increased Revenue off COVID-19. Monoclonal antibodies Euro material used in the manufacture COVID-19. Hata to test last day of consequence of COVID-19. May I speak with in our revenue of respiratory wanted care products?
And moving back now to our core business has already indicated in our HIV business have to return to a normal life. Revenue levels are diabetes business continued to help lowest replacement during the course. We still still the 30 instruments placed. This is less than 50% of normal places. That was hardly surprising is Hospitals and Clinics were likely to purchase new type of equipment and the month. However, we are confident that these statements were fully recover in a post-pandemic environment. Meanwhile reagents revenues in our diabetes business are running at about 90% of normal again do the stock. So that's like you can perform discretionary test doing this endemic meanwhile are also music business was talking to 10% of normal levels off again is the fact that George COVID-19 many patients after pairing hospital and doctor visits were absolutely necessary.
Now to look at the year as a whole.
Ultra avenues for fiscal twenty were twenty. We're 102 million compared with 90.4 million and 2019 which is an increase of 13% Year-on-year point-of-care revenues decreased from eleven point four million in 2019 to 9.2 million and 20 twenty which represents a decrease of 19% and was just by lower HIV sales involved USA and Africa kind of the USA certificate to the decision to Exodus Market, which has been in the time for a number of years while African says were lowered to the coax related issues arising primarily in the same quarters Avenues increased from $79 million dollars in 2019 to 92 Ford eight million in 2020, which represents into the 17% off. This increase is mainly due to some sales within a COVID-19 related product portfolio with violent transport media products being the most successful to revenue within the portfolio.
Humanitarian packed COVID-19 revenues for hemoglobin autoimmune and infectious disease part. It's all recorded decreases in 2020 compared to 2019 are hemoglobins business revenues were affected by the deferral of diabetes management practices as Health Care Resources perspective by the family are autoimmune business was also affected by COVID-19 experiencing Northampton volume in our New York Reference Laboratory, whatever we are confident about nuking these business sectors entirely recovered in the full synthetic environment. So if I could now hand over to the operator for a question-and-answer session.
We will now begin the question-and-answer session to ask a question. You may press * then 1 on your touchtone phone. If you using the speaker phone, please pick up your handset before pressing the key. It's at any time. Your question has been addressed and you would like to retire your question, please press * then two at this time. We will pause momentarily to assemble or dead.
The first question comes from Jim & Company, please go ahead good afternoon running and John. Sorry, I had to join the car a little late. So I'm sorry boss went over this already or not. But last quarter, I think you indicated that revenue from the COVID-19 products was around thirteen million. Did you break that out for this quarter dead?
And no we haven't actually we have them separated.
Was it you know similar to last quarter. Can you give us anything on that wage? Right and you indicated that you're you're getting closer with the the train screen who approval should we assume that you'll be generating Revenue function screen and in 2022?
Oh, yeah, absolutely. Yeah, absolutely. So the position we have at the moment is is despite all the covert headwinds and we're we're trials were delayed and in the in the various countries and two or three countries we and we have now completed the trial and we expect we actually expect to we had already submitted 38w with the World Health Organization with various modules in the final module, which they previewed the final module was the actual trials themselves. So we expect to submit that actually literally next 3 or 4 days. I haven't been sampled off the ready to take it and so now really system and by the way, the the results were like extraordinary thought they were absolutely really more the fiance would expect they would revert to Perfection, So if with a super super product and the wh oh, so now we just wait for them to to review it how quickly they'll do it in the cold environment is dead.
Care, we got to be speaking with the middle of the last number of days and talk to the person that they're giving precedence to sort of the compliments and Pats, but we're hoping that they'll get you a reasonably quickly and why we don't have any certainty we start to be hoping to get an approval and quarter 3, but if you know outside of our control don't think we get it in order to and and I talked to a free to sell. So yes, I think we will we usually have revenues before in 2022 possible that we get minor relatively 20-21 possible way to be hoping to do so, but you know, then it's a matter of you know, winning algorithms and and and whatever as they come up for review and but in overall terms as I said, you know in in Revenue income tax revenue terms if they entered the market side is bigger by a factor of 12 and we don't see the pricing is lower than for confirmatory and but it's a huge Market that we did away from home.
And if we're not able, you know a market dominated by earlier Side by habits earlier product range, and we think that we can take walk-ins market share over time.
And just in terms of timing. Do you have to wait for tenders to to start?
If you if you were to look across the you know, sort of 30 to 40 countries algorithms tend to be my husband's come up for review basically supplier Revolt. So basically that the the screening the part will be reviewed are changed every typically to sometimes every year but normally two years. So there's constant stream of of of renewals happening at any one time. So we will we be going through them all this really everyone.
You know Kobe's been you know, like some of the bigger countries have the technology area where there might be, you know, sixteen Seventeen million take $50 off in the air, you know, the the screening can be going to be split between two companies. And then the last one for me COVID-19 Coleman definitely been, you know a price on on certain products, but then you know, as you indicated it it's definitely put some pressure on things like your diabetes sales office or other products. Are you seeing that pressure so I mean subside into one and you said, you know, the diabetes business comes back to at least 2915 levels and in 2021.
Yeah, I mean if you look at diabetes, for example, we are adjustment basement collapsed in Florida, you know during the month of April and May just completely, nothing. I began to recover somewhat 4 to 3 in the morning to 4, but like we're still doing quarter for we were still at 50% to pay stub normalized placement levels Central reagents which car off at about 90% of normal like which actually is we think we're surprised at how strong it is given that, you know, people are trying to avoid going to hospital during detox juice and Thursday, but that's that's what we've been achieving. We we're absolutely confident so that the market will return recover it completely in the postman demek environment as soon as soon as you know, we kind of have a significant
As soon as majority of people are are vaccinated.
Okay, that that was it for me. Thank you, and I hope I hope you both will.
The next question comes from William lap with private and mr. Please go ahead. Good morning or good afternoon to you. Gentlemen, John nice to have you back. I got a few questions. Number one. I presume you did not qualify for the second draw on the pp loans. You didn't meet the criteria. Have you applied for the second drawer?
In some of our businesses we did into I think a we we did qualify and but not for the okay. So you've submitted.
Yeah, you got to meet the 20% test, but did you okay? Have you got the loan yet? Or you haven't got it yet?
Yep, we have we received we received two of them. And how much was that? One point seven million what you anticipate to be for?
Yeah.
Don't forget about the employee tax credit to when you do that.
Difficult to predict at this stage where it's going in terms of the in terms of the Forgiveness Bush and those the first step is we we we we we received the form. Okay. Well, that's good Ronin. Could you kind of you know last quarter the third quarter you had more of a profit than you did on the fourth quarter didn't weren't you a $22 million on the third quarter versus the fourth quarter. What are the comparisons of the third quarter of 2020 versus the fourth quarter of 2020. Did you not you didn't make much money in the fourth quarter?
No, we didn't not after I suppose yet the moving parts and would be you know an increase in its place in quarter and in quarter for and and I think the reduction in margin as well. So they're the main contributing factors to them. Okay. So now with I mean, yeah.
pardon
Did you say something wrong? Yeah, no, go ahead you go to
yeah, so but but go ahead you say it first?
Are you going to say that? Okay. Well, that's good. We have the big loan coming up then. Could you explain a little bit more on the COVID-19?
Well, we're we're selling in the United States and now we're open we're now we're working on that. I think in terms of faith of the significant potential. I think the bigger potential is in the rapid is in the point of characters rather than the laboratory and you know, like I'll turn out where we are with everybody and of course they're working on the antigen tests as well. And so I think the more significant Revenue potential lies there in Pointe-Claire than than in the other I also assigned to them. We would have a while and monoclonal antibodies. So so yeah. Yep.
Could could you explain the difference between the is there too?
Protest that one's an antibody. I was just kind of looking at the two the two rapid tissue didn't the Rapitest you're doing for the code. Is there two of them once a blood test, right?
And then what's the other one then? Yeah, so it's a
so we've got two sets. We got an antibody test which is just exactly like HIV test or so. Basically you take you use a spring loaded with you get a drop of blood and you put put that you basically put it basically onto the month the cadet solution. I wouldn't twelve minutes you get the results. So that's an antibody test that tells us whether or not you've got basically in the fact it tells you whether you previously off.
Articles that is very close, right? So as I said, we expect to get from the FDA off during court or two. I so basically went in the next three months and we expect to be in the market with Out product. The other tasks we talked about is an antigen test from a publicity but antigen tests and and an antigen tests basically whether you actually have at a particular Moment In Time. Corporate.
Okay, so it's like it's like the alert it's it's like the Abba tests that are out there the queue and whatever that is right those other tests.
It's like yeah, it's it's the same radius average test or could test right? Okay, very good progress not giving timelines and we still on a tire service timelines and and I refer to not not to over-promise, but we're confident with that developing a closet s which can be manufactured in high volume in our automated systems of manufacturing facility here in Ireland, you know, we already can manufacture and high volume and we're confident base with us developing a good test. If I could ask you test quality tests for the long-term. Hm. Well, that sounds good. So, I mean there's quite a market for that. And I mean that's what people have to go like to go to the airport. They have to go to another country. They have to have the test seventy-two hours that that tests would be performed an antigen tests, right?
Like if you're going to go from the United States, maybe to why you got to have a test before you get on the airplane 72 hours before that test would be used to say you can go in your safe right off and test that test is normal. That normally is it can be done literally, you know at the point of embarkation. I mean, there's only a couple of minutes so it can be done on okay before you travel you have to get done 36-24-36 hours earlier, okay.
So given your whole.
Yeah, that's very helpful for the distinction. So given where you're at in in 2021. What do you look for? What? What do you see as the rain boat coming forward as to where you know Trinity is really going to shine without giving you any guidance. Where do you look for the big upsurge?
I think the most exciting thing at the moment is our product. So basically we have been a dominant force in Africa off HIV testing screening where the HIV confirm that you're testing for sixteen years now, and we're now entering a market which is multiple times bigger, which is a screening Market with an absolutely awful product and we think we can take a big share of there. There are 117 million of these tests being run every year in Africa and we intend taking an awful taking a decent share of that business.
Okay, and that's pretty profit and that'll be pretty profitable.
Pardon, absolutely. Yeah, absolutely. Yeah beyond beyond that. We would be very excited about our COVID-19 range of products. And because we think although as people at the entire population became activated and it's not going to be a huge problem, but with COVID-19 is besides they not going away. And so we think we have a suite of products for the long term.
Okay, that's good. And and I presume that you're you're thinking very heavily on our repayment of that. Is that a hundred million in April of 2022? Is that the majority?
Yes for the loan. Okay. Well, thanks for taking my question and I appreciate the progress. You're making and keep up the good work.
So thank you so much. Thank you for this. Okay, but it's going to operator. It's going to take a last question and then wrap up the call.
Okay, the last question comes from a private investor, please go ahead.
Hello, good morning. You guys from the US here. Just quick question on that 4% senior node think the the prior color as the same question and you know let you finish. So what my question is, what are the plans for which you know, that seems like it's common doing may of 2022.
Okay today that it's obviously mattered that if given some considerable soldier with the management team and at the board, we have a number of options available to us back and make the Redemption date is still some time away. And and we do have time to determine what the optimal approach would be. You could probably understand that. I'm unlikely to you know, walk on the conference calls and open conference calls to give you our most intimate Phillip Thomas and you appreciate that topic would be a great idea. Are you all however note for example that are cash balance, you know from nineteen million dollars million dollars, which obviously is a very positive development in the context of you know, depending majority of that notice, but I don't mean to be obscure my response, but I think that's about as far as like can reasonably go
Okay, that's fair enough. Thank you.
Thank you very much for your for your sports and your interest and the forward to talking to you actually, not so many weeks away because this is a small Gap to Accord. Was it. Thank you and good morning. Thank everybody. Have a good day.
The conference has now concluded thank you for attending today's presentation. You may not disconnect.
public off
does need to be no more questions, so if I could just wrap up the call now and say