Q3 2024 Trinity Biotech PLC Earnings Call
Greetings. Welcome to Trinity Biotech's third quarter 2024 earnings conference call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce Eric Ribner, Investor Relations. Thank you, Eric. You may begin.
Eric Ribner: Thanks very much. Before we begin, please note that statements made during this presentation may be deemed forward-looking statements within the meaning of federal securities law. These statements are subject to known and unknown risks and uncertainties that may cause actual events to differ from those expressed or implied in such statements.
Please rise.
Eric Ribner: include but are not limited to those set forth in the risk factor statement in the company's annual report on Form 20-F filed with the FCC. Trinity Biotech undertakes no obligations to publicly update or revise these forward-looking statements to reflect events or circumstances.
after today or the occurrence of unanticipated events.
Speaker Change: I will now hand you over to John Gillard, President and CEO of Trinity Biotech, who will give an overview of Q3 performance and a business update.
Speaker Change: John will be followed by the company's Chief Financial Officer, Louise Tallon, who will give further details on third quarter financials. John, I turn it over to you.
John Gillard: Good morning, everyone. And thank you for joining today's call. It has been an exciting time for our company. I have a lot to share with you today.
Our company has been significantly transformed over the past year.
John Gillard: And we are now looking to the future and the growth drivers that will create meaningful value to our shareholders.
John Gillard: On our call today, I want to focus on three key elements.
One, planning for long-term growth.
John Gillard: which we believe will be driven by our Continuous Glucose Monitor, or CGM, for diabetes management.
John Gillard: As we progress towards commercial launch of our next generation solution, we are incredibly excited about the opportunity our innovative and pioneering approach presents in this fast market.
John Gillard: A market that is already worth over $10 billion a year and projected to grow rapidly.
John Gillard: In addition, in order to provide shareholders with more opportunities for value accretion, we are building out our pipeline of high growth potential products.
John Gillard: through the acquisition of innovative prostate cancer and preeclampsia test technology plus a strategic investment in a sepsis diagnostic technology.
John Gillard: Moving on to two, I will also update you on our continued strong execution of our comprehensive transformation plan.
John Gillard: which is establishing the profitability infrastructure for our existing and future business lines.
This will support R&D for growth and balance sheet strengthening.
John Gillard: as well as increasing the value of many of our existing business lines.
John Gillard: And finally, three, I will speak to how we have strengthened the company by successfully addressing NASDAQ listing deficiencies.
removing an important overhang from our stock.
John Gillard: Before I address each of those three areas, let me first speak to our Q3 performance.
John Gillard: As you saw in today's press release, we are continuing to grow our revenue base while at the same time reducing costs.
John Gillard: We saw 3% year-on-year revenue growth driven by Transcreen HIV revenues.
John Gillard: Our transcript revenues were lower in Q3 compared to Q2, but this is only as a result of different ordering patterns, quarter on quarter, which are a feature of the rapid HIV test market.
John Gillard: We expect higher revenues in Q4 of this year for Transcreen HIV and as set out in today's press release, we are reiterating our guidance of 2024 sales revenue for Transcreen HIV of approximately $10 million.
John Gillard: Are Q3 2024 hemoglobin revenues from A1C testing products were lower than Q3 2023?
John Gillard: primarily due to Q3 23 having unusually high revenues compared to the normal run rate
John Gillard: due mainly to uneven ordering patterns from certain customers during 2023.
John Gillard: Continued disciplined execution on our profitability enhancing initiatives contributed to a decrease in the operating loss before restructuring and impairment charges to $2.2 million from $4.5 million in Q2023.
Fifty-one percent improved.
as I will speak to later.
John Gillard: why we have spent this year planning and executing on the many profitability initiatives in our Comprehensive Transformation Plan.
John Gillard: Most of them were scheduled to be completed at the end of this year or early in 2025 and as such are not yet very significantly adding to our profitability.
John Gillard: However, I am happy to confirm that in line with our plan, many are due to be executed by the end of this year or very early 2025.
John Gillard: and as such, we expect that we are on the cusp of a near-term step change in our profitability performance.
John Gillard: Louise will bring you through our Q3 financial results in more detail later on the call.
and John F. Kennedy. Thank you.
Speaker Change: Now, let me walk you through some of our key achievements and provide more details across the three main priority areas for our new leadership team.
Speaker Change: beginning with driving long-term growth from our CGM solution and recently acquired lab-based innovative diagnostic tests.
With respect to our next generation CGM for diabetes management.
Speaker Change: As I mentioned, we are incredibly excited about the progress we are making in the design of this breakthrough solution.
Speaker Change: The opportunities this innovative solution presents for the company, in this vast and rapidly growing market, are game-changing.
Speaker Change: Having consulted with a broad range of commercial and clinical stakeholders globally.
Speaker Change: We know that reducing the cost per day of CGM solutions is a critical need in both established and developing markets.
Speaker Change: This is a need that the current main products do not satisfactorily address, given their products are built around entirely or mainly disposable components.
Speaker Change: We are specifically designing our next generation solution to address this market need.
Speaker Change: To remind you, our next generation solution capitalizes on our proprietary glucose sensor technology to reduce down the amount of non-reusable components.
Speaker Change: As a result, our new breakthrough design boasts a reusable applicator and transmitter
paired with a simplified low-cost
All designed to give a great user experience.
Speaker Change: This modular approach significantly reduces both cost per day and waste.
Speaker Change: Our new design also allows our solution to capture additional physiological data points.
Beyond Glucose
Speaker Change: Similar to many of the data points captured by smartwatches and other wearable devices.
Speaker Change: We believe these data points will provide key insights to users and further strengthen and differentiate the value proposition of our solution.
Thank you.
I suppose you could say
Speaker Change: Rather than trying to get a smartwatch to accurately measure glucose, as we understand some companies have tried, we are developing an accurate continuous glucose monitor that incorporates many of the data collection functions of a smartwatch and other wearables.
We believe this is a much more achievable solution.
Speaker Change: We are moving quickly to capitalise on this incredible market opportunity and as we previously reported, we successfully completed the first pre-pivotal trial of our updated sensor technology.
Speaker Change: This week we are starting a second larger pre-pivotal trial which will provide extensive data on further developments of the sensor technology which will feed into our sensor design choices.
We are confident that the steps we are taking
Supported by our impressive partners.
Speaker Change: With an emphasis on 1. A great user experience, 2. Enhanced data capture and insights, and 3. Reduced cost through more reusable components, we lead to a differentiated product and a higher value proposition.
Speaker Change: We believe this will allow Trinity Biotech to take a leading position in the global CGM and diabetes management market.
Thank you.
Speaker Change: Additionally, as we have mentioned previously, we are receiving significant inbound interest in our CGM technology from both commercial and strategic partners alike.
We continue to build and nurture these solutions.
Speaker Change: to create strategic optionality for our assets as well as create shareholder value.
Speaker Change: Finally, I'm pleased to report that we are establishing strategic manufacturing and supply chain relationships with large-scale premium market players to prepare for efficient and rapid scaling across the globe upon launch.
Now, let's turn to our recent new lab-based technology acquisitions.
Speaker Change: which form an additional vertical to our long-term value creation and growth strategy.
Speaker Change: The catalyst for these acquisitions is the recent set of changes by the U.S. Food and Drug Administration, the FDA, to the rules regarding the introduction of new lab-developed tests, or LDTs.
Speaker Change: We expect that these recent FDA changes will limit the ability of reference laboratories that are not New York State Department of Health certified to bring new laboratory-developed tests such as epicanthopteris prostate cancer test and metabolomics preeclampsia test to the market in the U.S.
Speaker Change: As our Incolab is New York State Department of Health certified, this provides us with a competitive advantage.
Speaker Change: which we have sought to capitalise on with these two acquisitions.
The End.
Speaker Change: Trinity Biotech's strategy was to leverage our New York State laboratory to attract new innovative technologies and products.
Speaker Change: and combine those with Trinity's established capabilities to address large-scale, urgent and important clinical issues.
Speaker Change: We believe that this FDA rule change provided us with attractive and capital efficient opportunities.
Speaker Change: to acquire companies with new technologies and products and support their route to market.
Speaker Change: As we evaluated these new opportunities in this area, our criteria were focused on 1. large and important disease areas, 2. diagnostics that lead to differentiated treatment paths for patients, and 3. utilization of sophisticated next generation technology platforms.
Speaker Change: For example, prostate cancer is the most common non-skin cancer among men in the U.S., with about 1 in 8 men diagnosed during their lifetime.
Speaker Change: and the cost for diagnosis and treatment is estimated at over 100 billion annually.
The ability to accurately monitor prostate cancer progression is critical.
Speaker Change: As the disease can often be slow-growing and unnecessarily invasive, interventions such as prostate biopsies can lead to significant complications.
Speaker Change: The EpiCapture test could significantly reduce the frequency of these interventions, thereby improving the quality of life for patients.
Speaker Change: The EpiCapture test offers a breakthrough approach to monitoring disease progression by using epigenetic analysis.
This technology is innovative and new to Trinity Biotech.
Speaker Change: thus allowing us to move up the technology and value curve in a large scale disease area and introduce our company to the high value oncology market.
Speaker Change: Similarly, our other new acquisition, Metabolomics Diagnostics, addresses the large-scale issue of preeclampsia.
Speaker Change: which impacts up to 5% of pregnancies in the U.S. and which can cause serious illness or death in affected mothers and babies.
Thank you.
The Metabolomic Diagnostics.
Speaker Change: Early detection of preeclampsia would allow for the prescription of effective medication which can significantly reduce the risk of often serious health issues for mothers and their babies.
Speaker Change: The metabolomics test uses mass spectrometry combined with machine learning powered bioinformatics which again is a new and innovative technology to Trinity Biotech.
Speaker Change: This increases our exposure to and capabilities in machine learning which is increasingly becoming a critical aspect of modern health care and in particular diagnostics.
Speaker Change: Regarding Novus Diagnostics, in which we have made a 12.5% strategic investment,
Speaker Change: Our strategic rationale is to leverage our existing capabilities to support the development and commercialization of Novus' groundbreaking technology.
Speaker Change: This is a rapid 15-minute sepsis test that can provide life-saving information to physicians to enable faster diagnosis and timeline treatment.
Speaker Change: Novus's platform addresses key limitations in current sets of diagnostics such as the delay in results.
Speaker Change: This rapid point-of-care solution is expected to significantly improve sepsis outcomes by enabling faster diagnosis and timely treatment.
Speaker Change: potentially saving lives and reducing the over 50 billion dollars estimated annual cost of sepsis related hospitalization in the U.S.
Speaker Change: Now turning to the second of the three key areas I want to focus on today.
our Comprehensive Transformation Plan.
Speaker Change: on which we continue to make significant progress and remain on track.
Speaker Change: Our aim with these initiatives is to enhance the value of our existing business line.
Speaker Change: by transforming operations to address the root causes of historical inefficiency.
Speaker Change: and paved the way for profitability growth on a larger scale.
Under this plan, we have several objectives to accomplish.
First, reduce costs through consolidation and offshore manufacturing.
Speaker Change: In this regard, we have now successfully completed the transfer of our second rapid HIV product manufacturing process to our offshore manufacturing partner.
in a significant milestone.
Speaker Change: We have made submissions to the relevant international regulator to permit commercial production of both rapid HIV tests with our offshore partner.
Speaker Change: We expect offshore production of both products to begin in Q1, 2025.
Speaker Change: We expect this shift will be gross margin accretive and provide meaningful working capital benefits.
Speaker Change: We are also beginning to transfer some of the more technical aspects of production of both of our rapid HIV tests to our offshore partner.
Speaker Change: In fact, we already have a team on site for the next two weeks with our partner.
Speaker Change: Once in place, this change should support further gross margin and profitability enhancement.
Speaker Change: We have continued to make significant progress in consolidating our main hemoglobin manufacturing activities currently carried out at our Kansas City plant.
into two of our other existing plans.
Speaker Change: We remain on track to cease the main manufacturing activities at our Kansas City site by the end of 2024.
Speaker Change: We have recently also informed staff at our autoimmune test manufacturing site at Buffalo, New York of our intention to consolidate its main manufacturing activities into our Jamestown, New York plant.
Speaker Change: We expect to cease main manufacturing activities at our Buffalo site by the end of Q1 2025.
We are also focused on optimising our supply chain.
Speaker Change: In this regard, we've continued to identify further material saving opportunities in our rapid HIV test supply chain and expect to have them in place by the end of Q1 2025.
Speaker Change: Lastly, we plan to centralize and offshore many of our corporate services to drive both efficiency and agility.
Speaker Change: As planned, our offshore corporate services site is now live, with a number of functions operating from this site.
Speaker Change: We expect to add additional functions through the end of 2024 and into Q1 2025. These changes will support improved profitability.
Our Comprehensive Transformation Plan is ambitious and wide-ranging.
impacting almost every aspect of our business.
Speaker Change: I would like to take this opportunity to thank our staff.
Speaker Change: including those that are set to leave the business as part of the transformation for their support and cooperation during this important journey.
Speaker Change: Once completed, I believe we will have a much more efficient and modernized operating model.
with just two main manufacturing sites.
focusing on the more complex aspects of our products.
One in the U.S. and one in Ireland.
with less complex manufacturing activities either offshored or outsourced.
Speaker Change: This simplification is expected to drive significant efficiency and profitability enhancement.
Speaker Change: In addition, our centralised and offshore corporate services site should give us a more efficient and effective platform to support the business.
Thank you. Thank you.
Speaker Change: Given our continued strong execution on our wide-ranging Comprehensive Transformation Plan
Speaker Change: We are today reiterating our guidance to achieve approximately $20 million of annualized run rate earnings before interest tax depreciation and share options costs, or EBITDACO.
Speaker Change: on annualized run rate revenues of approximately $75 million by Q2 2025.
and we will continue to execute towards this.
Speaker Change: Finally, and thirdly, I'm extremely pleased to be closing out a difficult period for the company over the past year.
Speaker Change: One of my top priorities when I took on the CEO role in December 2023 was to address the company's pre-existing NASDAQ listing requirement deficiencies.
Speaker Change: We have now regained compliance with NASDAQ listing requirements and removed an important overhang on our stock.
Speaker Change: We are grateful for the continued support of our shareholders, partners and employees during this process.
So to conclude
Speaker Change: Overall, I am very satisfied with the significant progress we have made over the past few months on our ambitious priorities.
Speaker Change: We will remain focused on disciplined execution in our Comprehensive Transformation Program.
Speaker Change: so that we as rapidly as possible transition to profitability while at the same time preparing the company for significant future goals with our exciting programs in CGM, prostate cancer and preeclampsia.
Thank you.
Speaker Change: I would like to thank you all for your attention and I will now hand you over to Louise Tallon, our Chief Financial Officer, to discuss the Q3 financial results in more detail.
Louise Tallon: Thanks John. I'm delighted to go through our Q3 results and highlight some of the progress the company has made during the last quarter.
Louise Tallon: Starting with our revenue, our revenues for Q3 2024 were £15.2 million which is just over 3% higher than Q3 2023.
Louise Tallon: Our point of care revenue continues to have a large impact on growing our business, increasing by 2.7 million to 4.3 million. This is an increase of 60% compared to Q3 2023, driven by our Trinscreen product, which had sales of approximately 2.4 million.
Louise Tallon: We have reiterated our guidance for trim screen sales of approximately $10 million for the full year 2024.
Louise Tallon: Our clinical laboratory revenues were 10.8 million, which is a decrease of 9% compared to Q3 2023. Included in these revenues was a strong performance from our clinical chemistry portfolio, which grew by almost 80% year-on-year.
Speaker Change: This occurred due to decreased instrument sales during the period combined with higher consumable sales in Q3 2023, which as John noted was influenced by the phasing of haemoglobin revenues from certain customers throughout the prior year.
Speaker Change: Moving on to our gross profit for the quarter, which was 5.3 million and represented a gross margin of 35%.
Speaker Change: This was broadly consistent with the margin for the comparative quarter in 2023 when you exclude the stock obsolescence costs that were included in 2023 results.
Speaker Change: We have some favourable movement in expenses year on year. Within research and development expenses, they were $200,000 less than the comparable quarter. We also capitalised $2.1 million for the quarter in relation to our biosensor development as we continued our development activities post the waveform transaction we completed in January.
Speaker Change: Our SG&A expenses were £6.5 million in the quarter compared to £7.7 million in Q3 2023. This is a substantial decrease of £1.2 million and is a clear indication of our journey on cost reduction where we've lowered overall employee remuneration costs.
Speaker Change: This quarter we have also incurred restructuring costs of approximately $300,000 related to the Comprehensive Transformation Plan which John described earlier.
Speaker Change: This brings total costs year-to-date to $2.3 million, with further costs expected in Q4 as a result of our ongoing transformation plan. These costs mainly comprise of termination payments, factory closure costs, and costs associated with the transfer of activities to the offshore service provider. The majority of the cash outflow related to these restructuring costs will happen in Q4 2024 and Q1 2025.
and John F. Kennedy. Thank you. Thank you.
Thank you.
Speaker Change: This brings us to a net loss post-tax and interest position of $4.8 million in the quarter compared to $6.7 million loss in the same quarter last year.
Speaker Change: The adjusted EBITDA is one of our primary KPIs and represents the loss before depreciation, amortization, impairment charges, restructuring costs, tax, interest and share-based payments.
Speaker Change: For the quarter, we report adjusted EBITDA so of 1.4 million loss compared to 3.5 million loss in the equivalent period last year, while our basic loss per ADF was 46 cents compared to 88 cents in Q3 2023.
Speaker Change: Finally, I'll talk about our cash for the quarter. The cash balance decreased from 5.3 million at June 30th to 2.8 million at the end of September.
Speaker Change: Cash used by our operations was 3.6 million in the quarter, an improvement of 1 million compared to Q3 2023. Although there was improvement on the prior year, I noticed the working capital outflow in the quarter. Trade and trade receivables have increased relating to large receivables associated with our trim screen product. We expect to show improvements here in Q4.
Speaker Change: We have invested cash outflows of 3.1 million which mainly related to our R&D capital expenditure for CGM and haemoglobin products as well as cash related to the acquisition of metabolomic diagnostics.
Now I'll hand you back to Eric for any questions.
Thank you, and I guess we'll take questions now, yeah.
Eric Ribner: Thank you. If you would like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star 2 if you would like to remove your question. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys.
Speaker Change: Our first question is from James Sidoti with Sidoti and Company. Please proceed.
Speaker Change: Hi, good evening. Thanks for taking the questions. It's nice to see Ernie's coming out before the next quarter's ended. So it seems like you're back on track that way, which is nice to see. So regarding the third quarter, you said you still expect
Speaker Change: The trim screen sales around 10 million so it sounds like you're looking for a little over three million dollars of revenue from that in the fourth quarter does that sound right?
Speaker Change: Hi Jim, good to talk to you and thanks for your question. Yeah I think that's fair and as we've seen over many years.
Speaker Change: With HIV rapid sales, there can be quarter or quarter variation in ordering patterns. And because the order sizes for Trinscreen are much larger typically than we would have for Unigold, that leads to, I suppose, a higher overall impact in terms of our revenue. And yeah, we would expect about three million for quarter four.
Hey and
Speaker Change: With regard to the premier instruments, it sounds like those sales are a little lower this quarter as some customers waited for the new column to come out. Do you think that business comes back in the fourth quarter or do you think that business is lost or do you think it comes back in 2025?
Speaker Change: Yeah, I think the core revenue for consumables there is broadly consistent quarter and quarter, which we would expect, right, given the nature of that business where you've got typically instruments placement, you know, and a consistent level of throughput in terms of those instruments.
I think that variation was...
Speaker Change: more really got to do with 2023. And there was some high variation in ordering patterns across particularly one customer. And we took steps earlier this year to kind of normalize their demand. And because it creates operational challenges for you're having very high spikes in demand over particular quarters.
being reduced.
Speaker Change: As we've been consistent, I think, throughout the year, we're not pushing them as hard as we will be in the past because we think the new column proposition is a much better proposition.
Speaker Change: given the higher level of tests that those columns do and the lower level of calibrations, etc. required for customers.
Speaker Change: So, while we're rolling out the new columns, I'm betting in that value proposition.
You know, we're not pushing instruments.
Speaker Change: as much as possible because, as you know, instrument sales for us typically have been quite gross margin dilutive and in some cases, you know, significantly cash flow negative. So we think that the value proposition is better with the new column and, you know, we prefer to sell on the basis of that. We also have met some significant supply chains.
changes in our supply chain.
Speaker Change: Okay and it it sounds like you you're making some pretty significant progress on the cost reduction side. Did I hear you say you think that these first phase of initiatives they should be complete by the end of the first quarter of 2025?
Speaker Change: Yes, Jim, and look, I appreciate completely that it is somewhat frustrating for investors, you know, hearing about these initiatives but not seeing a huge, huge impact in terms of financials as yet.
Speaker Change: We operate in a highly regulated environment, as people know, and changes in terms of our operating structure require significant planning and execution. I do believe, and I know other people who are very experienced in the industry, we are moving at a very fast pace, a controlled but very fast pace.
Speaker Change: There is nobody beyond myself and Louise that would like to see this happen much quicker. We would like this to be done as quickly as possible.
Speaker Change: But the truth is, it just takes time in this industry for all the various steps with checks and balances that are properly there to be carried out.
Speaker Change: And so for that reason, we had always expected most of these changes to be affected by the end of quarter four this year are very early in 2025. And, and that's where we expect the real profitability and cash flow benefits associated with those.
Speaker Change: to come on stream. So as I mentioned in my prepared remarks, you know, we do expect we are on the cusp of a step change in financial performance and that should build throughout the rest of, from early 2025 towards the end of the year.
Speaker Change: Okay, and then just a couple more. You know, what's the timeline for the two tuck-in deals you did? The PSA test, the preeclampsia test, what's the timeline do you think to commercialize those tests? And will they be sold throughout the United States or are they just New York tests?
Speaker Change: So if I take the metabolomics test, the preeclampsia, we'd expect that to be revenue-generating in the second half of 2025. They will be sold initially as lab-developed tests.
Speaker Change: We would expect that we will be able to provide that testing service all around the US because our lab is New York State certified, which basically gives the right to be able to provide testing services to people in 50 states. So that is the way that we will initially roll out that test, is as a service.
and Adinko has done for many, many years.
Speaker Change: We will then look to get traction for that test in the markets through interaction with KOLs, so key opinion leaders, physicians, et cetera, Jim. And then.
Speaker Change: Assuming that we get the level of traction that we expect.
Speaker Change: from providing that test as a service, we would then typically look to get an FDA approval as a 510K, for example, on that test, and then sell it as a test kit to other laboratories all across the U.S., and possibly internationally.
Speaker Change: With regards to the prostate cancer test for metabolomics, again, we're very excited with that opportunity and the opportunity to get into the oncology space.
Speaker Change: There is more work to be done on that in order to get it into the necessary kind of stage in order to start offering testing services out of our New York State certified lab. I'd expect that would be revenue in 2026.
Speaker Change: but given the nature of the test and the markers that is
Speaker Change: focuses on. I believe there's an opportunity for us to create very significant value
Speaker Change: in the short to medium term by further developing that test.
Speaker Change: So our plan would be to roll it out in the same way, but I think we can add a lot of value, as I said, given the nature of the test, the type of technology, what it does for patients in line with its intended use and the space that it operates in.
Speaker Change: Alright, and the last one for me is what do you expect the share count to be in the fourth quarter as a result of these two acquisitions?
Speaker Change: I don't have that number right now. We can come back to you on that, Jim. We can come back to you on that. Okay. Okay. Thank you.
Thank you.
Speaker Change: Our next question is from Paul Norrie with Noble Equity Funds. Please proceed.
Hey, good morning.
Speaker Change: I guess the looking at these goals for the second quarter of next year I guess pretty much calls for a sales increase of 20% and EBITDA so
Speaker Change: quarterly turnaround of six and a half million so maybe I know you I know all the initiatives you have and it's it's great that you're drilling into the details publicly but
Speaker Change: What are the biggest maybe two or three items that will get you there in the next few quarters?
Speaker Change: Thanks, Paul. Look, for commercial reasons, as you can imagine, we're dealing with partners, so I don't want to give particular details around the savings we get from different initiatives. But I think it's safe to say the ones that we have noticed are the biggest ticket items that we have. Right?
The drains on profitability for our analysis has been,
Speaker Change: significant number of factories operating not at full capacity and because we're in a very highly regulated industry that comes with a significant amount of overhead, right? So reducing down from three in the US to just one will have a big impact.
Speaker Change: And then offshoring some of the less complex aspects of our operations to a lower cost location and to a partner who's also manufacturing other products and allows effectively spread a lot that overhead. So they are each the biggest
Speaker Change: the biggest contributors. The offshoring and consolidation of corporate services has an impact and it's probably on the lower side than the physical infrastructure ones in terms of manufacturing, but again does add. I think the key benefit around that would be modernization of our processes and
Speaker Change: and further agility and ability to scale, particularly as we push out the CGM product. So that is a cost-save move, but also further agility focused as well. Does that make sense?
Yeah, thank you.
I guess looking at TrimScreen
and the revenues for next year are...
Speaker Change: Are most of the revenues for next year on Trendscreen expected to be from new tenders or building on the existing tender from this current year?
Speaker Change: Thanks, Paul. Good question. So, we are in a number of evaluation processes for Trendscreen.
Speaker Change: I know as a long-time investor in the company, Paul, you know as well as anyone.
Speaker Change: There is uncertainty around the timing of those tenders and those evaluation processes.
Speaker Change: and you know they can move from quarter to quarter depending upon different priorities within the health organizations, government changes, etc. Right? And that's something that we need to be agile on and ready to react and I think our outsource manufacturing will allow us to be more agile and to react to shorter notice in terms of skating up for big wins. Right? And that was one of the drivers in addition to cost savings.
And so.
Speaker Change: We would hope to win, and do expect to win, additional tenders and evaluations for 2025. When exactly they will come in, we don't know, we have an idea. That's not something we will go into publicly, but as you know, it can shift around. But, you know, we've done what we needed to do this year on Trendscreen.
Speaker Change: which was supply the market at a very, very big volume from the off. So we've proven that we can manufacture and supply a very high volume of product on time to the highest levels of quality.
Speaker Change: Okay, great. And then final question, how much capacity is remaining on the ATM?
Speaker Change: I think there's about less than a million on the current ATM filing.
Okay, thank you
Thanks, Paul.
Speaker Change: We have reached the end of our question and answer session. I would like to turn the conference back over to management for closing remarks.
Thank you, Sherry.
Speaker Change: Thank you everybody for your attention. We appreciate your interest in the company and your support as we continue with this transformation journey and we look forward to speaking with you over the next coming weeks.
Speaker Change: Thank you. This will conclude today's conference. You may disconnect your lines at this time, and thank you for your participation.