Trinity Biotech(TRIB) - 2022 Q4 - Annual Report

Q3 2022 Financial Results Summary Highlights Trinity Biotech reported Q3 2022 revenues of $19.5M, with non-COVID revenues up 2% YoY, driven by strong Haemoglobins and Fitzgerald Life Sciences growth, and advanced its product pipeline Q3 2022 Revenue Highlights | Metric | Value | Comparison | | :--- | :--- | :--- | | Total Revenues Q3 2022 | $19.5M | - | | Non-VTM Revenues Q3 2022 | $19.2M | +2% YoY, +6% QoQ | - Strong YoY revenue growth was driven by a 30% increase in both Haemoglobins and Fitzgerald Industries Life Sciences businesses, and a 30%+ increase in the Autoimmune product business[3] - The Haemoglobins business saw particularly strong demand in AsiaPac (over 50% YoY growth) and Latin America (over 40% YoY growth)[3] - Key product pipeline developments include the FDA 510k submission for the Premier Resolution instrument (expected US launch Q2 2023) and the initiation of development for the Premier 9210 HbA1c instrument (expected launch Q3 2023)[3] Third Quarter Financial Performance Q3 2022 saw revenue decline to $19.5M due to reduced COVID VTM sales, leading to a 10.3% gross margin, $7.1M operating loss, and $8.9M net loss, impacted by inventory write-downs and impairment charges Revenue Analysis Total Q3 2022 revenue decreased 11.4% YoY to $19.5M, driven by declines in Point-of-Care and Clinical Laboratory, though Clinical Laboratory (ex-VTM) grew 13.4% due to Haemoglobins and Fitzgerald Industries Q3 2022 Revenue by Segment (US$ thousands) | Revenue Segment | Q3 2022 (US$'000) | Q3 2021 (US$'000) | Change (%) | | :--- | :--- | :--- | :--- | | Clinical Laboratory | 16,966 | 17,891 | (5.2%) | | Point-of-Care | 2,536 | 4,113 | (38.3%) | | Total | 19,502 | 22,004 | (11.4%) | - Excluding COVID-related VTM products, Clinical Laboratory revenues increased by nearly $2.0 million, or 13.4%, compared to Q3 2021[5] - Growth drivers in the Clinical Laboratory segment included a $1.4M (30.3%) increase in Haemoglobins revenues and a $0.9M (30.2%) increase in Fitzgerald Industries revenues compared to Q3 2021[6][8] - Point-of-Care revenues decreased YoY due to an unusually high volume of HIV tests sold in Africa in Q3 2021; however, Q3 2022 revenues of $2.5M represented a 38% increase compared to Q2 2022[9] Profitability Analysis Gross margin fell to 10.3% from 40.4% YoY, primarily due to a $4.7M inventory write-down, resulting in a $7.1M operating loss and $2.3M impairment charge on intangible assets Q3 2022 Gross Profit and Margin (US$ thousands) | Metric | Q3 2022 (US$'000) | | :--- | :--- | | Gross Profit | 2,015 | | Gross Margin % | 10.3% | | Significant Inventory Charges | 4,697 | | Adjusted Gross Profit | 6,712 | | Adjusted Gross Margin % | 34.4% | - The company recorded a $4.7M inventory write-down, comprising $3.5M for VTM, $0.9M for other excess raw materials, and $0.3M for the Tri-stat instrument line[10][11] - An impairment charge of $2.3M was recorded for two internally developed intangible assets: the autoimmune smart reader and the Tri-stat instrument, whose recoverable amounts were determined to be zero[14][15] - The operating loss of $7.1M compares to an operating profit of $2.8M in Q3 2021; the net loss for the quarter was $8.9M, compared to a profit of $1.3M in the prior-year period[16][19] Earnings Per Share (EPS) Q3 2022 saw a basic loss per ADS of 23.5 cents, a reversal from a 6.3 cents profit in Q3 2021 Q3 Earnings Per American Depositary Share (US cents) | Earnings Per ADS (US cents) | Q3 2022 | Q3 2021 | | :--- | :--- | :--- | | Basic (Loss)/Profit per ADS | (23.5) | 6.3 | | Diluted (Loss)/Profit per ADS | (23.5) | 6.1 | Non-IFRS Financial Measures Trinity Biotech reported Q3 2022 Adjusted EBITDASO of $0.8M, derived from an operating loss of $7.1M adjusted for non-cash items like impairment charges and inventory write-downs Q3 2022 Reconciliation to Adjusted EBITDASO (US$ millions) | Reconciliation to Adjusted EBITDASO | Value ($m) | | :--- | :--- | | Operating loss | (7.1) | | Depreciation | 0.5 | | Amortisation | 0.3 | | Impairment charges | 2.3 | | Significant inventory charges | 4.7 | | Share option expense | 0.1 | | Adjusted EBITDASO | 0.8 | - The company presents non-IFRS measures like Adjusted Gross Profit, Adjusted Gross Margin, Adjusted EBITDA, and Adjusted EBITDASO to help investors perform additional financial analysis and to evaluate and manage operations internally[22] Liquidity and Cash Flow The company's cash balance decreased by $3.2M to $7.3M in Q3 2022, with $0.7M cash from operations offset by $1.3M capital expenditures and $1.7M interest payments - The Group's cash balance fell from $10.5 million at the end of Q2 2022 to $7.3 million at the end of Q3 2022[23] Q3 2022 Key Cash Flow Items (US$ millions) | Key Cash Flow Items (Q3 2022) | Value (US$m) | | :--- | :--- | | Cash generated from operations | 0.7 | | Capital expenditure outflows | (1.3) | | Interest payments | (1.7) | | Payments for property leases | (0.7) | Business Outlook and Strategic Initiatives Trinity Biotech is pursuing product innovation, market expansion, and margin improvement through new instrument launches, commercial footprint growth, strategic partnerships, and operational streamlining - The company's TrinScreen HIV product was recommended as the first-line screening test in Kenya, with initial orders expected in Q1 2023, ramping up to approximately 6 million tests per year[7] - Trinity is in partnership negotiations to leverage its lateral flow manufacturing capabilities and gain access to new intellectual property[7] - Margin optimization efforts include eliminating loss-making legacy products, consolidating manufacturing into its Jamestown facility, and reducing production headcount at two facilities[7][11] - The leadership team has been strengthened with recent appointments of a Chief Technology Officer, Head of Quality and Regulatory Affairs, and Global Supply Chain Leader[7] Consolidated Financial Statements The unaudited consolidated financial statements for Q3 2022 show a net loss of $8.9M, total assets of $97.9M, total equity of $6.6M, and a net cash usage of $3.2M Consolidated Income Statements Q3 2022 revenues were $19.5M, with gross profit of $2.0M, leading to a net loss of $8.9M after operating expenses and a $2.3M impairment charge Consolidated Income Statement (US$ thousands) | (US$000's) | Three Months Ended Sep 30, 2022 | Three Months Ended Sep 30, 2021 | | :--- | :--- | :--- | | Revenues | 19,502 | 22,004 | | Gross profit | 2,015 | 8,900 | | Operating (Loss)/Profit | (7,086) | 2,768 | | (Loss)/Profit for the period | (8,945) | 1,321 | Consolidated Balance Sheets As of Sep 30, 2022, total assets were $97.9M, with $7.3M cash and $23.6M inventories, total liabilities $91.3M, and total equity $6.6M Consolidated Balance Sheet (US$ thousands) | (US$ '000) | Sep 30, 2022 | Dec 31, 2021 | | :--- | :--- | :--- | | ASSETS | | | | Total non-current assets | 48,061 | 46,207 | | Total current assets | 49,834 | 72,688 | | TOTAL ASSETS | 97,895 | 118,895 | | EQUITY AND LIABILITIES | | | | Total equity/(deficit) | 6,633 | (319) | | Total liabilities | 91,262 | 119,214 | | TOTAL EQUITY AND LIABILITIES | 97,895 | 118,895 | Consolidated Statement of Cash Flows Q3 2022 saw $0.7M cash from operations, $1.3M used in investing, and $2.4M used in financing, leading to a $3.0M net decrease in cash Consolidated Statement of Cash Flows (US$ thousands) | (US$000) | Three Months Ended Sep 30, 2022 | Three Months Ended Sep 30, 2021 | | :--- | :--- | :--- | | Net cash generated by operating activities | 676 | 1,697 | | Net cash used in investing activities | (1,324) | (1,959) | | Net cash (used) in financing activities | (2,372) | (726) | | (Decrease) in cash and cash equivalents | (3,020) | (988) |