Trinity Biotech(TRIB) - 2023 Q1 - Quarterly Report

Summary Highlights Trinity Biotech's 2022 performance focused on core haemoglobins growth and strategic expansion, alongside cost optimization, despite overall revenue decline from reduced COVID-19 VTM sales Fiscal Year and Q4 2022 Revenue | Period | Total Revenue ($ million) | Revenue (Ex-VTM) ($ million) | YoY Change (Ex-VTM) (%) | | :--- | :--- | :--- | :--- | | Fiscal Year 2022 | $74.8 | $71.5 | -1.0 | | Q4 2022 | $18.0 | Not specified | -0.4 | - The core haemoglobins business was a key focus in 2022, with the main diabetes product line experiencing 27% overall revenue growth and a 60% increase in instrument placements compared to 2021[5] - The company plans to launch its TrinScreen HIV screening test in Kenya in Q2 2023, targeting a market with an estimated 7 to 9 million annual tests[5] - A strategic portfolio review is underway to exit or optimize non-core products, focusing on Diabetes/Haemoglobins, Point of Care & Digital Health, and Personalized Therapeutic Drug Monitoring[10] - Structural and operational initiatives include achieving a 40% operating gross margin run rate (excluding one-offs), reducing headcount by approximately 10% since Q4 2021, and targeting a 15% cost reduction for the Premier 9210 instrument[10] Fourth Quarter 2022 Financial Results Trinity Biotech's Q4 2022 saw total revenue decline by 7.6% to $18.0 million, driven by reduced COVID-19 VTM sales, resulting in an operating loss of $7.8 million due to increased SG&A and impairment charges Q4 2022 Revenue Breakdown (US$ thousand) | Category | Q4 2022 (US$ thousand) | Q4 2021 (US$ thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Clinical Laboratory | 15,361 | 17,146 | (10.4%) | | Point-of-Care | 2,675 | 2,379 | 12.4% | | Total | 18,036 | 19,525 | (7.6%) | - The decrease in Clinical Laboratory revenue was mainly due to a $1.4 million reduction in PCR VTM product sales as COVID-19 testing programs scaled down[11] - SG&A expenses increased by $4.6 million to $10.2 million, driven by a $1.2 million non-cash share-based payment charge, a $0.9 million unfavorable variance in foreign exchange on leases, and $1.0 million in non-recurring legal/professional fees for M&A activities[17][20] - The company recognized a $3.0 million impairment charge, primarily from writing down the value of two internally developed COVID-19 tests to zero due to unsuccessful commercialization and uncertain regulatory pathways[18][19] Q4 2022 Adjusted EBITDASO Calculation ($ million) | Item | Amount ($ million) | | :--- | :--- | | Operating loss | (7.8) | | Depreciation | 0.4 | | Amortisation | 0.2 | | Impairment charges | 3.0 | | Adjusted EBITDA | (4.2) | | Share option expense | 1.3 | | Adjusted EBITDASO | (2.9) | - The company's cash balance decreased by $0.7 million during the quarter, ending at $6.6 million as of December 31, 2022[27] Fiscal Year 2022 Financial Results Trinity Biotech's FY 2022 revenues declined 19.6% to $74.8 million, primarily due to reduced COVID-19 VTM sales, leading to a $16.8 million operating loss and a $41.0 million net loss, significantly impacted by financial expenses Fiscal Year 2022 Revenue Breakdown (US$ thousand) | Category | FY 2022 (US$ thousand) | FY 2021 (US$ thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Clinical Laboratory | 65,566 | 82,628 | (20.6%) | | Point-of-Care | 9,213 | 10,337 | (10.9%) | | Total | 74,779 | 92,965 | (19.6%) | - The main diabetes products achieved year-on-year revenue growth of 26.6%, with particularly strong demand in Asia Pacific and Latin America[31] - Gross margin for FY 2022 was 29.5%, significantly impacted by a $4.7 million excess inventory and obsolescence charge, primarily a $3.5 million write-down of VTM inventory[33] - Operating loss for FY 2022 was $16.8 million, a sharp decline from an operating profit of $6.6 million in 2021, due to lower revenues, reduced gross margin, and higher indirect costs[41] - Financial expenses increased to $24.7 million from $7.1 million in 2021, mainly due to a $9.7 million loss on the disposal of Exchangeable Notes and a $3.5 million penalty for early debt settlement[43][44] FY 2022 Adjusted EBITDASO Calculation ($ million) | Item | Amount ($ million) | | :--- | :--- | | Operating loss | (16.8) | | Depreciation | 1.4 | | Amortisation | 0.9 | | Impairment charges | 5.8 | | Significant inventory charges | 4.7 | | Adjusted EBITDA | (4.0) | | Share option expense | 1.8 | | Adjusted EBITDASO | (2.2) | Consolidated Financial Statements Trinity Biotech's consolidated financial statements for FY 2022 show a net loss of $41.0 million, an equity deficit of $2.2 million, and a $19.2 million decrease in cash, reflecting significant operational and financial challenges Key Income Statement Data (FY 2022 vs FY 2021, US$ thousand) | Metric | FY 2022 (US$ thousand) | FY 2021 (US$ thousand) | | :--- | :--- | :--- | | Revenues | 74,779 | 92,965 | | Gross Profit | 22,048 | 38,077 | | Operating (Loss)/Profit | (16,752) | 6,625 | | Net (Loss)/Profit | (41,009) | 875 | | (Loss)/Earnings per ADS | (121.6)¢ | 4.2¢ | Key Balance Sheet Data (As of Dec 31, 2022 vs Dec 31, 2021, US$ thousand) | Metric | Dec 31, 2022 (US$ thousand) | Dec 31, 2021 (US$ thousand) | | :--- | :--- | :--- | | Total Assets | 92,104 | 118,895 | | Cash & Equivalents | 6,578 | 25,910 | | Total Liabilities | 94,280 | 119,214 | | Total Equity | (2,176) | (319) | Key Cash Flow Data (FY 2022 vs FY 2021, US$ thousand) | Metric | FY 2022 (US$ thousand) | FY 2021 (US$ thousand) | | :--- | :--- | :--- | | Net Cash from Operating Activities | (921) | 13,238 | | Net Cash used in Investing Activities | (5,977) | (8,691) | | Net Cash used in Financing Activities | (12,322) | (6,019) | | Decrease in Cash | (19,220) | (1,472) |