Trinity Biotech(US:TRIB)2022-11-05 16:52Financial Data and Key Metrics Changes - Total revenues for Q2 2022 were $18.5 million, down from $25.8 million in Q2 2021, reflecting a significant decline [22] - Gross margin decreased to 35.3% from 42.7% in Q2 2021, primarily due to reduced demand for COVID-related products [23] - Operating loss for Q2 2022 was $1.4 million compared to an operating profit of $200,000 in Q2 2021 [27] - Net financial expenses increased to $8.3 million in Q2 2022 from $0.3 million in Q2 2021, largely due to early repayment penalties and higher interest rates [28] Business Line Data and Key Metrics Changes - Excluding COVID-related products, revenues for Q2 2022 were approximately $18 million, flat compared to Q2 2021, but up 7% from Q1 2022 [38] - The diabetes A1c product line saw a year-over-year revenue increase of over 25% [38] - Fitzgerald Life Science business experienced a 25% quarter-over-quarter growth [39] Market Data and Key Metrics Changes - Preliminary estimates for Q3 2022 revenues are expected to be between $19 million to $20 million, driven by double-digit year-over-year increases in hemoglobins and Fitzgerald Life Science businesses [39] - HIV point-of-care revenue is anticipated to grow over 30% on a quarter-over-quarter basis due to increased orders from Africa [40] Company Strategy and Development Direction - The company aims to establish a clear vision and strategy focusing on scaling core businesses, particularly in point-of-care and lab services [15] - There is a renewed focus on inorganic growth through partnerships and M&A to scale operations [17] - The company plans to leverage its Fitzgerald brand and optimize its hemoglobins business for profitability [15][47] Management's Comments on Operating Environment and Future Outlook - Management acknowledges the fluid situation regarding COVID-19 and its impact on product sales, particularly PCR testing [60][61] - The company is not relying on COVID-related products as a driver of future strategy [60] - Management is optimistic about growth potential in the autoimmune business and plans to invest significantly in the decentralized testing market [49][52] Other Important Information - The company received a $45.2 million investment from MiCo Group, which includes equity and a convertible note [44] - An early repayment of $35 million of the term loan is expected to save $5 million in annual cash interest expenses [45] - The company is undertaking a portfolio-wide capital and talent allocation review to maximize returns [55] Q&A Session Summary Question: What is the outlook for sales of COVID-related products? - Management indicated that sales have significantly declined and are not expected to be a major part of future strategy [60][61] Question: How should interest expenses be viewed for the upcoming quarters? - Interest on the Perceptive debt is approximately 14%, with expected cash interest costs based on the remaining balance [68] Question: What is the expected share count for the third quarter? - The share count is expected to increase due to shares issued to MiCo being outstanding for a longer period [69] Question: What is the market size for the new variant instrument? - The market for the variant product is expected to generate over $5 million to $6 million in revenue annually, primarily in the U.S. [84] Question: What is the company's strategy regarding potential partnerships? - The company is exploring partnerships with both younger tech companies and traditional CPG companies to enhance its market position [94][96]