-Business performance on track to achieve approximately
-Strong sequential 39% Q/Q growth on Point-of-Care revenues associated with successful rollout and scaling of HIV test production-
-Disciplined execution of operational efficiencies led to 3.6 percentage point Q/Q increase in gross margin percentage with further improvements expected through 2024 and into early 2025-
Existing Business - Key Highlights
- Strong demand and output in TrinScreen HIV drove a 10% quarter-on-quarter revenue increase with 39% quarter on quarter revenue growth in Point-of-Care (“PoC”).
- Continued disciplined execution on profitability enhancing initiatives contributed to:
- a decrease in the net loss from
$5.5m in Q4, 2023 to a net loss of$3.3m for Q1, 2024, a 40% improvement, and - a 62% improvement on our EBITDASO position when compared to Q4, 2023.
- a decrease in the net loss from
- Based upon strong Q1, 2024 execution and continued momentum in the new management team’s Comprehensive Transformation Plan (see below), the Company expects further gross margin and EBITDASO improvement through 2024 and into early 2025.
- Company reiterates guidance of approximately
$20 million of Annualized run-rate EBITDASO1 on annualised run-rate revenues of approximately$75 million by Q2, 2025. This outlook is predicated solely on growth from the existing businesses including haemoglobin testing and HIV, and planned improvements to operating margins, with no contribution from the recently acquired biosensor business.
TrinScreen HIV Growth
- 39% quarter on quarter increase in revenue from our PoC portfolio driven by increased sales of our new TrinScreen HIV product.
- Successful ramp up of TrinScreen HIV production in the quarter with sales of
$1.2m recognised in Q1, 2024. - TrinScreen HIV revenue was dilutive to our overall gross margin percentage in Q1, 2024, as we invested in training additional staff to support the ramp up in production. However, we do expect near term improvements in gross margin over the coming two quarters with additional automation coming online in Q2, 2024 through repurposing existing equipment and further supply chain optimisations. Additional improvements in profitability are expected later in the year as we move to offshore downstream assembly.
- Total orders of
$6m for TrinScreen HIV for 2024 supply received to date, with revenue of over$8m expected for fiscal year 2024.
Comprehensive Transformation Plan – Key Developments
- The following previously announced profitability initiatives are now contributing to improved financial performance:
- Our revised in-house manufacturing process of our key Diabetes HbA1c consumable.
- Reductions in headcount in late 2023 and Q1, 2024.
- Overall supply chain optimisation.
- Targeted price increases notified to customers in late 2023 and early 2024.
- We expect the above profitability initiatives to further contribute to improved financial performance improvements through 2024.
- In addition, we expect the launch of our improved diabetes column system, which is ongoing, to contribute to improved financial performance in 2024.
In early 2024, our new management team announced further profitability initiatives focused on delivering improved financial performance and since then the Company has made significant progress in advancing these key initiatives:
- Consolidate & Offshore Manufacturing:
- We completed training of our identified offshore manufacturing partner’s staff in the assembly of our rapid HIV tests.
- Significant progress in ceasing main manufacturing activities at our
Kansas City manufacturing plant which currently serves our Haemoglobin business. We remain on track to have fully executed this change by the end of 2024.
- We completed training of our identified offshore manufacturing partner’s staff in the assembly of our rapid HIV tests.
- Optimise Supply Chain:
- We prioritised optimisation of our rapid HIV supply chain, with increased volumes from TrinScreen HIV creating opportunities to negotiate with supply partners, resulting in meaningful reductions in our cost of goods.
- We prioritised optimisation of our rapid HIV supply chain, with increased volumes from TrinScreen HIV creating opportunities to negotiate with supply partners, resulting in meaningful reductions in our cost of goods.
- Centralise & Offshore Corporate Services:
- We have substantially progressed the set-up of our centralised & offshored corporate services function. We have signed an implementation agreement with a third party outsourced partner.
Biosensor Developments
- We continue to progress the development of our next generation Continuous Glucose Monitoring (“CGM”) system in line with our previously communicated plan.
- We have now engaged a world leading physical & digital product design consultancy, based in
London andCalifornia , to lead the design of this next generation solution. - We are progressing technical optimisations of our glucose sensor wire.
- We have applied for ethical approval to begin a pre-pivotal clinical trial in
June 2024 . This pre-pivotal clinical trial will give us insights into the sensor optimisation pathway and we expect to receive ethical approval to commence the trial in the coming weeks. - We also continue to focus on the exciting health & wellness analytical insight opportunities from our CGM’s data capture capabilities and recently announced a strategic collaboration with medical artificial intelligence company PulseAI. Under this collaboration
Trinity Biotech will provide a unique pool of multi-parameter CGM datasets from Waveform’s existing biosensor database to PulseAI, which will be used to support the design and implementation of Trinity Biotech’s AI-driven health & wellness analytics platform. - PulseAI are experts in evidence-based medical AI and have extensive experience in scaling AI algorithm training using medical sensor datasets. PulseAI have worked in association with
Mayo Clinic to train their machine learning algorithms using large-scale datasets captured across millions of patients. - We have also strengthened our team with the appointment of
Avinash Kale as Continuous Glucose Monitor Programme Director. We are very excited to welcome Avinash toTrinity Biotech and believe Avinash will be instrumental in advancing our mission of introducing intelligent wearable biosensors, including CGMs, into markets all around the globe.
First Quarter Results(Unaudited)
Total revenues for Q1, 2024 were
2024 Quarter 1 | 2023 Quarter 1 | Increase/ (decrease) | |
% | |||
Clinical laboratory | 11,712 | 12,669 | (7.6%) |
Point-of-care | 2,992 | 2,160 | 38.5% |
Total | 14,704 | 14,829 | (0.8%) |
Our PoC portfolio generated revenues of
Our clinical laboratory revenues were
Gross profit for the quarter was
- the financial benefits resulting from our previously announced haemoglobins business initiatives, namely the optimisation of our instrument manufacturing supply chain and our revised in-house manufacturing process of our key diabetes HbA1c consumable, which we fully implemented by the end of Q1 2024, and
- a more favourable sales mix of higher margin haemoglobin consumables.
The improved margin performance in haemoglobins this quarter was offset by the margin impact of the higher TrinScreen HIV revenues, which are currently achieving a lower-than-average gross margin. Higher TrinScreen revenues will continue to dilute our overall gross margin percentage in the remaining quarters of 2024 given its lower price point when compared to our UniGold HIV test, but we do expect TrinScreen HIV to contribute additional gross profit as 2024 progresses due to further automation of our manufacturing process, increased operational efficiency and the expected transfer of assembly to a lower cost of manufacturing location by the end of 2024.
Additionally, over the coming quarters, we expect to realize further financial benefits of the previously announced cost saving initiatives in our haemoglobins, autoimmune and infectious diseases divisions.
R&D
Research and development expenses in Q1, 2024 were
SG&A
Selling, general and administrative (SG&A) expenses were
Key drivers of this lower SG&A expense include:
- Lower recurring salary and contractor costs of
$0.4m in Q1 2024 versus the comparative period, driven by headcount optimisation activities during Q3 and Q4 2023. - Cost savings of approximately
$0.6m due to the benefits of our other cost saving initiatives in the last twelve months. - Our share-based payments accounting charge was
$0.6m lower in Q1, 2024 compared to Q1, 2023, with the lower expense mainly due to the resignation of our former CEO in Q4, 2023.
A favourable movement in foreign exchange retranslation gains and losses, which shifted from an FX loss of$0.1m in Q1, 2023, to an FX gain of$0.1m for Q1, 2024, largely related to the accounting driven requirement to mark-to-market Euro-denominated lease liabilities for right-of-use assets. - These savings were offset by a quarter-on-quarter increase in operating expenses relating to our biosensor division of
$0.3m and higher amortisation of$0.3m mainly due to the Waveform acquisition which occurred during Q1, 2024.
Operating Loss
Operating loss for the quarter was
Net Financial Expenses
Net financial expenses in Q1, 2024 were
Additionally, the fair value movement of the derivative liability associated with warrants held by Perceptive resulted in a
Offsetting the above was an increase in the Amended Term Loan interest expense of
The financial expense for the current and comparative period are summarized in the table below.
Q1, 2024 | Q1, 2023 | |
Amended Term Loan interest | 2,560 | 2,119 |
Convertible note interest | 282 | 265 |
Notional interest on lease liabilities for Right-of-use assets | 147 | 167 |
Fair value movement on derivative balances | 841 | – |
IFRS modification adjustment to term loan | (3,566) | – |
264 | 2,551 |
Loss on continuing operations
Loss on continuing operations for the quarter was
EBITDASO
Loss before interest, tax, depreciation, amortisation, share option expense (Adjusted EBITDASO) for continuing operations for Q1, 2024 was
Q1, 2024 | Q1, 2023 | |
Loss on continuing operations | (3,317) | (6,305) |
Income tax expense/(credit) | 67 | (11) |
Net Financial Expense | 209 | 2,397 |
Depreciation | 164 | 351 |
Amortisation | 527 | 251 |
Adjusted EBITDA for continuing operations | (2,350) | (3,317) |
Share option expense | 812 | 1,364 |
Adjusted EBITDASO for continuing operations | (1,538) | (1,953) |
Loss per Share
The basic loss per ADS for Q1, 2024 was
Liquidity
The Group’s cash balance increased from
Excluding the recognition of a contingent liability of
Notice of Delisting or Failure to Satisfy a Continued Listing Rule or Standard
As previously reported in a Current Report on Form 6-K filed
On
Notwithstanding the foregoing, there can be no assurance that the Panel will grant the Company an additional extension period or that the Company will ultimately regain compliance with all applicable requirements for continued listing on The Nasdaq Global Select Market.
Use of Non-IFRS Financial Measures
The attached summary unaudited financial statements were prepared in accordance with International Financial Reporting Standards (IFRS). To supplement the consolidated financial statements presented in accordance with IFRS, the Company presents non-IFRS presentations of, Adjusted EBITDA and Adjusted EBITDASO. The adjustments to the Company's IFRS results are made with the intent of providing both management and investors a more complete understanding of the Company's underlying operational results, trends, and performance. Non-IFRS financial measures mainly exclude, if and when applicable, the effect of share-based payments, depreciation, amortization and impairment charges.
Adjusted EBITDA for continuing operations and Adjusted EBITDASO for continuing operations are presented to evaluate the Company's financial and operating results on a consistent basis from period to period. The Company also believes that these measures, when viewed in combination with the Company's financial results prepared in accordance with IFRS, provides useful information to investors to evaluate ongoing operating results and trends. Adjusted EBITDA for continuing operations and Adjusted EBITDASO for continuing operations, however, should not be considered as an alternative to operating income or net income for the period and may not be indicative of the historic operating results of the Company; nor is it meant to be predictive of potential future results. Adjusted EBITDA for continuing operations and Adjusted EBITDASO for continuing operations are not measures of financial performance under IFRS and may not be comparable to other similarly titled measures for other companies. Reconciliation between the Company's operating profit/(loss) and Adjusted EBITDA for continuing operations and Adjusted EBITDASO for continuing operations are presented.
Forward-Looking Statements
This release includes statements that constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 (the “Reform Act”), including but not limited to statements related to Trinity Biotech’s cash position, financial resources and potential for future growth, market acceptance and penetration of new or planned product offerings, and future recurring revenues and results of operations.
About
Consolidated Income Statements | ||
(US$000’s except share data) | Three Months Ended (unaudited) | Three Months Ended (unaudited) |
Revenues | 14,704 | 14,829 |
Cost of sales | (9,182) | (9,256) |
Gross profit | 5,522 | 5,573 |
Gross margin % | 37.6% | 37.6% |
Other operating income | 29 | – |
Research & development expenses | (1,089) | (860) |
Selling, general and administrative expenses | (7,503) | (8,632) |
Operating Loss | (3,041) | (3,919) |
Financial income | 55 | 154 |
Financial expenses | (264) | (2,551) |
Net financial expense | (209) | (2,397) |
Loss before tax | (3,250) | (6,316) |
Income tax (expense)/credit | (67) | 11 |
Loss for the period on continuing operations | (3,317) | (6,305) |
Profit for the period on discontinued operations | - | 496 |
Loss for the period (all attributable to owners of the parent) | (3,317) | (5,809) |
Loss per ADS (US cents) | (37.4) | (76.1) |
Diluted loss per ADS (US cents) | (37.4) | (76.1) |
Weighted average no. of ADSs used in computing basic earnings per ADS | 8,872,108 | 7,631,692 |
Weighted average no. of ADSs used in computing diluted earnings per ADS | 8,872,108 | 7,631,692 |
Consolidated Balance Sheets | ||
US$ ‘000 (unaudited) | US$ ‘000 | |
ASSETS | ||
Non-current assets | ||
Property, plant and equipment | 3,363 | 1,892 |
38,572 | 16,270 | |
Deferred tax assets | 2,020 | 1,975 |
Derivative financial asset | 232 | 178 |
Other assets | 79 | 79 |
Total non-current assets | 44,266 | 20,394 |
Current assets | ||
Inventories | 22,645 | 19,933 |
Trade and other receivables | 17,319 | 13,901 |
Income tax receivable | 299 | 1,516 |
Cash, cash equivalents and deposits | 5,776 | 3,691 |
Total current assets | 46,039 | 39,041 |
TOTAL ASSETS | 90,305 | 59,435 |
EQUITY AND LIABILITIES | ||
Equity attributable to the equity holders of the parent | ||
Share capital | 2,338 | 1,972 |
Share premium | 49,944 | 46,619 |
(24,922) | (24,922) | |
Accumulated deficit | (51,145) | (48,644) |
Translation reserve | (5,804) | (5,706) |
Equity component of convertible note | 6,709 | 6,709 |
Other reserves | 23 | 23 |
Total deficit | (22,857) | (23,949) |
Current liabilities | ||
Income tax payable | 337 | 279 |
Trade and other payables | 20,527 | 12,802 |
Exchangeable senior note payable | 210 | 210 |
Provisions | 50 | 50 |
Lease liabilities | 1,694 | 1,694 |
Total current liabilities | 22,818 | 15,035 |
Non-current liabilities | ||
Senior secured term loan | 58,674 | 40,109 |
Derivative financial liability | 1,367 | 526 |
Convertible note | 14,748 | 14,542 |
Lease liabilities | 10,310 | 10,872 |
Other payables | 1,760 | - |
Deferred tax liabilities | 3,485 | 2,300 |
Total non-current liabilities | 90,344 | 68,349 |
TOTAL LIABILITIES | 113,162 | 83,384 |
TOTAL EQUITY AND LIABILITIES | 90,305 | 59,435 |
Consolidated Statement of Cash Flows | ||
Three Months Ended (unaudited) | Three Months Ended (unaudited) | |
Cash flows from operating activities | ||
Loss for the period | (3,317) | (5,809) |
Adjustments to reconcile loss to cash used in operating activities: | ||
Depreciation | 164 | 351 |
Amortisation | 527 | 251 |
Income tax expense / (credit) | 67 | (11) |
Financial income | (55) | (154) |
Financial expense | 264 | 2,551 |
Share-based payments | 812 | 1,364 |
Foreign exchange gains on operating cash flows | (163) | (89) |
Other non-cash items | (153) | 195 |
Operating cash outflows before changes in working capital | (1,854) | (1,351) |
Net movement on working capital | (2,143) | (1,364) |
Cash used in operations before income taxes | (3,997) | (2,715) |
Income taxes received/(paid) | 1,178 | (3) |
Net cash used in operating activities | (2,819) | (2,718) |
Cash flows from investing activities | ||
Payments to acquire trades or businesses | (12,500) | - |
Payments to acquire intangible assets | (1,397) | (355) |
Payments to acquire financial assets | - | (700) |
Acquisition of property, plant and equipment | (66) | (274) |
Net cash used in investing activities | (13,963) | (1,329) |
Cash flows from financing activities | ||
Net proceeds from senior secured term loan | 21,676 | 4,853 |
Interest paid on senior secured term loan | (1,925) | (2,567) |
Interest paid on convertible note | (75) | (75) |
Interest paid on exchangeable notes | (4) | (4) |
Payment of lease liabilities | (556) | (599) |
Transaction costs paid in relation to the issue of share capital | (270) | - |
Net cash provided by financing activities | 18,846 | 1,608 |
Increase / (decrease) in cash and cash equivalents | 2,064 | (2,439) |
Effects of exchange rate movements on cash held | 21 | 14 |
Cash and cash equivalents at beginning of period | 3,691 | 6,578 |
Cash and cash equivalents at end of period | 5,776 | 4,153 |
The above financial statements have been prepared in accordance with the principles of International Financial Reporting Standards and the Company’s accounting policies but do not constitute an interim financial report as defined in IAS 34 (Interim Financial Reporting).
1 Earnings before interest, tax, depreciation, amortisation, share based payments from continuing operations– also excludes impairment charges and one-off items.
Contact: | ||
(353)-1-2769800 | (1)-646-751-4363 | |
E-mail: investorrelations@trinitybiotech.com |
Source:
2024 GlobeNewswire, Inc., source