Exhibit
|
|
Description
|
|
|
|
TRINITY BIOTECH PLC
|
||||
Trinity Biotech plc
|
||||
(Registrant)
|
||||
By:
|
/s/ John Gillard
|
|||
John Gillard
|
||||
Chief Financial Officer
|
Contact:
|
Trinity Biotech plc
John Gillard
(353)-1-2769800
|
Lytham Partners, LLC
Joe Diaz
(1)-602-889-9700
E-mail: investorrelations@trinitybiotech.com
|
• |
Total revenues for fiscal year 2022 and Q4, 2022 were $74.8m and $18.0m respectively. Excluding our Covid focused PCR Viral Transport Media (“VTM”) products, full year 2022 revenues of $71.5m were 1.0% lower than in 2021 and Q4, 2022
revenues were 0.4% lower than in Q4, 2021.
|
• |
Our performance in 2022 was focused on our core flagship haemoglobins business, where our main diabetes product line experienced 27% overall revenue growth and over 60% higher instrument placements versus 2021. As highlighted by the 43%
growth in sales of high-margin diabetes consumables in Q4, 2022 versus Q4, 2021, the increased instrument placements position the Company for strong recurring revenues in contracted consumables sales over the next several years.
|
• |
We expect to expand on this strategy with the expected U.S. launch of our Premier Resolution Haemoglobin Variants instrument this year as we continue to work closely with the FDA to gain clearance of our 510(k) submission.
|
• |
The Company also continued the development of the next generation of its flagship diabetes HbA1c instrument, the Premier 9210. With an expected launch in Q3, 2023, the instrument is planned to feature an improved, backward compatible
reagent column system that will feature up to 3 times the injection capacity and stability, limited calibration, improved user interface and lab system integration. This is the first step of a multi-generational product development plan
aimed at expanding the target market, driving lower service downtime and cost, while significantly expanding operating margins.
|
• |
We are experiencing particularly strong demand for our diabetes products in the South America and Asia Pacific regions, with 43% YoY revenue growth in South America and 36% YoY revenue growth in Asia Pacific. We continue to scale our
commercial coverage in these markets where the increase in diabetes and propensity for haemoglobin variants is at some of its highest rates and our boronate affinity technology has a particular competitive advantage.
|
• |
While our HIV business was down 14% in the year, this reflected significant non-recurring bulk orders from Nigeria in 2021. Our run-rate core Uni-Gold business continues to perform steadily with 15% growth in the fourth quarter versus
last year and 10% growth versus Q3, 2022.
|
• |
The Company is focused on executing, beginning in Q2 2023, on the launch/distribution of our TrinScreen HIV screening test, following the announcement by the Kenyan Ministry of Health of the adoption of a new HIV rapid testing algorithm.
This new algorithm establishes Trinity Biotech’s TrinScreen HIV as the standard screening test in Kenya under World Health Organisation (“WHO”) guidelines.
|
• |
The Kenyan HIV screening program is one of the largest in Africa, with an estimated 7 million to 9 million screening tests annually. This announcement demonstrates Trinity Biotech’s ability to disrupt well-established incumbents with
world-class, innovative, high-quality point of care solutions.
|
• |
Significant activity is underway to transform our US-based lab business. With a 13% CAGR over the last three years, the Company continues to see significant growth in its proprietary Sjogren’s bio-marker lab developed tests, despite
limited commercialization activities. Plans are in development for distribution through ophthalmology, dental and gynaecological channels at scale.
|
• |
In January 2023, the Company announced a strategic partnership with imaware, Inc. that combines imaware’s built-to-partner digital health platform with Trinity Biotech’s advanced reference laboratory facilities to power the Digital
Health Industry with private and white-label at-home and remote testing programs.
|
• |
Finally, the Company intends to introduce up to a dozen new lab developed tests in 2023 targeted at the Therapeutic Drug Monitoring (“TDM”) market aimed at high-growth recurring revenue opportunities in autoimmune diseases such as IBD,
Rheumatoid Arthritis and Psoriatic Arthritis as well as the rapidly expanding biological therapeutics market tackling cancer and degenerative diseases such as Alzheimer’s.
|
• |
The Company is conducting a portfolio review of all activities that do not align with its strategic focus around three key priorities, specifically:
|
o |
Diabetes/Haemoglobins
|
o |
Point of Care & Digital Health Disruption
|
o |
Personalized Therapeutic Drug Monitoring
|
• |
Management intends to exit or optimize for cash its portfolio of non-core products and platforms in order to maximise shareholder value.
|
• |
Given the strong pipeline of attractive M&A opportunities in our areas of strategic focus, in February 2023 the Company secured a $20 million flexible term-facility specifically to provide the ability to move quickly when
opportunistic transactions arise.
|
• |
Our portfolio optimization efforts and opportunistic M&A are key to our efforts to optimize our capital structure and reduce our debt costs in 2023.
|
• |
Cost optimisation and pricing actions has resulted in a Q4 operating gross margin run rate of approximately 40%, excluding one-off inventory adjustments.
|
• |
The Company has reduced headcount by approximately 10% compared to Q4 2021 as we continue to focus on process simplification and automation.
|
• |
Our emphasis on supply chain optimisation is currently in our haemoglobins division where we seek to reduce the cost of our Premier 9210 diabetes instrument by approximately 15%, in conjunction with our multi-generational product
development plan.
|
• |
Significant margin accretive actions for Q2 2023 are the insourcing of key Haemoglobins manufacturing processes and rapid transformation of our global logistics operations.
|
• |
A highly motivated, shareholder aligned leadership team is at the core of the Company strategy. We are rolling out a revised employee share-based compensation programme aimed at driving significant shareholder value. The plan follows the
same structure as the share-based compensation plan for our CEO, whereby 60% of options are stock performance based and only pay out when the stock reaches trading milestones at $3, $4 and $5 per ADS.
|
2021
Quarter 4
|
2022
Quarter 4
|
Increase/
(decrease)
|
|
US$’000
|
US$’000
|
%
|
|
Clinical Laboratory
|
17,146
|
15,361
|
(10.4%)
|
Point-of-Care
|
2,379
|
2,675
|
12.4%
|
Total
|
19,525
|
18,036
|
(7.6%)
|
o |
A higher IFRS driven non-cash accounting charge, which increased by $1.2m in Q4, 2022 compared to Q4, 2021, due to options granted in Q4, 2022. This charge is a notional accounting charge calculated under a Black-Scholes financial
model. As previously set out by our Chairman and CEO, Mr. Aris Kekedjian, one of his key priorities is to build a performance culture and drive ownership and accountability in the Company. A share-based compensation model that ensures
shareholder alignment is regarded as core to this transformation and is currently being rolled out. As this point in time, it is intended that these share-based compensation awards will be structured in a manner similar to that of the
options granted to our CEO, with a significant proportion of any awards being performance-based awards that only become exercisable if the Company’s ADS price reaches a hurdle level. These performance share-based compensation awards are
intended to closely align the goals of our team with those of our shareholders in the creation of shareholder value. The majority of the options granted in Q4, 2022 are performance share options and are structured such that they are
exercisable only if the Company's ADS price increases to certain levels ($3.00, $4.00 and $5.00 per ADS) during the life of the option. None of these performance share options are currently exercisable.
|
o |
An increase in foreign exchange loss largely related to the accounting driven requirement to mark-to-market Euro-denominated lease liabilities for right-of-use assets. In Q4, 2021, the foreign exchange gain on leases was $0.2m while in
Q4, 2022, a foreign exchange loss of $0.7m was recorded, resulting in an unfavourable quarter-on-quarter variance of $0.9m.
|
o |
Higher legal and professional fees of approximately $1.0m mainly comprising non-recurring costs for due diligence, corporate development and corporate finance activities. Included in this cost are professional fees in relation to several
M&A opportunities, of which only the strategic partnership with imaware™ has been completed to date.
|
o |
With the lifting of COVID-related travel restrictions, we have tasked our sales and marketing teams to increase travel to customers and trade shows as we continue to revitalise our sales activities. Similarly, some key functional leaders
based in Ireland have resumed visits to our overseas facilities as we seek to drive operational efficiencies. All of this has led to an increase in travel costs in Q4, 2022, compared to Q4, 2021, of approximately $0.3m. Management believes
this is a worthwhile and important investment, but we do not expect the level of travel to stay at this level going forward.
|
$m
|
|
Operating loss
|
(7.8)
|
Depreciation
|
0.4
|
Amortisation
|
0.2
|
Impairment charges
|
3.0
|
Adjusted EBITDA
|
(4.2)
|
Share option expense
|
1.3
|
Adjusted EBITDASO
|
(2.9)
|
Full Year
2021
|
Full Year
2022
|
Decrease
|
|
US$’000
|
US$’000
|
%
|
|
Clinical Laboratory
|
82,628
|
65,566
|
(20.6%)
|
Point-of-Care
|
10,337
|
9,213
|
(10.9%)
|
Total
|
92,965
|
74,779
|
(19.6%)
|
1. |
VTM inventory write down ($3.5m) – as disclosed previously by the Company, we have not seen any evidence during the winter season of 2022-23 of significant peaks in demand for VTM products. This has led management to revisit our strategy
of maintaining significant levels of raw materials inventory to meet demand peaks. Consequently, the value of inventory was written down in Q3, 2022 to our estimate of its net realisable value.
|
2. |
Other inventory write down ($0.9m) - the value of certain excess raw materials and work in progress was written down in Q3, 2022 following a review and an update to our relevant quality assurance policy.
|
3. |
Tri-stat inventory write down ($0.3m) - as disclosed previously, we undertook a strategic review of our Tri-stat instrument line as part of a broader review of our haemoglobins product portfolio. Management decided to limit sales of
Tri-stat to certain targeted partnerships and as a consequence the value of this inventory was written down to reflect the revised outlook.
|
o |
An IFRS driven non-cash share-based payments accounting charge, which is a notional accounting charge calculated under a Black-Scholes financial model, was $0.7m higher in 2022 compared to 2021, mainly due to share options granted in Q4,
2022. The majority of the options granted in 2022 are performance share options and are structured such that they are exercisable only if the Company’s ADS price exceeds certain levels ($3.00, $4.00 and $5.00 per ADS) during the life of the
option. These performance share options align the goals of our team and our shareholders in the creation of shareholder value. None of these performance share options are currently exercisable.
|
o |
Due diligence and other legal and professional fees have increased by approximately $0.8m in 2022 as we took an active, but disciplined, approach to pursuing a pipeline of attractive M&A opportunities.
|
o |
As disclosed in our earnings announcement for Q1, 2022, there was a non-recurring professional fees expense of $0.6m primarily associated with the debt refinancing.
|
o |
With the lifting of COVID-related travel restrictions, we have tasked our sales and marketing teams to increase travel to customers and trade shows as we continue to revitalise our sales activities. Similarly, some key functional leaders
based in Ireland have resumed visits to our overseas facilities as we seek to drive operational efficiencies. All of this has led to an approximately $1.1m increase in travel and promotional costs in 2022, however management believes this
is a worthwhile and important investment, but we do not expect the level of travel to stay at this level going forward.
|
o |
Increased expected credit loss on trade receivables, with the majority of the increase due to one distributor.
|
o |
Higher recruitment fees incurred in 2022 as we are developing a world class leadership team with appointments of a Chief Technology Officer, Head of Quality and Regulatory Affairs and Global Supply Chain Leader.
|
|
Full Year 2021
US$’000
|
Full Year 2022
US$’000
|
Loss on disposal of Exchangeable Notes
|
-
|
9.7
|
Penalty for early settlement of term loan
|
-
|
3.5
|
Term loan interest
|
-
|
9.8
|
Convertible note interest
|
-
|
0.7
|
Notional interest on lease liabilities for Right-of-use assets
|
0.8
|
0.7
|
Exchangeable note interest
|
4.6
|
0.4
|
Loan origination costs - term loan
|
1.6
|
-
|
Fair value movement for derivative asset
|
-
|
0.1
|
Total financial expense
|
7.1
|
24.7
|
$m
|
|
Operating loss
|
(16.8)
|
Depreciation
|
1.4
|
Amortisation
|
0.9
|
Impairment charges
|
5.8
|
Significant excess and obsolescence charges related to inventory recorded at September 30, 2022
|
4.7
|
Adjusted EBITDA
|
(4.0)
|
Share option expense
|
1.8
|
Adjusted EBITDASO
|
(2.2)
|
(US$000’s except share data)
|
Three Months Ended
December 31, 2022
(unaudited)
|
Three Months Ended
December 31, 2021
(unaudited)
|
Twelve Months Ended
December 31, 2022
(unaudited)
|
Twelve Months Ended
December 31, 2021
|
||||||||||||
Revenues
|
18,036
|
19,525
|
74,779
|
92,965
|
||||||||||||
Cost of sales (including Q3, 2022 significant excess and obsolescence charges related to inventory of $4,697; Q3, 2021: $Nil)
|
(11,800
|
)
|
(12,286
|
)
|
(52,731
|
)
|
(54,888
|
)
|
||||||||
Gross profit
|
6,236
|
7,239
|
22,048
|
38,077
|
||||||||||||
Gross margin %
|
34.6
|
%
|
37.1
|
%
|
29.5
|
%
|
41.0
|
%
|
||||||||
Other operating income
|
341
|
722
|
343
|
4,672
|
||||||||||||
Research & development expenses
|
(1,166
|
)
|
(941
|
)
|
(4,138
|
)
|
(4,497
|
)
|
||||||||
Selling, general and administrative expenses
|
(10,188
|
)
|
(5,581
|
)
|
(29,166
|
)
|
(24,683
|
)
|
||||||||
Impairment charges
|
(3,032
|
)
|
(876
|
)
|
(5,839
|
)
|
(6,944
|
)
|
||||||||
Operating (Loss)/Profit
|
(7,809
|
)
|
563
|
(16,752
|
)
|
6,625
|
||||||||||
Financial income
|
112
|
10
|
303
|
1,223
|
||||||||||||
Financial expenses
|
(2,395
|
)
|
(3,001
|
)
|
(24,745
|
)
|
(7,097
|
)
|
||||||||
Net financing expense
|
(2,283
|
)
|
(2,991
|
)
|
(24,442
|
)
|
(5,874
|
)
|
||||||||
(Loss)/Profit before tax
|
(10,092
|
)
|
(2,428
|
)
|
(41,194
|
)
|
751
|
|||||||||
Income tax credit
|
16
|
1,189
|
192
|
178
|
||||||||||||
(Loss)/Profit for the period on continuing operations
|
(10,076
|
)
|
(1,239
|
)
|
(41,002
|
)
|
929
|
|||||||||
Loss for the period on discontinued operations
|
(4
|
)
|
(25
|
)
|
(7
|
)
|
(54
|
)
|
||||||||
(Loss)/Profit for the period (all attributable to owners of the parent)
|
(10,080
|
)
|
(1,264
|
)
|
(41,009
|
)
|
875
|
|||||||||
(Loss)/Earnings per ADS (US cents)
|
(26.5
|
)
|
(6.0
|
)
|
(121.6
|
)
|
4.2
|
|||||||||
Diluted (loss)/earnings per ADS (US cents)
|
(26.5
|
)
|
(6.0
|
)
|
(121.6
|
)
|
4.2
|
|||||||||
Weighted average no. of ADSs used in computing basic earnings per ADS
|
38,107,571
|
20,901,703
|
33,734,832
|
20,901,703
|
||||||||||||
Weighted average no. of ADSs used in computing diluted earnings per ADS
|
38,107,571
|
20,901,703
|
33,734,832
|
20,901,703
|
December 31,
2022
US$ ‘000
(unaudited)
|
September 30,
2022
US$ ‘000
(unaudited)
|
December 31,
2021
US$ ‘000
|
||||||||||
ASSETS
|
||||||||||||
Non-current assets
|
||||||||||||
Property, plant and equipment
|
5,682
|
6,082
|
5,918
|
|||||||||
Goodwill and intangible assets
|
35,269
|
37,144
|
35,981
|
|||||||||
Deferred tax assets
|
4,218
|
4,533
|
4,101
|
|||||||||
Derivative financial asset
|
128
|
147
|
-
|
|||||||||
Other assets
|
139
|
155
|
207
|
|||||||||
Total non-current assets
|
45,436
|
48,061
|
46,207
|
|||||||||
Current assets
|
||||||||||||
Inventories
|
22,503
|
23,553
|
29,123
|
|||||||||
Trade and other receivables
|
15,753
|
17,265
|
16,116
|
|||||||||
Income tax receivable
|
1,834
|
1,762
|
1,539
|
|||||||||
Cash, cash equivalents and deposits
|
6,578
|
7,254
|
25,910
|
|||||||||
Total current assets
|
46,668
|
49,834
|
72,688
|
|||||||||
TOTAL ASSETS
|
92,104
|
97,895
|
118,895
|
|||||||||
EQUITY AND LIABILITIES
|
||||||||||||
Equity attributable to the equity holders of the parent
|
||||||||||||
Share capital
|
1,963
|
1,963
|
1,213
|
|||||||||
Share premium
|
46,458
|
46,588
|
16,187
|
|||||||||
Treasury shares
|
(24,922
|
)
|
(24,922
|
)
|
(24,922
|
)
|
||||||
Accumulated (deficit)/surplus
|
(26,695
|
)
|
(17,929
|
)
|
12,559
|
|||||||
Translation reserve
|
(5,775
|
)
|
(5,799
|
)
|
(5,379
|
)
|
||||||
Equity component of convertible note
|
6,709
|
6,709
|
-
|
|||||||||
Other reserves
|
86
|
23
|
23
|
|||||||||
Total (deficit)/equity
|
(2,176
|
)
|
6,633
|
(319
|
)
|
|||||||
Current liabilities
|
||||||||||||
Income tax payable
|
28
|
21
|
22
|
|||||||||
Trade and other payables
|
17,051
|
14,447
|
17,107
|
|||||||||
Exchangeable senior note payable
|
210
|
210
|
83,312
|
|||||||||
Provisions
|
50
|
50
|
50
|
|||||||||
Total current liabilities
|
17,339
|
14,728
|
100,491
|
|||||||||
Non-current liabilities
|
||||||||||||
Senior secured term loan
|
44,301
|
44,143
|
-
|
|||||||||
Derivative financial liability
|
1,569
|
1,681
|
-
|
|||||||||
Convertible Note
|
13,746
|
13,557
|
-
|
|||||||||
Other payables
|
12,267
|
11,818
|
13,865
|
|||||||||
Deferred tax liabilities
|
5,058
|
5,335
|
4,858
|
|||||||||
Total non-current liabilities
|
76,941
|
76,534
|
18,723
|
|||||||||
TOTAL LIABILITIES
|
94,280
|
91,262
|
119,214
|
|||||||||
TOTAL EQUITY AND LIABILITIES
|
92,104
|
97,895
|
118,895
|
|
Three
Months
Ended
December 31, 2022
US$’000
(unaudited)
|
Three Months Ended
December 31, 2021
US$’000
(unaudited)
|
Twelve Months Ended
December 31, 2022
US$’000
(unaudited)
|
Twelve Months Ended
December 31, 2021
US$’000
|
||||||||||||
Cash flows from operating activities
|
||||||||||||||||
(Loss)/Profit for the period
|
(10,080
|
)
|
(1,264
|
)
|
(41,009
|
)
|
875
|
|||||||||
Adjustments to reconcile (loss)/profit to cash generated by/(used in) operating activities:
|
||||||||||||||||
Depreciation
|
453
|
146
|
1,410
|
1,827
|
||||||||||||
Amortisation
|
215
|
228
|
923
|
917
|
||||||||||||
Income tax credit
|
(16
|
)
|
(1,189
|
)
|
(192
|
)
|
(167
|
)
|
||||||||
Financial income
|
(112
|
)
|
(10
|
)
|
(303
|
)
|
(1,223
|
)
|
||||||||
Financial expense
|
2,395
|
3,001
|
24,744
|
7,097
|
||||||||||||
Share-based payments
|
1,318
|
154
|
1,756
|
1,100
|
||||||||||||
Foreign exchange gains on operating cash flows
|
(91
|
)
|
(285
|
)
|
(76
|
)
|
(251
|
)
|
||||||||
Loss on disposal/retirement of fixed assets
|
-
|
(1
|
)
|
-
|
(1
|
)
|
||||||||||
Impairment charge
|
3,032
|
876
|
5,839
|
6,944
|
||||||||||||
Other non-cash items
|
3,061
|
4,903
|
7,662
|
272
|
||||||||||||
|
||||||||||||||||
Operating cash inflows before changes in working capital
|
175
|
6,559
|
754
|
17,390
|
||||||||||||
Net movement on working capital
|
2,112
|
(2,649
|
)
|
(1,662
|
)
|
(5,761
|
)
|
|||||||||
|
||||||||||||||||
Cash generated by/(used in) operations
|
2,287
|
3,910
|
(908
|
)
|
11,629
|
|||||||||||
Interest paid
|
-
|
27
|
-
|
(11
|
)
|
|||||||||||
Interest received
|
-
|
(2
|
)
|
2
|
1
|
|||||||||||
Income taxes (paid)/received
|
(12
|
)
|
395
|
(15
|
)
|
1,619
|
||||||||||
|
||||||||||||||||
Net cash generated by/(used in) operating activities
|
2,275
|
4,330
|
(921
|
)
|
13,238
|
|||||||||||
|
||||||||||||||||
Cash flows from investing activities
|
||||||||||||||||
Payments to acquire intangible assets
|
(663
|
)
|
(1,905
|
)
|
(4,876
|
)
|
(6,879
|
)
|
||||||||
Acquisition of property, plant and equipment
|
(475
|
)
|
(570
|
)
|
(1,101
|
)
|
(1,812
|
)
|
||||||||
|
||||||||||||||||
Net cash used in investing activities
|
(1,138
|
)
|
(2,475
|
)
|
(5,977
|
)
|
(8,691
|
)
|
||||||||
|
||||||||||||||||
Cash flows from financing activities
|
||||||||||||||||
Issue of ordinary share capital including share premium (net of issuance costs)
|
(130
|
)
|
-
|
25,336
|
-
|
|||||||||||
Proceeds from shares to be issued
|
63
|
-
|
63
|
-
|
||||||||||||
Net proceeds from new senior secured term loan
|
-
|
-
|
80,015
|
-
|
||||||||||||
Proceeds for convertible note issued
|
-
|
-
|
20,000
|
-
|
||||||||||||
Expenses paid in connection with debt financing
|
-
|
(848
|
)
|
(2,356
|
)
|
(848
|
)
|
|||||||||
Purchase of exchangeable notes
|
-
|
-
|
(86,730
|
)
|
-
|
|||||||||||
Repayment of senior secured term loan
|
-
|
-
|
(34,500
|
)
|
-
|
|||||||||||
Penalty for early settlement of term loan
|
-
|
-
|
(3,450
|
)
|
-
|
|||||||||||
Repayment of other loan
|
(23
|
)
|
-
|
(23
|
)
|
|||||||||||
Interest paid on senior secured term loan
|
(1,103
|
)
|
-
|
(6,424
|
)
|
-
|
||||||||||
Interest paid on convertible note
|
(75
|
)
|
-
|
(199
|
)
|
-
|
||||||||||
Proceeds from Paycheck Protection loans
|
-
|
-
|
-
|
1,764
|
||||||||||||
Interest payment on exchangeable notes
|
-
|
(1,998
|
)
|
(1,293
|
)
|
(3,996
|
)
|
|||||||||
Payment of lease liabilities
|
(577
|
)
|
(741
|
)
|
(2,761
|
)
|
(2,939
|
)
|
||||||||
|
||||||||||||||||
Net cash used in financing activities
|
(1,845
|
)
|
(3,587
|
)
|
(12,322
|
)
|
(6,019
|
)
|
||||||||
|
||||||||||||||||
Decrease in cash and cash equivalents
|
(708
|
)
|
(1,732
|
)
|
(19,220
|
)
|
(1,472
|
)
|
||||||||
Effects of exchange rate movements on cash held
|
32
|
167
|
(112
|
)
|
55
|
|||||||||||
Cash and cash equivalents at beginning of period
|
7,254
|
27,475
|
25,910
|
27,327
|
||||||||||||
|
||||||||||||||||
Cash and cash equivalents at end of period
|
6,578
|
25,910
|
6,578
|
25,910
|