Yahoo Finance Trinity Biotech PLC (TRIB) Q4 2023 Earnings Call Transcript Highlights: A Glimpse into ...
Revenue (Q4 2023): $13.4 million, down $2.3 million from Q4 2022.
Gross Margin (Q4 2023): 34%, consistent with Q4 2022.
Operating Loss (Q4 2023): $3.8 million, improved from $8.2 million in Q4 2022.
SG&A Expenses (Q4 2023): $6.9 million, down $2.8 million from Q4 2022.
Impairment Charges (Q4 2023): $0.3 million, down from $3 million in Q4 2022.
Basic Loss per ADS (Q4 2023): $0.718, improved from $1.323 in Q4 2022.
Cash Balance (End of Q4 2023): $3.7 million, down from $6.3 million in Q3 2023.
Full-Year Revenue (FY 2023): $56.8 million, approximately 9% decrease from 2022.
Full-Year Gross Margin (FY 2023): 34.2%, up 6.6% from 2022.
Full-Year Operating Loss (FY 2023): $27 million.
Full-Year SG&A Expenses (FY 2023): Increased by $4.2 million to $31.2 million.
Full-Year Impairment Charges (FY 2023): $11.1 million.
Full-Year Financial Expenses (FY 2023): $11.1 million, down from $24.7 million in FY 2022.
Profit from Discontinued Operations (FY 2023): $12.9 million.
Loss from Continuing Operations (FY 2023): Before interest, tax, depreciation, amortization, share-based payments, and impairment charges was $12.1 million.
Cash Used by Operations (FY 2023): $11.9 million.
Release Date: April 04, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
Trinity Biotech is targeting approximately $20 million of annualized run rate EBITDASO by Q2 2025, based on targeted annualized run rate revenues of approximately $75 million.
The company has acquired biosensor technology from Waveform Technologies, which includes a European regulatory approved Continuous Glucose Monitor (CGM) product, and key personnel from Waveform.
Trinity Biotech has initiated a comprehensive transformation plan aimed at transforming the existing business into a high-performing, cash-generative enterprise.
The company has made key appointments from established medical device and diabetes technology companies to build out its biosensor team.
Trinity Biotech has successfully scaled its rapid HIV testing manufacturing capacity in Q1 2024 to meet additional output requirements for the HIV screening algorithm in Kenya.
Negative Points
Revenue for the fourth quarter of 2023 was $13.4 million compared to $15.7 million for the same quarter in 2022, a decline of $2.3 million.
The decline in revenue was driven by decreases in the hemoglobins business, autoimmune business, and lower sales from COVID-19 VTM products.
Gross profit for Q4 2023 was $4.6 million with a gross margin percentage of 34%, which was broadly in line with Q4 2022, indicating no significant improvement in profitability.
The company recognized an impairment charge of $0.3 million in Q4 2023, which, although lower than the previous year, still impacts the financial results.
Trinity Biotech's cash balance decreased from $6.3 million in Q3 2023 to $3.7 million in Q4 2023, indicating a reduction in liquidity.
Q & A Highlights
Q: First one on the diabetes business, are all the new products that you have, the new consumables, are those all approved and ready for market or are there approvals that you need to get before you can start to sell those devices? A: John Gillard, Trinity Biotech PLC - President and CEO: There may be local registrations required, but they are effectively a variant on the existing approved product. So we don't have to go for a new 510(k) or something like that. They're available to roll out immediately in certain markets and other markets, there's just registration requirements. We've finished all the testing, all the trials, there's no regulatory risk at this point around that.
Q: So that applies to the fact that you've changed manufacturing locations for the consumable and the instruments that has all been worked out with the FDA? A: John Gillard, Trinity Biotech PLC - President and CEO: Yes, they go through what's called a variation change process, and you need to show basically comparable performance. We have an experienced and highly specialized team that can plan and execute on those types of initiatives. There's very significant savings associated with this, and we're now seeing the benefits of having those people in place.
Q: And so it sounds like by this current quarter you should be in the market with a product that has similar results but significantly lower manufacturing costs. So I would assume you'd be able to compete on price more effectively starting the second quarter of 2024. Is that correct? A: John Gillard, Trinity Biotech PLC - President and CEO: Yes, exactly. The reason we push these changes is to reduce down our cost in manufacture and that should give us higher revenue and higher cash flows from that business. And then secondly to allow us to compete in different parts of the market especially, A1c testing that traditionally haven't been really that open to us.
Q: And then if we switch over to TrinScreen, it sounds like you've made progress getting that manufacturing up and running. You've got the sales already in Kenya. Are there other markets in Africa where you can sell the product? A: John Gillard, Trinity Biotech PLC - President and CEO: Yes, because we have WHOPQ approval, there are many markets effectively open to us for a regulatory perspective. We have a senior team that are very experienced, both within Trinity and from other companies that are highly successful in this market, working for us on these initiatives. And we do expect to win further countries as we move through.
Q: So it sounds like nothing may happen in the near term, but by 2025, you do think that you'll be selling the product to other countries in Africa? A: John Gillard, Trinity Biotech PLC - President and CEO: I think that's a fair way to categorize it. I would agree with that.
Q: Okay. All right. And then I just want to be clear, the guidance you gave for revenue and EBITDA for 2025, that includes no revenue from CGM, is that correct? A: John Gillard, Trinity Biotech PLC - President and CEO: Yeah, exactly. So that's really built upon the existing business.
Q: And when do you think it's reasonable to assume that you'll start your underwriting revenue from CGM? A: John Gillard, Trinity Biotech PLC - President and CEO: At this point, we are not seeing a huge amount on that. We are very much looking at the data from Waveform's existing device. We're also speaking with commercial partners, and that would inform what we will do in terms of commercial launch. We expect to be in clinical trials December 2025, and we'd expect to be in the market, ideally within six months after that.
Q: And then some general modeling questions. What should we use for an effective share count for 2024? A: John Gillard, Trinity Biotech PLC - President and CEO: I think we're at about $9 million ADSs now. That's after our reverse share split a number of weeks ago. So I think we're at $9 million.
Q: Okay. And that includes the shares that were used to complete the divestures? A: John Gillard, Trinity Biotech PLC - President and CEO: Yeah, the Waveform acquisition, Jim.
Q: And do you think with the cash on hand and the $6 million cash available, do you think you have enough cash to make the changes in 2024 that you want to make? A: John Gillard, Trinity Biotech PLC - President and CEO: We're running fast to do that. The benefit of improving the cost basis of the business is twofold, Jim, right. The quicker we do it, the less cash we need to get there. And then each initiative that we successfully execute on provides further positive cash flow to fund the other initiatives. We're running very, very fast. We're being aggressive here. We think it's necessary and we think it's warranted.
Q: Okay. All right. And then you mentioned a couple of times that 2024 is off to a strong start. Can you give us any guidance on that first quarter? Or would you rather wait a couple of weeks for that? A: John Gillard, Trinity Biotech PLC - President and CEO: We're only four days post quarter in. So what I will say is we do expect revenues to be stronger in Q1 2024 than they were in Q4 2023. So certainly some positive momentum there.
Q: So do you have a target gross margin for 2025 that you could share or a range? A: John Gillard, Trinity Biotech PLC - President and CEO: We hadn't really planned on going that deep, Paul, right. I think we'd expect it to be 50% would be kind of where we would be hoping to get to, are targeting to get to, and that's really from the procurement efficiencies that we're talking about, the outsourcing of some of the less complex aspects of our manufacturing, right, and the consolidation of the manufacturing site.
Q: And in terms of the source of the growth, because it's pretty dramatic, the expected growth, do you see it evenly between point-of-care and the lab business or should it be more weighted towards one or
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