OREANDA-NEWS. July 29, 2015. Trinity Biotech plc (Nasdaq: TRIB), a leading developer and manufacturer of diagnostic products for the point-of-care and clinical laboratory markets, today announced results for the quarter ended June 30, 2015.

Total revenues for Q2, 2015 were \\$24.3m compared to \\$26.0m in Q2, 2014. However, when the impact of foreign exchange movements, due to the strength of the US dollar against a range of other currencies, is removed revenues would have been \\$25.4m this quarter, thus representing a decrease of 2%.

Point-of-Care revenues for Q2, 2015 were \\$3.4m, which represents a decrease of \\$1.2m on a constant currency basis. This decrease was due to lower sales of HIV products to Africa in the quarter. This reflects the irregular ordering patterns which characterize this market rather than any underlying adverse change in the nature of the business.

Clinical Laboratory revenues for the quarter were \\$20.9m.  However, on a constant currency basis revenues would have been \\$21.9m compared to \\$21.4m in Q2, 2014, an increase of 3%. This increase was due to the continued increase in Premier and Immco revenues, although this was partially offset by lower Lyme sales due to weather related factors and a decrease in Fitzgerald revenues.

The tax charge for Q2, 2015 was \\$0.2m which equates to an effective tax rate of approximately 7% and is broadly in line with the effective rate of 6% in Q2, 2014.

Profit before tax for the quarter was \\$2.9m compared to \\$4.6m in Q2, 2014.  Meanwhile, profit after tax for the quarter was \\$2.7m versus \\$4.3m for the comparative quarter.  EPS for the quarter was 11.6 cents which compares to 19.0 cents for the equivalent period last year. Excluding the non-cash items arising from the accounting for the Exchangeable Notes, the EPS for the quarter would have been 7.4 cents.  The fully diluted EPS for the quarter was 9.9 cents.

Earnings before interest, tax, depreciation, amortisation and share option expense for the quarter was \\$5.0m. This compares to \\$6.0m for Q2, 2014.
Accounting for Exchangeable Loan Notes

During Q2, 2015, Trinity Biotech issued US\\$115 million of Exchangeable Loan Notes which will mature on April 1, 2045, subject to earlier repurchase, redemption or exchange. The notes are senior unsecured obligations and accrue interest at an annual rate of 4%, payable semi-annually in arrears on April 1 and October 1 of each year, beginning on October 1, 2015.

From a valuation perspective, accounting standards require the Loan Notes to be split into two parts. The first part is the derivatives embedded in the note (i.e. various put options and call options). These derivatives are initially recognised at their fair value, and at each subsequent quarterly reporting date will be revalued with any changes in value being recognised in the Income Statement within Non-Cash Financial Income/Expenses. The second part is the underlying debt liability, excluding any derivatives. The value of this part is calculated as being the total note proceeds less the fair value of the derivatives, less the directly related transaction costs.

The total interest cost relating to the notes is made up of the cash interest plus a non-cash interest element which will accrete the fair value of underlying debt liability back to its nominal value (\\$115 million) over the term of the debt using an effective interest rate methodology. The cash interest of 4% is shown in the Income Statement within Financial Expenses. The non-cash interest is shown in the Income Statement within Non-Cash Financial Income.

The sum total of the non-cash interest and the change in value of the derivative instruments in the Quarter is a gain of \\$978,000.

During Q2, significant progress has been made in relation to the preparation of Meritas Troponin I for submission to the FDA. Firstly and very importantly, we are happy to report that enrolment to the Troponin ACS (Acute Coronary Syndrome) clinical study, which had been carried out at 12 clinical trial sites across the USA, is now complete. The company has reached its goal of recruiting close to 1,500 patients presenting in the Emergency Room with symptoms suggestive of ACS thus generating 150 actual ACS patients.  The complete ACS patient cohort is currently being put through the cardiologist adjudication process. 

Moreover, enrolment into the URL Study (Upper Reference Limit or 99th Percentile) is also complete, with the company having recruited sufficient normal patient samples, across three US sites, to be able to calculate a statistically significant URL value (99th percentile value) for its Troponin I product in a US normal population.

With the two main components of the Troponin Trial now complete, and although results of the adjudication process remain unknown to us, we are very encouraged by the trial data that we have seen.

Still remaining to be completed is a precision study which will be run at three US sites. This study consists of running high, medium and low Troponin controls and patient samples for 20 consecutive days. This study will run concurrently with the ACS adjudication process and is expected to end slightly ahead of adjudication.

Finally, preparation of our FDA submission document is at an advanced stage. It essentially awaits the final outcome from the trial data sets to be ready for submission.  The company now estimates that the adjudication process will be completed by the end of August with submission of the application to the FDA expected by end of September or early October.

Significant progress has also been made on the second test to be launched on the Meritas platform, Meritas BNP.  Following a clarification call with the FDA on July 13th, and in accordance with the recommendation that utilisation of banked clinical samples should be avoided, it has been decided to increase the number of US trial sites to 12.  This will have the effect of pushing FDA submission out by 3 to 4 months. However, because the BNP trial is considerably simpler that the Troponin trial, approval is still expected to be received ahead of Troponin.

Dividend
Shareholder approval for payment of a dividend of 22 US cents per ADR was granted at the company's AGM, which was held on 5 June, 2015. Payment of the dividend was made in early July 2015.

Comments
Commenting on the results, Kevin Tansley, Chief Financial Officer, said "Trinity Biotech earned profits of \\$2.7m this quarter which is a reduction from \\$4.3m in the comparative quarter last year.  A major contributory factor was a drop of \\$1.5m in HIV revenues in Africa. However, this was due to the inherent variability and unpredictability of such sales rather than any underlying change in this market or Trinity's position within it.  Profits were also impacted by lower sales of higher margin Lyme products and higher sales and marketing expenses largely driven by costs incurred in relation to our Troponin product."

Ronan O'Caoimh, CEO, stated "Completion of the ACS trial for our Meritas Troponin test represents an extremely important milestone for the Company. In relation to the results of the trial, although the adjudication process is not completed, we can see the actual hospital diagnosis on the patient samples and although there is no guarantee that the hospital result will agree with the adjudicated result in every case, we are very encouraged by the trial results. We will now complete the last remaining elements of the trial and will make our submission to the FDA in late September or early October."

Litigation Reform Act of 1995. Investors are cautioned that such forward-looking statements involve risks and uncertainties including, but not limited to, the results of research and development efforts, the effect of regulation by the United States Food and Drug Administration and other agencies, the impact of competitive products, product development commercialisation and technological difficulties, and other risks detailed in the Company's periodic reports filed with the Securities and Exchange Commission. Trinity Biotech develops, acquires, manufactures and markets diagnostic systems, including both reagents and instrumentation, for the point-of-care and clinical laboratory segments of the diagnostic market. The products are used to detect infectious diseases and to quantify the level of Haemoglobin A1c and other chemistry parameters in serum, plasma and whole blood. Trinity Biotech sells direct in the United States, Germany, France and the U.K. and through a network of international distributors and strategic partners in over 75 countries worldwide. For further information please see the Company's website: www.trinitybiotech.com.