Trinity Biotech(TRIB) - 2023 Q4 - Earnings Call Transcript

Financial Data and Key Metrics Changes - Revenue for Q4 2023 was $13.4 million, down from$15.7 million in Q4 2022, a decline of $2.3 million driven by decreases in the hemoglobins business and point-of-care business [66] - Gross profit for the quarter was$4.6 million, representing a gross margin percentage of 34%, consistent with Q4 2022 [75] - SG&A expenses were $6.9 million, down from$9.7 million in Q4 2022, primarily due to lower share-based payments [76] - Operating loss for the quarter was $3.8 million, improved from$8.2 million in Q4 2022, attributed to lower impairment charges and SG&A expenses [70] Business Line Data and Key Metrics Changes - Hemoglobins business saw a decline of $1 million quarter-on-quarter due to deferred year-end shipments [66] - Point-of-care business experienced a decline of$0.5 million, partially offset by $0.4 million revenue from the TrinScreen test [67] - The autoimmune business declined by$0.6 million due to ceasing transplant testing activity [74] Market Data and Key Metrics Changes - The company expects growth in the international markets, particularly in Asia and Africa, rather than in the U.S. and Western Europe [17] - The TrinScreen product has begun generating revenue in Africa, with expectations for it to be a key growth driver [75] Company Strategy and Development Direction - The company is targeting approximately $20 million of annualized run-rate EBITDASO by Q2 2025, based on targeted annualized run-rate revenues of approximately$75 million [34] - A comprehensive transformation plan is in place to improve financial performance by reducing complexity and costs through consolidation and outsourcing [42][45] - The company aims to build a global business in wearable biosensors, focusing on continuous glucose monitors (CGMs) as a key growth driver [35] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in a strong start to 2024, with expectations for revenue growth in Q1 2024 compared to Q4 2023 [35] - The management team is focused on executing initiatives to improve cash generation and reduce costs, with a strong emphasis on operational efficiency [10][44] - The company is optimistic about the CGM market, recognizing strong demand for lower-cost solutions [21] Other Important Information - The company entered into an amended credit agreement providing an additional $22 million in funding, with$12.5 million used for the acquisition of Waveform assets [71] - The amended term loan reduced the annual interest rate and early repayment penalties, maturing in January 2026 [82] Q&A Session Summary Question: What is the target gross margin for 2025? - Management targets a gross margin of around 50% through procurement efficiencies and outsourcing [7] Question: Is the growth expected to be evenly distributed between point-of-care and lab business? - Growth is expected to be more weighted towards point-of-care, particularly with the new TrinScreen product [11] Question: Will the EBITDA guidance include spending on the CGM segment? - The CGM spending is capitalized under IFRS and will only continue if it shows results [20] Question: Are the new diabetes products approved and ready for market? - The new products are effectively variants of existing approved products, with local registrations required in some markets [97] Question: When can the company expect to start generating revenue from CGM? - Clinical trials for the next-generation device are expected to begin in summer 2025, with market entry anticipated six months after that [110]