Trinity Biotech plc (NASDAQ:TRIB) Q2 2020 Earnings Conference Call - Final Transcript

Aug 25, 2020 • 11:00 am ET

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Trinity Biotech plc (NASDAQ:TRIB) Q2 2020 Earnings Conference Call - Final Transcript

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Presentation
Operator
Operator

Good day, and welcome to the Trinity Biotech Second Quarter Financial Results Conference Call. [Operator Instructions] Please note, that this event is being recorded.

I'd now like to turn the conference over to Kevin Tansley, CFO. Please go ahead, sir.

Executive
Kevin Tansley

Thank you very much. Before we begin with our prepared remarks today, we submit for the record the following statements. Statements made by the management team of Trinity Biotech during the course of this conference call that are not historical facts are considered to be forward-looking statements subject to risks and uncertainties. The Private Securities Litigation Reform Act of 1995 provides a Safe Harbor for such forward-looking statements.

The words believe, expect, anticipate, estimate, will and other similar statements of expectation identify those forward-looking statements. 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, commercialization and technological difficulties; and other risks detailed in the company's periodic reports filed with the Securities and Exchange Commission.

Forward-looking statements reflect management's view only as of today. The company undertakes no obligation to publicly release the results of any revision to these forward-looking statements.

In addition, there is uncertainty about the spread of the COVID-19 virus and the impact it will have on the company's operations, the demand for it's products, global supply chains and economic activity in general.

So now, I will take you through the results for quarter two 2020. Beginning with our revenues, total revenues for the quarter were $16 million compared to just over $22.5 million in quarter two last year. Ronan will provide more details on the quarter two's revenues later in the call. So I will move on now and discuss the other aspects of the income statement.

Our gross margin this quarter was 42.9%, which represents an improvement on the 42% reported in quarter two last year. This improvement was due to two factors. Firstly, the impact of lower instrument placements, which tend to have a lower average margin then other products, in addition to a lower depreciation charge during the period. You might also recall that our gross margin tends to fall in the event of lower revenues due to the largely fixed nature of our cost base. However this quarter, we were able to offset most of the impact of COVID-19 on revenue by swiftly implementing a range of cost-saving measures.

Moving next to our indirect costs. In total, they've fallen by over $1.9 million in the quarter to $6.4 million a reduction of nearly 23%. Within this, R&D expenses during the quarter decreased from $1.4 million to $1.2 million while SG&A expenses from $6.6 million to $5 million. Both of these decreases are largely due to cost-saving measures we implemented in response to COVID-19 such as the furloughing of employees.

So in the case of SG&A expenses, it would