Good day, and welcome to the Trinity Biotech Third Quarter Financial Results Conference Call. All participants will be in listen-only mode. [Operator Instructions] After today’s presentation, there will be an opportunity to ask questions. [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference over to Joe Diaz with Lytham Partners. Please go ahead.

Thank you, Kate, and thanks to all of you for joining us today to review the financial results of Trinity Biotech for the third quarter of 2022, which ended on September 30, 2022. Joining us on today’s call are Aris Kekedjian, Chief Executive Officer; and John Gillard, Chief Financial Officer. At the conclusion of today’s prepared remarks, we will open the call for a question-and-answer session. Before we begin, let me inform you that statements made in this conference call may be deemed forward-looking statements within the meaning of federal securities laws. These statements are known -- these statements, excuse me, these statements are subject to known and unknown risks and uncertainties that may cause actual results to differ from those expressed or implied in such statements. These risks include, but are not limited to, those set forth in the risk factor statements in the company’s annual report on Form 20-F filed with the Securities and Exchange Commission. Trinity Biotech undertakes no obligation to publicly update or revise these forward-looking statements to reflect events or circumstances after today or the occurrence of unanticipated events. With that said, I will now turn the call over to John Gillard, Chief Financial Officer, for a review of the financial results. He will be followed by Mr. Aris Kekedjian, Chief Executive Officer, who will provide additional background on revenue for the quarter and the overall business. After which, we will open the call for your questions. John, the floor is yours.

Thank you, Joe. Good morning, everyone. Now I will take you through the results for Q3 2022. Starting with revenues, total revenues for the quarter were $19.5 million, compared to $22 million in Q3 2021. Aris will discuss revenues in further detail later on the call. As such, I will move on to discuss other aspects of the income statement. You will have seen from our income statement that we have recorded significant excess and obsolescence charges related to inventory of $4.7 million this quarter. As this amount is material to the results this quarter, I will now bring you through the components of this charge. Firstly, there is a Viral Transport Media inventory write-down of $3.5 million. As we have talked about on recent earnings calls, the situation relating to COVID-19 products has been fluid and hard to predict. Last year, when demand for PCR VTM products diminished, we took back our production. We decided to retain the capability to flex manufacturing volumes should market conditions warrant. As part of this strategy, we maintained an inventory of critical raw materials to allow a ramping up of VTM production to meet peak demand and it was important that we were able to fulfill high volume orders at shortened orders in order to retain existing customers and capture new customers at attractive price points. So far we have not seen any evidence of current or future significant peaks in demand for PCR or VTM products this season. So we revised our strategy of maintaining significant levels of raw material inventory to meet demand peaks. We now intend to sell the vast majority of this inventory, which given current market conditions, is expected to be at lower prices. Consequently, the value of inventory has been written down for an estimate of its…

Thank you, John. I’d like to take a few minutes before we answer any questions to go through the highlights for the quarter. Total revenues for Q3 2022 were $19.5 million. Excluding our COVID-focused PCR products, Q3 2022 revenues of $19.2 million were marginally higher by 2% compared to Q3 2021 and were up 6% Q2 -- compared to Q2 2022. So we have sequential -- some sequential growth of around 6%. A strong year-over-year increase of 30% revenues [ph] attributable to both our haemoglobins and Fitzgerald businesses, offset the timing impact of atypical concentrated sales associated with Uni-Gold HIV in Q3 2021. In addition, we put through pricing changes and optimized capacity in our autoimmune products business and that’s led to a 30% increase compared to the same period last year. Quarter-over-quarter revenue momentum was once again driven by Fitzgerald at about 25% and this reflects actions that we have taken to optimize demand generation throughout the year. We also had some strong demand for the Uni-Gold HIV product on a quarter-over-quarter basis up 35%, and as I previously mentioned, the actions we took in autoimmune resulted in a 20% quarter-over-quarter growth in the autoimmune products. We are experiencing particularly strong demand for our haemoglobin products in Asia-Pac and Latin America, with a well over 50% year-over-year revenue growth in Asia-Pac and over 40% in Latin America. We continue to scale our commercial coverage in these markets where the increase in diabetes and propensity for haemoglobin variants is at some of the highest rates and our boronate affinity technology has a particular competitive advantage in this area, given that it mitigates and limits interference associated with variables -- variants, excuse me. The other thing that I am particularly focused on with respect to our global growth is in relation…

[Operator Instructions] The first question is from Jim Sidoti of Sidoti & Company. Please go head.

Hi. Good afternoon. Thanks for taking the questions. It seems like you have made some pretty significant investments in the haemoglobin product line to accelerate growth there. If you look out to 2024, how many different Premier Instruments do you expect to have on the market and what markets do you think you will be in?

Well, look, let me -- I will let John give you some context around the numbers associated with the plan. But I will give you some context. Our technology is somewhat unique. It keeps variant interference out of the A1c testing process. That might not be as big a deal in the U.S., but outside the U.S. where you have the highest growth rates of diabetes, whether it’s in Southeast Asia or Latin America or the Middle East for that matter, our technology is actually perfectly suited with the high-growth markets that we are talking about and that’s where we are seeing significant growth. So we feel pretty confident that we could be placing quite a number of instruments on a consistent basis in those markets. Now at the same time, behind that, we are using a fair bit of the same technology to rollout our T20 lower cost instrument for lower throughput use, same column technology, similar supply chain. And I think, again, that gives us significant opportunity to gain share in these critical markets. And as you know, the business model, it’s a bit of a razor/razor blade model. If we get a number of placements in around the world, especially where the high growth rates are, it’s just math. John, I don’t know if you want to give some context on some...

Yeah. In terms of numbers, like, we have historically placed 200 -- about 200 instruments a year, that has been reduced down through COVID and we certainly have seen an uplift throughout this year. I’d expect once this redesign goes through and we are also focused very much in terms of our supply chain efficiency to reduce down the cost of the instrument, our intent there would be to give a lower entry price point, right, in terms of the market. So I think both of those, the redesign and the supply chain efficiency, reducing down the price point, Jim, we would expect that we would increase those number of placements from that historical run rate. In terms of the T20 instrument, the mid-level analyzer that is a lower cost instrument and we certainly, again, would be expecting to be in the 100 range in terms of placements of that once we have got that established in the market. Geographically...

As far as the new 9210, I would expect, we would be running well ahead of where we were prior to COVID, once we were up and running and properly marketing the product. It wouldn’t surprise me if we are starting to put 250, even higher 300 units in the market on annual basis. That’s what I would expect from my sales team, okay? The T20 is coming later. We still have to get approvals and commercialized. But we -- to John’s point, we should have a similar number of run rate unit placements with the T20 as we are with the 9210. So, like, if you think about doubling over time, we should be doubling our placement levels with both products compared to where we were a couple of years ago.

Geographically…

So…

… we expect the T20, Jim, is probably suited more to countries where there’s more dispersed testing regime, so a lower concentration of big, big labs and that can generally be kind of the lower to middle income countries, okay? For the 9210, we will probably continue to be strongest in higher income countries are those with a significant level of variants. So, it depends on the economic factors and it also depends on the type of lab infrastructure in country. We have got a good global spread of our instrumentation and we think the T20 gives us a chance to have even better global spread and a greater diversified placement base.

And the other thing with the T20 is, we are doing some work on it now, but we think there is an interesting market opportunity in the U.S. around CLIA Labs and whether or not they are the appropriate throughput levels and the right entry point. So we think there is a revitalization potentially of our U.S. placements potentially with the T20. And part of the redesign effort, we have got the team together in January, but part of the redesign effort is to make sure that the features that we are incorporating really stops into where we think the sweet spot might be.

But it sounds like, by 2024, you are going to have -- you will have at least three versions of the Premier systems on the market, is that right?

That’s…

Yeah.

Yeah. Including…

Yeah.

Including the Primary Resolution, yeah. That’s a plan.

Okay. And in terms of…

The haemoglobins business for us right now is really all about focused product development, commercialization and rollout. It’s just execution right now, very focused.

In terms of facility consolidations, is there enough capacity in Jamestown to continue to consolidate?

Yeah. So, just to be clear, we are not closing our Buffalo site. We are expanding our autoimmune manufacturing capability. So our Jamestown site has historically dealt with our legacy infectious disease business. I think we flagged a number of times we do expect that business to continue to kind of keep -- was reduced down over time, right? And for that reason, we are seeking to get greater utility out of the Jamestown site. That site has been a very loyal, highly productive site for Trinity…

It’s a very flexible product site as well. You can ramp up and ramp down in a number of different product lines. We are looking at it as one of these -- as a swing facility and a flexible site in many ways.

Yeah. And that flexibility increases our overall utilization, okay, so that’s critical. So we want that portfolio effect at as many sites as we can, so that we are not left with trapped costs in particular sites depending upon inter-quarter demand for product.

And look, our intention with the Buffalo side is, to be honest, expansion around our lab. That’s where our focus is. So using Jamestown for capacity around autoimmune products so that we can expand the lab in Buffalo actually aligns a lot better with workforce dynamics and so we think it’s the right way to go.

Okay. Any update on refinancing the remaining portion of the debt?

We continue to examine a number of options. I think as we flagged previously, we seek to do that as part of some kind of strategic transaction and that would be our preference. So looking at a number of different options, we don’t have a critical need at this point to overly focus on that and we will make a thoughtful decision in the context of broader strategic objectives.

A number of our…

Okay.

Yeah. We were having a number of dialogues with various parties about different strategic ideas. That -- most of those should be kind of coming to fruition one way or the other in the first quarter, early first quarter and that’s probably the right time for us to then go seek a proper refinancing on the back of a move around strategy we have been outlining.

Okay. And then I just want to be clear that I heard you correctly, in terms of guidance for the fourth quarter, it sounds like maybe a little bit weaker on Fitzgerald, a little bit stronger in some of the other product lines, but overall, it seems like guidance you gave at the end of last quarter of $19 million or so, it sounds like that’s similar to the guidance you have given for the fourth quarter?

I think we will be a little lower in the fourth quarter. I -- what I said last quarter was, we are kind of flattening baselining around $18 million, $18.5 million ballpark. That’s why came and roughly -- I have done the math, roughly, we are a $75 million run rate company closing out the year, okay? It’s about $18.5 million run rate. I think that’s kind of -- it’s a little lumpy like here quarter-to-quarter, but that’s kind of where we are averaging out. The initiatives we have been putting in place, I have been here 60 days, the initiatives we have been putting in place should start kicking in, in the New Year. So we expect to start seeing tick ups in revenue profile in 2023 -- early 2023.

Got it. All right. Thanks.

Fitzgerald is really -- yeah, Fitzgerald is the most, it’s the biggest swing from quarter-to-quarter. It’s just -- we wanted to make sure the demand profile was more evenly distributed over the course of the year. We have got a number of inbounds and Asia seems to be rebounding a little bit faster. So we were able to book some of that stuff, but we are not banking on that with Fitzgerald in the fourth quarter and that’s the major gap.

And Jim, as you know from the past, some of our orders can be large value and there’s uncertainty around that until we reach out into the quarter.

Understood. Thank you.

You bet.

The next question is from Paul Nouri of Noble Equity Fund. Please go head.

Hey. Good afternoon. I am wondering if you could give us any guidance on what gross margin will be compared to the third quarter going forward?

Not really at this stage, Paul, a lot of moving pieces, and to be honest, between the headcount reductions that we are doing and there’s a lot of PPV variants at the moment with input price increases. So, at this point, I’d be reluctant to give guidance on this.

I think we gave a perspective last at Piper. It’s in the presentation. I think we are targeting over the next two years, three years about 40%, 45% gross margin level. That’s kind of where our base plan lands.

Okay. And the run rate of the screening test that you mentioned in the press release. Is that just a number that you can do based on manufacturing or that you think you will have based on won tenders next year?

The -- is this the TrinScreen?

Yes.

Yeah. That would be from one algorithm. So that will just literally be from Kenya. So -- and we are hopeful that we will be included as the screening test in the algorithm. That’s what all indications suggest and that’s what the task force recommended. And…

The pilot is going well. So all indications are we are good to go with Kenya. And Kenya, as you know, sets the tone, and we have got commercial teams on the ground. We have got a whole team on the ground working all the other algorithms. But we really do believe that when we get Kenya landed, that it’s going to set the stage for the rest.

And that’s what has been indicated most of their annual demand, right, under their current plans. So, yeah, it’s not driven from our manufacturing capability. It’s driven from our expected demand. I mean on the basis we get the screening position.

And the legacy business that’s been declining for a number of years and was hit by the lockdowns in China, how large does that business remain now?

And it’s probably -- it’s less than $2 million a quarter, right? What we are seeing with that, Paul, is just a continued tapering off, right? And I think, we -- there’s some evidence of a little bit of a bounce back in that, yeah, around basically a higher level of pregnancy in China and a lot of our infectious disease test there is used for screening pregnant mothers. So, look, there will be variability within that number, but over time, that’s not an area that we are expecting to grow and that’s why we are moving to that portfolio effect in terms of our productive manufacturing capability.

Look, the key for us with respect to infectious disease is, as we are examining next-generation instrumentation around autoimmune, especially around a chemiluminescence type technology platform, we believe that has significant synergy and alignment and potentially rejuvenates our infectious disease business. So we are looking at that as in tandem. We think that’s -- we are going to do anything significant in terms of investment in infectious disease. It will be on the back of being smart about what we do with autoimmune on a next-generation basis.

And the syphilis test that you guys had FDA approved and didn’t really sell much of whatever the factors were in the U.S. Is it completely pulled from the market and what are your plans for syphilis point-of-care moving forward?

We distributed the syphilis tests on behalf of a third-party and demand for that product is high. We continue to have ongoing discussions with that supplier in terms of our strategic plans. Look, we are inherently an infectious disease lateral flow developer and manufacturer, right? So there’s clearly an element of skill set. But we have to weigh that all versus the regulatory costs and development costs and challenges have gone after that market. So constantly under review, but at the moment, we are happy with the performance of the -- from a revenue perspective of the third party product that we are distributing.

Okay. And I guess, probably, last question. How did the lab in Buffalo perform this quarter, and in particular, the Sjogren's test?

Yeah. We have continued to see growth in Sjogren's test. That’s typically growing quarter-on-quarter and…

Yeah. I mean, Sjogren's we are probably doing $3.5 or so million of revenue. We think -- and that’s up -- I mean if you look at it just from a couple of years, it was $2 million back in what 2000, was it 2020?

Yeah. I mean, yeah, a bit lower. Yeah.

So…

Significant growth in that.

Significant and we haven’t really marketed it, to be honest with you, one of the opportunities that I have been focused on is where our -- where do we have IP and what’s an interesting model going forward for our reference lab. And the beauty of the Sjogren's product is that, we haven’t marketed it and it’s been growing significantly. If we put some work behind it, I think we can significantly scale that business and it’s all based on the fact that we had a partnership with the University of Buffalo, where we licensed key markers into a test. I think that’s a model for us going forward, where we can license promising biomarkers around the autoimmune space and develop those into tests that only we can provide. So between that and partnerships with pharmaceutical companies in the autoimmune space, that’s kind of where we are leaning with a broader strategy

And the lab, generally, Paul, I think, we have set out at the Piper conference, Aris spoke about it and we are very, very focused on increasing the capabilities of that lab. We have a huge amount of infrastructure there. We have a great asset, having a New York Certified lab. We think that really plays well in terms of the at-home testing market that’s kind of opened up post-COVID. So a big strategic focus for us is finding the right partner that can help us scale that business in a way that delivers real value to Trinity in a way that’s sticky and recurring rather than a kind of merely transactional relationship that we can lose value over time. So that’s our strategy around that.

I mean, if you look our plan has real growth in the lab over the next several years, because we have visibility to both improving the specialized nature of what it does today around the kind of things that are growing like autoimmune disease. And at the same time, we believe we have the capability of capacity to build it out to meet the needs of the B2B2C market. And it’s something I discussed last week at Piper and I really believe we are sitting on a valuable asset there.

Right. Well, thanks for answering my questions.

Thanks, Raul.

[Operator Instructions] The next question is from Andrew May of Wells Fargo. Please go ahead. Andrew is your line muted?

Kate, why don’t you move on.

Hello, Andrew. Is your line muted? Okay. There are no additional questions at this time. This concludes our question-and-answer session. I would like to turn the conference back over to Aris Kekedjian for closing remarks.

Thank you. I appreciate it. Look, I just wanted to give out a comment or two around the recent 13D filing by the MiCo Group. I wasn’t surprised by it given my knowledge of all the facts. I don’t think it’s worth seriously addressing the individual points. It chose to raise. But first and foremost, to be clear, I was recruited by MiCo initially as a Board member and subsequently put forward by them as CEO. My assessment of the situation is this is all about control and not about shareholder economics. There’s a clear stable mentality at work here. A 29% stake does not entitle you to control. The tender rules are clear and are there for a reason. They are there to protect all the shareholders. MiCo like anyone else has the option to make a proper bid for the company. Just remember, their market cap is about $230 million. I imagine we take significant resources to acquire Trinity at a price of the Board and shareholders would find compelling in light of the ambitious and attractive value creation opportunities available to the company. It was obvious to me when MiCo asked me to join the Board and then put me forth as CEO that Trinity had several compelling market opportunities that also clearly had been in a turnaround situation for several years. My focus, the focus of the Board, the management team is a complete turnaround to instill operating rigor, build partnerships and ambitiously rejuvenate the growth potential that lies ahead of us. That’s all I have to say about the matter, and with that, I’d like to thank all of you for joining us today. Enjoy the holidays. We look forward to an ambitious and exciting 2023. Thank you.

Thanks, everybody.

The conference has now concluded. Thank you for attending today’s presentation. You may now disconnect.