Trinity Biotech PLC (TRIB) 2020 Q2 法說會逐字稿

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

Thank you very much. Before we begin with our prepared remarks today, we submit for the record the following statement.

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 U.S. 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 its products, global supply chains and economic activity in general.

Now I will take you through the results for quarter 2 2020. Beginning with our revenues, total revenues for the quarter were $16 million compared to just over $22.5 million in quarter 2 last year. Ronan will provide more details on quarter 2's revenues later in the call, so I will move on now and discuss the other aspects of income statement.

Our gross margin this quarter was 42.9%, which represents an improvement on the 42% reported in quarter 2 last year. This improvement is due to 2 factors: firstly, there was the impact of lower instrument placements, which tend to have a lower average margin than 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 revenues by swiftly implementing a range of cost-saving measures.

Moving next to our indirect costs. In total, they have 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 decreased 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. Though in the case of SG&A expenses, it was also due to the virtual elimination of travel costs and discretionary sales and marketing expenditure, including the costs of trade shows, many of which have been canceled or deferred. Meanwhile, our share option expense increased slightly from $181,000 to $213,000.

And as result was that we are reporting an operating profit of $0.5 million for the quarter, down from $1.2 million last year. This reduction is entirely due to the lower revenues and would have been significantly higher had we not undertaken the cost measures -- cost-saving measures, which I mentioned earlier.

Moving on to our financing costs, which includes the impact of our exchangeable notes. Our financial income for the quarter was $2,000 versus $133,000 in the comparative period. This is primarily reflective of lower levels of cash deposits.

Meanwhile, financial expenses for the quarter were stable at $1.2 million, and of this $1 million relates to the cash interest element of our exchangeable notes and the remaining $200,000 relates to the notional financing charge relating to lease payments as a result of IFRS 16. The results of the noncash financial expense of $700,000 we just disclosed further down the income statement that relates to the accretion interest on our exchangeable notes and a fair value adjustment in relation to the derivatives embedded in those notes caused by the increase in the company's share price during the quarter.

Our tax charge for the quarter was $32,000, and this represents an effective tax rate of 6.4% of operating profit. The comparative tax charge in quarter 2 2019 was $5.6 million, though this included a charge of $5.5 million in relation to a tax settlement.

In terms of overall results, the loss before tax and noncash interest for the quarter was $718,000 compared to a profit of $101,000 in 2019. Meanwhile, after-tax loss for the quarter was $1.5 million compared to a loss of $5.6 million in quarter 2, 2019.

The basic EPS for the quarter, excluding noncash items, was a loss of $0.036 compared to a loss of $0.266 in quarter 2 2019. However, fully diluted EPS was a profit of $0.01 compared to a loss of $0.179 in 2019.

Finally, on the income statement, earnings before interest, tax, depreciation, amortization and share option expense was $1.5 million for the quarter.

We'll now move on and talk about the significant balance sheet movements since the end of March 2020. There was an increase in property, plant and equipment of $87,000. Additions for the quarter were $500,000, and this was offset by depreciation of $400,000. In the same period, our intangible assets increased by $1.3 million. And this was made up of additions of $1.7 million, offset by an amortization charge of $0.4 million.

Moving on to inventories. You'll have seen that these have decreased $1.2 million and now stand at $31.5 million. Meanwhile, trade and other receivables have decreased by $2.9 million to $17 million, thus reflecting the lower revenues in the quarter.

Our trade and other payables, including both current and noncurrent, are broadly static at $39.9 million. This includes $4.5 million related to new loans received under the U.S. government's Paycheck Protection Program. Under the provisions of the PPP, these loans will be partially or totally forgiven based on the extent to which a borrower's workforce returns to normal levels in the period immediately following the granting of the loans.

On receipt of the loans, Trinity ended the furloughing of staff in each of its U.S. plants. And consequently, we believe that a large percentage, if not, all of these loans will be forgiven later in the year once the necessary verification has taken place.

Offsetting this increase was a $1 million decrease relation to interest accrued on exchangeable notes, as we made a biannual interest payment of $2 million during the quarter and then accrued the next quarter of interest of $1 million. The remaining offsetting reduction relates to lower trade creditors and lease liabilities due to payments which were made during the quarter.

I will now discuss our cash flows for the quarter. Cash generated from operations for the quarter was $2.8 million. Capital expenditure in the quarter was $2.2 million, which represents a decrease of approximately $900,000 on the corresponding quarter last year. Then we incurred lease payments of $800,000 in relation to lease premises. These resulted in us having a negative free cash flow of approximately $200,000 for the quarter.

Also, in the quarter, we then had our biannual exchangeable note interest payment of $2 million. And finally, there was the receipt of the aforementioned $4.5 million of PPP loans. The net result is that we had an increase in cash for the quarter of approximately $2.3 million, bringing the quarter end cash balance to $15.6 million.

I'll now hand it over to Ronan.

Thanks. I'm going to review our revenues for quarter 2 before opening the call to a question-and-answer session.

Our revenues for quarter 2 were $16 million compared with $22.5 million in the corresponding quarter last year, which is a decrease of 29%. Point-of-Care revenues were $1.3 million compared with $2.1 million in the corresponding quarter, which is a decrease of 41%. Clinical Laboratory revenues were at $14.8 million compared to $20.3 million in the corresponding quarter last year, which is a decrease of 27%.

Moving back to Point-of-Care, our revenues decreased by 41% when compared with the corresponding quarter. As a consequence of COVID, we saw the suspension or reduction of HIV testing programs in certain countries in Africa. And this combined with supply chain difficulties caused by the major reduction in air traffic to Africa as well as general uncertainty as to how quickly COVID would spread throughout Africa led to a slowdown in orders. However, during quarter 3, we have seen a return to more normal levels of ordering and expect the outcome for quarter 3 to be marginally short of normal.

Moving back to Clinical Laboratory. Our revenues declined 27.5% to $14.8 million. We saw a significant reduction in our hemoglobin and in our autoimmune businesses due entirely to COVID. As a consequence of COVID, in many countries, testing for nonacute conditions were severely reduced as patients were reluctant to visit their physicians or hospitals and run the risk of contracting COVID and that subsequently and consequently that they would opt to defer or forego such testing. It therefore comes as no surprise that we saw a sudden fall off in diabetes and also in autoimmune testing during the quarter.

For autoimmunity, this first manifested itself in our reference laboratory in Buffalo where testing volumes declined, for example, 90% in April. In the case of diabetes, we also saw instrument sales decline significantly with only 20 instruments placed during quarter 2, as hospitals and clinics were unlikely to purchase new capital equipment in the midst of a pandemic. Diabetes testing volumes also decreased significantly during the quarter.

On a positive note, however, we are now seeing revenues for both autoimmunity and diabetes return to near-normal levels with the exception being that hospitals continue to defer capital equipment purchasing. However, the impact of COVID is not only negative from a revenue perspective. We are seeing higher sales of some of our Point-of-Care respiratory products such as Legionella urinary antigen and Strep pneumonia given the increased testing for these conditions in light of COVID.

With regard to our life science subsidiary, Fitzgerald, we are also seeing significant increased revenues for our COVID monoclonal antibodies and our complementary reagents. In addition, the company is benefiting from sales of our FDA-approved transport medium, which is a sample collection device for COVID-19 PCR molecular testing, which is used to store the nasopharyngeal swab which contains the patient's sample, allowing it to be transmitted in a stable environment. The transport medium stabilizes the sample, prevents bacterial growth and maintains its integrity until such time as the test is run in a laboratory.

As recently announced, the company has now launched its COVID-19 IgG ELISA antibody test and is now free to sell the product in the U.S.A. We expect to have the product CE marked for sale in Europe within the next 6 weeks. The product has demonstrated specificity in excess of 98% and sensitivity in excess of 95% in samples drawn at least 14 days from date of symptom onset. These percentages comfortably exceed the minimum requirements of the FDA Emergency Use Authorization pathway. As the utility of this product is to detect individuals with an antibody response to COVID-19 indicating past exposure and potential immunity, the specificity is the key performance metric.

A high percentage specificity means that there are virtually no false positives and therefore, for example, patients are not given the false impression that they may be immune. The test will potentially be useful in the screening of people prior to vaccinations to avoid vaccinating individuals who already have a circulating antibody response.

Additionally, the test can be used to monitor patients' serological response in the weeks and months following vaccination as their immune system builds an antibody response to the virus. In addition, the test can be used to prove whether an individual had previously had COVID-19 and is now assumed immune and can also be used by governments to monitor the prevalence of COVID immunity in the population. As previously indicated, our ELISA production capacity is -- capability is very significant, and the instrumentation platforms that perform these type of tests are available in virtually every laboratory in the world.

So in summary, our quarter 3 revenues for autoimmune and diabetes and HIV will be below normal but not significantly so, while our infectious disease revenues, which include COVID-19 products, will be significantly higher than normal, reflecting significantly higher sales of our Point-of-Care rapid test, our new antibody COVID-19 ELISA test, the PCR transport medium and [Fitzgerald-19] monoclonal antibodies. We estimate that quarter 3 revenues will exceed $28 million.

Moving back to the development of COVID-19 tests. We have previously indicated that the company is also developing a rapid Point-of-Care COVID-19 test to detect IgG antibodies and that the test can run in 12 minutes using 1 drop of cold blood procured by a spring-loaded lancet or finger prick. Like the ELISA test, this test will determine which individuals within the population have been exposed to COVID-19 and are therefore regarded as immune.

We expect to complete the development of this test and transfer it into manufacturing before year-end and, again, believe that the product is exhibiting performance characteristics that will enable us to gain FDA Emergency Use Authorization. We already have in place existing and substantial automated manufacturing capability for such a test given that we have already manufactured -- that we already manufacture every year many millions of HIV tests on the same automated equipment.

And relating to the FDA warning letter, as you would have seen last week, we announced that our Primus subsidiary had received a warning letter from the FDA following an inspection of its Kansas City manufacturing facility that took place in January 2020. Firstly, can I say that we are obviously extremely disappointed to have received such a letter. And in fact, it is the first time that this has occurred with regard to any of our facilities during our 28-year history.

The principal issue that was identified was in relation to our Ultra2 instrument, which is used for hemoglobin variants testing. This product has been on the market for over 20 years, making it the oldest Primus instrument operating in the field. In its letter, the FDA has pointed out that certain post-launch changes and enhancements made to the Ultra2 mean that it no longer bear sufficient similarity to enable its initial 510(k) approval to be relied upon. In order to address this, the company intends to negotiate with the FDA to allow for a new 510(k) submission to be made within an agreed time frame.

In addition to this, we're actively preparing more detailed remediation plans in relation to 3 483 findings identified during the January audit. And again, these findings principally relate to the Ultra2 instrument. I would like to point out that approximately $4.5 million of our revenues are derived from the Ultra2 in the U.S.A. as opposed to from the Premier 9210, where the majority of our hemoglobin revenues are earned.

In addition, our Premier Resolution instrument, which is already being sold in a number of countries, including CE marked throughout Europe, and is undergoing the process of obtaining its own FDA clearance at this time, is a designated successor for Ultra2. In fact, but for COVID-related delays in completing independent trials, it is likely that such clearance would have been obtained already. We now anticipate making the Premier Resolution submission by the end of November, ultimately allowing for the Ultra2 installed base to be replaced by the Premier Resolution new instrument.

I would like to assure you that we are treating this letter with the utmost seriousness, and we are giving the resolution of the issues contained in FDA's letter the highest priority. We've assembled a highly qualified team who will spend the next 2 weeks completing our responses to the FDA, which will contain a detailed plan outlining how we intend to resolve all the issues that they've raised.

So at this stage, if I could hand back to Fisher for a question-and-answer session, please.

(Operator Instructions) And our first question will come from Jim Sidoti with Sidoti & Company.

Can you hear me? I hope you're well. I just want to be clear. Did you say you expect third quarter revenue to be $28 million?

Yes, $28 million.

So that represents about 14% top line growth from a year ago, which was also an up quarter. You haven't had a double-digit top line growth quarter in a couple of years, and we're in the middle of the pandemic. What's driving that growth?

Yes. Well, I mean, I think it's probably something like a 40%, 4-0 percent, growth in the context of our current run rate, bearing in mind that I'd already indicated that autoimmunity, HIV and diabetes have not returned to full levels. For example, our instrument placements will still be reasonably modest in quarter 3. So -- I mean it reflects the fact that, basically, we are selling our new ELISA antibody test, the PCR transport medium. We're selling more infectious disease products like Legionella urinary antigen and Strep pneumonia. And Fitzgerald is selling a lot of monoclonal antibodies, the COVID-related antibodies. So I think accumulation of those factors has given rise to this.

So -- again, that would be 5 weeks to go to the end of the quarter, but I think we feel confident in that number.

And do you think those trends continue for the next few months? Or do you think that it could go up or down depending on what happens with COVID?

I think for quarter 4, it's likely to accelerate.

And quarter 1, it's very difficult to foresee.

Okay, but for the remainder of 2020...

I think acceleration rather than deceleration is more likely.

So it sounds like for the remainder of 2020, you're expecting double-digit top line growth, so year-over-year.

Yes or more than that, yes. Yes.

Yes. Okay. All right. And then on the expense side, I know you said you received the money, the PPP money. Is there any effect on the income statement from that? Does that offset any expenses? Or is that something that will happen later on?

That's something that will happen later on. So at this point, I suppose that the scheme is relatively new. The rules have been changing somewhat since it was introduced. There's a formal process to be gone through with the lending bank and then in turn with the government agency. And just given all that, at this point, we've taken a prudent approach and not recognized any forgiveness at this point. And we just wait until there's greater certainty as to exactly how that plans out. So at the moment, the loans are currently included in our balance sheet as a liability, albeit, as I mentioned in my remarks, I believe that a high percentage, if not, all of them will be forgiven on the basis that we did bring back all of our furloughed employees in the U.S. immediately after receipt of the loan financing. So from our point of view, we've held up our end of the bargain.

Okay. And can you give us an update on the timetable for the approval process for both the screening tests in Africa and then for the Point-of-Care immunity test -- the COVID immunity test or -- I'm sorry, the COVID antibody test here in the U.S.?

Okay. So the TrinScreen in Africa has just been held up because of -- because we can't run any trials at the moment. So just waiting to finish up in 2 of the 3 countries, but we haven't been able to get going again. We're hoping to get going in the next month or so, but we don't have complete clarity on that.

And then in respect of the rapid test, we've virtually completed it at the moment. We're doing validations. But the other thing that has to be done is, obviously, it has to be transferred into manufacturing, and there's mold issues, et cetera, et cetera. So they are taking time. And then the new mold should be validated, et cetera.

So because remember, it's going on to automated systems. So it's -- what's actually holding us up more than anything else at the moment probably is actually the manufacturing side of things. But I think we'll be clear -- we think -- we're satisfied we'll be cleared before year-end. We certainly -- yes. So I mean, the EUA, I think, will come probably comfortably enough probably sometime in November. The real issue is how quickly we can actually get up manufacturing in scale.

And then last one for me for the IgG test that has already received the EUA approval. Are you receiving inquiries regarding that? And when do you expect sales to commence?

Sorry, we have huge interest. And it's not just in the U.S.A., but around the world. So we have huge interest. And yes, it's looking very promising. We have -- we also, of course, are going to CE Mark, which will enable us to sell in Europe, and we hope to have that within the next 6 weeks.

So does your revenue guidance for $28 million of revenue for the September quarter, does that include any sales for that test?

Yes, it does. Yes. But again, I mean -- yes.

Our next question will come from Paul Nouri with Noble Equity.

Did you say that the annualized impact of the Kansas City plant issue is $4 million? Or did I mishear that?

$4.5 million.

Okay. And the company issued a shelf statement a little while ago. What are the different financing options you're considering? Is ATM one of them? Or you can issue shares at the market?

The -- well, the first thing to say on that, Paul, is we've had a policy for some time now as always having a live shelf registration. The reason we put the shelf in place is because the previous one has expired. And so in keeping with the policy to always have a shelf, we just placed one at the first available opportunity. We put in a whole range of broad categories of financing the broadest as such as is the norm in these situations when you're doing a shelf registration. So I wouldn't necessarily read anything into the fact that we put a registration there. And as I say, again, it's the broadest possible range of raising just in keeping with the spirit of those types of documents.

So Paul, just to be clear, I mean it's our policy to have a shelf registration in place as I think most companies would do. And so the fact that we actually did that filing in no way reflects an intention to actually raise money. In fact, it's not our intention. Specifically, clearly not our intention to do so at this kind of share price.

Our next question will come from [Charles Latario] with [GTM].

Excellent job on the numbers and great job on basically turning everything around the pandemic. Hopefully everyone is staying safe over there. I just have a couple of quick questions. The first one is your New York facility. Can you tell us a little bit about what's going on over there and what the status on how the ramp-up over there is going?

We didn't quite hear you there. Can you just give us a little bit more just on the last -- on just the exact question itself, please?

Okay. The New York facility that you guys are actually working on, what is the status on that? And actually, how much is the ramp-up going on now? And what do you plan on doing with it over there?

[Charles], we have 2 facilities in New York with one in Jamestown and we have one in Buffalo, right?

The one in Jamestown, I believe.

Yes. But we're not really ramping up. I mean no particular ramp-up. That's been part of the group for quite some time. It's a key part of our operations. It's our main infectious diseases facilities where we make all our ELISA production as such. It will be where we make our ELISA IgG antibody test for COVID, but -- so it's a very established plant as such and has been part of the group for 20 years.

Sorry, I mean it's a very busy plant at the moment because we just talked about a huge increase in our infectious disease revenues. And of course, a lot of that -- an awful lot of that is happening in that particular plant. So maybe that answers the question.

Yes, yes. And as far as your employee count, I know you guys pulled back on your U.S.A. employees. Do you find you have enough actually employees to handle what the current revenue going right now going forward is?

Yes. I mean we have -- I mean we have probably -- yes, what happened was when the pandemic hit, we've furloughed a lot of employees in the U.S.A. And then the U.S. government brought in a program, and they've sent us a check for $4.5 million, and we just -- we brought everybody back in. Now since then, particularly in Jamestown in New York, we've got really, really busy with the combination of the antibody test, the development of it and then the manufacturing of it, with the PCR transport medium as well. So we're busy. So we have brought on extra people. But it's like 15 people, something, maybe 20. And of course, we found it difficult to get people because the pandemic payments are quite high. But -- so we have probably marginally more employees than at the start of the pandemic in the U.S.A.

Excellent. Excellent. Now I know this question, if you can give me some color on your burn rate going forward. Obviously, your revenue is going to be increasing. Would you expect your cash burn to stay similar to what it is, go down, go up, I mean, with your revenues going up increasing?

Well, I suppose you would have heard us on previous calls talk about the fact that we'd be making cost savings. Also, we did close our facility in Carlsbad in California. So we've been working very hard to get cash flow breakeven notwithstanding an uptick in revenues. So the fact that there's an uptick in revenues coinciding with those, I think we're very well positioned to meet our objective of becoming cash flow positive. So I don't believe we're going to be burning what we would have in the past.

So would you feel comfortable with your current cash level right now? Is that what you're basically trying to -- color you're trying to put out?

We would anticipate that our cash balances will increase in coming quarters.

Excellent. Well, keep up the good work, gentlemen. I think everything is looking forward. And hopefully, you can make a big impact on the COVID-19 because it looks like you've a lot of good product going out there.

Thank you.

Thank you.

Our next question will come from Jim Sidoti with Sidoti & Company.

I just want to follow up on the issue with the Ultra. Does the fact you have the warning letter, does that prevent you from shipping either the device or the consumable for the device in the near term?

No. Jim, I mean, what happened at the inspection -- we got an FDA inspection on the factory on the end of January, first few days of February, right? And then we received the letter now, right? So I mean, yes, there's no question of not being able to ship product or anything like that. I mean if there's something large, I think they would have written to us sooner.

Okay. And you said, I think that by the end of the year, you're hoping to have Premier approved in the U.S., and that would basically obsolete the Ultra anyway. Is that correct?

Well, to be clear, what we said was and we actually hope to basically by the end of November submit. So I mean it could take 3 months then. So I think it will be probably the start of -- early next year but before we'd actually have an approval. And I just would -- just put one word of caution with all of that, and that is, is that we have been -- we're waiting to do -- actually, it's a clinical trial, right? We can't get in because of COVID at the moment, right?

Now they're allowing us in on the 1st of September, but if possible, that can change. It has changed a couple of times. I think we will get in. But the point I'm making is it's very difficult to do clinical trials at the moment. I mean hospitals don't want outside influences, understandably. And that's why, again, for example, we have sold very few diabetes instruments over the past number of months because you really don't want engineers wandering around your hospital installing instrumentation. And similarly, you're not going to welcome outside trials. So that's just the one caveat I'll put on that.

Okay. And then the last thing, I assume there's some remediation expense related to the back and forth with the FDA. Can you just give an order of magnitude? Are you talking tens of thousands, hundreds of thousands, millions of dollars to clear this up?

I think it's probably like a couple of hundred thousand dollars. I mean we're going to put extra regulatory people and all that in. We'll be working on our technical side, things like that. But I mean it's not a couple of hundred thousand, maybe $200,000 or $300,000, that kind of money, but it's not -- it's of that magnitude.

And Jim, just to point out, yes, I mean, it was always our intention to replace. The reason we developed the Resolution was to replace the Ultra. I mean as you've heard, today, Ultra, it was an instrument that we inherited when we bought the business in 2005. So it's had a good run. And so -- the Resolution is a much better instrument. It's much more modern instrument. So we would hope to enable a transfer from one to the other, but it needs to be negotiated.

Our next question will come from [William Lapp], investor.

I just have a quick question. On the rapid test, is that something that has to be done at the doctor's office? If you have this rapid test like you do for HIV, how is that performed? Is that in a doctor's office or can it be done at home or in a business? I'm not sure about that.

So Ronan here. It can depend on the country, but it would typically be done in a doctor's office, in a clinic, in a dental practice. But bear in mind, all it involves is, is a spring-loaded lancet, which you release and you get a drop of blood. And then you operate it -- and then you just add a drop of wash solution and you wait 12 minutes, and it operates like a pregnancy test.

Right. And that's exactly -- and that test, that test is what they're all saying they need, the rapid test. I mean they say if you get rapid test, you can spot the infection first. You don't have to wait 10 -- 3 to 4 days to get it. There's people from Harvard, they've been talking about it. So this rapid test could really be a windfall or it could be really great. I mean you guys do it with HIV. I'm just wondering could a business even have it so people come in, they can do a rapid test. Or is that more like it? Am I wrong?

So I appreciate your support. But just -- I need to clarify one thing. I mean it has a lot of significant utility. And I know I went to the dentist a few weeks ago and I was made to do one of these tests. I had to pay like $80, but this is an antibody test. But bear in mind, this is an antibody test. So it's not accessed by anybody when you got the current infection but rather that you had it in the past.

Right. I mean it isn't a molecular test. Right.

No. But it is still being used, as I say, I was obliged to use it before I could go to the dentist. So they're being used a lot. There's a lot of them around. And we just point out that there's been a lot of negative publicity surrounding them and accusations being made that they don't work and all of that. I can't speak for any other test, other than to say that our test has exhibited 95% sensitivity but most importantly, specificity of 98% -- just over 98%, which we believe is right up there.

(Operator Instructions) Our next question will come from Sam Rebotsky with SER Asset Management.

Could I suggest that this will be the last question, and we close the call after this?

Tell me, how much money do you owe? What is the date of the obligation? And the $28 million, did you say you're going to be cash flow positive and as long as you continue this in the $28 million range, assuming you will continue to be cash flow positive?

So our total indebtedness is $99.9 million, which is the 4% bond, and it falls due in May 2022. Yes, with $28 million worth of revenue, we would be significantly profitable and depending on working capital movements, would expect over a period of a number of quarters to be significantly cash flow positive. There's an element of building your debtors book first. You don't take X number of days before you get paid. But basically, yes, that level of revenues would be -- would generate significant profitability and significant cash flow positive.

So with your '22 -- with the debt due in '22, do you have a plan how to pay this? Or are you going to wait to get closer to the timetable?

Well, we've many thoughts on that. Something we review all of the time. But if you don't mind, I won't really go into all of our thoughts on that at this moment in time. But we're very encouraged by the strong revenue that we're projecting for quarter 3 and which we see sort of continuing and even being enhanced in quarter 4.

Okay. Well, good luck. I hope you get your numbers and the cash flow positive and profitability so you could -- the stock will give you more flexibility. Good luck.

Thank you very much.

Thank you.

So at this stage, then there seems to be no more questions. Thank you to everybody, and look forward to speaking to you again soon. Good afternoon.

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