Trinity Biotech PLC (TRIB) 2008 Q1 法說會逐字稿

Greetings, and welcome to the Trinity Biotech's First Quarter 2008 Earnings Conference Call. (OPERATOR INSTRUCTIONS) As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Mr. Brendan Farrell, Chief Executive Officer of Trinity Biotech. Thank you, Mr. Farrell. You may now begin.

Thank you, Latanya. Good day, everybody. Welcome to Trinity Biotech's First Quarter 2008 Conference Call. Joining me today on the call are Rory Nealon, Chief Operating Officer, and Kevin Tansley, Chief Financial Officer.

Before getting into the call proper, I need to inform you that we will be speaking under the provision of Safe Harbor. By that I mean that we will mention certain forward-looking statements. These statements are neither promises nor guarantees, but are subject to risks and uncertainties. You should not place undue reliance on any such forward-looking statements which are current only as of today.

I now would like to hand you over to Kevin Tansley, Chief Financial Officer, to take you through the quarter one results in detail. Kevin?

Thanks, Brendan. I want to take you through a review of the income statements and the key movements in the balance sheet during the quarter, starting with our revenue performance. You will note in the press release an analysis of revenues broken down by our key product areas of Clinical, Laboratory and Point of Care, and also by geographic location for the quarter.

Looking at the total revenues, you will note that our revenues for the first quarter of 2008 have decreased by 6.7% over the same period of 2007, with a decrease compared to quarter four 2007 was approximately 3%. In both cases the decrease has been entirely attributable to lower point of care sales, in particular, HIV sales in Africa. Meanwhile, our clinical laboratory revenues have grown by approximately 3% compared to quarter one last year. We also achieved growth of 7% in this product line versus the last quarter.

Ronan will get into detail in the moment by product category and geographical location. I'll move on to our gross margin performance, and Brendan will shortly take you through a more detailed analysis of the revenue.

Our gross margin for the quarter was 46% as compared to 47.4% for the same period last year. This slight reduction is caused by the lower Point of Care sales, which as you are aware tend to be higher margin products. The reverse was seen in quarter four last year when our gross margins benefited from an increase in Point of Care sales.

Moving down to our direct/indirect expenses, our R&D costs are slightly ahead of previously quarters, or approximately 5% are consistent with the percentage of revenues.

Our Selling, General Administration expenses remain constant at just over $12 million in both quarter one 2008 and quarter one 2007. However, our SG&A costs have shown a reduction for quarter four 2007, in this case was $13.3 million to $12 million. As you will recall from the quarter four conference call, these higher SG&A costs were due to a number of factors such as the impact of the first time implementation of Sarbanes Oxley. The SG&A costs can be expected to increase a little in future quarters as we invest in increased marketing and sales resources.

The year as a whole we expect to average approximately $12.5 million per quarter, which incidentally is in line with 2007. This reflects the fact that the savings arising from the reorganization announced in December 2007 will contract any upward pressure on costs because of adverse exchange rate movement and normalization.

Regarding our net financial costs, you will notice that our net finance charges are reasonably constant quarter on quarter. Within this, our financial expense has fallen reflecting payments of debt and lower prevailing interest rates.

At this stage I'd like to say a word about our tax charge. Effective tax rate for the period is only 6%. This is due to the low corporation tax rate in Ireland, 12.5%, and the utilization of tax losses in other jurisdictions in which the Company operates. The net result is that the Company has made an operating profit for the quarter of $1.8 million, and profit after tax of over $1 million.

Before concluding on our income statement, I would like to point out that our EBITDA for the quarter was just over $4 million.

Now, let's talk about our balance sheet. Starting with our property, plant and equipment, the movement since the beginning of 2007 was largely explained by the combination of net addition of $800,000 as offset by depreciation of $1.1 million. Just to remind you that with the addition of $8.3 million in 2007, the average to quarterly spend in 2007 was just over $2 million.

Now that we've completed our capital program associated with the bioMerieux integration, expenditure on property, plant and equipment is now reverting to lower levels. Also included in this capital expenditure are instrument placements. These are instruments which are placed with customers on operating leases and hence required to remain on our balance sheet of fixed assets.

Our goodwill and intangible assets increased by approximately $800,000 during the quarter. In this case, the increase is made up of additions of approximately $1.7 million as offset by amortization of $900,000.

The addition consists of capitalization of costs in relation to our product development projects. In this regard, (inaudible) Destiny MAX project, which accounts for just under half of the additions. Our key project includes TRIstat, GeneSys, which is our Neonatal Variant Assay, and HIV Incidence.

For the year to date, the level of expenditure of intangible assets of $1.7 million is in line with budget.

Moving on to Inventory, in net term, inventory has fallen by over $1.3 million since year-end 2007. This decrease has been contributed to by a reduction in the level of bioMerieux inventory that was built up to carry us through the transition period when manufacturing of the bioMerieux product line was transferred from the bioMerieux facility in North Carolina to our plant in Bray. We've also seen a reduction in inventory now that is associated with items identified for culling as part of reorganization announced in December 2007.

Our trade and other receivables balance comprise trade receivables from customers in prepayments. Trade receivables have increased by approximately $3 million for the quarter, and this is due to a number of factors. Our trade debtors have increased due to a particularly strong third month in the quarter, and we expect in the months ahead that the level of debtors will revert to levels we've seen at the end of 2007.

In addition, the timing of certain payments which typically arrive at the beginning of the year increased the prepayment element of this caption. Finally, this caption also contains the fair value of our currency for our contracts which increased during the period as the dollar has weakened.

Our interest-bearing debt which totals $37.9 million consists largely of a five-year term loan with our corporate bankers. The remainder is made up of lease liabilities. The reduction in the level of debt since the year-end has been principally due to the repayment of a $4.1 million in January 2008. The next repayment of $1.1 million is due in July of this year, followed by a payment of $2.1 million in early 2009.

Finally, on the balance sheet I'd like to note that our cash position. Our cash balance has reduced from $8.7 million at the end of 2007 to $3.1 million at the end of the quarter. This reduction in due in essence to debt and interest repayment of approximately $4.8 million.

As most of you are aware that since the quarter end the Company has raised approximately $7 million of equity. It has increased our cash position and additional funds will be used to make the final deferred consideration payment of $2.8 million to bioMerieux, and the remainder will be used for general corporate purposes, which include the completion of our key development projects such as Destiny MAX.

Also in relation to equity, I would like to point out that Chairman, Ronan O'Caoimh purchased 350,000 ADRs in the open market since year end.

Now, I'll hand it over to Rory, who will talk to you about our R&D activities.

Thanks, Kevin. I propose now to bring you up to speed on the following key projects within Trinity over the course of the next few minutes. Firstly I'll touch on the Destiny MAX. Secondly, I'll take you through our TRIstat Point of Care haemoglobin A1c project. Then our Neonatal Haemoglobin Variant Assay, followed by our HIV Instance Assay, the closure of our facility in Umea, and finally I'd like to update you on the BioMerieux integration.

So, starting with the Destiny MAX. As we're all aware, the Destiny MAX project is the largest R&D project which Trinity has ever undertaken to date. The objective being to develop a high throughput instrument in the haemostasis market which would replace the old AMAX 400 instrument we inherited from Sigma, and replace the BioMerieux. And, finally, we'll target the competitor instrument base in the high throughput sector.

As I mentioned to you before, the high throughput segment of the market accounts for about 50% of the reagent and consumable market, or about 1200 new instrument placements each year on a global basis. In fact, we reckon there are 6,055 high throughput instruments on the globe to date, so about 20% of those come up for renewal every year, hence my estimate of 1200.

As noted on our most recent conference call in March, we have reached and passed design-free stage, which means that we're happy with the functionality of the instrument. We're now setting out to prove that for what's called the verification and validation phase.

Currently, we are building 10 new instruments according to the final design, which will be used in the verification phase, that is, internal testing, and finally the validation phase, or external testing in third-party labs.

The plan is to complete those trials in the summer months -- to commence those trials, I should say, in the summer months, and to complete them in September.

So, just to reiterate, our goal is to have these trials complete and the data compiled before the end of September with a view to announcing to the market that we're good to go. And this will result in the selling instruments into the non-U.S. or European markets specifically in quarter four. And again, as stated before, the USA itself will take longer and we'll have to submit a 510-K application to the FDA, which will happen simultaneously with the non-U.S. launch.

Moving on to the second of the projects, namely our TRIstat project, which is our Point-of-Care instrument for the haemoglobin A1c market and which is being developed by our R&D team in our Kansas City facility, which is effectively a tool which is used in the diagnosis and monitoring of diabetes.

Just to be clear, this test will predominantly be used in doctors' offices as opposed to the clinical lab market, and as such will be part of our Point-of-Care Division. And just to remind you, we received the 510-K approval from the FDA for this product, which we announced on November 29, and this 510-K effectively means the test works and can be used in a medical environment, albeit by experienced technicians.

We subsequently again just remind you that we submitted an application to the FDA for clear waiver just before year-end, and this submission is still being considered by the FDA.

On the last conference call back in March, we talked about being through two sets of questions and answers at the FDA. More recently we received another set of questions with answers already being submitted back to the FDA. And at this point we believe they have all the information they need and in fact a conference call is now scheduled for the week of May 12 to review the submission again.

I'm hoping, obviously that we receive positive information at that time, but for obvious reasons I can't be definitive.

Moving on to our neonatal products and to talk about our Neonatal Haemoglobin A1c Project. We talked about this on the last conference call, and since that call we have in fact formally launched the product you have seen a press release about it. In fact the first two instruments have gone to a state lab, which Brendan will shortly talk to you in more detail in just a minute.

Just to remind you, the products we're targeting the 38 state labs which test all newborns in the USA for haemoglobin variant, and there are approximately 4.5 million newborns annually in the United States at an average price per test of about $3.

This is a product we're very excited about in that it has very significant advantages over its competitor, and that competitor in fact dominates the market. There really is only one significant player in the space. Those advantages being firstly automated handling in that our instrument can manage the samples from the microtiter well in question in which the sample is placed, as opposed to having to move samples from one well to another well as our competitor needs to.

Secondly, we have a two-minute screening time as compared to somewhere between a three- and six-minute screening time for the competitor. And finally we've an automated confirmatory test, which is run on the same instrument, as opposed to needing to move the sample to a different instrument and to confirm it on a different technology. So, quite significant advantages.

In summary, this is a product that has been extremely well received in the market and has been extensively demoed in various state labs as we speak.

The next item I wanted to talk to you about briefly was the HIV Incidence Assay, which we have developed at the request of the CDC. Again, just to remind you, this HIV Incidence Assay effectively determines how recently you've been infected with HIV, and it's typically used by agencies such as the CDC to track the spread of the disease. That test is effectively developed right now and we're just finalizing some wording with the CDC, and you can expect to see a press release shortly on the matter.

The fourth item I wanted to touch on was the Umea closure, and I thought a quick update might be in order. You will recall from our December conference call that we're moving the Umea business in Sweden to our facilities in Jamestown in upstate New York, and also to our facility in Bray in Ireland. So, we're splitting the Swedish operation. Practically all of the training is complete ahead of schedule at this point in time, and we're due to make our last product in Umea in Sweden at the end of next month.

We're also making our first batches in Ireland this quarter with the Irish transfer being fully complete in Q4. And regarding the Jamestown move, we are in fact moving some significant equipment from Sweden, which means it will take slightly longer. That said, that project is very much on schedule and the move is expected to be fully complete in the new year in Jamestown, New York.

So, in summary, the overall project is on or ahead of schedule and we expect to see the benefits of this move start to come through in the second half of this year.

Finally, before concluding on the operations and R&D review part of this call, I'd like to briefly talk about the progress on the BioMerieux integration. You will recall from the December and March conference calls that we've already rationalized our approach to instrumentation. In relation to the reagent side of the business, we have been integrating the reagents which have previously been manufactured, as Kevin just touched on, in Durham, North Carolina by bioMerieux, and we've been integrating those into our haemostasis reagent manufacturing operations in Ireland.

In essence, there are various product families we've been working through and validating in the new plant, and to date we've successfully completed the transfer of our platelins, our verified both normal and abnormal, our Fibriquik, Thromboquik and [HDF] families of products.

So, at this point, only three product families remain, and the goal as previously stated is to have those complete by the end of June. In effect, what's going to happen then is it will take a lot of pressure off the factory and enable us to produce more product and produce it more efficiently.

Brendan, over to you.

Thanks, Rory. Just to conclude in the formal presentation, I'd just like to emphasize some of the points made by both Kevin and Rory as they related to marketing and sales.

In relation to the revenues for quarter one, starting with the Clinical Lab Division, as you have seen that sales were up 2.7 over the comparable quarter of 2007. This represents an increase of approximately $800,000 in revenues, of which $600,000 -- in fact, over $600,000 came from within the Infectious Disease portfolio, which had a very strong quarter one.

Now, you will have noticed that during the quarter we announced, as Rory has already alluded to, the launch of our new GeneSys Neonatal Haemoglobin Variant Screening System. We think this is a product with great potential, both within and outside the United States, particularly in all those countries where it is mandated to perform haemoglobin variant testing on neonates.

As Rory has mentioned, 4.2 million live births a year in the United States, at an average test price of $3.50 to $4.00 performed in 38 state labs presents a very good opportunity for us in this clinical chemistry area. And, indeed, the customer that Rory mentioned, which we had acquired soon after our announcement after the launch of this new GeneSys system was in fact a state lab in South Carolina, one of the 38 state labs where the centralized testing takes place. And we see ourselves having great opportunities in these other state labs in the months to come.

Similarly, just to pick an example outside the United States, in the United Kingdom, where there are 700,000 live births a year, again there is mandatory centralized testing for haemoglobin variants in neonates, and the pricing is attractive, being somewhere around the $8 a test. So, again, to emphasize the importance of that product release to our future growth prospects.

Within the quarter we also announced by press release the launch of our new Lyme ELISA products for the European markets, which completes Trinity Biotech's product offering for Lyme disease in Europe, and complements the existing EU Lyme Western Block Confirmatory Assays.

Turning now to Point-of-Care, sales in quarter one, and these were made up entirely of HIV Rapid Tests, amounted, as you heard, to just over $3 million, which is down from the very strong performance in quarter one of '07 of $6.6 million. The level of sales which we saw this quarter just gone for Rapid HIV was expected by us because of the extremely strong performance we had in 2007 in relation to our Uni-Gold HIV product. And remind you in 2007, we had sales of our Rapid HIV product outside the United States of $18 million for the year, which is up from $11 million in 2006. That was an exceptional performance.

As I emphasized in our press release today, current orders on book for Uni-Gold HIV outside the United States would indicate a return to normal sales levels of this product in quarter two. And by normal sales levels, I mean a run rate of approximately $3.5 million to $4 million a quarter, and not the levels we saw in early 2007, which were clearly exceptional.

In summary, with the product launches which we have announced, namely, the EU Lyme and the GeneSys Neonatal Variant System, together with the soon to be launched HIV Incidence Assay, the TRIstat haemoglobin A1c product, and of course the quarter four launch of our Destiny MAX haemostasis instrument, we certainly feel that we're well positioned to drive growth in our business in 2008 and beyond. With that. I'd like to hand back to Latanya to open the call to questions. Thank you. Latanya?

Yes, thank you. (OPERATOR INSTRUCTIONS) Our first question comes from Matt Dolan with Roth Capital. Please proceed with your question.

Hey, guys. Good morning. First question on the Point-of-Care business. Can you break out what you're seeing from a performance standpoint in the U.S. relative to Africa, in terms of growth?

Certainly, Matt. We are continuing to see good strong growth in the United States both -- we are dividing up the HIV business in the United States now, so I need to emphasize that. Because part of the business is handled through our hospital sales reps, and they are taking the product into the hospital lab, as opposed to the product that's handled into the public health arena in the United States. So, we're splitting that up, Matt. And what we would have seen is sales of about $1.2 million, $1.3 million in the quarter, which is in line with what we would expect and shows good growth over prior year.

Okay, great. And then on the GeneSys product, how much of that market do you think you can penetrate in the first year?

Well, we certainly have very good prospects lined up. As Rory pointed out, very, very strong advantages over the competitors. The main competitor in there is Bio-Rad, and we think and Rory has actually outlined what the advantages are. We think that we have a very good advantages over Bio-Rad. Of course there will be contacts in place and some purchases will wait until those contracts are at an end. But I think we should be able to capture somewhere between 5% to 10% of that market on an annualized basis during 2008.

Okay.

Matt, just to go back onto the U.S. HIV, I think I gave you another statement there, it was about $1.4 million to $1.5 million. I think I said $1.2 million to $1.3 million.

Matt, it's Rory here. Just for the sake of clarity, and you possibly know this already, but obviously Q4 in the U.S. HIV business is radically different from quarters one, two and three. There is a [sticky] effect there, so I'm not sure what you have annualized in for the year, but we can talk about it maybe later on. But the reality is there is about 40-odd percent of sales for the year tend to turn up in Q4, so it's a little bit skewed that way, okay?

And, Matt, just to follow on, also, we're expecting significant new moneys to be made available by CDC toward the end of 2008, certainly in the fall of 2008, again, to push the use of rapid testing into the emergency rooms and hospitals, and into designated sites and jurisdictions which the CDC feel are areas where testing should increase. So, I think we're going to see substantially new moneys being made available, and substantial grants being made available to those who will conduct testing in these environments.

Is that what you saw from the original money that came down from CDC? Is that why you're seeing such good growth in the U.S.?

Well, I think that's partly true, but I would say that CDC is perhaps -- and I shouldn't really speak for CDC -- but it's our view that CDC hasn't perhaps seen as much new testing performed in the jurisdictions where they allocated money as they would have liked. And I think their criteria going forward are going to be more stringent in terms of mandating that those who receive the grants are doing sufficient testing and are not using moneys for other purposes.

Okay, great. And moving on to the reorg, you gave us kind of the major steps that needed to take place here. I think Sweden and bioMerieux are the two significant goals here. But can you tell us what the cost was in Q1 relative to the reorganization and what you're expecting that to be in Q2, so we can get a more normalized rate?

As you're probably aware, Matt, the cost of the reorganization role taken in quarter four as such, I mean, the main cost we would have incurred this year would have been termination payments in relation to those people would have been let go. But as I said, they would have been recognized in quarter four. We're not seeing any sort of hits in terms of reorganization costs.

There's no sort of ongoing move-related expenses that you'll see over the next few quarters?

There are some expenses to do with the transfer of the Umea business over to our other plants, but they're not regarded as being significant.

Okay. And then in your press release you mentioned you're content with the street's outlook on the year, which I think is about $148 million and a mid $0.30 number. Are you seeing any abnormal strength or weakness in some of your key areas, like haemostasis or flu or Lyme, that you could give us an idea of how seasonally that should play out here? It's obviously a decent step up from the Q1 revenue numbers. So, any comments on seasonality of the appreciated?

Okay, Matt, certainly on the basis of seasonality. As you know, Lyme will start to kick in strongly now in Q2 and Q3, so that's going to be a positive seasonality coming through. We're also going to see hopefully some positive seasonality in terms of sales of raw materials for influenza testing, so antigen antibodies for influenza testing should impact if indeed we get those orders in Q2, Q3. And there is nothing really negative in terms of seasonality that we're talking about.

In terms of consensus, yes, you're correct, the revenues of 148, but the EPS consensus would be a bit lower than your numbers would be in the high 20s or thereabouts, mid to high 20s, Matt, not in the 30s.

You also mentioned haemostasis, Matt, just to touch on that. We did disclose numbers on haemostasis last year, and these are very rough numbers, but you might recall they were of the order of $16 million in Q1, $16 million in Q2, $14 million Q3, and I think $13.6 million, $13.7 million Q4. Just to answer your question, haemostasis bounced back quite significantly in Q1. In fact, back up close to $16 million, just shy of it. So, we've had a very strong performance in haemostasis in quarter one versus the second half of last year, and that's very comforting, to put it mildly.

Okay. And then last couple here, sorry for dragging on. But, Kevin, do you have an impact of currency on the revenue line in Q1 that you could provide us with?

Currency. Well, currency, the average for the quarter was with a rate of 150, and the average rate for the previous quarter was about 145, so you're talking about a 3% movement in the exchange rate quarter-on-quarter. So, the impact on that would be -- means that you're talking about less than a 2% impact, or about 1.5% impact on the revenue, so not noticeably significant on the revenue side.

Okay. And then finally, Rory, on TRIstat, is there any chance you're seeing a delay there due to potential changes in home reimbursement relative to the specific CLIA waiver you're looking for? Is it basically a black box at this point and we'll wait for the May meeting? And I'll jump off. Thanks.

No. No reason to expect that at all. It's just various questions about the (inaudible) and creating the (inaudible) and how its made up and what's in it and what's not in it, etc., etc. And it's just back and forward. It's obviously taken a lot longer than any of us could have anticipated. Submitting a CLIA waiver on the 29th, or whatever it was, of December, and we're now into nearly May. But the reality is we're getting through it and we have a good relationship with the FDA. And once they ask the questions we're back to them within hours or a couple of days at most. The next call is scheduled for the week after next. So, I'm not going to make any promises. We'll see what happens. They'll either ask a couple more questions or they'll give us approval then. So, we'll wait and see what happens in a couple of weeks' time.

Great. Thank you guys.

Our next question comes from Mark Healy with Davy Incorporated. Please proceed with your questions.

Thanks very much. Thanks for taking the questions, guys. I have two questions. The first is on SG&A. Could you just give a bit more color on the projected trend? I know you're mentioning you may see increases over the next few quarters. Will there be any impact from the dollar effect that was mentioned in the press release? And then, secondly, in relation to the Rapid HIV test, I notice that OraSure has been sued for their alleged patent infringement on their OraQuick test. Do you think that is going to have any impact on the market and how do you guys stand in relation to that for your own test? Thanks.

Well, I'll take the first question and then, Mark, in terms of the SG&A. I mean, as I indicated there, I expect that the average will probably come somewhere close to being $12.5 million for the year as a whole for each quarter. (Inaudible) for this quarter as you can expect a slight (inaudible) between now and the end of the year, pretty much in line with what it was last quarter -- an average per quarter last year.

The exchange rate, obviously it's what the exchange rate is. We've seen a slight deterioration again this quarter again over previous quarters of about 3%. So, the impact of the exchange rate will depend obviously on the future rate. So, it could impact it probably about 30% or 40% of those costs are in Euros. So, you can do the math on that depending on what the exchange rates are.

Okay, and this is Brendan here just coming back on to your question about the Uni-Gold HIV and the fact that Inverness Medical are suing OraSure because of infringement of the Inverness patent. Just to be clear about this, these patents center around technology called lateral flow technology, which means that the reagents literally flow laterally across the membrane.

We have taken a license from Inverness for this technology. We do pay Inverness a royalty on sales of our Uni-Gold HIV product. In a sense we would like to see a level playing field for all participants in this market, and it's long been our opinion that OraSure do infringe the Inverness patents, that their technology is lateral flow technology. And we would welcome them taking a license and paying a royalty, as I say, to create a level playing field.

I can't predict the outcome of any legal action. Potentially, it could be that they are not obliged to pay a license for some reason that I can't understand, or they are obliged to pay, or even that they might be taken out of the market. So, that's our view on it and I have to say we do have reasonably strong views on it.

Okay. Thanks, guys.

Our next question comes from Bill Nasgovitz with Heartland Funds. Please proceed with your question.

Yes, hi. Good morning. I came on late here, so I apologize for perhaps being repetitious. But could you -- what's the actual share count now? A deal was done, correctly, and what's your cash balance?

Okay, Kevin.

In terms of ADRs, we're at about $20.9 million ADR equivalents.

Could you say that again?

20.9.

20.9 million ADRs?

ADRs, all right.

ADRs. All right, ADRs. And where is your cash balance today?

Our cash balance you can see at the end of the quarter was approximately $3 million, and we've taken in $7 million since. We're currently at about -- between $7 million and $8 million at the moment.

$7 million and $8 million in cash?

Yes.

Okay, thank you.

Our next question comes from Joseph [Demeo] with [Madden Thurman]. Please proceed with your question.

Hello gentlemen. Good morning. Brendan, if you could, just comment on the Legionella Urinary Antigen Test. What is the status with that test?

Well, sorry, I'm hearing an echo on the line there. Do you want to pick up your handset?

Yes, I'm not on speaker. I'm just asking about the Legionella.

Okay. The status of the LUA test is that it is through R&D. It has been released, and it's out there on the market. It's not a very large market. It is an outbreak disease, but it does show that our Uni-Gold is a platform technology because it's the second test to be developed on that platform.

I see. And, secondly, the distribution partners. I know you mentioned in the previous quarter about -- that there would be an announcement. Anything developed further since last quarter?

Are you referring, just to be clear, to distribution partners for the Legionella?

For the TRIstat.

The TRIstat, okay.

Yes, sorry. Thank you. In relation to distribution partners for the TRIstat, we are still in discussion with distribution partners. We have always said that we would wait for CLIA waiver before signing up with distribution partners. And, as you heard earlier in the call, we expect that CLIA waiver virtually any day now.

Okay, very good. Thank you, gentlemen.

Thank you very much.

Our next question comes from Ian Hunter with Goodbody Stockbrokers. Please proceed with your question.

Good afternoon, gentlemen. Just going back to GeneSys just a minute. I'm just wondering if you can give me a sense of the ramp-up into the state labs. I mean, I know you're saying it's [five steps] on an annualized basis. I'm just wondering how it's going to run through 2008 that's left for that. I mean, I just -- I mean, how many instruments are there per lab at the moment, and will you be looking to put in multiple instruments or is it just one per lab? And how are you costing for this? You placing instruments or are you selling them, or is it going to be mainly sales through the reagents, through instruments that are placed in labs?

Hi, Ian. This is Brendan here. There could indeed -- there are 38 state labs and each of those could take multiple instruments depending on the volume that we're doing. Sorry, 38 states and each of those could take multiple instruments, and it will be a combination of selling and placing of instruments in those labs [microphone dysfunction].

Ian, it's Rory here. Do you hear the echo?

I am getting the sound coming on and off and on and off, and I'm on handset. I'm not on speaker phone.

Okay. We're hearing a very strong echo. Did you hear what I said, Ian?

I got the gist of it, yes. It's all right. There could be multiple instruments and there is the option for both selling and placing of instruments into the lab. I'm just wondering how you're going to report the progress of these? Is it just going to be part of the clinical chemistry overall budget, or are you going to separate that out to give us a sense of how things are progressing?

Well, it will be part of the clinical chemistry budget and it is part of the clinical chemistry budget. But on our calls we will give you a sense of how well our sales are developing in that area.

Okay, thanks. I'm just going to be one final question, which is more kind of bookkeeping. I'm just wondering if you can give a sense of what the tax rate is going to be going forward? The last five quarters it's been considerably different with each quarter. I'm just wondering if there is any trend that we can take?

Kevin here. I mean, the tax rate will change around quarter to quarter. That's partially due to sort of inventory movement. I won't go into the specific details of what caused that. Typically speaking, we've been indicating that mid to low double digits in terms of effective tax rate and it will probably even itself out over the year. There may be fluctuation quarter-on-quarter.

Okay, that's fine. Thanks very much.

Latanya, if you're on the line, could you please see what you can do about this echo?

Okay. One moment. Our next question is from Rick Sherman with Oppenheimer & Company. Please proceed with your question.

Hello, gentlemen. You've made numerous comments in a press release about some of the officers buying the ADRs on the open market. Do you have a little more color on that as to what price?

Well, at the current market price at the time of purchase, but I don't have an averaged out figure for you. I'm going to suggest that it was perhaps somewhere around the $3.60, $3.70 somewhere around that, maybe $3.80, but I don't have it averaged out, weighted average price for that. I can't do that.

Don't you normally file with the SEC, so it gives an average or what the dates were?

Actually, it's Rory here. To answer your question, foreign private issuers don't file Form 4s, which is what domestic companies do. In fact, believe it or not, there is no obligations on us to file anything when we buy shares, but we as a policy press release whenever we buy shares, and that way we get the information out into the market. If we sell shares, just to make the point, we do have to file a 144 in advance expressing our intention to do so. That is an obligation on officers of the company, but when we buy shares as has happened here, there is no form filling for foreign private issuers, believe it or not. But we do put the press release out, like I said, to get the message out into the market.

All right, I appreciate that. Look, I happen to be a shareholder, so what I'm about to say is -- I say this as a shareholder [who is long], so there is no misunderstanding. The company, if you look at the stock price, the stock is at a 15-year low. With all the ups, downs, sideways and everything else, there really has been basically no value created for the shareholders certainly in the last six or seven years. And we're basically been gyrating since 1993. I've just wondered, you know, there's been restructuring. You do a lot of acquisitions, you divest things. At the end of the day it hasn't created much in terms of long-term value. I was wondering when you think you can get back to or structure the company in some way that's going to create more sustainable profitability on an ongoing basis, especially moving forward?

Okay, this is Brendan here, and I do appreciate -- and I take your comments in the spirit in which they were made, in a constructive way. Our restructuring and reorganization that took place in December is in our view the very first step to take in getting us back to a point where we are delivering value to shareholders. Shareholders including ourselves, I should add, because we are significant shareholders.

I also think it's relevant to point out to you that if you do some of the parts exercises of Trinity Biotech, just taking our Uni-Gold HIV product alone, which has sales of $25 million last year. And taking current diagnostic industry multiples, would give you a valuation of at least US $100 million right now for that single part of our business, ignoring all of the other aspects of the business that are showing growth prospects as well.

So, we believe that we're moving in the right direction. We believe that by delivering new product introductions in a timely fashion and on budget, that we will progress and we will progress over '08 and beyond, and we will deliver shareholder value.

Okay. Thank you for the response.

Thank you.

We have a follow-up question from Mr. Bill Nasgovitz from Heartland Funds. Please proceed with your question.

Yes, Bill Nasgovitz, thank you. Just in terms of public information, it would be helpful, I think it might clear some of the uncertainty if you did release -- maybe I missed it -- publicly what you raise, what price, and the share count so we'd be all up-to-date here.

Bill, this is Brendan here. It was released in a press release issued on April 8, which gives you chapter and verse on it there.

Oh, I couldn't find it. I'll look on the -- is it on your website?

It's on our website, it's on the Yahoo website. I just saw it a few moments ago before I came in here.

If you have a problem, Bill, come back to one of us and we'll send you a copy of it directly.

All right. Thank you.

Any other questions, please?

No, there are no further questions in the queue. I would like to turn it back to management for closing comments.

Okay. Thank you very much. We appreciate your interest and your time, and look forward to talking to you again in 13 weeks from now. Thank you very much.

This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation.