Trinity Biotech PLC (TRIB) 2015 Q4 法說會逐字稿

Good morning, and welcome to the Trinity Biotech Fourth Quarter and Fiscal Year 2015 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, Garry and thank all of you for joining us today to review the financial results of Trinity Biotech for the fourth quarter and full year 2015, which ended on December 31, 2015. With us on the call representing the Company are Ronan O'Caoimh, Chief Executive Officer; Kevin Tansley, Chief Financial Officer; and Dr. Jim Walsh, Business Development Director. At the conclusion of today's prepared remarks, we will open the call for a question-and-answer session.

Before we begin with today's prepared remarks, 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 forward-looking statements.

Investors are cautioned that such forward-looking statements involve risks and uncertainties, including, but not limited to, the results of research and development efforts, the effect of regulation by the United States Food and Drug Administration and other agencies, the impact of competitive products, product development, commercialization and technological difficulties, and other risks detailed in the Company's periodic reports filed with the Securities and Exchange Commission.

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

With that said, let me turn the call over to Kevin Tansley, Chief Financial Officer for a review of the results. After Kevin's remarks, we will hear from Jim Walsh on product development issues, and Ronan O'Caoimh will wrap up the prepared remarks with his perspectives on the quarter and the year. Kevin?

Thanks very much, Joe. Firstly today, I will take you through the results for quarter four and then the results for the full year 2015. So beginning with quarter four. Total revenues were $24.9 million and this compares to $26.7 million in quarter four 2014. As we've mentioned in the release, the main factor driving this has been the impact of exchange rate movements. This factor has also had an impact on other aspects of profitability as I will mention later on. Ronan will provide more details on the revenues for the quarter in Asia on the call, so I'll now move on and disclose the other aspects of the income statement.

Gross margin for the quarter was 43.2% and this compares to 47.5% in quarter four 2014. This is one of the places where we're seeing the impact of the exchange rate movements. In fact this year for the previous three quarters, you would have seen that our gross margins have been approximately 2% lower than in the previous year. However, you can see that the reduction this quarter is somewhat more pronounced. This is due to the fact that as part of our year-end financial close process, we've changed the classification of certain costs within the income statement to ensure consistency across the Group.

The amounts in question are not large but as they relate to the year as a whole, they have a disproportionate impact on quarter four's results. The impact on cost of sales of this factor, for example, is approximately $500,000, and which equates to approximately 2% on gross margin and thus this explains the lower-than-expected margin this quarter.

If we're only talking about the reclassification of costs, the same factor has impacted elsewhere in the income statement and in this case, both R&D and SG&A expenses. As you can see, at $1.5 million, R&D expenses are somewhat higher than normal. This has been impacted by approximately $300,000 of reclassified costs in the quarter.

Meanwhile, our SG&A expenses have actually decreased significantly this quarter from $7.2 million to $6 million, so this is about $800,000 lower, again because of the same factor. So obviously these are reclassifications and in total they net out to zero, but unfortunately (inaudible) slightly unusual looking income statement this quarter with both cost of sales and R&D expenses appearing higher and being offset by the exact same amount into lower SG&A costs.

I will point out that this does not explain the entire fall in SG&A expenses as we do get some benefit here from exchange rates. So whilst both revenues and gross margins are adversely impacted by exchange rate movements, this is one caption where we actually get a benefit. We'd also like to remind you that we continue to incur sales and marketing costs relating to our cardiac business, which is obviously not yet generating any matching revenues.

Operating profit for the quarter was $3.1 million, equating to an operating margin of almost 13%. This quarter's operating profit compares to the higher figure of $4.3 million in quarter four 2014 hence a reduction of $1.2 million. Obviously this is largely attributable to the combined impact of lower revenues and gross margins, both of which have been caused by the foreign currency factors that I mentioned earlier. While this resulted in a reduction of $1.9 million in gross profit, it was partially offset by the reduction in indirect costs of $800,000, both of which I've addressed earlier.

Moving on to our financing cost, which includes the impact of our convertible notes, our financial income for the quarter was $132,000, which was higher than the comparative of $48,000, both reflecting higher levels of deposits albeit at lower interest rates than we would have earned in the past. Financial expenses for the quarter were $1.2 million, the vast majority of which relates to the cash interest element of the convertible notes for which there was no equivalent last year. And similarly, the financial income of $975,000 also relates entirely to our convertible notes, which this quarter is showing a gain of $1.15 million on the fair value of the derivatives embedded in the notes and that is partially offset by $175,000 of non-cash interest relating to the notes as well.

Where in the press release, or indeed later in the call I refer to measures, which exclude non-cash financial income, it is the exclusion of this $975,000 for the quarter or its equivalent full-year figure of $12.5 million that I'm talking about.

Our tax charge for the quarter was $223,000, which represents a headline effective rate of 7.3%. Though a better way of looking at this is to exclude non-financial income, in which case we're seeing a raise of 10.7% which is a truer measure of our real effective rate.

The net result of all I've spoken of so far is that the profit for the period is $2.8 million. This equates to a basic EPS of $0.12 per ADR, though this would be $0.08 if we were to exclude the non-cash financial income. Meanwhile, fully diluted EPS for the quarter was $0.105.

Finally, on the quarterly income statement, earnings before interest, tax, depreciation, amortization and share option expense for the quarter amounts to $4.8 million.

Before I move on to the balance sheet, I will now make some comments about the full year income statement. Annual revenues decreased from $104.9 million to almost $100.2 million while gross margin decreased by 1.8% to 46.2%. In both of these instances, we are seeing the currency fine -- the currency factor having the same impact as it had on the quarterly result. Meanwhile, indirect costs were broadly static for the year, $33.1 million versus $32.7 million in the previous year. This is notwithstanding the fact that we incurred increased sales and marketing expenditure in relation to cardiac as well as the normal inflationary increases on wages and overheads. The reason we are not seeing an overall increase in costs, which these factors would suggest, is as I mentioned earlier on, due to the favorable impact that exchange rates are having on the indirect costs.

Operating profits for the year was $13.4 million, which represents a decrease of $4.6 million, which is virtually entirely due to the decrease in gross profits for the reasons mentioned earlier. Financial income for the year increased from $96,000 to $431,000 on the back of higher cash deposits. From a financial expense perspective, the results include nearly three quarters of interest expense on convertible notes that were issued in April last year, and this has amounted to approximately $3.5 million.

Then there was the separate financial income of $12.5 million associated with the notes, but this was entirely non-cash in nature, mainly driven by changes in the fair value of embedded derivatives in the notes. I'll be the first to admit that such movements are pretty meaningless in assessing the performance of the Company and hence they're separately disclosed.

The result is that the profit after tax for the year was $21.8 million. However, if I remove the non-cash financial income of $12.5 million, this means that the profit for the year would have been $9.3 million. Compared to last year's profit of $17.2 million, this represents a fall of $7.9 million.

In terms of explaining this reduction, there are essentially two main elements. First, the reduction in revenues and lower gross margins due to foreign currency represents a reduction of $4.1 million in gross profit. And secondly, as I said earlier, we incurred the cash interest cost of $3.5 million on the convertible notes.

I'll now move on and talk about the significant balance sheet movement since the end of September, 2015. Property, plant and equipment increased by approximately $1.5 million. This increase was made up of additions of $2.1 million in the quarter and was offset by a depreciation charge of $800,000 with the remainder being translation adjustments. During the same period, our intangible assets increased by $5 million, additions were approximately $6.4 million, and was offset by amortization charges of $0.7 million and a similar amount of translation adjustments.

Moving on to inventories. You'll have seen these have fallen from $36.9 million to $35.1 million. It is not unexpected to see a reduction in inventories at this time of year and the peak line season is now behind us, thus reducing the needs for inventory. But it has also been due to a drive to reduce inventory levels within the Group. Meanwhile, trade and other receivables have decreased by $1.5 million to $25.6 million, again this is not unusual as revenues in quarter four tend to be lower than quarter three. Meanwhile, our trade and other payables, including current and non-current have decreased from $22.3 million to $21 million. Before leaving the balance sheet, I'll focus on some of the major movements from a balance sheet perspective, year-on-year. Firstly, property, plant and equipment has increased by $2.8 million, which consists of additions of $7 million, offset by depreciation of $3 million and translation adjustments of $1.2 million. Meanwhile, intangible assets have increased from $145 million to $161.3 million. This is due to normal additions incurred during the year of $19.8 million, and offset by amortization of $2.7 million and translation adjustments of about $900,000. Meanwhile, trade and other receivables have decreased slightly from $26.1 million to $25.6 million, this is encouraging as it represents the fact that cash collections have continued to be strong despite the challenging economic environment in which we're operating.

Inventories increased from $33.5 million to $35.1 million over the same period. This proved to be somewhat of a drag on cash in the early part of the year, but since then we've introduced measures to reduce inventories, thus resulting in a fall from a peak of $38.2 million at the end of quarter two to $35.1 million by the end of the year. Meanwhile, our trade and other payables, again including current and non-current actually fell from $23.6 million to $21 million, partly reflecting the payments of one of our HIV license fees.

Finally, I will discuss our cash flows for the quarter. Cash generations from operations for the quarter was $5.8 million, which included positive working capital movements of approximately $200,000. Meanwhile, capital expenditure in the quarter was $6 million. As in previous quarters, this included significant expenditure in relation to our development programs, and in particular, cardiac. This resulted in free cash flow for the quarter of close to zero. Interest payments then amounted to $2.2 million, these are payments made in relation to convertible notes and as these payments are only made on a six-monthly basis, this effectively represents six months of interest.

The net result is that we had a decrease in cash for the quarter of approximately $2.3 million, most of which was obviously attributable to the interest on the note, thus resulting in a year-end balance of close to $102 million.

I'll now hand over to Jim, who will take you through the latest developments with regards to cardiac.

Thank you, Kevin. I'll take the opportunity now to update you on our cardiac development programs. In particular, I'll provide you with a detailed update on our Troponin FDA submission and an overview of our clinical trial data. I'll also provide a brief update on our Meritas BNP product, which, as you know, is currently undergoing clinical trials to support the 510(k) FDA application.

So starting with Troponin. You'll now of course know that on December 17 we submitted a 510(k) application to the FDA for our high sensitivity Troponin product. This was the culmination of 90 months of clinical trial work in the United States. To the very best of our knowledge, Meritas is the very first point of care Troponin product ever to be submitted to the FDA under the new guidelines adopted in accordance with the third definition of MI. It is very important to keep this fact in mind later as we compare our clinical performance against some of the currently approved market leading Troponin products, as the complexity and thoroughness of the new guidelines has raised the bar on clinical performance by many orders of magnitude. The guideline change of course has made the clinical trial very challenging for Trinity, however, in the long run, it may prove to be a huge advantage to us as it provides a similar high barrier to our competitors.

Following our December submission, the FDA contacted us on December 23 to confirm that they had received our application and that they had issued our application with a file number or a K number, as it's known in our industry. We were again contacted in writing by the FDA on January 5, with a number of relatively minor clarification questions. We submitted our response to these questions one week later and shortly after that the FDA acknowledged receipt of our answers. Therefore, in about January 14, with the initial administration process complete, the formal review process commenced. And the review clock actually started ticking from that date. So essentially, the review -- the first month was involved in administration market and the actual review process starting towards the very end of January.

Since then we have had a number of informal communication with the FDA, namely on February 3, February 5 and February 12, again with relatively minor clarification questions as they worked their way through our application. All questions to date have been dealt with and as of today, there is nothing outstanding.

At the moment, therefore, we are happy to report that our application has been submitted and that it is receiving the careful and serious consideration of the FDA. The actual number of communications, the number of questions and the detail of the questions would indicate that the FDA are treating this application seriously and with a sense of urgency. Full review of our application, I believe must be completed by the FDA within the next 90 days, around the fourth -- the last week of April and we'll receive the FDA's comments and questions. However, it's possible that the review process may be completed before then.

I'll move on now to discuss our product clinical performance as determined in our US trials. However, in order to put our clinical trial into context, I would briefly remind you of the scope of our trials. Firstly, as you'll remember, by far the most challenging was the ACS or heart attack trial in the emergency room setting. This clinical evaluation was around 14 trial sites across the USA during 2014 and 2015. The aim of this trial was to recruit up to 1,500 patients presenting in the emergency room with symptoms suggestive of MI, and more specifically, to find at least 150 actual heart attacks amongst this group. Moreover, and I'll refer to this later, as directed by the new guidelines, this was an all-comers trial, which by definition must include both Type I and Type II MI subjects.

The inclusion of Type II MI significantly increases the clinical challenge on the product, a hurdle that would not have been nearly as (inaudible) the previously approved products. Each of the patients were sampled up to four times, namely under the machine, otherwise known as time zero, three hours, six hours and 12 hours to 24 hours. At each time point, the Troponin level in the patient's body was measured, the complete patient cohort was then adjudicated by a panel of three independent cardiologists. The outcome of the adjudication process is ultimately used to determine the clinical sensitivity and specificity of the Meritas Troponin product. There is no doubt that no order point of care product presented to the FDA to date has ever undergone such a stringent, robust and clinically challenging assessment.

The second major component of our trial was to determine the upper reference level or the 99 percentile of our product in a population of about 750 normal healthy people. This trial was run at three geographically diverse sites across the USA. The 99 percentile in the US population was determined to be 36 picograms in whole blood, which you may remember is exactly the same (inaudible) was determined in our European patient cohort for CE Marking.

The final external component of our clinical trial was a precision study. This was carried out across three US trial sites. The data observed with this study was within the specifications that were laid out in the 2012 universal definition of MI.

What I would like to do now, however, is to put the observed clinical performance of the Meritas Troponin product into context for you by comparing our results to two market-leading products currently approved and widely used in the USA today, namely the Abbott iSTAT point of care Troponin product and the Abbott Architect Central Lab Troponin product. According to the manufacturer's package insert, the admission sensitivity of the current FDA approved Abbott Architect Central Lab system is 60% with a corresponding specificity of 95%. In a recent study carried out by Dr. Apple at Hennepin County Medical Center, the Abbott iSTAT Troponin product was determined to have an admission sensitivity of 32% with a specificity of 92%.

In our recent US clinical trials, the Meritas product demonstrated a whole blood sensitivity of 66% and a corresponding specificity of 94%, thus beating the market-leading Abbott iSTAT product by a whopping 25 percentage points in sensitivity, while Meritas also beats the Architect Central Lab system by 6 percentage points in sensitivity. However, although these results presented look excellent for Meritas, you need to keep in mind that we're still not actually comparing like with like.

Meritas, as I've already said, is the first point of care product to be presented to the FDA, having been put through the new and substantially more rigorous guidelines. For example, 14 trial sites, third party adjudication and an all-comers trial, which will include substantially more Type II MIs in the patient cohort than our competitors would have encountered. In fact, the Meritas MI cohort consists of 57% type I MIs, with 43% type II MIs. If we were to [reconsider] clinical performance on Type I MIs only, which is much closer to what our competitors would have done, our time zero sensitivity rises from 66% to in fact 75%, which is in fact substantially better than most of these Central Lab Troponin systems.

In summary therefore, we now see that the Trinity Biotech Troponin product is exhibiting market leading clinical performance, not only much better than the performance reported on the current market-leading point of care products, but also matching and even beating some of the best Central Lab Troponin products. Moreover, as you know, Meritas produces these exceptional results in 15 minutes, right to the patient side while the Central Lab result can take an hour or more to report back. Undoubtedly, Meritas will deliver better medicine and would certainly save lives.

Now I'll move on briefly to Meritas BNP. As you know, BNP levels in the bloodstream increase as the severity of heart failure increases, thus BNP has emerged as the principal biomarker in the diagnosis of acute and chronic heart failure. I mentioned on our last call that following discussions with the FDA last year, we agreed to expand the number of US trial sites to 12. The adoption of this strategy, we believe would help a smoother review process with the FDA.

The aim of this study is to recruit 1,450 subjects, approximately 700 of which have heart failure and approximately 700 without heart failure. At this time point, with the trial sites actively recruiting, we are at the 50% point in patient recruitment. At our current enrollment rate, patient recruitment is expected to be completed in Q2 with submission for 510(k) clearance in Q3 2016. We are quite pleased that the product looks to be demonstrating the same high level of performance as observed in our CE Marking trials last year.

I'll conclude and hand over to Ronan now. I'm happy to take questions later. Thank you.

Thank you, Jim. I'm going to review our revenues for the quarter briefly and then I'll review the revenues for the year before opening the call to a question-and-answer session.

Our revenues for quarter four were $24.9 million compared to $26.7 million in the prior quarter, which is a decrease of 6.5%. Point of care revenues at $5.4 million was the same level as the corresponding quarter last year. Clinical laboratory revenues at $19.5 million were down 8.1% or $1.7 million when compared with quarter four of 2014.

The negative impact of currency fluctuations was $1.7 million in the quarter. Therefore, the entire reduction is explained by currency. Absent currency movements, our revenues would have been flat for quarter four 2015 compared with quarter four 2014. Within clinical laboratory, Premier performed well with 6% growth, Immco achieved 5% growth while infectious disease with a weak Lyme season was down 3% and Fitzgerald was down 6%.

And now I'll go and look at the year as a whole, where our revenues decreased from $104.9 million to $100.2 million, which is a decrease of 4.5%. However, when the impact of foreign currency exchange movements, due to the strength of the US dollar against a range of currencies is removed, then the entire decrease is erased and the result for the year is an organic growth rate of 2%. Our point of care revenues decreased from $20 million to $18.8 million which is a 6.1% decrease. Our US HIV revenues were flat year-on-year, the overall dynamic is that we are gaining from the advantage of having our new HIV-1/2 claim in the market, which is diminishing slightly with the reduced public health spend, so the overall impact is that we're flat.

In Africa, our sales decreased and bear in mind that there's no currency impact here as both revenues and costs are in dollars. But our sales decreased 7% year-on-year, but we do not believe that either the market or indeed our market share have diminished. We believe that this movement is consistent with the haphazard nature of NGO purchasing while the product is still underfunded.

Our HIV Uni-Gold product continues to be regarded as the gold standard and continues to be utilized as the confirmatory HIV test of choice across virtually the entire continent as it has done for the past decade. In addition, funding continues to increase as more and more Africans are put on to antiretroviral drugs, with the number now exceeding 20 million people. We are confident of our African HIV business growing into the future.

As you know, a year ago we were delighted to receive a CLIA waiver for our Rapid Syphilis product. This means we're the only FDA-approved Rapid Syphilis test, and also the only CLIA waived Rapid Syphilis test available in the United States. Therefore, and this is a totally new market and it's difficult to estimate the size of the revenues and -- the estimated size of revenue and what they'd be. We'll sell into the public health departments, and community-based organizations throughout the United States. It's impossible to say what percentage of the $50 million HIV market, the syphilis market will transpire to be. What we can say though is that we are ideally positioned to maximize this potential, as we already serve the public health market with our direct sales force.

We sell our HIV product to the same demographic, and secondly, we've been in contact with all 50 United States public health departments, and virtually all the city and county public health departments. And the best we can tell, all are initiating purchasing plans. However, this takes time. In each case, there is a purchasing decision followed by the sourcing of funding, and then the establishment of procedures, sometimes the establishment of a pilot and of course training of personnel. In many cases, this can take over 200 days.

Our actual Syphilis sales were $10,000 in quarter one, $100,000 approximately in quarter two, $300,000 approximately in quarter three and just under $400,000 in quarter four, which is the quarter just completed. And basically, we're gathering significant momentum, particularly in the city and public health departments. We believe that this will be a $10 million product, but it is difficult to assess at what point in time we will reach this run rate.

Moving onto the clinical laboratory business. Our revenues for the quarter were $81.4 million, down 4.1% from $84.8 million. However, on a constant currency basis, our revenues for the year increased 3%.

Fitzgerald revenues were down 7% year-on-year while our diabetes business performed well during the year, with the legacy Primus business flat, this business will now grow with the pending launch of the Premier resolution in quarter two and this will enable us to grow in the hemoglobin variants market.

Going back to our Premier hemoglobin business, it performed very well, we placed over 300 new Premier instruments around the world in 2015, approximately 20% of all new instruments worldwide. This was obviously less than the 460 instruments we placed in 2014. But the difference arises due to the fact that we placed 121 instruments in Brazil in 2014 and we made negligible placements in Brazil this year because the Brazilian real currency has basically moved from BRL2 to BRL4 against the US dollar. This has resulted in an effective halving of the price we receive. We are in the process of increasing our level of manufacturing activity in Brazil, thereby saving on import duty and sales taxes and creating a natural hedge. In addition, we are seeking price increases against the backdrop of a high inflation environment. We hope to recommence placing instruments later this year.

Meanwhile, Premier placements in the United States and Europe and in China continued strongly. It is important to remember that every instrument we place is new business, we are never replacing an existing Trinity instrument as we are in the early years of the placement cycle.

Moving on to infectious disease, this business declined 2% year-over-year on a constant currency basis. This arises due to Lyme, which had a weak year due to severe previous winter conditions. Lyme sales in 2015 were $1.2 million lower than in 2014. The balance of the infectious disease business performed reasonably, growing 2%.

Immco performed well, growing 12% year-on-year. Sales of Sjogren's during the quarter were approximately $600,000, which is the same as the sale in quarter one, quarter two and quarter three. So the loss of Sjogren's sales momentum has arisen due to the fact that the ownership of our distribution partner moved from Nicox to Bausch & Lomb, the Valeant subsidiary at the beginning of 2015.

The loss of momentum arose due to transition logistics and training of new sales persons. However, the sales force at Bausch & Lomb is 13 times larger than that of Nicox, and we believe that Bausch & Lomb will be a much stronger partner than Nicox into the future. Bausch & Lomb have 150 direct sales reps, serving optometrists and ophthalmologists around the country, so they have 150 compared with 12. So we're very, very confident of the momentum being regained and being regained quickly.

In general, the strength of the US dollar, and the weakness of many of our customer currencies is causing a significant loss of sales. As an example, our Russian sales were $1.8 million in 2014. Since then the ruble has depreciated 60% against the dollar and our 2016 sales look like barely exceeding $100,000.

The Turkish Lira has dropped 30%, the Colombian peso dropped 43% and of course the Brazilian real has halved and all of these are important markets for us. If we invoice in US dollars, then our customer cannot afford our products. If we invoice in lira, real, or pesos, then we can't afford to supply. It's proving difficult to grow our revenues with this currency headwind.

At this point in time, I'll go ahead and hand back to the operator for a question-and-answer session.

We will now begin the question-and-answer session. (Operator Instructions). Larry Solow, CJS Securities.

Good afternoon. Just a couple of just clarifications, on the Meritas first. So it sounds like I guess your best guess is you'll hear something from the FDA by the end of April and then -- but more than likely that will be more questions and then that will sort of trigger another 90-day clock after you respond to that. Is that sort of where you stand for that?

Larry, hi, Jim here. Correct, Larry. Okay, so we may hear before the end of April, but you know historically they tend to take the full 90 days, okay?

Having said that, we have submitted multiple 510(k)s to the FDA over the years and we have never had the same amount of communication back and forth we've had on this particular product. So there's no doubt they're taking this particular product, very, very seriously.

But yes, we would expect that the start of May 1 we may get some clarification questions between now and then, but I would suspect that it will take the full 90 days and they'll come back with all sorts of suggestions and et cetera, et cetera, et cetera. Some of that may involve having to -- perhaps even add one or two more patients to the cohort, God knows what, Larry, but I would expect in an ideal world, obviously they would come back and say it's approved at the end of April, I think that's highly unlikely it's possible they're going to ask us to do some work that will need to be done to augment the data set. It will take some time to do that and then, theoretically you would submit that and another 90-day clock would start again. And it's not impossible for that to happen more than once. So best case is we get questions back in April, we'll answer them, we'll submit them, they take another 90 days and perhaps after than we get approval, but it wouldn't be beyond perhaps another round of that happening, okay?

And then just on the Meritas. Could you just talk about just underlying spending or the increase in spending in 2015, a little bit hard to obviously gauge because I know SG&A is impacted by currency to get in the reclassification this quarter, but just a look at sort of what spending was on Meritas in 2015 versus 2014? And do you expect that to go up in 2016 before the approval or how you look at that would be great.

So last year I think that we would have announced that we would have spent $2.3 million in relation to sales and marketing related to Meritas cost. And we would have been increasing steadily our expenditure throughout the year starting at about $600,000 in quarter one, so we're close to $3 million for the year in the P&L on that.

As time goes forward, obviously the next key thing for -- to happen to us will be the getting approval as we approach, getting an approval, we would also be looked on additional cost in place and just in terms of strengthening our sales force in the US with specialists, et cetera. So you can expect it to go up, as you can imagine prior to a launch, there will be non-personnel costs as well which you can expect from marketing et cetera, engaging key opinion leaders and what have you.

Okay. But does it necessarily need to go up -- I assume it will go up, and that'll probably be a high-class problem hopefully, that you will face. Does it need to go up dramatically or it seems like you've been sort of increasing in investing in it?

No, I don't see it going up dramatically pre-launch, obviously as the product is launched and it gains traction, then obviously additional personnel will be required, which would make sense. And that wouldn't -- nothing like on a linear basis -- you're talking about developing a very significant cardiac franchise, which is what we're about. You will have to have people involved in servicing and there will be increased shipping people, et cetera. So basically, I think as you referred to there, it would be a high quality problem at that particular juncture.

Right, okay. And how about -- just any progress on outside the US, trying to get opinion leaders more onboard and doing other exploratory work and I guess their own independent trials or how's that effort shaping up or is there any movement, any progress there? (multiple speakers)

It's Jim again. The answer is absolutely, yes, okay? But as it was -- we put really all our efforts for 2015 were focused on getting our clinical trials in the United States done and complete and managed, okay, because even though Kevin says we have a big spend here, we're a very small team and a very focused team, so we put virtually all of our efforts into the United States.

But, for instance, we have started registrations in Brazil which can be a very big market for us, okay? And we have started clinical evaluations in Brazil, we have started registrations in China, although China is a long process, those registrations are taking place. And as we speak, we are -- as well as getting together again with some of the European countries as restarting the evaluations that we would have commenced before we had the product problems in late 2014. So yes is the answer, but it's really only starting now.

Gross margins, switching gears a little bit, excluding the re-characterization or classification, I guess that the gross margin is being hurt by currency and still the Premier side, how do you guys view that going forward, I mean, assuming currency sort of stabilizes, where do you see that gross margin going?

Yes. If you look at the difference in margin year-on-year, you're talking about 48%, 46.2% to 1.8%, the majority of that is currency, there's a small element which relates to the more favorable sales mix, the lower Lyme sales, better margin product for us, that doesn't helping, certainly we had lower HIV sales, obviously in particular in quarter two, that wouldn't have helped us in that regard.

But the big factor there is currency, I would ignore the lower quarter, this quarter. So just to make that point, if currency therefore stays the same, you can expect that wouldn't deteriorate any further, obviously it depends on then sales mix and revenue levels going forward. We're fortunate as if and when our revenues do begin to grow, we will have a leverage effect whereby our fixed costs will be spread over a wider base and hence you get the operating synergies that we're looking for. So from that point of view improvements will come as also, as you mentioned there in relations to Premier, as you get more and more instruments in the field and getting the throughput from the reagents associated with that, that will also help.

Just lastly on Premier. Clearly a majority of the year-over-year drop was Brazil although it does seem like there was some other -- I guess maybe Turkey and some other countries had some drops, right to take you sort of from 450 to the low 300s, if you could comment on that, comment on what you see actual reagent utilization and reagent sales and without giving a number, do you see placements returning to growth in 2016 or are we stabilizing?

On Premier?

Yes.

I think we did 460 instruments in 2014, we just did over 350 in 2015.

Over 350 or 300?

350.

Okay. I thought it was -- 350, okay, so it was basically all Brazil?

Yes. So it's all Brazil, so it really depends on what stage we get back into Brazil. Well, that depends on how quickly we can get up manufacturing in a significant way and because at a point which we do, we get QC savings as we bring product in, as we bring raw materials in and we also get an overall savings on VAT, on sales tax on our entire business. So until we get the natural hedge and saving there. In addition to that, then, we're looking for price increases, as an example, we had no choice in giving 12% salary increases to all of our Brazilian employees and that reflects the inflationary environment that's down there.

So I think the combination of the cost savings and the price increase will enable us to get back in, but it's just that it's (inaudible) time where it depends somewhat on government licenses for manufacturing, et cetera. So I think it's going to be kind of late 2016, late this year before we're really back up and running. At the point of which we're back up and running, our placements will recover significantly. We're confident that there's significant demand for our product. And so I think at that stage we ought to get back to sort of 400, there will be a 4 in front of the number, like 400 and something, probably very low 400s, I think is where I think you would probably see us maturing.

And then just lastly on the share purchases, is -- do you guys plan on -- do you have any target, I know you can purchase up to a certain amount, but do you plan on (multiple speakers)

We can't give you anything exact as you can imagine. There are a number of factors, I mean it'll depend on the liquidity of the stock, it'll depend, obviously, on the share price at the time, general market conditions and all of which is somewhat unpredictable, but there are specific rules, too, that we have to adhere to which should determine how much we can buy in a particular day, and et cetera, et cetera. Just in terms of our authorization, our most recent Annual General Meeting authorized us to purchase up to 10% of our shares, which would be 2.3 million shares. So that -- we have that authority. In terms of how quickly we'll move, we'll move fairly immediately. We will be -- into the market as soon as we're allowed, which is in the next few days.

Jim Sidoti, Sidoti & Company.

Would you say that the sales levels in Brazil and Russia and some of the other regions where you had a pretty big headwind because of currency, have those bottomed out at this point or do you think they could decline further from where they were in the fourth quarter?

Let me -- Ronan obviously mentioned the fact that Russia has gone from over $1 million to virtually about $100,000. So I think it's fair to say that has bottomed out, regardless of what happens in the future currency-wise.

We are obviously hopeful that the Brazilian currency will stabilize, if not actually improve going forward, it has hovered around the sort of the high threes, low fours, so we're hopeful that has ended. If not, then as it (inaudible) that as well that is in and around two. So we'd hope it will come back towards those levels. If that doesn't happen, we would hope that some inflationary pressures in the markets would help things, we're already seeing that and again the level of salary increases points to that.

So today, we're sitting at BRL3.82, if things stay like that, we would expect that the combination of inflationary pressures in the market, plus that the measures that we are taking will help us in that regard.

And then on a similar note, the Lyme disease sales, those were down because of the severe winter in 2014. Do you think those are at a level where they've bottomed out or do you think those could decline further in 2016?

Jim, Ronan here. I think we -- this is a mild winter, a relatively mild winter, so I think that augers well for the coming year.

Then in December the Congress put a two-year suspension on the medical device tax. What impact will that have for you in 2016?

Yes, that was very welcome good news and to be very exact about it. It should be worth $632,000 to us, that's I think what we paid last year, to give you a very exact answer. So that's very welcome news and we're very pleased about that.

And then my last question is, will you have any communication with us regarding Troponin prior to the next quarter? If you do get questions from the FDA will you come back and let us know right away or is that something you would wait until the next quarterly conference call to tell us?

I don't -- I think we -- I don't believe we would call a special conference call to deal with it unless -- no, I don't believe we would.

I mean, the circumstances are ironically that the two events should probably coincide fairly close to each other. I don't have my calendar open, but let's imagine that our quarter one results would be sort of say 23 April, something around there, they're actually due back around that sort of -- maybe they could come back by the 28. Our sense is they'll come back before, so we're kind of hoping they might come back sooner. You'll have noticed when Jim was giving the outline that it's certainly unprecedented in our experience and we've done over 150 510(k)s, it's unprecedented to have sort of the FDA answer you on the January 5 and then on February 3, February 5, February 12, so you know who knows when they'll be back, but I think the chances are that the two events will largely coincide and we will be able to give you a good update on the next quarter.

I think we should also state, Jim here, that we need to be very careful that in discussing the FDA on these calls that we don't in any fashion be seen to be backing the FDA into any corners, if you like, okay? That can only come against you, you know what I mean? The FDA would prefer that you would not absolutely to have any discussion of their discussions with the Company publicly. So we have to be very careful that we don't irritate the FDA.

I mean, you'll have noted for example that when we announced our submission to the FDA, that it wasn't very expansive, it was literally one paragraph and no commentary or anything like that. So that is a kind of way we would probably approach it.

So we may not hear anything regarding the trial or regarding the FDA in Troponin until possibly it's approved?

No, I'm not saying that. But I'm just simply saying this -- we're saying that it's -- we walk a fine path here, we need to be careful not to do anything that would prejudice our chances of bringing the product through the process.

Drew Jones, Stephens Inc.

The first question on Troponin, and I guess, Jim given some of the sensitivity of what you just discussed, but you talked about sensitivity on Type I MIs at 75%, assuming approval, is that something that would go on the label or that you could put in marketing materials?

That would absolutely have to be a negotiation with the FDA. My gut feel is it's highly unlikely because we work maths by the FDA to select -- to do a trial on Type Is and Type IIs, and we actually would do a trial on all-comers, which would include Type Is and Type IIs. So I'd be very, very doubtful we get to make that claim, quite frankly. But I can absolutely talk what we will do of course. So I think we're going to (inaudible) won't get that claim, but what we will do is we will run a number of what you might call white papers, okay, with the key opinion leaders, the likes of Fred Apple, the likes of -- we have all the key opinion leaders working with us on this. So we can get them to run specific trials for us, like on Type Is, like on Type IIs and we can publish separately, but I think it's unlikely we'll get to make that claim just by the way we were asked to set up the trial.

(Multiple speakers). I was just going to say that 65% sensitivity, that includes both Type I and Type IIs is very powerful in any event, it's way ahead of the competition.

Okay. Yes, sure, not trying to discount that at all. But I guess moving over to diabetes, if you exclude any assumption for Brazil, is that a business that will grow in 2016?

Absolutely, because you need to bear in mind, I think I mentioned this in my prepared comments, is that every instrument, every Premier that we place is new additional business, everything -- so we're not replacing existing product that we have in the market. So it's all new business. So it's all growth.

And then last one from me, you kind of referenced it in the press release, but is it safe to assume no M&A activity this year?

No, that would be actually very erroneous. No, we are continuing to look for acquisitions, either singular or plural and actively seeking to do so. I mean, a buyback and an acquisition aren't mutually exclusive events.

And one thing I would say is the reason that we haven't yet done a deal over the past number of months is because -- not because we couldn't find anything that we liked, we did, but it was because price expectations were entirely unreasonable. And I mean I think we all are aware of the fact that valuations and prices, et cetera are coming down and some smaller companies are running out of money, can't fund. And so we think that more opportunities may arise, certainly we're expecting price expectations now to soften, to become more realistic. I can't say that we've seen much strong evidence of it today, but I think it's an -- we're hoping that it will be an inevitable consequence of what's happening in the markets.

Per Ostlund, Craig-Hallum Capital.

I guess following up to both Drew and Larry's questions on the Premier side, just want to kind of parse through the 6% growth here in the fourth quarter, is it safe to assume that the consumable pull through is running north of that 6% given the placement difficulties in Brazil? And I guess just in general, how satisfied are you with where the reagent pull through per instrument is at this point? Thanks.

Yes, we are very satisfied with the reagent pull through in Brazil, in the United States, and particularly in Europe and -- but less so in China, I think we've shared that with you in the past. So we're replacing 100 instruments a year into China, like clockwork, 25 instruments every quarter and that's the good news.

The disappointing news is that the reagent run rate on those instruments is modest, okay, but a positive is that it's growing. So you have a situation where you've got progressively more and more reimbursement across more and more Chinese districts. But the GP, the doctor on the ground needs to be tuned into it to basically be sending his patients -- to send his patient samples and that's growing. So we expect to see a lot of growth, but in terms of unit volumes, they are disappointing in China, elsewhere they are extremely positive. Does that answer the question?

It does answer the question, thank you. Turning to the cardiac side, I guess really quickly, and thank you for really all the color on Troponin and the ongoing dialog there. I guess that the question that I would have, maybe as an adjunct to that on the BNP side, assuming all goes well with Troponin, assuming all goes well with BNP, are the two approvals still kind of looked at as being in relative concert time wise? I know that's been sort of articulated in the past that maybe it would be advantageous to have the two in the market together, I just want to see if that timeline is still kind of on target?

First of all, it's clear from what I just said, on the advice of the FDA, we did have to expand the number of trial sites for BNP quite dramatically. We have planned to run four trial sites and they did very much suggest that we should extend up to 12, okay. That has slowed us down, I'd say we've lost a quarter on BNP.

Look, we're recruiting about -- so just to give you the details, so we have about 700 patients recruited and we're recruiting probably about 60 patients or 70 patients a week across the 10 trial sites now, okay? That will get us a complete data set by probably 8 weeks from now, okay? It's not nearly as difficult a trial as Troponin. It's one patient, one sample, none of this four time points et cetera. So it's a much less intense, I suppose, clinical trial, and a much smaller application in terms of just volume. It should -- there is a good chance that -- assuming there's no surprise in the clinical data and to date there's none, that this thing may have a chance of going through one cycle with the FDA, i.e., a submission, some questions and a return within 90 days, at worse 180 days. So yes, I think there's a fighting chance of there or thereabouts together.

Very good. Thank you. And then I guess my last question is just purely housekeeping for Kevin. In the last couple of releases I think, you'd sort of broken out a table of what sort of the net financing income items were related to the exchangeable notes, sort of the in and out cash, non-cash, expense, income, would you be able to provide that now or is that a follow-up question for later? Thank you.

I can go through it with you in more depth, but what you're seeing is -- are you talking about the quarter or for the year?

The quarter.

For the quarter, if you're looking at financial expenses there, the $1.2 million, virtually all of that is the standard cash-base interest, the $1.15 million is what you'd expect, $4.6 million being the annual cash interest. So divide that by four, it's $1.15 million. Included in the $975,000 that of non-cash financial income, there is a gain of $1.15 million, which is coincidentally the exact same number as the cash-base interest, so a gain of $1.15 million of non-cash gain in relation to a revaluation of the embedded derivatives, and that is offset by $175,000 of non-cash interest charges, which is just the accretion required to bring the nominal amount of the loan back up to the -- the carrying amount of the loan back up to the nominal amount of the loan at the very end of its life. So does that answer your question?

I think it does. Thank you. I appreciate it.

Chris Lewis, ROTH Capital Partners.

Wanted to start on Troponin following up on a couple of earlier questions. Jim, you talked about potentially a possibility to add more patients or a need to add more patient to the cohort to respond to some potential FDA comments or questions. Can you elaborate on that, have their initial comments that you've you made --?

I'm just giving (Multiple Speakers) I'm not expecting that to happen quite frankly at all because if you think, actually we have over the number of patients than the FDA actually asked us to do. I was just giving that as an example, in the past in certain other fighting case, they would have asked you to add elderly patients over the age of 80 years of age and like that. I'm not expecting that at all in this particular incident. I just can't anticipate what the questions will be, but I do anticipate that there will be some -- there will be some laboratory work to be done, but maybe I'm wrong, but it's just unknown. But certainly I'm not expecting that, put it that way.

Okay. So to be clear, nothing from there I guess initial comments there (Multiple Speakers)?

No, no absolutely not at all. If I led anybody to that conclusion, please, please, that's not the case. All of their comments to-date have been actually very much administrative type things. There has been actually no question at all on the data (inaudible), okay?

Great. Appreciate it. And on that 65%-ish sensitivity in the US trial seems to be a bit lower than Dr. Apple study where it showed about sensitivity of 75%. I guess first, is that observation correct? And then can you elaborate, I think it may be due to the blood versus plasma and the mix of patients and types of samples, but can you just elaborate on the delta there and how the FDA will look at both of those data sets?

Well, first of all, just to say the FDA -- Dr. Apple's data set has nothing to do with the FDA. That was just a separate trial that was done, that we had actually asked to be done before we embarked upon the US clinical trials, just to make sure that our product was as good as we thought it was, okay? Essentially the differences are, there are a couple of differences in Dr. Apple trial to the FDA trial, okay? In Dr. Apple's trial, he got 75% sensitivity whereas in our FDA trial, we got 66% sensitivity, okay? Couple of differences. First of all, Apple's samples were banked samples, we are working fresh samples, they were banked sample, from people over a period of two years or three years. And because they were banked, the vast majority weren't in whole blood, they were plasma, okay? Because you can't bank whole blood, if you like, okay? It has to turn into plasma.

And actually if you look at the data that we got from our plasma results in the USA, you will see that we actually got 78% sensitivity on plasma in our US trials. So that's one thing. So there was a difference of sample basically in plasma and whole blood. So our 78% is very close to Fred Apple's 75%.

The second thing is that in the Apple data, I don't have the percentage to (inaudible) but he had one much less Type II MIs in his cohort than we had in -- I think it was like 10% or 12% Type II MIs in his cohort than we had our 43% MIs in our clinical trial cohort. That again would serve to explain the differences in the data. What I'm -- but quite frankly, that's not an issue for the FDA because the FDA have no interest quite frankly in the Fred Apple data because that was just a separate independent study done and nothing there to do with our FDA trials.

Okay, I appreciate all the color there. In the past you'd outlined a point of care Troponin market at about $350 million. Do you have the kind of the latest estimate in how that's splits up between the US and rest of world?

Yes, we estimate that 80% of the market is in the USA, about say, $280 million in the USA, $70 million in the rest of the world. So it's primarily a US market, and that's the way we've approached it, our primary effort is the United States. Thereafter, we're working in Brazil. We think -- we see Brazil has $15 million, China has about $20 million, Europe really quite modest, hasn't happened there yet, it's going to be a missionary sales.

And then in terms of the $280 million, we would give about -- not far off 50% of that (inaudible) 25% to Alere Triage. And then the balance would be to -- the balance we call basically point of care, but it's actually big instruments that'll run quickly. So there is Stratus and there is radiometer instrument, Mitsubishi, Pathfinder, those three would share that other $70 million in the United States. And arguably there are Central Lab, because it's a kind of $50,000 instrument that you can't place into the emergency room or into a small room office, that can run in 15 minutes. And so it does the test quickly, but it needs an operator. So arguably it's a hybrid. So that answer the question?

Yes, it's very helpful, thanks. And then my final question is just about kind of the growth outlook for this year. I know you don't give official guidance, you have quite a bit in moving parts, I appreciate all the color you provided in your prepared remarks, within the different drivers and segments of the business. But bigger picture, excluding more significant FX pressure this year, do you see the Company getting back to positive revenue growth in 2016? And what are the key kind of drivers and how do you prioritize those to get back to positive revenue growth?

Chris, we absolutely do, but as you said yourself, we don't give guidance, I think what I would say is we talk to yourself and other analysts and we interact with you and you guys have -- we're very grateful the trouble you go to and you basically put out numbers and I think people will have to get a flavor for where we're going. I think they'll get the best flavor that way, I mean you have talked to us -- you guys have talked to us, but I mean, I think all of your research would indicate growth of sort of 5% to 6% in that kind of mark and we'd be comfortable with that kind of level on average -- and I think on average just six of you are kind of somewhere between $0.104 and $0.107, maybe from recollection. I think one of the analysts has a much higher number, I think Sidoti's higher number, but they've got an acquisition built into the model so -- but that order of magnitude and I think we are comfortable with that kind of -- those kind of numbers. Is that helpful?

(Technical Difficulty) cash financial income for the quarter, diluted adjusted EPS was at $0.06, I know you said $0.08, but I believe that was on the basic share count, so on a diluted share count is it about $0.06?

You broke up in the start there, Chris, just you're talking of a quarter, is it, and the diluted?

Yes, I was talking about the non, I guess, diluted EPS excluding non-cash financial income, I just wanted to confirm if my math is correct, it's about $0.06 per share?

No, because no -- diluted EPS was $0.105 for the quarter, diluted EPS already excludes the non-cash financial income. That's essentially what the -- there is a calculation built, that removes all aspects in relation to the notes, so excludes the cash interest, the non-cash interest and the change in fair value of the derivatives. So you don't have to make a further reduction. So you take the profit after tax of $2.8 million and take out the $975,000 of gain, you'd add back the $1.15 million of cash interest, which will give you a figure of about $3 million and you divide it by the diluted number of shares and -- which is $28.7.

Operator, we're really running very late. So could I just take last two questions and Paul and then Walter and we (inaudible).

Paul Norrie, Novel Equity Fund.

So I know it will take some time to ramp up the point of care Syphilis business, but you got the CLIA waiver over a year ago now and is it a process the clinics have to go and get the funding for it or is it more that they have to make room in their budget for you?

I think Paul, it's probably a combination of both and I would concede by the way that the progress we've made is disappointing. And as I said, we did quarter one $10,000, quarter two $100,000, quarter three $300,000, quarter four probably not going to be -- just under $400,000. So it's slow progress, we are confident that the market is there and what probably not helping us is that the CDC haven't really engaged in an active way. So for example, in the case of HIV, they would have written the protocols and kind of agree then with each of the individual states. And this case, they're kind of inactive and we're the ones are having to kind of handhold the states for protocols. As you stated in your question and this whole thing of funding, finding room in the budgets and then after that is the whole training process. So it's just very slow.

And as I said, our sense is that we can get it to about a $10 million business, I mean it's a new business, it's a missionary sales, and we have it all to ourselves and I don't see any competitors coming onto the market and even on a very long time horizon because you both have to get an FDA approval and then after that separately get a CLIA waiver, both which are very difficult hurdles. So our best estimate anyways in the longer term we get to $10 million, but that is a caution, that's only an estimate. That would basically make the Syphilis market 20% of where HIV has gone, because HIV is a $15 million market and we are suggesting that we can bring Syphilis may be to one-fifth of that size, I mean if anything that's actually (inaudible) conservative, I think it's very achievable. But will it miss, and we're a bit taken aback at just how slow the whole thing is it's kind of coming along.

Well, how many sales people do you have addressing that portion of the market?

Well, we have generalists -- but we also then have a number of absolute specialists and public health people. So we probably have three full-time public health specialists. But the number of people who are involved in this process is the entire group of 30 sales people, so we have three dedicated and then we have 27 generalists.

And then the Immco acquisition, are there any new products expected this year?

Yes, we would have immunofluorescence and ELISA part is coming going through the FDA approval process and it's -- we have a continual range of products continue to come onto the market. We certainly don't have any blockbuster that I would mention. It's more kind of broad thing of our -- we are filling out the product range basically, as you would require to sort of up to 40 products.

Okay. And then I think the Company spent around $6 million on CapEx in the quarter, is that mainly development cost?

Certainly, that $4.7 million of that will be on development cost, that $1.3 million on PP&E.

And will that relent at all in 2016 or it will be about the same pace?

Obviously we've come through a very heavy period in relation to trial costs and what have you, so those costs, on the Troponin side will obviously be eliminated, it will be replaced somewhat by the BNP trial cost although they're much lower because they're much simpler and trials process and a smaller still be per se with fewer elements. So the swing at around those were basically the reduction should obviously only increase, so it will come down.

And then last question, when you're looking at acquisitions, are you looking at technologies that you could possibly put on your platform? Are you looking at generally stay in the same spaces that you're in or are you kind of open to a lot of different things?

We're probably not really looking for a technology acquisition at this time. I mean I think we -- for example, we made a technology acquisition in Sweden but I think -- so I think we're really looking for to put some more (inaudible) solid revenue and earnings enhancing accretive add-ons, that's really what we're looking for, with synergies within the existing organization rather than basically buying technology in which we'd spend further.

Walter Schenker, Maz Partners.

Thank you, as lunch is due, I'll be quick. Two related questions, both relating to capital allocation. First, is there any technical or legal reason aside from the use of capital why the dividend needed to be eliminated in starting up a buyback? And secondly, in regard to the buyback, your goal is to in fact buy the shares as opposed to buying shares over a 12-month period and therefore if some would walk in with a large block tomorrow, hypothetically speaking, I don't own it, so it won't be me, with 1 million shares tomorrow, end of the week, beginning the next the week when it starts, you would have -- and the price was acceptable, you can just go buy stock, i.e. you want to buy 2.3 million shares, as expeditiously at reasonable prices as possible. Thank you.

Okay, Walter, Ronan here. Just in terms of the -- there is no legal link between buying back shares and ceasing paying a dividend. I think you're kind of opting that, I mean we're not stopping paying a dividend -- we're not obliged to, it was a decision voluntarily made by the Board, I mean it was made in the basis that we felt that given our size, I think, said in the press release, our level of R&D expenditure, at the stage of the development this Company is at that it just didn't seem appropriate. That was it, there was no -- there are no legal reason that we have to, that we weren't -- we couldn't pay a dividend because we weren't making enough profit or anything like that, just to deal with that.

And then to deal with the second part of your question is, yes, I mean in terms of what we can buy back, we are allowed to -- there are very stringent requirements in terms of it can't be the opening trade, it can't be the closing trade, it can only be 25%, I think of the average daily volume that was moving whatever, so that's pretty quiet restrictive. But then sort of -- in addition to that you can buy blocks, if so wish. So the answer to your question, yes we might buy blocks, we probably would buy blocks.

Okay, so the goal is to buy in the stock, not necessarily over a time frame, but to own by the Company those shares.

Yes, and again, as we said at the outset, I mean, everything is variable, it will depend on the price, it will depend on the volumes, it will depend on all of those factors. But yes, I mean we are very -- our intention is to get into the market and buy stock. We think that the prices is -- we think that the prices -- we can get a very good price, we would still buy the stock.

Thanks, Walter and Jim. Okay, so I think we probably set a record today, I'm sorry it's 23 minutes past five or past 12 in your case. So anyway thank you for your attention and your support and we look forward to talking to you at the end of quarter one and thank you and good morning. Bye-bye.

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