Good day, and welcome to the Trinity Biotech Third Quarter Fiscal Year 2017 Financial Results Conference Call. All participants are in listen only mode. [Operator Instructions] After today's presentation, there'll be an opportunity to ask questions. [Operator Instructions] Please note, today's event is being recorded. I'd now like to turn the conference over to Joe Diaz with Lytham Partners. Please go ahead sir.

Thank you. And thanks all of you for joining us to today to review the financial results of Trinity Biotech for the third quarter of calendar year 2017, which ended September 30, 2017. With us on the call representing the Company are Ronan O'Caoimh, Chief Executive Officer and Kevin Tansley, Chief Financial Officer. At the conclusion of today's prepared remarks, we will open the call for a question-and-answer session. Before we begin with 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 the safe harbor for such forward-looking statements. The words believe, expect, anticipates, estimate, will and other similar statements of expectation identify those forward-looking statements. Investors are cautioned that such forward-looking statements involve risks and uncertainties, including but not limited to, the results of research and development efforts, the effect of regulations 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 Ronan O'Caoimh on his review of the quarter. After which, we’ll open the call for your questions. Kevin?

Thank you very much, Joe. And I'll now take you through the financial results for quarter three 2017. Beginning with our revenues, total revenues for the quarter were $25.6 million, which compares to $26.1 million in quarter three of 2016. And given that Ronan will be providing more details on revenues later in the call, I'll then move on and discuss the rest of the income statement. Our gross margin this quarter was 43%, and this compares to 44.7% for the same quarter last year. Two main factors are driving this reduction; firstly, as you all have seen from the table in the press release, Point-of-Care revenues lowered this quarter. And given these revenues of higher margin than average, this has adversely affected this quarter's number. Secondly, we are continuing to see the impact from the strength of the U.S. dollar and distributor pricing, a factor which we would have mentioned previously. However, what I’ll point out is that gross margins have now improved for each of the last few quarters, rising from 40% in quarter four 2016 to 42% in quarter one this year to 42.5% in quarter two and now 43% this quarter. In fact, this quarter's number is getting very close to the average of 43.2% achieved in 2016 as a whole. Moving onto our indirect costs. Our R&D expenses were just under $1.5 million, which is a little higher than the $1.3 million reported last year. Similarly, our SG&A expenses have increased to $7.8 million this quarter. As you all have seen from our release, this net increase is due to normal inflationary pressures, as well as higher discretionary sales and marketing expenses. It should be noted that quarter three traditionally tends to be the quarter with the higher sales and marketing expenditure, given the concentration…

Thanks Kevin. And I'm going to review our revenue for quarter three before opening the call to a question-and-answer session. Our revenue for quarter three were $25.6 million compared with $26.1 million in the corresponding quarter last year, which is a reduction of 2%. Point-of-Care revenues were $4.6 million compared with $4.9 million in the corresponding quarter, which is a decrease of 6%. Clinical laboratory revenues were $21 million compared with $21.2 million in the corresponding quarter last year, which is a decrease of 1% or $200,000. The impact during the quarter of the cull of our MicroTrak and Bartels infectious disease products amounted to $800,000. Absent this factor, our clinical laboratory business demonstrated an organic growth of $600,000 during the quarter or 2.6% and compared with the corresponding quarter. Moving back to Point-of-Care, our revenues decreased this quarter by 6% when compared to the corresponding quarter. Our U.S. HIV revenues decreased 14% and this is explained by the fact that public health spending in the United States on HIV testing continues to decrease. Our competitors in the U.S. market appear to be experiencing even greater decreases in HIV sales into the public health market. Our U.S. HIV revenues constitute approximately 20% to 25% of our total HIV revenues. Moving onto Africa. Our HIV sales decreased by 4% when compared with the corresponding quarter. However, 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. Indeed, our African HIV revenues for the nine months year-to-date are 8% greater than the corresponding revenues of last year. Moving on to clinical laboratory. I indicated that our revenues have reduced by $200,000 during the quarter when compared to the corresponding quarter last year. This…

Thank you. We will now begin the question-and-answer session. [Operator Instructions] Today's first question comes from Larry Solow of CJS. Please go ahead.

Just a couple of quick follow-ups. Ron, I know in the last couple of calls, you have spoken about your targets as we look at into '18 of getting back to a high single even lower double-digit sales growth. Do you still see that -- is that still something you, is that a realistic target? And I know one of the leverage there was a rebound in HIV or some return to growth in HIV with going into front line in Africa. Can you give us an update on where you stand with that?

We do believe -- we still believe that we can achieve just about double-digit growth in 2018. And some of the reasons will be first the launch of the Trin-Screen HIV products. So just to remind you, at the moment, we have virtually all update fee and confirmatory business in the African markets. But we have never really participated in the Screening market, which in volume terms is 8x eight to 10x higher, so we’ve developed a new product and we’re about to launch that, I mean if you get WHO approval of the product. But we think during the later part of 2018 that we would enter that market. And it's an excellent product. We have a super reputation in the markets, and we can manufacturer at a really, really competitive price and in our automated new facility here in Dublin. So we’re very optimistic about what we can do with that product. And we think it can be a real growth engine for us. But there is many other factors involved in terms of how we can increase our growth rates. Obviously, we’re going to be implementing our annual pricing increases. We have -- we’re bringing the premier part of back into Brazil, as I mentioned, because remember over the past year, we've placed nothing in Brazil. And we have this premier resolution, which is big launch and which is gathering momentum right across the world. And of course then we have our [indiscernible] diabetes products, which is the Tri-stat, which we don’t speak a lot about. But which has just recently been launched and which is gathering momentum. We have and moving on to autoimmunity, we have the Immunofluorescence. And where we said which we believe is best in class and we’ve just spoken into the biggest laboratory group in China. And that alone has very significant potential. I showed them this product’s continuity to develop momentum. And then we have our -- we are getting finally our vehicle with the last of our license products in autoimmunity. In particular, we’ve also got our HEP 2000 products, which is with a pending FDA approval on that. And I think it's a very significant product that can do really well. And so all of those factors and as we’ll go to the fact that the currency and headwinds are -- appear to returning at the tailwinds, I think that will help us as well. Because we've been greatly disadvantaged in many markets through some candidate through Columbia, Turkey and then the other institutes in Brazil with such a strong dollar, so a gradual -- a reversal of that is a great help to us. So I think all those factors, and I believe Kevin can give us that double-digit growth clarity that we've talked about.

I think, obviously, a lot of moving parts and a lot of products. So just two questions and bigger ones, including the HIV, which is my leading question have you already filed with the WHO for approvals? I think normally it takes like nine to 12 months. So I assume you expect approval in the back half of next year. Does that mean you've already completed the filing or?

No, we haven't actually completed the filing. But it's as along the process as that. I mean I think we’ll be talking about three or four months.

How about Premier, obviously, it’s been flatted the 350 placements. But over time that should drive higher reagents, say higher margin and higher reagent sales. And are you seeing your agent sales and utilization improve? And when might we start seeing that as a reflection in your gross margin that went up?

Well, I mean, I think that we picked 85 instruments this quarter we’ll be placing about 350 instruments a year. But remember they're all new instruments they’re not to [indiscernible] existing instruments. So that in itself is very, very significant. I mean, it constitutes probably in the order 25% of all the instruments placed in the world in the past quarter for diabetes. So that alone can drive very significant growth. And as we put it like, we’ve got 10% or 11% growth -- just 9% to 10% growth in past quarter. And so I think that’s not happening for us, well there's two big things that haven't been happening for us as well is that we haven't been placing in Brazil and how that will recommence in quarter two of next year. And the second thing is that the Chinese, the volumes the reagent volumes in China, are disappointing but they're improving. So they the future generates more GP than the general taxation awareness of the reimbursement programs that are available. And so we're involved in them and the land grab with our competitors are trying to take our instruments in the hospitals throughout China. But really I mean I think our Premier business is performing really, really well. And taking 300 instruments per annum constituting somewhere between 20% to 25% of worldwide placements is a very strong performance.

And just continues to grow double-digits on a global basis. Is that true?

I mean, as it has been doing, yes.

And just in terms of Brazil. Obviously, the pull out of [hold] on sales there, I guess, in beginning of '16. I think that was obviously was an impact. As you reenter that country or begin to manufacture there and reenter into the commercial sales. Is there pent up demand, is there still demand there? Or who’s instilling that demand, have the others come back in or taking back some shares as you guys have been out for a while there? Or what -- any color on the outlook there will be great?

I think if you remember, I think we've hedged 121 instruments there in '15, and then we base that to itself in the market. Now, I don't think we’ll ever place that many instruments again at good rate of some limited type. But I do think that’s on 50, 60 instruments annually is an achievable target?

And just last question on the cost side. And I assume obviously as have you reached your targeted revenue growth that even if you get somewhere in the mid-to-high-single digit growth, which I think people will be happy to see. And what margins. I was well surprised to see that in your cost section went up this quarter and the face of hopefully a little bit of decline on fee only. So how should we think about underlying expenses and hopefully there would be some operating margin improvement the company buys on sales growth?

Yes, I think there is two significant things are going to have our cost of sales and increase our gross margin during 2018. And they will be, firstly that we will commence the manufacturing of our HIV test in the automated factory in Dublin. And that's going to give rise to an increase in our gross margin. And the second thing is that we’re just in terms of the premier products we are and we’re making some technical changes with the gel we use in our columns. And which will give rise all to just I think to an improvement in the gross margin. I think those two factors kick-in in 2018 I think will improve to gross margins.

And our next question comes from Nick Jansen of Raymond James. Please go ahead.

First, just on Lyme disease, just wanted to get a better sense of what's going on in that market right now. I do see one of your competitors get a Lyme disease product approved recently, and I don’t think it's a head-to-head, but I think there might be some confusion in the marketplace about their positioning versus your. So maybe just help us better understand your Lyme potential in the short to medium term?

Yes, I think you’re referring to our [23.33] [quidel] test. Just be aware, that’s the screening test rather than a confirmatory test. We are attached basically as a monopoly player in the confirmatory side. So anything, which will just come up as a positive on that [23.45] [quidel] test within, you would expect to be confirmed using our test as what would be the case at all of screening test. So it's not a direct competitor of ours at all different parts of markets.

And does it help to expand your market opportunity if we’re now more actively screening for the disease?

More active screening for the disease was I'm not sure the introduction of the new products per se would result in the increased screening. And if the number of presumptive positives we should have drives the number of tests that we do and that will be influenced by the prevalence of Lyme for weather conditions et cetera. The expansion of the Lyme condition and obviously awareness and what have you. So the fact that more tests are coming out maybe will contribute to increased awareness and people more likely to look out for the symptoms of Lyme et cetera. But it's difficult to estimate what direct co-relation would be in that regard.

And then bigger picture more strategically with your stock sitting here near 52-week lows, you are showing, albeit moderate, but you are showing progress on organic revenue growth and in gross margins over the last couple of quarters. How do we think about your use of capital, going forward? And I know you in the press release you’re talking more about buyback. But I do think you’re somewhat constrained there on the amount you can do at any given quarter plus you’re not fully free cash flow positive. So I just wanted to get your thoughts on capital allocation, just strategically, how you can perhaps either reaccelerate growth from inorganic means or pursue other avenues to create shareholder value?

As it stands at this moment of time, we’ve got $63 million in cash. We’re probably burning as the current revenue rates all in about $5 million a year. And we are committed at these prices to find back stock and at the kind of price level that we’re doubly committed. So we obviously know with the actual volume and stock that we’ve brought back in the last quarter is disappointing. I am really that arises in fact that our volumes are really, really low at the moment. So at this moment in time, we’re only really able to buy back 7,000 shares a day, which we’ve been doing. So we need to get our hands on block. I mean just in the past couple of months, we were unsuccessful in getting our hands on blocks, but we redouble our efforts there. And of course, the past three weeks, we've been out in the market; although, the time has been in place. So I think the best use of our capital given our current share price will be to buyback stock, and we're committed to doing that.

[Operator Instructions] Our next question today comes from Jim Sidoti of Sidoti and Company. Please go ahead.

So we had two pretty significant hurricanes during the quarter here in the U.S. Any impact from that on any of your business?

No, none.

And then the [indiscernible] deal has closed during the quarter. Are you seeing any changes in the way they are engaged in some of the markets where you compete with them?

No, I mean we've seen nothing yet, but it's only a few weeks. But no, we've seen absolutely nothing yet. Except for, I would say, availability of some people basically that have moved on the data closed within a couple of -- some people available.

Okay, thank you.

Okay, right that's then no more questions. So I think, at this stage, we'll close the call and thank you very much for your interest and your support. And we'll talk soon. Good afternoon.

And thank you sir. Today's conference has now concluded. And thank you all for attending today’s presentation. You may now disconnect your lines and have a wonderful day.