Good morning, and welcome to the Trinity Biotech First Quarter 2019 Financial Results Conference Call. [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, Gary. And thank all of you for joining us to review the financial results of Trinity Biotech for the first quarter of calendar year 2019, which ended March 31, 2019. 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'll open the call for a question-and-answer session. But before we begin with those 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 word 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 Security 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?

Thanks very much, Joe. Today, I'll take you through the results for quarter 1 2019. Beginning with our revenues, total revenues for the quarter were $22 million, which represents a decrease of approximately $1.8 million versus quarter one last year. Ronan will provide more details in revenues later in call, so I'll then move on and disclose the other aspects of the income statement. Our gross margin this quarter was 42.4%. Whilst this was a lower than the 43.8% reported on quarter 1 2019, it was stronger than the 42.1% in quarter three and 41.7% in quarter four of last year. This is not what's done in the fact that revenues were down this quarter. And as I mentioned before, our margins are very sensitive to revenue fluctuations. We were also impacted by the fact that the decreased revenues arose in the more profitable of company's business lines. And then there was the adverse currency movements mentioned in our release, particularly with regards to the Brazilian real, which were also a drag on margins this quarter. Though we did get at a slight tailwind due to the introduction of new accounting standard on leases, which I will address later on. Moving next to our indirect costs. In total, they have fallen by over $600,000 in the quarter to $8.6 million. Within this, you're seeing relatively flat R&D expenses of $1.3 million whilst SG&A expenses decreased by nearly $400,000 to $6.6 million. I will point out that the average SG&A for last year was over $7 million per quarter. And then our share option expense also decreased from $400,000 to $200,000. The net result of all this there's been a decrease in operating profit from $1.8 million to $1.3 million. Moving on to our financing costs, which includes the impact of…

Thanks, Kevin. I'm going to review our revenues for quarter 1 before opening the call to a question-and-answer session. Our revenues for quarter 1 were $22 million compared with $23.8 million in the corresponding quarter last year, which is a decrease of 7%. Point-of-Care revenues were $3.2 million compared with $3.8 million in the corresponding quarter last year, which is a decrease of 15%. Clinical Laboratory revenues were $18.8 million compared with $20 million in the corresponding quarter last year, which is a decrease of 6%. And moving back to Point-of-Care, our revenues decreased this quarter by 6% when compared with the corresponding quarter. Our U.S. HIV revenues decreased 9%, and this is explained by the fact that public health spending in the U.S. on HIV testing continues to decrease. Moving on to Africa, our HIV sales decreased 3% 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. For the past 15 years, we have held approximately 90% of the African confirmatory market, and we believe that we will continue to do so given the status of our products as gold standard. However, as previously indicated, we have developed a HIV screening product, which we anticipate will be launched on the African market around the end of this year. Given the quality of the product and given that the price at which we can manufacture this product in our new automated plant in Ireland and given our long reparation as manufacturer of gold standard, we believe that we can take significant market share in the screening segment of the African HIV market, which comprises 170 million tests annually, and is many times greater…

[Operator instructions] Our first question comes from Jim Sidoti with Sidoti & Company.

Great. Can you give us a little more color on the new HIV screening test and the process with the WHO. Have you had any communication with them since the last call? What makes you confident you still get that in the market at some point in 2019?

Well, so we are conducting trials in three different countries. In Kenya, Ivory Coast and South Africa. So those trials are ongoing. And we believe that we will -- so we're broad -- we're most of the way through. So we're kind of waiting for some outliers. For example, we're waiting for more walk-ins with HIV-2 and with subtype O. So we have -- I think we've all got our HIV-1s done. So to that extent -- to some extent, we're talking about less prevalent samples and this an element of -- it's difficult to estimate when you are going to actually get the numbers when we need. But the balance we believe that we will have got everything together and collated everything and sometime in September, submit it to WHO at that point in time. And then really it's difficult to determine when the actual approval would occur. It could probably, on balanced, be anytime between December and early next year. There's an element of luck attaching there.

Okay. And then in the U.S. you said you have one instrument approved and then another one before the FDA. Can you just remind me what they are?

Would you repeat that, please, Jim?

You mentioned that you have an instrument before the FDA for approval. I believe it was the hemoglobin variant. Can you just remind me what that's used for?

Oh, yes. Okay. So the hemoglobin variant would be for variants which for example, would be sickle cell anemia, thalassemia. So basically, mutations are the hemoglobin gene. Nothing to do with diabetes, right? And basically, so it's a very spacious market with really only one other significant participant. And we are as well as the new kids on the block here with an excellent instrument. Average prices are higher. So this constitutes for us a significant market opportunity whether that be U.S.A. or Brazil or indeed, China. And I think, sorry, the estimated value of the market for variants worldwide, including neonatals, all new born babies maybe is like $150 million, that kind of size.

Okay. And did you say that, that application has been submitted, or is that something you're still working on?

No, it's submitted. So we have approval in Europe and we have submitted to the FDA about two months ago in the U.S.A. And of course that has dual importance for us because not only will it open up the U.S.A. for us, but it also enables us to commence our regulatory process in China. So we need to have home approval before we can go for Chinese approval. The Chinese market in particular is largest, the higher instances of variance. And also they are very committed to coming to grips with it. And meanwhile in Brazil, we're in the regulatory process as we speak.

So what's your thought for revenue growth?

Jim, just to give you a flavor for, we would supply the 2 U.S. mega labs with virtually all of their requirements in this area, for example. So we have an existing presence here.

So do still think if you can get this product approved this year and still grow revenues in 2019, or do you think because of the headwinds with the Lyme disease test and the lower public health spending that you think you'll be down again in 2018?

Well. I mean, I think that premier resolution that Lyme has no effect whatsoever on it. It's an independent opportunity. But in terms of just if you're looking at overall revenues and I would make the point that quarter 1, historically, has always been our weakest quarter. This particular quarter we have, I think, for the third we've had, just this quarter, we've had the weakest growth in our hemoglobin A1c business that we've had for a number of years. But I think that's generally a blip just a more reflective probably for higher placements, as I mentioned, of instruments last quarter than this quarter, so it kind of went from 96 down to 61. But I could see us being right up there next quarter. So we are -- I mean you've put out a paper in terms of your revenue expectations for us for the year and we would be confident of achieving those numbers.

Okay. So what I was asking, so despite the headwind you have with the Lyme disease, you still think you will grow revenue this year because of the diabetes business and then getting some these new products launched?

Yes. I mean just to quantify, just to look at the Lyme, we lost a Lyme contractor worth $2.1 million and we, of course, we lost it last May. So from comparability point of view post perspective, it hit quarter one like -- because they were just buying their last products almost virtually last year and they were probably stocking up a bit in context of looking to transition to a different technology. And therefore, the sales of that product in quarter one last year were like approximately $600,000. And so from a comparability point of view, it makes this quarter look weak. But just to bear in mind that the loss of that business it had virtually no impact next quarter from a comparability point of view. So I think that just in overall terms, what we need to realize is that the quarter 1 has always been our weakest quarter. I mean we still have a very substantial Lyme business worth in excess of $6 million and there's virtually no sales in quarter one. Lyme, ticks is a kind of summer time problem. People don't buy much Lyme testing in January, February, March and some other factors as well. So the point is that our HIV -- sorry, is that our quarter 1 revenues it's our lowest quarter.

Okay. So do you still think you can grow revenue this year, and I assume you still think that you'll be cash flow neutral or better?

Yes. We've indicated that we want to maintain a cash balance of $30 million, and we believe we will do that.

Maintain or strengthen.

The next question comes from Paul Nouri with Noble Equity Funds.

Hey, just wondering if you expect growth to pick up in the autoimmune business throughout the year?

Paul, yes, hi. Yes, we do. I mean we bought this business 4.5 years years ago, it was doing $12.5 million and it did $20 million last year and hoping it will do $22 million this year. So we had a soft enough quarter, quarter 1. But our quarter -- we expect quarter two is looking quite good, and we are very optimistic about our autoimmune business. We think it's a real opportunity for us. It's a very nice niche market for us. We have the next in the range of product, and we have very positive about growing it.

And where are you with the expansion? I know you're expanding the current location or moving to a new one out in Buffalo?

Yes. That expansion is now complete. So basically, we didn't have enough production capacity. I mean bear in mind the business we bought was doing $12 million, $12.5 million. So we have opened -- we've opened a second location in Buffalo. Well, in fact, we had two locations in Buffalo. We had a lab in the city center and then we have a factory. And so we've moved the lab out of the city center into a new facility and expanded our production capability within in addition. So basically, we have two locations within Buffalo now up and running.

This concludes our question-and-answer session. I would like to turn the conference back over to Ronan O'Caoimh for any closing remarks.

Alright. Well, thank you very much indeed for attention, your support, and your interest. And we look forward to speaking to you in a couple of months on quarter 2. Bye-bye.

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