SECURITIES AND EXCHANGE COMMISSION

Washington D.C. 20549

FORM 20-F

o		REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934

þ		ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

o		TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

o		SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission file number: 0-22320

Trinity Biotech plc

(Exact name of Registrant as specified in its charter
and translation of Registrant’s name into English)

Ireland
(Jurisdiction of incorporation or organization)

(Address of principal executive offices)

Kevin Tansley
Chief Financial Officer
Tel: +353 1276 9800
Fax: +353 1276 9888
IDA Business Park, Bray, Co. Wicklow, Ireland
(Name, Telephone, E-mail and/or Facsimile number and Address of Company Contact Person)

Securities registered or to be registered pursuant to Section 12(b) of the Act:

Title of each class		Name of each exchange on which registered
None		None

Securities registered or to be registered pursuant to Section 12(g) of the Act:

Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act: None

Indicate the number of outstanding shares of each of the issuer’s classes of capital or common stock as of the close of the period covered by the annual report:

82,017,581 Class ‘A’ Ordinary Shares and 700,000 Class ‘B’ Shares
(as of December 31, 2008)

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

Yes o No þ

If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.

Yes o No þ

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes þ No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer o		Accelerated filer þ		Non-accelerated filer o		Smaller reporting company o
				(Do not check if a smaller reporting company)

Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:

U.S. GAAP o		International Financial Reporting Standards as issued by the International Accounting Standards Board þ		Other o

If “Other” has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected to follow:

Item 17 o Item 18 o

If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes o No þ

This Annual Report on Form 20-F is incorporated by reference into our Registration Statements on Form F-3 File No. 333-113091, 333-112568, 333-116537, 333-103033, 333-107363 and 333-114099 and our Registration Statements on Form S-8 File No. 33-76384, 333-220, 333-5532, 333-7762 and 333-124384.

 

 

TABLE OF CONTENTS

		Page
PART I
Item 1 Identity of Directors, Senior Management and Advisors			1
Item 2 Offer statistics and Expected timetable			1
Item 3 Selected Consolidated Financial Data			1
Item 4 Information on the Company			7
Item 5 Operating and Financial Review and Prospects			14
Item 6 Directors and Senior Management			37
Item 7 Major Shareholders and Related Party Transactions			42
Item 8 Financial Information			44
Item 9 The Offer and Listing			44
Item 10 Memorandum and Articles of Association			46
Item 11 Qualitative and Quantitative Disclosures about Market Risk			56
Item 12 Description of Securities other than Equity Securities			57
PART II
Item 13 Defaults, Dividend Arrangements and Delinquencies			57
Item 14 Material Modification to the Rights of Security Holders and Use of Proceeds			58
Item 15 Control and Procedures			58
Item 16A Audit Committee Financial Expert			59
Item 16B Code of Ethics			59
Item 16C Principal Accounting Fees and Services			59
PART III
Item 17 Consolidated Financial Statements			60
Item 18 Consolidated Financial Statements			60
Item 19 Exhibits			134
Exhibit 12.1
Exhibit 12.2
Exhibit 13.1
Exhibit 13.2
Exhibit 15.1

As used herein, references to “we”, “us”, “Trinity Biotech” or the “Group” in this form 20-F shall mean Trinity Biotech plc and its world-wide subsidiaries, collectively. References to the “Company” in this annual report shall mean Trinity Biotech plc.

Our financial statements are presented in US Dollars and are prepared in accordance with International Financial Reporting Standards (“IFRS”) both as issued by the International Accounting Standards Board (“IASB”) and as subsequently adopted by the European Union (“EU”). The IFRS applied are those effective for accounting periods beginning on or after 1 January 2007. Consolidated financial statements are required by Irish law to comply with IFRS as adopted by the EU which differ in certain respects from IFRS as issued by the IASB. These differences predominantly relate to the timing of adoption of new standards by the EU. However, as none of the differences are relevant in the context of Trinity Biotech, the consolidated financial statements for the periods presented comply with IFRS both as issued by the IASB and as adopted by the EU. All references in this annual report to “Dollars” and “$” are to US Dollars, and all references to “euro” or “€” are to European Union euro. Except as otherwise stated herein, all monetary amounts in this annual report have been presented in US Dollars. For presentation purposes all financial information, including comparative figures from prior periods, have been stated in round thousands.

Item 1 Identity of Directors, Senior Management and Advisers

Not applicable.

Item 2 Offer Statistics and Expected Timetable

Not applicable.

Item 3 Selected Consolidated Financial Data

The following selected consolidated financial data of Trinity Biotech as at December 31, 2008 and 2007 and for each of the years ended December 31, 2008, 2007 and 2006 have been derived from, and should be read in conjunction with, the audited consolidated financial statements and notes thereto set forth in Item 18 of this annual report. The selected consolidated financial data as at December 31, 2006, 2005 and 2004 and for the years ended December 31, 2005 and December 31,2004 are derived from the audited consolidated financial statements not appearing in this Annual Report. This data should be read in conjunction with the financial statements, related notes and other financial information included elsewhere herein.

CONSOLIDATED STATEMENT OF OPERATIONS DATA

		Year ended December, 31
		2008				2007				2006				2005				2004
		Total				Total				Total				Total				Total
		US$’000				US$’000				US$’000				US$’000				US$’000
Revenues			140,139				143,617				118,674				98,560				80,008
Cost of sales			(77,645	)			(75,643	)			(62,090	)			(51,378	)			(40,047	)
Cost of sales — restructuring expenses			—				(953	)			—				—				—
Cost of sales — inventory write off / provision			—				(11,772	)			(5,800	)			—				—
Total cost of sales			(77,645	)			(88,368	)			(67,890	)			(51,378	)			(40,047	)
Gross profit			62,494				55,249				50,784				47,182				39,961
Other operating income			1,173				413				275				161				302
Research and development expenses			(7,544	)			(6,802	)			(6,696	)			(6,070	)			(4,744	)
Research and development — restructuring expenses			—				(6,907	)			—				—				—
Total research and development expenses			(7,544	)			(13,709	)			(6,696	)			(6,070	)			(4,744	)
Selling, general and administrative expenses			(47,816	)			(51,010	)			(42,422	)			(34,651	)			(29,332	)
Selling, general and administrative — impairment charges and restructuring expenses			(87,882	)			(20,315	)			—				—				—
Total selling, general and administrative expenses			(135,698	)			(71,325	)			(42,422	)			(34,651	)			(29,332	)
Operating (loss)/ profit			(79,575	)			(29,372	)			1,941				6,622				6,187
Financial income			65				457				1,164				389				302
Financial expenses			(2,160	)			(3,148	)			(2,653	)			(1,058	)			(824	)
Net financing costs			(2,095	)			(2,691	)			(1,489	)			(669	)			522
(Loss)/ profit before tax			(81,670	)			(32,063	)			452				5,953				5,665
Income tax (expense)/ credit			3,892				(3,309	)			2,824				(673	)			49
(Loss)/ profit for the year (all attributable to equity holders)			(77,778	)			(35,372	)			3,276				5,280				5,714
Basic (loss)/ earnings per ‘A’ ordinary share (US Dollars)			(0.96	)			(0.47	)			0.05				0.09				0.10
Basic (loss)/ earnings per ‘B’ ordinary share (US Dollars)			(1.91	)			(0.94	)			0.10				0.18				0.20
Diluted (loss)/ earnings per ‘A’ ordinary share (US Dollars)			(0.96	)			(0.47	)			0.05				0.09				0.09
Diluted (loss)/ earnings per ‘B’ ordinary share (US Dollars)			(1.91	)			(0.94	)			0.10				0.18				0.18
Basic (loss)/ earnings per ADS (US Dollars)			(3.82	)			(1.86	)			0.19				0.36				0.41
Diluted (loss)/ earnings per ADS (US Dollars)			(3.82	)			(1.86	)			0.19				0.35				0.37
Weighted average number of shares used in computing basic EPS			81,394,075				76,036,579				70,693,753				58,890,084				55,132,024
Weighted average number of shares used in computing diluted EPS			81,394,075				76,036,579				72,125,740				67,032,382				65,527,802

Consolidated Balance Sheet Data

		December				December				December				December 31,				December 31,
		31,2008				31,2007				31,2006				2005				2004
		US$’000				US$’000				US$’000				US$’000				US$’000
Net current assets (current assets less current liabilities)			39,494				36,298				60,996				44,964				53,448
Non current liabilities			(27,897	)			(35,623	)			(45,928	)			(19,083	)			(16,636	)
Total assets			129,509				215,979				249,131				184,602				156,040
Capital stock			1,070				991				978				830				776
Shareholders’ equity			65,905				136,845				167,262				133,618				118,894

No dividends were declared in any of the periods from December 31, 2004 to December 31, 2008.

Risk Factors

Before you invest in our shares, you should be aware that there are various risks, which are described below. You should consider carefully these risks together with all of the other information included in this annual report before you decide to purchase our shares.

Trinity Biotech’s operating results may be subject to fluctuations.

•

Trinity Biotech’s operating results may fluctuate as a result of many factors related to its business, including the competitive conditions in the industry, major reorganisations of the Group’s activities, loss of significant customers, delays in the development of new products and currency fluctuations, as described in more detail below, and general factors such as the size and timing of orders, the prevalence of various diseases and general economic conditions. In the event of lower operating profits, this could have a negative impact on cash generated from operations and also negatively impact shareholder value.

A need for capital might arise in the future if Trinity Biotech’s capital requirements increase or revenues decrease.

•

Up to now Trinity Biotech has funded its operations through the sale of its shares and securities convertible into shares, cashflows from operations and bank borrowings. Trinity Biotech expects that the proceeds of equity financings, bank borrowings, lease financing, current working capital and sales revenues will fund its existing operations and payment obligations. However, if our capital requirements are greater than expected, or if our revenues do not generate sufficient cashflows to fund our operations, we may need to find additional financing which may not be available on attractive terms or at all. Any future financing could have an adverse effect on our current shareholders or the price of our shares in general.

Trinity Biotech’s acquisition strategy may be less successful than expected, and therefore, growth may be limited.

•

Trinity Biotech has historically grown organically and through the acquisition of, and investment in, other companies, product lines and technologies. There can be no guarantees that recent or future acquisitions can be successfully assimilated or that projected growth in revenues or synergies in operating costs can be achieved. Our ability to integrate future acquisitions may also be adversely affected by inexperience in dealing with new technologies, and changes in regulatory or competitive environments. Additionally, even during a successful integration, the investment of management’s time and resources in the new enterprise may be detrimental to the consolidation and growth of our existing business.

The diagnostics industry is highly competitive, and Trinity Biotech’s research and development could be rendered obsolete by technological advances of competitors.

•

Trinity Biotech’s principal business is the supply of medical diagnostic test kits and related diagnostic instrumentation. The diagnostics industry is extremely competitive. Trinity Biotech is competing directly with companies which have greater capital resources and larger marketing and business organisations than Trinity Biotech. Trinity Biotech’s ability to grow revenue and earnings may be adversely impacted by competitive product and pricing pressures and by its inability to gain or retain market share as a result of the action of competitors.

We have invested in research and development (“R&D”) but there can be no guarantees that our R&D programmes will not be rendered technologically obsolete or financially non-viable by the technological advances of our competitors, which would also adversely affect our existing product lines and inventory. The main competitors of Trinity Biotech (and their principal products with which Trinity Biotech competes) include Siemens (Sysmex^® CA, D-Dimer plus, Enzygnost^®), Zeus Scientific Inc. (Zeus EIA, IFA), Diasorin Inc. (ETI™), Abbott Diagnostics (AxSYM™, IMx™), Diagnostic Products Corp. — DPC (Immulite™), Bio-Rad (ELISA, WB & A1c), Roche Diagnostics (COBAS AMPLICOR™, Ampliscreen™, Accutrend™) and OraSure Technologies, Inc (OraQuick ^®).

Trinity Biotech is highly dependent on suitable distributors worldwide.

•

Trinity Biotech currently distributes its product portfolio through distributors in approximately 80 countries worldwide. Our continuing economic success and financial security is dependent on our ability to secure effective channels of distribution on favourable trading terms with suitable distributors.

Trinity Biotech’s business could be adversely affected by changing market conditions resulting in the reduction of the number of institutional customers.

•

The diagnostics industry is in transition with a number of changes that affect the market for diagnostic test products. Changes in the healthcare industry delivery system have resulted in major consolidation among reference laboratories and in the formation of multi-hospital alliances, reducing the number of institutional customers for diagnostic test products. There can be no assurance that we will be able to enter into and/or sustain contractual or other marketing or distribution arrangements on a satisfactory commercial basis with these institutional customers.

Trinity Biotech’s long-term success depends on its ability to develop new products subject to stringent regulatory control. Even if new products are successfully developed, Trinity Biotech’s proprietary know-how, manufacturing techniques and trade secrets may be copied by competitors. Furthermore, Trinity Biotech’s patents have a limited life time and are thereafter subject to competition with generic products. Also, competitors might claim an exclusive patent for products Trinity Biotech plans to develop.

•

We are committed to significant expenditure on research and development (“R&D”). However, there is no certainty that this investment in research and development will yield technically feasible or commercially viable products. Our organic growth and long-term success is dependent on our ability to develop and market new products but this work is subject to very stringent regulatory control and very significant costs in research, development and marketing. Failure to introduce new products could significantly slow our growth and adversely affect our market share.

•

Even when products are successfully developed and marketed, Trinity Biotech’s ownership of the technology behind these products has a finite life. In general, generic competition, which can arise through replication of the Trinity Biotech’s proprietary know-how, manufacturing techniques and trade secrets or after the expiration of a patent, can have a detrimental effect on a product’s revenue, profitability and market share. There can be no guarantee that the net income and financial position of Trinity Biotech will not be adversely affected by competition from generic products. Conversely, on occasion, certain companies have claimed exclusive patent, copyright and other intellectual property rights to technologies in the diagnostics industry. If these technologies relate to Trinity Biotech’s planned products, Trinity Biotech would be obliged to seek licences to use this technology and, in the event of being unable to obtain such licences or it being obtainable on grounds that would be materially disadvantageous to Trinity Biotech, we would be precluded from marketing such products, which could adversely impact our revenues, sales and financial position.

Trinity Biotech’s patent applications could be rejected or the existing patents could be challenged; our technologies could be subject to patent infringement claims; and trade secrets and confidential know-how could be obtained by competitors.

•

We can provide no assurance that the patents Trinity Biotech may apply for will be obtained or that existing patents will not be challenged. The patents owned by Trinity Biotech and its subsidiaries may be challenged by third parties through litigation and could adversely affect the value of our patents. We can provide no assurance that our patents will continue to be commercially valuable.

•

Trinity Biotech currently owns 15 US patents with remaining patent lives varying from less than one year to 14 years. In addition to these US patents, Trinity Biotech owns a total of 7 additional non-US patents with expiration dates varying between the years 2009 and 2023.

•

Also, our technologies could be subject to claims of infringement of patents or proprietary technology owned by others. The cost of enforcing our patent and technology rights against infringers or defending our patents and technologies against infringement charges by others may be high and could adversely affect our business.

•

Trade secrets and confidential know-how are important to our scientific and commercial success. Although we seek to protect our proprietary information through confidentiality agreements and other contracts, we can provide no assurance that others will not independently develop the same or similar information or gain access to our proprietary information.

Trinity Biotech’s business is heavily regulated and non-compliance with applicable regulations could reduce revenues and profitability.

•

Our manufacturing and marketing of diagnostic test kits are subject to government regulation in the United States of America by the Food and Drug Administration (“FDA”), and by comparable regulatory authorities in other jurisdictions. The approval process for our products, while variable across countries, is generally lengthy, time consuming, detailed and expensive. Our continued success is dependent on our ability to develop and market new products, some of which are currently awaiting approval from these regulatory authorities. There is no certainty that such approval will be granted or, even once granted, will not be revoked during the continuing review and monitoring process.

•

We are required to comply with extensive post market regulatory requirements. Non-compliance with applicable regulatory requirements of the FDA or comparable foreign regulatory bodies can result in enforcement action which may include recalling products, ceasing product marketing, paying significant fines and penalties, and similar actions that could limit product sales, delay product shipment, and adversely affect profitability.

Trinity Biotech’s success is dependent on certain key management personnel.

•

Trinity Biotech’s success is dependent on certain key management personnel. Our key employees at December 31, 2008 were Ronan O’Caoimh, our CEO and Chairman, Rory Nealon, our COO and Kevin Tansley, our CFO and Secretary. Competition for qualified employees among biotechnology companies is intense, and the loss of such personnel or the inability to attract and retain the additional highly skilled employees required for the expansion of our activities, could adversely affect our business. In the USA, the UK, France and Germany we have been able to attract and retain qualified personnel. In Ireland, we have experienced some difficulties in attracting and retaining staff due to competition from other employers in our industry.

Trinity Biotech is dependent on its suppliers for the primary raw materials required for its test kits.

•

The primary raw materials required for Trinity Biotech’s test kits consist of antibodies, antigens or other reagents, glass fibre and packaging materials which are acquired from third parties. Although Trinity Biotech does not expect to be dependent upon any one source for these raw materials, alternative sources of antibodies with the characteristics and quality desired by Trinity Biotech may not be available. Such unavailability could affect the quality of our products and our ability to meet orders for specific products.

Trinity Biotech may be subject to liability resulting from its products or services.

•

Trinity Biotech may be subject to claims for personal injuries or other damages resulting from its products or services. Trinity Biotech has global product liability insurance in place for its manufacturing subsidiaries up to a maximum of €6,500,000 (US$9,555,000) for any one accident, limited to a maximum of €6,500,000 (US$9,555,000) in any one year period of insurance. A deductible of US$25,000 is applicable to each insurance event that may arise. There can be no assurance that our product liability insurance is sufficient to protect us against liability that could have a material adverse effect on our business.

Currency fluctuations may adversely affect our earnings and assets.

•

Trinity Biotech records its transactions in US Dollars, euro and Swedish Kroner and prepares its financial statements in US Dollars. A substantial portion of our expenses are denominated in euro. However, Trinity Biotech’s revenues are primarily denominated in US Dollars. As a result, the Group is affected by fluctuations in currency exchange rates, especially the exchange rate between the US dollar and the euro, which may adversely affect our earnings and assets. The percentage of 2008 consolidated revenue denominated in US Dollars was approximately 66%. Of the remaining 34% revenue, 26% relates to revenue denominated in Euro and 8% relates to sterling, yen and Swedish Kroner denominated revenues. Thus, a 10% decrease in the value of the euro would have approximately a 3% adverse impact on consolidated revenues.

•

As part of the process of mitigating foreign exchange risk, the principal exchange risk identified by Trinity Biotech is with respect to fluctuations in the euro. This is attributable to the level of euro denominated expenses exceeding the level of euro denominated revenues thus creating a euro deficit. Trinity Biotech continuously monitors its exposure to foreign currency movements and based on expectations on future exchange rate exposure implements a hedging policy which may include covering a portion of this exposure through the use of forward contracts. In the medium term, our objective is to increase the level of non-US Dollar denominated revenue, thus creating a natural hedge of the non-US Dollar expenditure.

The conversion of our outstanding employee share options and warrants would dilute the ownership interest of existing shareholders.

•

The warrants issued in 2004 and 2008 and the total share options exercisable at December 2008, as described in Item 18, note 19 to the consolidated financial statements, are convertible into American Depository Shares (ADSs), 1 ADS representing 4 Class “A” Ordinary Shares. The exercise of the share options exercisable and of the warrants will likely occur only when the conversion price is below the trading price of our ADSs and will dilute the ownership interests of existing shareholders. For instance, should the options and warrant holders of the 8,670,013 ‘A’ Ordinary shares (2,167,503 ADSs) exercisable at December 31, 2008 be exercised, Trinity Biotech would have to issue 8,670,013 additional ‘A’ ordinary shares (2,167,503 ADSs). On the basis of 82,017,581 ‘A’ ordinary shares outstanding at December 31, 2008, this would effectively dilute the ownership interest of the existing shareholders by approximately 10%.

It could be difficult for US holders of ADSs to enforce any securities laws claims against Trinity Biotech, its officers or directors in Irish Courts.

•

At present, no treaty exists between the United States and Ireland for the reciprocal enforcement of foreign judgements. The laws of Ireland do however, as a general rule, provide that the judgements of the courts of the United States have in Ireland the same validity as if rendered by Irish Courts. Certain important requirements must be satisfied before the Irish Courts will recognise the United States judgement. The originating court must have been a court of competent jurisdiction, the judgement may not be recognised if it is based on public policy, was obtained by fraud or its recognition would be contrary to Irish public policy. Any judgement obtained in contravention of the rules of natural justice will not be enforced in Ireland.

Item 4 Information on the Company

History and Development of the Company

Trinity Biotech (“the Group”) develops, acquires, manufactures and markets medical diagnostic products for the clinical laboratory and point-of-care (“POC”) segments of the diagnostic market. These products are used to detect autoimmune, infectious and sexually transmitted diseases, diabetes and disorders of the blood, liver and intestine. The Group is also a significant provider of raw materials to the life sciences industry. The Group sells worldwide in over 80 countries through its own sales force and a network of international distributors and strategic partners.

Trinity Biotech was incorporated as a public limited company (“plc”) registered in Ireland in 1992. The Company commenced operations in 1992 and, in October 1992, completed an initial public offering of its securities in the US. The principal offices of the Group are located at IDA Business Park, Bray, Co Wicklow, Ireland. The Group has expanded its product base through internal development and acquisitions.

The Group, which has its headquarters in, Bray Ireland, employs in excess of 700 people worldwide and markets its portfolio of over 500 products to customers in 80 countries around the world. Trinity Biotech markets its products in the US and the rest of the world through a combination of direct selling and a network of national and international distributors. The Group has established direct sales forces in the US, Germany, France and the UK. Trinity Biotech has manufacturing facilities in Bray, Ireland and Lemgo, Germany, in Europe and in Jamestown, New York, Carlsbad, California and Kansas City, Missouri in the USA.

The following represents the acquisitions made by Trinity Biotech in recent years.

Acquisition of Haemostasis business of bioMerieux Inc

In June 2006, Trinity Biotech acquired the haemostasis business of bioMerieux Inc. (“bioMerieux”) for a total consideration of US$44.4 million, consisting of cash consideration of US$38.2 million, deferred consideration of US$5.5 million (net of discounting) and acquisition expenses of US$0.7 million. At December 31, 2006, Trinity Biotech had accrued US$5,688,000 for the deferred consideration to be paid in June 2007 and June 2008 (see Item 18, note 26 to the consolidated financial statements). Deferred consideration of US$3,208,000 was paid to bioMerieux in June 2007. At December 31, 2007, the Group had accrued deferred consideration US$2,725,000 (net of discounting) and the Group paid this deferred consideration in June 2008.

Acquisition of the distribution business of Laboratoires Nephrotek SARL

In October, 2006, Trinity Biotech acquired the French distribution business of Laboratoires Nephrotek SARL (“Nephrotek”) for a total consideration of US$1,175,000, consisting of cash consideration of US$1,060,000 and acquisition expenses of US$115,000.

Acquisition of the immuno-technology business of Cortex Biochem Inc

In September 2007, the Group acquired the immuno-technology business of Cortex Biochem Inc (“Cortex”) for a total consideration of US$2,925,000, consisting of cash consideration of US$2,887,000 and acquisition expenses of US$38,000.

Acquisition of certain components of the distribution business of Sterilab Services UK

In October 2007, the Group acquired certain components of the distribution business of Sterilab Services UK (“Sterilab”), a distributor of Infectious Diseases products, for a total consideration of US$1,489,000, consisting of cash consideration of US$1,480,000 and acquisition expenses of US$9,000.

Principal Markets

The primary market for Trinity Biotech’s tests remains the US. During fiscal year 2008, the Group sold 50% (US$69.9 million) (2007: 48% or US$68.4 million) (2006: 51% or US$60.7 million) of product in the US. Sales to non-US (principally European and Asian/ African) countries represented 50% (US$70.2 million) for fiscal year 2008 (2007: 52% or US$75.2 million) (2006: 49% or US$57.9 million).

For a more comprehensive segmental analysis please refer to Item 5, “Results of Operations” and Item 18, note 2 to the consolidated financial statements.

Principal Products

Trinity Biotech develops, acquires, manufactures and markets a wide range of clinical in-vitro diagnostic products. The complete portfolio is divided into 2 product lines which are sold under the following established brand names:

Clinical Laboratory
		Infectious		Clinical
Haemostasis		Diseases		Chemistry		Point of Care
Trini™		Bartels®		Primus™		UniGold™
Biopool®		CAPTIA™		EZ™		Capillus™
Amax™		MarDx®				Recombigen®
Destiny™		MicroTrak™
		MarBlot®

These products are sold through our direct sales organisations in USA, UK, France and Germany and through our network of over 80 principal distributor partners in the rest of the world.

Clinical Laboratory

Trinity Biotech supplies the clinical laboratory segment of the market with a range of diagnostic tests and instrumentation which detect infectious diseases, sexually transmitted diseases, blood coagulation and autoimmune disorders. We also sell raw materials to the life sciences industry. Within the clinical laboratory product line, there are three product portfolios, namely haemostasis, infectious diseases and clinical chemistry.

Haemostasis

The haemostasis product line comprises test kits and instrumentation used in the detection of blood coagulation and clotting disorders. The market for blood clotting and bleeding tests continues to grow due to an aging population and improvement in healthcare systems. Trinity Biotech’s instrumentation and assays for haemostasis are recognized as being among the highest quality available. The comprehensive product offering is marketed globally to hospitals, clinical laboratories, commercial reference laboratories and research institutions.

During 2008 we commenced the rationalization of the three existing haemostasis brands of Amax, Biopool and Destiny under a single brand name called “Trini”. At the end of 2008 we launched the Destiny MAX instrument, which is specifically designed to service the high throughput segment of the market. This market segment is valued at approximately $500million per year. Prior to the launch of the Destiny MAX, this segment was not served by the existing Trinity Biotech instrument product range

Infectious Diseases

The infectious diseases product line is the most diverse within Trinity Biotech. The products are used to perform tests on patient samples and the results generated are reported to physicians to guide diagnosis for a broad range of infectious diseases. This product line has grown to include diagnostic kits for autoimmune diseases (e.g. lupus, celiac and rheumatoid arthritis), hormonal imbalances, sexually transmitted diseases (syphilis, chlamydia and herpes), intestinal infections, lung/bronchial infections, cardiovascular and a wide range of other diseases.

The vast majority of the infectious diseases product line is FDA cleared for sale in the USA and CE marked for sale in Europe. Products are sold in over 80 countries, with the focus on North America, Europe and Asia.

The main drivers of expansion and opportunity for the product line have been:

	1.		The increased Trinity Biotech instrumentation offering/portfolio through collaboration with Adaltis and Dynex and implementation of a system sell (i.e. combining instruments and reagents) strategy;
	2.		Focus on key accounts in affiliate markets;
	3.		Expansion of product portfolio to meet market demands; and
	4.		Increase in our geographical spread with new partnerships in major markets in Asia-Pacific.

Clinical Chemistry

The Trinity Biotech speciality clinical chemistry business includes reagent products such as ACE, Bile Acids, Lactate, Oxalate and Glucose 6 phosphate dehydrogenase (G6PDH) that are clearly differentiated in the marketplace. These products are suitable for both manual and automated testing and have proven performance in the diagnosis of many disease states from liver and kidney disease to G6PDH deficiency which is an indicator of haemolytic anaemia.

In 2005, Trinity Biotech acquired Primus Corporation, a leader in the field of in-vitro diagnostic testing for haemoglobin A1c used in the monitoring of diabetes. Primus manufactures a range of instrumentation using patented HPLC (high pressure liquid chromatography) technology. These products are the most accurate and precise methods available for detection and monitoring the patient status and overall diabetic control. The Primus product range also includes HPLC equipment specifically designed to detect haemoglobin variants which is important for screening populations for genetic abnormalities that can lead to conditions such as sickle cell anaemia. Primus sells the products to physicians’ offices and reference laboratories directly in the USA and via a distribution network in other countries. In addition, the group developed the GeneSys system for assay and detection of Haemoglobin variants in neo-natal screening and the system was FDA cleared and launched in the US in May 2008. Since the launch of the GeneSys system in the US, three state laboratory services had adopted the method for their state-wide screening programs for all neonates. Primus, as part of its research and development, continues to focus on developing a sub one minute assay for A1c determination.

Point of Care (POC)

Point of Care refers to diagnostic tests which are carried out in the presence of the patient. Trinity Biotech’s current range of POC tests principally test for the presence of HIV antibodies. The Group’s principal products are UniGold™ and Capillus™.

UniGold™ and Capillus™ products have been used for several years in voluntary counselling and testing centres (VCTs) in sub-Saharan Africa where they provide a cornerstone to early detection and treatment intervention. In the USA, the Centres for Disease Control (CDC) recommend the use of rapid tests to control the spread of HIV/AIDS. As part of this, UniGold HIV is used in public health facilities, hospitals and other outreach facilities. Trinity Biotech, through both UniGold™ and Capillus™, make a very significant contribution to the global effort to meet the challenge of HIV.

In November 2007, Trinity Biotech received FDA clearance on the TRIstat™ point-of-care system, which will be used in physician laboratories, diabetes clinics and health centres for the rapid determination of Haemoglobin A1c. The TRIstat system is undergoing the completion of CLIA (Clinical Laboratory Improvement Act) clinical trials for the definition of ease of use and these are expected to be completed in mid 2009.

Sales and Marketing

Trinity Biotech sells its product through its own direct sales-force in four countries: the United States, Germany, France and the United Kingdom. In the United States there are approximately 93 sales and marketing professionals responsible for the sale of the Trinity Biotech range of haemostasis reagents and instrumentation, clinical chemistry, point of care and infectious disease products. The Group also has sales forces of 23 in Germany, 11 in France and 16 in the UK. In addition to our direct sales operations, Trinity Biotech also operates in approximately 80 countries, through over 300 independent distributors and strategic partners.

Manufacturing and Raw Materials

Trinity Biotech uses a wide range of biological and non-biological raw materials. The primary raw materials required for Trinity Biotech’s test kits consist of antibodies, antigens, human plasma, latex beads, rabbit brain phospholipids, bovine source material, other reagents, glass fibre and packaging materials. The reagents used as raw materials have been acquired for the most part from third parties. Although Trinity Biotech is not dependent upon any one source for such raw materials, alternative sources of antibodies and antigens with the specificity and sensitivity desired by Trinity Biotech may not be available from time to time. Such unavailability could affect the supply of its products and its ability to meet orders for specific products, if such orders are obtained. Trinity Biotech’s growth may be limited by its ability to obtain or develop the necessary quantity of antibodies or antigens required for specific products. Thus, Trinity Biotech’s strategy is, whenever possible, to establish alternative sources of supply of antibodies.

Competition

The diagnostic industry is very competitive. There are many companies, both public and private, engaged in the sale of medical diagnostic products and diagnostics-related research and development, including a number of well-known pharmaceutical and chemical companies. Competition is based primarily on product reliability, customer service and price. The Group’s competition includes several large companies such as, but not limited to, Roche, Abbott, Johnson & Johnson, Siemens (from the combined acquisitions of Bayer Diagnostics, Dade-Behring and DPC), Beckman Coulter, Bio-Rad and Thermo Fisher.

Patents and Licences

Patents

Many of the Trinity Biotech’s tests are not protected by specific patents, due to the significant cost of putting patents in place for Trinity Biotech’s wide range of products. However, Trinity Biotech believes that substantially all of its tests are protected by proprietary know-how, manufacturing techniques and trade secrets.

From time-to-time, certain companies have asserted exclusive patent, copyright and other intellectual property rights to technologies that are important to the industry in which Trinity Biotech operates. In the event that any of such claims relate to its planned products, Trinity Biotech intends to evaluate such claims and, if appropriate, seek a licence to use the protected technology. There can be no assurance that Trinity Biotech would, firstly, be able to obtain licences to use such technology or, secondly, obtain such licences on satisfactory commercial terms. If Trinity Biotech or its suppliers are unable to obtain or maintain a licence to any such protected technology that might be used in Trinity Biotech’s products, Trinity Biotech could be prohibited from marketing such products. It could also incur substantial costs to redesign its products or to defend any legal action taken against it. If Trinity Biotech’s products should be found to infringe protected technology, Trinity Biotech could also be required to pay damages to the infringed party.

Licences

Trinity Biotech has entered into a number of key licensing arrangements including the following:

In 2005 Trinity Biotech obtained a license from the University of Texas for the use of Lyme antigen (Vlse), thus enabling the inclusion of this antigen in the Group’s Lyme diagnostic products. Trinity also entered a Biological Materials License Agreement with the Centre for Disease Control (CDC) in Atlanta, GA, USA for the rights to produce and sell the CDC developed HIV Incidence assay.

In 2002, Trinity Biotech obtained the Unipath and Carter Wallace lateral flow licences under agreement with Inverness Medical Innovations (“IMI”). In 2006, Trinity Biotech renewed its license agreement with Inverness Medical Innovations covering IMI’s most up to date broad portfolio of lateral flow patents, and expanded the field of use to include over the counter (“OTC”) for HIV products, thus ensuring Trinity Biotech’s freedom to operate in the lateral flow market with its UniGold technology.

On December 20, 1999 Trinity Biotech obtained a non-exclusive commercial licence from the National Institute of Health (“NIH”) in the US for NIH patents relating to the general method of producing HIV-1 in cell culture and methods of serological detection of antibodies to HIV-1.

Trinity Biotech has also entered into a number of licence/supply agreements for key raw materials used in the manufacture of its products.

Government Regulation

The preclinical and clinical testing, manufacture, labelling, distribution, and promotion of Trinity Biotech’s products are subject to extensive and rigorous government regulation in the United States and in other countries in which Trinity Biotech’s products are sought to be marketed. The process of obtaining regulatory clearance varies, depending on the product categorisation and the country, from merely notifying the authorities of intent to sell, to lengthy formal approval procedures which often require detailed laboratory and clinical testing and other costly and time-consuming processes. The main regulatory bodies which require extensive clinical testing are the Food and Drug Administration (“FDA”) in the US, the Irish Medicines Board (as the authority over Trinity Biotech in Europe) and Health Canada.

The process in each country varies considerably depending on the nature of the test, the perceived risk to the user and patient, the facility at which the test is to be used and other factors. As 50% of Trinity Biotech’s 2008 revenues were generated in the US and the US represents approximately 43% of the worldwide diagnostics market, an overview of FDA regulation has been included below.

FDA Regulation

Our products are medical devices subject to extensive regulation by the FDA under the Federal Food, Drug, and Cosmetic Act. The FDA’s regulations govern, among other things, the following activities: product development, testing, labeling, storage, pre-market clearance or approval, advertising and promotion and sales and distribution.

Access to US Market. Each medical device that Trinity Biotech may wish to commercially distribute in the US will require either pre-market notification (more commonly known as 510(k)) clearance or pre-market application (“PMA”) approval prior to commercial distribution. Devices intended for use in blood bank environments fall under even more stringent review and require a Blood Licence Application (“BLA”). Some low risk devices are exempted from these requirements. The FDA has introduced fees for the review of 510(k) and PMA applications. The fee for a PMA or BLA in 2008 is in the region of US$200,000.

510(k) Clearance Pathway. To obtain 510(k) clearance, Trinity Biotech must submit a pre-market notification demonstrating that the proposed device is substantially equivalent in intended use and in safety and effectiveness to a “predicate device” — either a previously cleared class I or II device or a class III preamendment device, for which the FDA has not called for PMA applications. The FDA’s 510(k) clearance pathway usually takes from 3 to 9 months, but it can take longer. After a device receives 510(k) clearance, any modification that could significantly affect its safety or effectiveness, or that would constitute a major change in its intended use, requires a new 510(k) clearance or could even require a PMA approval.

PMA Approval Pathway. A device that does not qualify for 510(k) clearance generally will be placed in class III and required to obtain PMA approval, which requires proof of the safety and effectiveness of the device to the FDA’s satisfaction. A PMA application must provide extensive preclinical and clinical trial data and also information about the device and its components regarding, among other things, device design, manufacturing and labeling. In addition, an advisory committee made up of clinicians and/or other appropriate experts is typically convened to evaluate the application and make recommendations to the FDA as to whether the device should be approved. It generally takes from one to three years but can take longer.

Although the FDA is not bound by the advisory panel decision, the panel’s recommendation is important to the FDA’s overall decision making process. The PMA approval pathway is more costly, lengthy and uncertain than the 510(k) clearance process. It generally takes from one to three years or even longer. After approval of a PMA, a new PMA or PMA supplement is required in the event of a modification to the device, its labeling or its manufacturing process. As noted above, the FDA has recently implemented substantial fees for the submission and review of PMA applications.

BLA approval pathway. BLA approval is required for some products intended for use in a blood bank environment, where the blood screened using these products may be administered to an individual following processing. This approval pathway involves even more stringent review of the product.

Clinical Studies. A clinical study is required to support a PMA application and is required for a 510(k) pre-market notification. Such studies generally require submission of an application for an Investigational Device Exemption (“IDE”) showing that it is safe to test the device in humans and that the testing protocol is scientifically sound.

Post-market Regulation

After the FDA permits a device to enter commercial distribution, numerous regulatory requirements apply, including the Quality System Regulation (“QSR”), which requires manufacturers to follow comprehensive testing, control, documentation and other quality assurance procedures during the manufacturing process; labeling regulations; the FDA’s general prohibition against promoting products for unapproved or “off-label” uses; and the Medical Device Reporting (“MDR”) regulation, which requires that manufacturers report to the FDA if their device may have caused or contributed to a death or serious injury or malfunctioned in a way that would likely cause or contribute to a death or serious injury if it were to recur.

Trinity Biotech is subject to inspection by the FDA to determine compliance with regulatory requirements. If the FDA finds any failure to comply, the agency can institute a wide variety of enforcement actions, ranging from a public warning letter to more severe sanctions such as fines, injunctions, and civil penalties; recall or seizure of products; the issuance of public notices or warnings; operating restrictions, partial suspension or total shutdown of production; refusing requests for 510(k) clearance or PMA approval of new products; withdrawing 510(k) clearance or PMA approvals already granted; and criminal prosecution.

Unanticipated changes in existing regulatory requirements or adoption of new requirements could have a material adverse effect on the Group. Any failure to comply with applicable QSR or other regulatory requirements could have a material adverse effect on the Group’s revenues, earnings and financial standing.

There can be no assurances that the Group will not be required to incur significant costs to comply with laws and regulations in the future or that laws or regulations will not have a material adverse effect upon the Group’s revenues, earnings and financial standing.

CLIA classification

Purchasers of Trinity Biotech’s clinical diagnostic products in the United States may be regulated under The Clinical Laboratory Improvements Amendments of 1988 (“CLIA”) and related federal and state regulations. CLIA is intended to ensure the quality and reliability of clinical laboratories in the United States by mandating specific standards in the areas of personnel qualifications, administration and participation in proficiency testing, patient test management, quality control, quality assurance and inspections. The regulations promulgated under CLIA established three levels of diagnostic tests (“waived”, “moderately complex” and “highly complex”) and the standards applicable to a clinical laboratory depend on the level of the tests it performs.

Export of products subject to 510(k) notification requirements, but not yet cleared to market, are permitted without FDA export approval, if statutory requirements are met. Unapproved products subject to PMA requirements can be exported to any country without prior FDA approval provided, among other things, they are not contrary to the laws of the destination country, they are manufactured in substantial compliance with the QSR, and have been granted valid marketing authorisation in Australia, Canada, Israel, Japan, New Zealand, Switzerland, South Africa or member countries of the European Union or of the European Economic Area (“EEA”). FDA approval must be obtained for exports of unapproved products subject to PMA requirements if these export conditions are not met.

There can be no assurance that Trinity Biotech will meet statutory requirements and/or receive required export approval on a timely basis, if at all, for the marketing of its products outside the United States.

Regulation outside the United States

Distribution of Trinity Biotech’s products outside of the United States is also subject to foreign regulation. Each country’s regulatory requirements for product approval and distribution are unique and may require the expenditure of substantial time, money, and effort. There can be no assurance that new laws or regulations will not have a material adverse effect on Trinity Biotech’s business, financial condition, and results of operation. The time required to obtain needed product approval by particular foreign governments may be longer or shorter than that required for FDA clearance or approval. There can be no assurance that Trinity Biotech will receive on a timely basis, if at all, any foreign government approval necessary for marketing its products.

Organisational Structure

Trinity Biotech plc and its subsidiaries (“the Group”) is a manufacturer of diagnostic test kits and instrumentation for sale and distribution worldwide. Trinity Biotech’s executive offices are located at Bray, Co. Wicklow, Ireland while its research and development, manufacturing and marketing activities are principally conducted at Trinity Biotech Manufacturing Limited, based in Bray, Co. Wicklow, Ireland, Trinity Biotech (UK Sales) Limited, based in Berkshire England, Trinity Biotech GmbH, based in Lemgo, Germany, and at Trinity Biotech (USA), MarDx Diagnostics Inc, Primus Corporation and Biopool US Inc. based in Jamestown, New York State, Carlsbad, California, Kansas City, Missouri and Berkeley Heights, New Jersey respectively. The Group’s distributor of raw materials for the life sciences industry, Fitzgerald Industries, is based in Concord, Massachusetts and Bray, Co. Wicklow, Ireland.

For a more comprehensive schedule of the subsidiary undertakings of the Group please refer to Item 18, note 31 to the consolidated financial statements.

Property, Plant and Equipment

Trinity Biotech has five manufacturing sites worldwide, three in the US (Jamestown, NY, Kansas City, MO and Carlsbad, CA), one in Bray, Co. Wicklow, Ireland and one in Lemgo, Germany. The US and Irish facilities are each FDA and ISO registered facilities. As part of its ongoing commitment to quality, Trinity Biotech was granted the latest ISO 9001: 2000 and ISO 13485: 2003 certification. This certificate was granted by the Underwriters Laboratory, an internationally recognised notified body. It serves as external verification that Trinity Biotech has an established an effective quality system in accordance with an internationally recognised standard. By having an established quality system there is a presumption that Trinity Biotech will consistently manufacture products in a controlled manner. To achieve this certification Trinity Biotech performed an extensive review of the existing quality system and implemented any additional regulatory requirements.

Trinity Biotech’s Irish manufacturing and research and development facilities consisting of approximately 45,000 square feet are located at IDA Business Park, Bray, Co. Wicklow. This facility is ISO 9001 approved and was purchased in December 1997. The facilities include offices, research and development laboratories, production laboratories, cold storage and drying rooms and warehouse space. Trinity Biotech spent US$4.2 million buying and fitting out the facility. In December 1999, the Group sold the facility for net proceeds of US$5.2 million and leased it back from the purchaser for 20 years. The current annual rent, which is reviewed every five years, is set at €479,000 (US$704,000).

Trinity Biotech has entered into a number of related party transactions with JRJ Investments (“JRJ”), a partnership owned by Mr O’Caoimh and Dr Walsh, directors of the Company, and directly with Mr O’Caoimh and Dr Walsh, to provide current and potential future needs for the Group’s manufacturing and research and development facilities, located at IDA Business Park, Bray, Co. Wicklow, Ireland. In July 2000, Trinity Biotech entered into a 20 year lease with JRJ for a 25,000 square foot warehouse adjacent to the existing facility at a current annual rent of €275,000 (US$404,000). In November 2002, Trinity Biotech entered into an agreement for a 25 year lease with JRJ, for 16,700 square feet of offices at an annual rent of €381,000 (US$560,000), payable from 2004. In December 2007, the Group entered into an agreement with Mr O’Caoimh and Dr Walsh pursuant to which the Group took a lease on an additional 43,860 square foot manufacturing facility in Bray, Ireland at a rate of €17.94 per square foot (including fit out) giving a total annual rent of €787,000 (US$1,157,000). See Item 7 — Major Shareholders and Related Party Transactions).

Trinity Biotech USA operates from a 24,000 square foot FDA and ISO 9001 approved facility in Jamestown, New York. The facility was purchased by Trinity Biotech USA in 1994. Additional warehousing space is also leased in upstate New York at an annual rental charge of US$128,000.

MarDx operates from two facilities in Carlsbad, California. The first facility comprises 21,500 square feet and is the subject of a five year lease, renewed in 2006, at an annual rental cost of US$259,000. The second adjacent facility comprises 14,500 square feet and is the subject of a five year lease, renewed in 2006, at an annual rental cost of US$174,000.

Trinity Biotech closed its facility located in Umea, Sweden during 2008 and thus the lease was not renewed at this facility during the year.

Trinity Biotech GmbH owns an ISO 9001 approved manufacturing and office facility of 78,000 square feet in Lemgo, Germany.

Trinity Biotech also has sales and marketing functions which operate from additional premises in the UK and France. Trinity Biotech leases two units in Berkshire, UK, at an annual rent of £91,000 (US$169,000). In 2006, Trinity Biotech entered into a lease for a 5,750 square foot premises in Paris, France, at an annual rent of €46,000 (US$68,000).

Additional office space is leased by the Group in Ireland, Kansas City, Missouri, Concord, Massachusetts and Berkeley Heights, New Jersey at an annual cost of US$170,000, US$100,000, US$109,000 and US$274,000, respectively.

Capital expenditures and divestitures

Trinity Biotech has no divestitures or significant capital expenditures in progress.

Item 5 Operating and Financial Review and Prospects

Operating Results

Trinity Biotech’s consolidated financial statements include the attributable results of Trinity Biotech plc and all its subsidiary undertakings collectively. This discussion covers the years ended December 31, 2008, December 31, 2007 and December 31, 2006, and should be read in conjunction with the consolidated financial statements and notes thereto appearing elsewhere in this Form 20-F. The financial statements have been prepared in accordance with IFRS both as issued by the International Accounting Standards Board (“IASB”) and as subsequently adopted by the European Union (“EU”) (together “IFRS”). Consolidated financial statements are required by Irish law to comply with IFRS as adopted by the EU which differ in certain respects from IFRS as issued by the IASB. These differences predominantly relate to the timing of adoption of new standards by the EU. However, as none of the differences are relevant in the context of Trinity Biotech, the consolidated financial statements for the periods presented comply with IFRS both as issued by the IASB and as adopted by the EU.

Trinity Biotech has availed of the exemption under SEC rules to prepare consolidated financial statements without a reconciliation to U.S. generally accepted accounting principles (“US GAAP”) as at and for the three year period ended December 31, 2008 as Trinity Biotech is a foreign private issuer and the financial statements have been prepared in accordance with IFRS both as issued by the International Accounting Standards Board (“IASB”) and as subsequently adopted by the European Union (“EU”).

Overview

Trinity Biotech develops, manufactures and markets diagnostic test kits used for the clinical laboratory and point of care (“POC”) segments of the diagnostic market. These test kits are used to detect infectious diseases, sexually transmitted diseases, blood disorders and autoimmune disorders. The Group markets over 500 different diagnostic products in approximately 80 countries. In addition, the Group manufactures its own and distributes third party haemostasis and infectious diseases diagnostic instrumentation. The Group, through its Fitzgerald operation, is also a significant provider of raw materials to the life sciences industry.

Factors affecting our results

The global diagnostics market is growing due to, among other reasons, the ageing population and the increasing demand for rapid tests in a clinical environment.

Our revenues are directly related to our ability to identify high potential products while they are still in development and to bring them to market quickly and effectively. Efficient and productive research and development is crucial in this environment as we, like our competitors, search for effective and cost-efficient solutions to diagnostic problems. The growth in new technology will almost certainly have a fundamental effect on the diagnostics industry as a whole and upon our future development.

The comparability of our financial results for the years ended December 31, 2008, 2007, 2006 and 2005 have been impacted by acquisitions made by the Group in three of the four years. There were no acquisitions made in 2008. In 2007, the Group acquired the immuno-technology assets of Cortex and certain components of the distribution business of Sterilab. In 2006, the Group acquired the Haemostasis business of bioMerieux and a direct selling entity in France. In 2005, Group acquired Primus Corporation and Research Diagnostics Inc (“RDI”).

For further information about the Group’s principal products, principal markets and competition please refer to Item 4, “Information on the Company”.

Critical Accounting Policies and Estimates

Our discussion and analysis of our financial condition and results of operations are based upon our consolidated financial statements, which have been prepared in accordance with IFRS. The preparation of these financial statements requires us to make estimates and judgements that affect the reported amount of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities.

On an on-going basis, we evaluate our estimates, including those related to intangible assets, contingencies and litigation. We base our estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgements about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

We believe the critical accounting policies described below reflect our more significant judgements and estimates used in the preparation of our consolidated financial statements.

Research and development expenditure

We write-off research and development expenditure as incurred, with the exception of expenditure on projects whose outcome has been assessed with reasonable certainty as to technical feasibility, commercial viability and recovery of costs through future revenues. Such expenditure is capitalised at cost within intangible assets and amortised over its expected useful life of 15 years, which commences when commercial production starts.

Factors which impact our judgement to capitalise certain research and development expenditure include the degree of regulatory approval for products and the results of any market research to determine the likely future commercial success of products being developed. We review these factors each year to determine whether our previous estimates as to feasibility, viability and recovery should be changed.

At December 31, 2008 the carrying value of capitalised development costs was US$5,338,000 (2007: US$19,150,000) (see Item 18, note 12 to the consolidated financial statements). The decrease in 2008 was attributable to an impairment loss of US$21,480,000 which arose from the Group’s annual impairment review (see Item 18, note 3 to the consolidated financial statements). This decrease was partially offset by development costs of US$8,426,000 being capitalised in 2008.

In December 2007, as part of an overall restructuring announced, the Group announced its intention to focus on a smaller number of R&D projects, with a particular focus on projects which will make the greatest contribution to the strategic growth and development of the Group. As part of the Group restructuring it was decided to terminate or suspend a number of projects. As a result, US$5,134,000 of development costs were written off for the year ended December 31, 2007.

Impairment of intangible assets and goodwill

Definite lived intangible assets are reviewed for indicators of impairment annually while goodwill and indefinite lived assets are tested for impairment annually, individually or at the cash generating unit level. Factors considered important, as part of an impairment review, include the following:

•

Significant underperformance relative to expected, historical or projected future operating results;

•

Significant changes in the manner of our use of the acquired assets or the strategy for our overall business;

•

Obsolescence of products;

•

Significant decline in our stock price for a sustained period; and

•

Our market capitalisation relative to net book value.

When we determine that the carrying value of intangibles, non-current assets and related goodwill may not be recoverable based upon the existence of one or more of the above indicators of impairment, any impairment is measured based on our estimates of projected net discounted cash flows expected to result from that asset, including eventual disposition. Our estimated impairment could prove insufficient if our analysis overestimated the cash flows or conditions change in the future.

The recoverable amount of goodwill and intangible assets contained in each of the Group’s CGU’s is determined based on the greater of the fair value less cost to sell and value in use calculations. The Group operates in one business segment and accordingly the key assumptions are similar for all CGU’s. The value in use calculations use cash flow projections based on the 2009 budget and projections for a further four years using a projected revenue growth rate of 3% and a cost growth rate of 3%. At the end of the five year forecast period, terminal values for each CGU, based on a long term growth rate are used in the value in use calculations. The cashflows and terminal values for the CGU’s are discounted using pre-tax discount rates which range from 8% to 41%.

Asset impairment charges totalling $85,793,000 have been recognised in the statement of operations in the year ended December 31, 2008. In accordance with IAS 36 the Group carries out an annual impairment review of the asset valuations. The Group carries out its impairment review on 31 December each year. In determining whether a potential asset impairment exists, the Group considered a range of internal and external factors. One such factor was the relationship between the Group’s market valuation and the book value of its net assets.

Trinity Biotech’s market capitalization in the recent equity market conditions was significantly below the book value of its net assets. In such circumstances given the accounting standard requirements, the Group decided to recognize at December 31, 2008 a non-cash impairment charge of US$81.3 million after tax. The impairment was recorded against goodwill and other intangible assets, property, plant and equipment and prepayments.

In the event that there was a variation of 10% in the assumed level of future growth in revenues, which would represent a reasonably likely range of outcomes, there would be the following impact on the level of the goodwill impairment loss recorded at December 31, 2008:

	•		An increase in impairment of US$5.3 million in the event of a 10% decrease in the growth in revenues.
	•		A decrease in impairment of US$5.0 million in the event of a 10% increase in the growth in revenues.

Similarly if there was a 10% variation in the discount rate used to calculate the potential goodwill impairment of the carrying values, which would represent a reasonably likely range of outcomes, there would be the following impact on the level of the goodwill impairment loss recorded at December 31, 2008:

	•		An increase in impairment of US$4.8 million in the event of a 10% increase in the discount rate.
	•		A decrease in impairment of US$4.7 million in the event of a 10% decrease in the discount rate

Allowance for slow-moving and obsolete inventory

We evaluate the realisability of our inventory on a case-by-case basis and make adjustments to our inventory provision based on our estimates of expected losses. We write off any inventory that is approaching its “use-by” date and for which no further re-processing can be performed. We also consider recent trends in revenues for various inventory items and instances where the realisable value of inventory is likely to be less than its carrying value. Given the allowance is calculated on the basis of the actual inventory on hand at the particular balance sheet date, there were no material changes in estimates made during 2006, 2007 or 2008 which would have an impact on the carrying values of inventory during those periods, except as discussed below.

At December 31, 2008 our allowance for slow moving and obsolete inventory was US$16,461,000 which represents approximately 28.0% of gross inventory value. This compares with US$18,234,000, or approximately 29.1% of gross inventory value, at December 31, 2007 (see Item 18, note 15 to the consolidated financial statements) and US$7,284,000, or approximately 13.8% of gross inventory value, at December 31, 2006. There has been no significant change in the estimated allowance for slow moving and obsolete inventory as a percentage of gross inventory between 2007 and 2008. In the case of finished inventory the size of this provision has been calculated based on the expected future sales of products which are being rationalised. In the case of raw materials and work in progress the size of the provision has been based on expected future production of these products. Management is satisfied that the assumptions made with respect to future sales and production levels of these products are reasonable to ensure the adequacy of this provision. The change in the estimated allowance for slow moving and obsolete inventory as a percentage of gross inventory in 2007 compared to 2006 was principally due a US$11,772,000 provision recorded in 2007 arising from the rationalisation of the Group’s haemostasis and infectious diseases product lines announced as part of the Group’s restructuring of its business in December 2007 (See Item 18, note 3 to the consolidated financial statements). In the event that the estimate of the provision required for slow moving and obsolete inventory was to increase or decrease by 2% of gross inventory, which would represent a reasonably likely range of outcomes, then a change in allowance of US$1,176,000 at December 31, 2008 (2007: US$1,253,000) (2006: US$1,057,000) would result.

Allowance for impairment of receivables

We make judgements as to our ability to collect outstanding receivables and where necessary make allowances for impairment. Such impairments are made based upon a specific review of all significant outstanding receivables. In determining the allowance, we analyse our historical collection experience and current economic trends. If the historical data we use to calculate the allowance for impairment of receivables does not reflect the future ability to collect outstanding receivables, additional allowances for impairment of receivables may be needed and the future results of operations could be materially affected. Given the specific manner in which the allowance is calculated, there were no material changes in estimates made during 2008 or 2007 which would have an impact on the carrying values of receivables in these periods. At December 31, 2008, the allowance was US$619,000 which represents approximately 0.4% of Group revenues. This compares with US$657,000 at December 31, 2007 which represents approximately 0.5% of Group revenues (see Item 18, note 16 to the consolidated financial statements) and to US$1,074,000 at December 31, 2006, which represents approximately 0.9% of Group revenues. In the event that this estimate was to increase or decrease by 0.4% of Group revenues, which would represent a reasonably likely range of outcomes, then a change in the allowance of US$561,000 at December 31, 2008 (2007: US$574,000) (2006: US$475,000) would result.

Accounting for income taxes

Significant judgement is required in determining our worldwide income tax expense provision. In the ordinary course of a global business, there are many transactions and calculations where the ultimate tax outcome is uncertain. Some of these uncertainties arise as a consequence of revenue sharing and cost reimbursement arrangements among related entities, the process of identifying items of revenue and expense that qualify for preferential tax treatment and segregation of foreign and domestic income and expense to avoid double taxation. In addition, we operate within multiple taxing jurisdictions and are subject to audits in these jurisdictions. These audits can involve complex issues that may require an extended period of time for resolution. Although we believe that our estimates are reasonable, no assurance can be given that the final tax outcome of these matters will not be different than that which is reflected in our historical income tax provisions and accruals. Such differences could have a material effect on our income tax provision and profit in the period in which such determination is made. Deferred tax assets and liabilities are determined using enacted or substantively enacted tax rates for the effects of net operating losses and temporary differences between the book and tax bases of assets and liabilities.

While we have considered future taxable income and ongoing prudent and feasible tax planning strategies in assessing whether deferred tax assets can be recognised, there is no assurance that these deferred tax assets may be realisable. The extent to which recognised deferred tax assets are not realisable could have a material adverse impact on our income tax provision and net income in the period in which such determination is made. In addition, we operate within multiple taxing jurisdictions and are subject to audits in these jurisdictions. These audits can involve complex issues that may require an extended period of time for resolution. In management’s opinion, adequate provisions for income taxes have been made.

Item 18, note 13 to the consolidated financial statements outlines the basis for the deferred tax assets and liabilities and includes details of the unrecognized deferred tax assets at year end. The Group does not recognize deferred tax assets arising on unused tax losses except to the extent that there are sufficient taxable temporary differences relating to the same taxation authority and the same taxable entity which will result in taxable amounts against which the unused tax losses can be utilised before they expire.

Impact of Recently Issued Accounting Pronouncements

The consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (“IFRS”) both as issued by the International Accounting Standards Board (“IASB”) and as subsequently adopted by the European Union (“EU”). The IFRS applied are those effective for accounting periods beginning on or after 1 January 2008. Consolidated financial statements are required by Irish law to comply with IFRS as adopted by the EU which differ in certain respects from IFRS as issued by the IASB. These differences predominantly relate to the timing of adoption of new standards by the EU. However, as none of the differences are relevant in the context of Trinity Biotech, the consolidated financial statements for the periods presented comply with IFRS both as issued by the IASB and as adopted by the EU. During 2007, the IASB and the International Financial Reporting Interpretations Committee (“IFRIC”) issued additional standards, interpretations and amendments to existing standards which are effective for periods starting after the date of these financial statements. A list of these additional standards, interpretations and amendments, and the potential impact on the financial statements of the Group, is outlined in Item 18, note 1(z).

Results of Operations

Year ended December 31, 2008 compared to the year ended December 31, 2007

The following compares our results in the year ended December 31, 2008 to those of the year ended December 31, 2007 under IFRS. Our analysis is divided as follows:

	1.		Overview
	2.		Revenues
	3.		Operating Expenses
	4.		Loss for the year

1. Overview

In 2008, Trinity Biotech recognised an impairment charge of US$85.8 million in the statement of operations relating to the carrying value of goodwill and other intangible assets, property, plant and equipment and prepayments. This non-cash impairment charge, which was triggered by a comparison of our market capitalisation versus the book value of our net assets as required under IFRS accounting standards, contributed to the company recording a loss for the year of US$77.8 million.

Additionally in December 2008, we recognised restructuring expenses of US$2.1 million. This is made up of US$1.5 million in relation to the resignation of the Company’s former Chief Executive and US$0.6 million in relation to costs associated with the implementation of headcount reductions as part of a cost cutting programme announced in December 2008.

Before the impact of these impairment and restructuring charges the Company would have recorded a profit before tax of US$6.2 million.

The following table sets forth a breakdown of impairment charges and restructuring expenses incurred in the current financial year:

		Year ended December 31, 2008
		Impairment				Restructuring				Total
		US$’000				US$’000				US$’000
Selling, general & administration expenses
Impairment of property, plant and equipment (Item 18, note 11)			13,095				—				13,095
Impairment of goodwill and other intangible assets (Item 18, note 12)			71,684				—				71,684
Impairment of prepayments (Item 18, note 16)			1,014				—				1,014
Employee termination payments			—				589				589
Director’s compensation for loss of office and share option expense			—				1,465				1,465
Other restructuring expenses			—				35				35
Total impairment loss and restructuring expenses before tax			85,793				2,089				87,882
Income tax impact of impairment loss and restructuring expenses (Item 18, note 9)			(4,536	)			(215	)			(4,751	)
Total impairment loss and restructuring expenses after tax			81,257				1,874				83,131

For the year ended December 31, 2007, the impact of restructuring expenses and a goodwill impairment was a charge to the statement of operations after tax of US$38.4 million.

Group revenues decreased by US$3.5 million in 2008, representing a decline of 2%. This was mainly attributable to lower Point of Care revenues. During 2008 revenues from HIV products grew in the USA but this was more than offset by lower revenue for HIV tests in Africa. The latter was due to particularly strong sales in 2007 with the result that the return to more normal sales levels resulted in a decline in overall Point of Care revenues.

The gross margin for the year ended December 31, 2008 was approximately 45%. In 2007, excluding the impact of US$12.7 million restructuring expenses and write-offs, the gross margin would have been 47%. The lower gross margin in 2008 reflects the impact of lower sales of Uni-Gold™ HIV products, as these products typically command higher margins. Gross margins were also adversely impacted by the weaker US dollar during 2008 compared to 2007.

The operating loss was US$79.6 million for the year ended December 31, 2008 which compares to an operating loss of US$29.4 million for the year ended December 31, 2007. Excluding the impact of impairment charges and restructuring expenses in both 2007 and 2008, the operating profit would be $8.3 million in 2008, compared to US$10.6 million in 2007, a decline of 22%. This decline is mainly attributable to the significant decrease in revenue from higher margin HIV tests in Africa and the adverse change in the euro to US dollar exchange rate. The Group succeeded in significantly offsetting these negative effects by implementing cost reduction measures and by driving revenue growth in its other product lines, principally infectious disease and clinical chemistry.

The loss for the year ended December 31, 2008 was US$77.8 million which compares to a loss for the year ended December 31, 2007 of US$35.4 million. Excluding the after tax impact of the restructuring expenses and goodwill impairment, the profit for 2007 would have been US$3.0 million. Similarly, if the after tax impact of the restructuring expenses and impairment charges is excluded from the 2008 results, the profit for the year would be US$5.3 million. Despite a loss before tax being recorded for the year in ended December 31, 2007, we recorded a tax charge of US$3.3 million due to the derecognition of deferred tax assets of US$3.8 million in relation to unused tax losses.

In December 2008, the Group’s new haemostasis analyzer, Destiny Max, was launched in markets outside the USA. Destiny Max represents the largest development project ever undertaken by the Group. Its launch represents a major success for the Group. Notwithstanding that the launch came close to the end of the year, the Group was proud to announce it had achieved the first sales of instruments in Japan, Italy and Ireland in 2008. The submission to the FDA for approval of Destiny Max was filed in December 2008. The Group expects to launch Destiny Max in the USA towards the end of quarter 2, 2009.

2. Revenues

The Group’s revenues consist of the sale of diagnostic kits and related instrumentation and the sale of raw materials to the life sciences industry. Revenues from the sale of the above products are generally recognised on the basis of shipment to customers. The Group ships its products on a variety of freight terms, including ex-works, CIF (carriage including freight) and FOB (free on board), depending on the specific terms agreed with customers. In cases where the Group ships on terms other than ex-works, the Group does not recognise the revenue until its obligations have been fulfilled in accordance with the shipping terms.

No right of return exists in relation to product sales except in instances where demonstrable product defects occur. The Group has defined procedures for dealing with customer complaints associated with such product defects as they arise.

The Group also derives a portion of its revenues from leasing infectious diseases and haemostasis diagnostic instruments to customers. In cases where the risks and rewards of ownership of the instrument passes to the customer, the fair value of the instrument is recognised at the time of sale matched by the related cost of sale. In the case of operating leases of instruments which typically involve commitments by the customer to pay a fee per test run on the instruments, revenue is recognised on the basis of customer usage of the instruments. In certain markets, the Group also earns revenue from servicing infectious diseases and haemostasis instrumentation located at customer premises.

Revenues by Product Line

Trinity Biotech’s revenues for the year ended December 31, 2008 were US$140,139,000 compared to revenues of US$143,617,000 for the year ended December 31, 2007, which represents a decrease of US$3,478,000 or 2.4%. The following table sets forth selected sales data for each of the periods indicated.

		Year ended December 31,
		2008				2007
		US$’000				US$’000				% Change
Revenues
Clinical Laboratory			121,143				119,113				2	%
Point of Care			18,996				24,504				(23	%)
Total			140,139				143,617				(2	%)

Clinical Laboratory

In 2008 Clinical Laboratory revenues increased by US$2,030,000 which equates to a growth rate of 2%. The growth was driven by strong demand for infectious disease tests and clinical chemistry tests, which increased by 8% and 9% respectively. These increases were largely offset by a 5% decline in sales of haemostasis products.

Sales of infectious diseases products have increased by US$3,401,000. The 8% increase in 2008 is principally due to higher sales of Lyme kits in the US market, a full year’s trading for the Cortex Biochem and Sterilab Services businesses which were acquired in September and October 2007 respectively, and lastly an increase in sales of antibodies by our Fitzgerald business. The Fitzgerald revenues were weakened in 2007 by a poor flu season in that year and 2008 saw a recovery to a more typical level.

Clinical chemistry revenues grew by 9% or US$1,567,000 mainly due to increased sales of diabetes tests in US, Europe and Asia. The demand for in vitro diagnostic tests for haemoglobin A1c and haemoglobin variants continues to grow as diabetes becomes more prevalent.

The decrease in haemostasis revenues of US$2,938,000 was mainly caused by a decrease in customers in the installed base of MDA instruments in the US and UK and, to a lesser extent, a reduction in the Amax instrument base in Germany. The MDA and Amax 400 instruments are large scale instruments in the late stage of their life cycles. The newly developed Destiny Max instrument, which was launched in all markets except US in December 2008, is the natural replacement for the MDA and Amax 400 instruments. Its introduction to our product range will help to curtail customer losses in that end of the market. Increased haemostasis revenues through our distributor network in Western Europe and Latin America partially offset the effect of the lower revenue in US, UK and Germany.

Point of Care

Our principal Point of Care products are Unigold™ and Capillus™ and they test for the presence of HIV antibodies. 2007 was an exceptionally strong year for sales of HIV tests in Africa. Revenues from HIV sales in Africa reverted to more normal levels in 2008 and were 16% higher than in 2006, a more comparable year. Meanwhile in the important US market, Point of Care revenue continues to show strong growth with an increase this year of 18% compared to 2007.

Revenues by Geographical Region

The following table sets forth selected sales data, analysed by geographic region, based on location of customer:

		Year ended December 31,
		2008				2007
		US$’000				US$’000				% Change
Revenues
Americas			69,915				68,481				2	%
Europe			43,481				43,631				0	%
Asia/Africa			26,743				31,505				(15	%)
Total			140,139				143,617				(2	%)

The 2% increase in the Americas amounting to US$1,434,000 is primarily attributable to the growth in the sales of the Unigold rapid HIV test, higher sales of infectious disease tests mainly Lyme’s disease and higher revenues relating to diabetes tests. These increases were largely offset by a reduction in haemostasis revenue arising from an erosion of the MDA customer base.

European revenues were consistent with the previous year. A decrease in revenue in the German market was offset by increased sales to distributors in other European markets mainly relating to haemostasis products.

A US$4,762,000 decrease in Asia/Africa revenues is primarily due to lower sales of Trinity’s Unigold rapid HIV tests in Africa, partly offset by higher haemostasis revenues in the region.

For further information about the Group’s principal products, principal markets and competition please refer to Item 4, “Information on the Company”.

3. Operating Expenses

The following table sets forth the Group’s operating expenses.

		Year ended December 31,
		2008				2007
		US$’000				US$’000				% Change
Revenues			140,139				143,617				(2	%)
Cost of sales			(77,645	)			(75,643	)			3	%
Cost of sales — restructuring expenses			—				(953	)			(100	%)
Cost of sales — inventory write off/ provision			—				(11,772	)			(100	%)
Gross profit			62,494				55,249				13	%
Other operating income			1,173				413				184	%
Research & development			(7,544	)			(6,802	)			11	%
Research & development — restructuring expenses			—				(6,907	)			(100	%)
SG&A expenses			(47,816	)			(51,010	)			(6	%)
SG&A expenses — impairment charges and restructuring expenses			(87,882	)			(20,315	)			333	%
Operating (loss)			(79,575	)			(29,372	)			171	%

Cost of sales

Total cost of sales decreased by US$10,723,000 from US$88,368,000 for the year ended December 31, 2007 to US$77,645,000, for the year ended December 31, 2008, a decrease of 12%. The decrease is primarily attributable to the restructuring expenses of US$12,725,000 recognised in cost of sales in 2007, partially offset by an increase in cost of sales (excluding once-off items) of $2,002,000.

Included in cost of sales for the year ended December 31, 2007 was US$11,772,000 for an inventory write off and US$953,000 for restructuring expenses. These charges resulted from a decision taken by the Board of Directors of Trinity Biotech during 2007 to restructure the business. Under the restructuring plan, the company undertook to reduce the number of products and instruments within the two key product lines of haemostasis and infectious diseases. As a result, the Group recognised US$11,772,000 for inventory written off relating to those haemostasis and infectious diseases products and instruments being rationalised for the year ended December 31, 2007. As part of the restructuring, the Group also recognised an additional amount of US$953,000 in cost of sales for termination payments for the year ended December 31, 2007.

Excluding the inventory write off and restructuring expenses incurred, the cost of sales in 2007 would have been $75,643,000, which is 3% lower than the comparable figure in 2008. The two main reasons for the increase in cost of sales in 2008 were the adverse change in the euro exchange rate compared to the previous financial year and the change in the sales mix. A significant proportion of the Group’s Cost of Sales is denominated in Euro. During 2008 the average Euro versus US Dollar exchange rate was 8% higher than in 2007 and this had the effect of increasing Cost of Sales. The sales mix changed principally because of the decline in revenues from HIV tests in Africa with an increase in revenues for Infectious Disease and Clinical Chemistry revenues.

Gross margin

The gross margin of 45% in 2008 compares to a gross margin of 38% in 2007. The increase in gross margin in 2008 is primarily attributable to the impact of the restructuring expenses and the inventory write off recorded in 2007. Excluding the impact of the US$12.7 million restructuring expenses and inventory write off, the gross margin in 2007 would have been 47%, which is slightly higher than the 2008 gross margin. The main reasons for this reduction are the impact of lower sales of Uni-Gold HIV products, as these products achieve higher margins, and secondly the gross margin was adversely impacted by the weaker US dollar during 2008 compared to 2007.

Research and development expenses

Research and development (“R&D”) expenditure reduced from US$13,709,000 in 2007 to US$7,544,000 in 2008. In 2007, R&D restructuring expenses of US$6,907,000 were incurred and this is largely the reason for the higher expenditure in 2007. The restructuring expenses in 2007 consisted of US$5,573,000 of development and licence costs written off, US$1,094,000 written off the carrying value of technology intangible assets acquired from BioMerieux and lastly termination payments amounting to US$240,000.

Research and development expenditure, excluding the impact of last year’s restructuring expenses, increased by $742,000 compared to 2007. The main reason for the increase was the change in the US Dollar to Euro exchange rate, which caused research and development costs incurred in our Irish and German operations to increase by about 8%. The other reason for the increase in R&D expenditure was the increase in average R&D headcount from 51 in 2007 to 57 in 2008. For a consideration of the Company’s various R&D projects see “Research and Products under Development” in Item 5 below.

Selling, General & Administrative expenses (SG&A)

Total SG&A expenses increased by US$64,373,000 from US$71,325,000 for the year ended December 31, 2007 to US135,698,000 for the year ended December 31, 2008. The increase is primarily due to the higher impairment charges incurred in 2008, which were partially offset by a reduction in SG&A expenses excluding share-based payments and amortisation. The following table outlines the breakdown of SG&A expenses in 2008 compared to 2007.

		Year ended December 31,								Increase/
		2008				2007				(decrease)
		US$’000				US$’000				US$’000				% Change
SG&A (excl. share-based payments and amortisation)			43,269				46,368				(3,099	)			(7	%)
SG&A — impairment charges and restructuring expenses			87,882				20,315				67,567				333	%
Share-based payments			931				1,224				(293	)			(24	%)
Amortisation			3,616				3,418				198				6	%
Total			135,698				71,325				64,373				90	%

Selling General & Administrative Expenditure (excluding share-based payments and amortisation)

SG&A expenses excluding share-based payments and amortisation decreased from US$46,368,000 for the year ended December 31, 2007 to US$43,269,000 for the year ended December 31, 2008, which represents a decrease of 7%. The decrease would have been greater than 7% but for an adverse change in the euro exchange rate compared to the previous financial year. A significant proportion of the Group’s SG&A expenses are denominated in euro. During 2008 the average euro versus US dollar exchange rate was 8% higher compared to 2007 and this had the effect of increasing SG&A expenses by about US$1,800,000.

Despite the adverse change in the euro exchange rate, there was a decrease of US$3,099,000 in SG&A expenses (excluding restructuring expenses, goodwill impairment, share-based payments and amortisation) in 2008 due to cost reductions as follows:

	•		a reorganisation of our sales force mainly in the US was announced in December 2007. As a result, a headcount reduction was implemented which delivered payroll cost savings of about US$1,000,000 in 2008. Other headcount reductions in management and administrative functions reduced SG&A payroll costs by a further US$900,000.
	•		through cost control the Group succeeded in reducing its selling overheads and administrative expenses by about US$2,000,000 in 2008. Further cost cutting measures were announced by the Board in December 2008 but due to timing these measures did not have a significant impact on the 2008 figures. The full benefit of these cost cutting measures, which mainly comprise further headcount reductions in sales, marketing and administration, will be seen in 2009.
	•		a reduction in professional fees including audit fees of approximately US$700,000.
	•		the closure of the plant in Umea, Sweden during 2008 reduced administrative expenses by about US$180,000.
	•		the US dollar strengthened versus Sterling in the second half of 2008 and this had the effect of reducing the reported SG&A costs for our UK selling entity by just over $100,000.

SG&A impairment charges and restructuring expenses

An impairment charge of US$85,793,000 was recorded in year ended December 31, 2008 arising out of the annual impairment review of the asset valuations included on the balance sheet. The Company has recognized an impairment loss against goodwill and other intangible assets (US$71,684,000), property, plant and equipment (US$13,095,000) and prepayments (US$1,014,000). By its nature this adjustment has no cash implications for the Group and does not impact on debt covenants.

Restructuring expenses of US$2,089,000 were recorded in SG&A in year ended December 31, 2008. This is made up of US$1,465,000 arising from the resignation of the Company’s former Chief Executive and US$589,000 in relation to costs associated with the implementation of headcount reductions as part of the cost cutting measures announced in December 2008. Other restructuring costs amounted to US$35,000. The restructuring, which consists of a combination of head count and overhead reductions, will generate a saving of approximately US$6 million in 2009. The cash flow benefit will also be approximately US$6 million in 2009. In total the Company’s headcount has been reduced by 70 full-time employees which equates to a reduction of approximately 10% of the overall work force.

In the 2007 statement of operations, a goodwill impairment loss of US$19,156,000 was recognised. Additionally, restructuring expenses of US$1,159,000 were included in SG&A in 2007 primarily relating to termination payments (US$842,000) and onerous lease obligations resulting from the closure of the Swedish manufacturing operation (US$116,000).

Share-based payments

The expense represents the value of share options granted to directors and employees which is charged to the statement of operations over the vesting period of the underlying options. The Group has used a trinomial valuation model for the purposes of valuing these share options with the key inputs to the model being the expected volatility over the life of the options, the expected life of the option and the risk free rate.

The Group recorded a total share-based payments charge of US$1,166,000 (2007: US$1,403,000) in 2008. The total charge is shown in the following expense headings in the statement of operations: US$51,000 (2007: US$71,000) was charged against cost of sales, US$48,000 (2007: US$108,000) was charged against research and development expenses and US$886,000 (2007: US$1,224,000) was charged against selling, general and administrative expenses. A further share option charge of US$181,000 has been included within the selling, general and administrative expenses restructuring charge. This amount is related to the share option cost associated with the resignation of the former Chief Executive Officer, Mr Brendan Farrell.

The decrease of US$237,000 in the total share-based payments expense is primarily because share option holders ended their employment with the company and thereby forfeited their share options. For further details refer to Item 18, note 19 to the consolidated financial statements.

Amortisation

The increase in amortisation of US$198,000 from US$3,418,000 to US$3,616,000 is primarily due to the full year impact of the amortisation charge relating to the Group’s acquisitions in 2007. There was a full year’s amortisation charge in 2008 for the intangible assets valued on the acquisition of the immuno-technology business of Cortex Biochem Inc. This business was acquired in September 2007 and the amortisation expense was higher in 2008 by an amount of US$106,000 due to the full year effect. Similarly, there was an increase of US$82,000 in amortisation for the intangible assets valued on the acquisition of the Sterilab Services distribution business which was acquired in October 2007. The remaining increase of US$10,000 is attributable to the amortisation of software assets and capitalised development projects costs, which are being amortised over their expected lives.

4. Loss for the year

The following table sets forth selected statement of operations data for each of the periods indicated.

		Year ended December 31,
		2008				2007
		US$’000				US$’000				% Change
Operating (loss)			(79,575	)			(29,372	)			171	%
Net financing costs			(2,095	)			(2,691	)			(22	%)
(Loss) before tax			(81,670	)			(32,063	)			155	%
Income tax credit/(expense)			3,892				(3,309	)			(218	%)
(Loss) of the year			(77,778	)			(35,372	)			120	%

Net Financing Costs

Net financing costs decreased by US$596,000 from US$2,691,000 in 2007 to US$2,095,000 in 2008. The decrease is primarily due to a combination of lower interest bearing loan balances outstanding and lower interest rates. The interest bearing loan balances at December 31, 2007 were US$42,133,000 compared to US$36,121,000 at December 31, 2008. The interest rate for the Group’s borrowings is based on LIBOR rates, which reduced significantly during 2008. The deposit interest earned during the year reduced from US$457,000 to US$65,000 due to lower cash balances and lower interest rates.

Taxation

The Group recorded a net tax credit of US$3,892,000 for the year ended December 31, 2008. The net deferred tax credit is primarily attributable to the impairment of goodwill and other intangible assets, property, plant and equipment. For further details on the impairment please refer to Item 18, note 3 and for further details on the Group’s tax charge please refer to Item 18, note 9 and note 13 to the consolidated financial statements.

(Loss) for the year

The loss for the year amounted to US$77,778,000 which represents an increase of US$42,406,000 when compared to the loss for the year of US$35,372,000 in 2007. Excluding the after tax impact of the restructuring expenses and impairment loss of US$83,131,000, the profit for the year would have been US$5,353,000. This compares to a profit for the year ended December 31, 2007 of US$2,991,000, excluding the after tax impact of the inventory write off, restructuring expenses and goodwill impairment of US$38,363,000. A decrease in net financing costs and a decrease in the income tax expense resulted in this increase in profits after tax excluding once off items.

Year ended December 31, 2007 compared to the year ended December 31, 2006

The following compares our results in the year ended December 31, 2007 to those of the year ended December 31, 2006 under IFRS. Our analysis is divided as follows:

	1.		Overview
	2.		Revenues
	3.		Operating Expenses
	4.		Retained Profit

1. Overview

The financial results for the year ended December 31, 2007 are impacted by the announcement made by Trinity Biotech in December 2007 to restructure its business. The restructuring included the following elements:

	•		the rationalisation of the Haemostasis and Infectious Diseases reagent and instrumentation product lines resulting in an inventory write off of US$11,772,000;
	•		the closure of the Group’s operation in Sweden, resulting in an inventory write off of US$147,000 (included in the total inventory write off in 2007 of US$11,772,000), a write down of property, plant & equipment of US$42,000, termination payments of US$332,000 and accrued lease obligations of US$116,000;
	•		the streamlining of the Group’s development activities which resulted in a write off of capitalised development and license costs of US$6,667,000 and,
	•		the reorganisation of the US sales force coupled with a redundancy programme to reduce headcount across the Group resulting in additional termination payments of US$1,703,000 (exclusive of termination payments made as part of the closure of the Swedish manufacturing operation of US$332,000). Total termination payments for the year amounted to US$2,035,000 of which US$2,016,000 has been accrued at December 31, 2007.

In addition, in accordance with IAS 36, Impairment of Assets, the Group also recognised an impairment provision of US$19,156,000 against goodwill. A further US$1,094,000 was written off technology intangible assets acquired from BioMerieux and this charge is included in research and development expenses as part of the total amount written off for capitalised development and license costs of US$6,667,000. Please refer to Item 18, note 3 to the consolidated financial statements for a more comprehensive discussion on the restructuring in 2007.

The impact of this restructuring and goodwill impairment is a charge to the statement of operations after tax of US$38,363,000 for the year ended December 31, 2007.

		Restructuring				Impairment				Total
		US$’000				US$’000				US$’000
Cost of sales
Inventory provision			11,772				—				11,772
Termination payments			953				—				953
			12,725				—				12,725
Research & development
Write-off of capitalised development and license costs			6,667				—				6,667
Termination payments			240				—				240
			6,907				—				6,907
Selling, general & administration expenses
Impairment of goodwill			—				19,156				19,156
Termination payments			842				—				842
Lease obligation provision			116				—				116
Other			201				—				201
			1,159				19,156				20,315
Total restructuring expenses and goodwill impairment before tax			20,791				19,156				39,947
Income tax impact of restructuring expenses and goodwill impairment			(1,584	)			—				(1,584	)
Total restructuring expenses and goodwill impairment after tax			19,207				19,156				38,363

In 2007, Group revenues increased by US$24.9 million, which represented a growth rate of 21%. In 2007 haemostasis continued to be the Group’s most significant product line representing 42% of product revenues. Haemostasis revenues increased by 31% in 2007, primarily due to the full year impact of the acquisition of the haemostasis business of BioMerieux in 2006. The remaining revenues came from the infectious diseases (29%), point of care (12%) and clinical chemistry (17%) product lines. Geographically, 48% of sales were generated in the Americas, 30% in Europe and 22% in the rest of the world.

The gross margin for the year ended December 31, 2007 was 38%. In 2007, as part of the overall restructuring expense, the Group recognised US$11,772,000 in cost of sales for inventory written off relating to those haemostasis and infectious diseases products and instruments being rationalised for the year ended December 31, 2007. The Group also recognised an additional charge of US$953,000 in cost of sales for termination payments for the year ended December 31, 2007. Excluding the impact of the US$12.7 million for the restructuring expenses, the gross margin would be 47% which is broadly consistent with the gross margin for the year ended December 31, 2006, excluding the impact of the inventory provision of US$5.8 million, of 48%.

The operating loss was US$29,372,000 for the year ended December 31, 2007 which compares to an operating profit of US$1,941,000 for the year ended December 31, 2006. The movement is primarily due to the impact of the US$39.9 million for restructuring expenses and goodwill impairment. Excluding the impact of the restructuring expenses and goodwill impairment in 2007 and the inventory provision of US$5.8 million in 2006, the operating profit increased by 37% primarily due to increased sales, of which US$13,523,000 relates to the impact of acquisitions made in 2007 and 2006 and US$11,420,000 is as a result of organic growth. However, the impact of increased sales, which grew by 21%, was offset by increased selling, general & administrative (SG&A) and research and development (R&D) costs. This resulted in an operating margin, excluding the impact of the restructuring expenses and goodwill impairment, of 7%. In 2006, the operating margin, excluding the impact of the US$5.8 million inventory provision was also 7%.

The loss for the year ended December 31, 2007 was US$35,372,000 which compares to a profit for the year ended December 31, 2006 of US$3,276,000. Excluding the after tax impact of the restructuring expenses and goodwill impairment, the profit for the year would be US$2,991,000, which represents a decrease in profit for the year of 9% (compared to an increase in operating profit of 37%). Although profit before tax increased in 2007, the profit after tax was lower than 2006. This is due to the impact of the derecognition of deferred tax assets of US$3,780,000 in relation to unused tax losses and higher net interest financing costs in 2007.

2. Revenues

The Group’s revenues consist of the sale of diagnostic kits and related instrumentation and the sale of raw materials to the life sciences industry. Revenues on the sale of the above products are generally recognised on the basis of shipment to customers. The Group ships its products on a variety of freight terms, including ex-works, CIF (carriage including freight) and FOB (free on board), depending on the specific terms agreed with customers. In cases where the Group ships on terms other than ex-works, the Group does not recognise the revenue until its obligations have been fulfilled in accordance with the shipping terms.

No right of return exists in relation to product sales except in instances where demonstrable product defects occur. The Group has defined procedures for dealing with customer complaints associated with such product defects as they arise.

The Group also derives a portion of its revenues from leasing infectious diseases and haemostasis diagnostic instruments to customers. In cases where the risks and rewards of ownership of the instrument passes to the customer, the fair value of the instrument is recognised at the time of sale matched by the related cost of sale. In the case of operating leases of instruments which typically involve commitments by the customer to pay a fee per test run on the instruments, revenue is recognised on the basis of customer usage of the instruments. In certain markets, the Group also earns revenue from servicing infectious diseases and haemostasis instrumentation located at customer premises.

Revenues by Product Line

The following table sets forth selected sales data for each of the periods indicated.

		Year ended December 31,
		2007				2006
		US$’000				US$’000				% Change
Revenues
Infectious diseases			41,293				42,051				(2	%)
Haemostasis			60,759				46,476				31	%
Clinical Chemistry			17,061				14,868				15	%
Point of Care			24,504				15,279				60	%
Total			143,617				118,674				21	%

Trinity Biotech’s consolidated revenues for the year ended December 31, 2007 were US$143,617,000 compared to consolidated revenues of US$118,674,000 for the year ended December 31, 2006, which represents an overall increase of US$24,943,000.

Infectious Diseases Revenues

Sales of infectious diseases products have decreased by US$758,000. This decrease is principally due to a reduction in sales of flu anti-bodies through our Fitzgerald business due to a poor flu season principally attributable to mild winter conditions in Fitzgerald’s US and Asian markets. This was partially offset by improved Lyme sales in the US, increased sales in the Group’s direct selling operation in France during its first full year of trading and the impact of the acquisition of Sterilab in the United Kingdom.

Haemostasis Revenues

The net increase in haemostasis revenues of US$14,283,000 is principally attributable to increased sales arising from the full year impact of the acquisition of the haemostasis business of BioMerieux in 2006 (US$12,224,000). The remaining increase is attributable to the 8% growth in the Group’s Amax and Biopool product ranges (US$2,059,000).

Clinical Chemistry Revenues

The increase in clinical chemistry revenues of US$2,193,000 is principally due to international sales of the Primus products. Primus specialises in the field of in vitro diagnostic testing for haemoglobin A1c and haemoglobin variants (used in the detection and monitoring of diabetes patients).

Point of Care

Sales of Point of Care products have increased by US$9,225,000 which is primarily attributable to increased sales of Trinity’s Unigold rapid HIV test in Africa and the US.

Revenues by Geographical Region

The following table sets forth selected sales data, analysed by geographic region, based on location of customer:

		Year ended December 31,
		2007				2006
		US$’000				US$’000				% Change
Revenues
Americas			68,481				60,748				13	%
Europe			43,631				34,452				27	%
Asia/Africa			31,505				23,474				34	%
Total			143,617				118,674				21	%

The US$7,733,000 increase in the Americas is primarily attributable to the following factors:

	•		An increase in haemostasis sales including the full year impact of bioMerieux haemostasis products which was acquired in June 2006;
	•		the growth in the sales of Trinity’s Unigold rapid HIV test.

The US$9,179,000 increase in Europe is primarily due to increased sales arising from the full year impact of the acquisition of BioMerieux and sales of Infectious Diseases products in France.

The US$8,031,000 increase in Asia/Africa is primarily due to increased sales of Trinity’s Unigold rapid HIV tests in Africa.

For further information about the Group’s principal products, principal markets and competition please refer to Item 4, “Information on the Company”.

3. Operating Expenses

The following table sets forth the Group’s operating expenses.

		Year ended December 31,
		2007				2006
		US$’000				US$’000				% Change
Revenues			143,617				118,674				21	%
Cost of sales			(75,643	)			(62,090	)			22	%
Cost of sales — restructuring expenses			(953	)			—				100	%
Cost of sales — inventory write off/ provision			(11,772	)			(5,800	)			103	%
Gross profit			55,249				50,784				9	%
Other operating income			413				275				50	%
Research & development			(6,802	)			(6,696	)			2	%
Research & development — restructuring expenses			(6,907	)			—				100	%
SG&A expenses			(51,010	)			(42,422	)			20	%
SG&A expenses — restructuring expenses			(20,315	)			—				100	%
Operating (loss)/ profit			(29,372	)			1,941				(1613	%)

Cost of sales

Total cost of sales increased by US$20,478,000 from US$67,890,000 for the year ended December 31, 2006 to US$88,368,000, for the year ended December 31, 2007, an increase of 30%. The increase is primarily attributable to the restructuring expenses of US$12,725,000 recognised in cost of sales in 2007, partially offset by the inventory provision in 2006 of US$5.8 million. Cost of sales, excluding the impact of the restructuring expenses of US$12.7 million in 2007 and the US$5.8 million inventory provision in 2006, increased by US$13,553,000 from US$62,090,000 for the year ended December 31, 2006 to US$75,643,000, for the year ended December 31, 2007, an increase of 22%. This increase in cost of sales is broadly in line with the increase in revenues for the Group. Cost of sales excluding the US$12.7 million for the inventory write off and restructuring expenses for the year represents 53% of revenues, which is broadly in line with the cost of sales excluding the US$5.8 million inventory provision as a percentage of revenue in 2006 (52%). See Revenues section above for details on movements in revenues during 2007.

Included in cost of sales for the year ended December 31, 2007 is US$12,725,000 for the inventory write off and restructuring expenses, resulting from a decision taken by the Board of Directors of Trinity Biotech during 2007 to restructure the business. Under the restructuring plan, Trinity Biotech undertook to reduce the number of products and instruments within the two key product lines of haemostasis and infectious diseases. As a result, the Group has recognised US$11,772,000 for inventory written off relating to those haemostasis and infectious diseases products and instruments being rationalised for the year ended December 31, 2007. As part of the restructuring, the Group also recognised an additional amount of US$953,000 in cost of sales for termination payments for the year ended December 31, 2007.

In 2006, the Group made a US$5.8 million inventory provision resulting from the acquisition of the haemostasis business of bioMerieux in 2006. This arose from the process of combining the acquired bioMerieux range of products with the Group’s existing product range. As part of this process it was decided to discontinue various existing products, hence the requirement for the inventory provision.

Gross margin

The gross margin for 2007 was 38% which compares to a gross margin in 2006 of 43%. The decrease in gross margin in 2007 is primarily attributable to the impact of the restructuring expenses and goodwill impairment. Excluding the impact of the US$12.7 million restructuring expenses, the gross margin would have been 47%, which is broadly in line with the 2006 gross margin excluding the impact of the US$5.8 million inventory provision of 48%.

Research and development expenses

Research and development (“R&D”) expenditure increased to US$13,709,000 in 2007 compared to expenditure of US$6,696,000 in 2006. The increase in research and development expenditure is primarily attributable to the total restructuring expenses recognised in R&D in 2007 of US$6,907,000. The total R&D restructuring expenses of US$6,907,000 consists of US$5,134,000 of development costs written off, US$439,000 for license costs written off and a further US$1,094,000 written off technology intangible assets acquired from BioMerieux. Termination payments included in R&D amounted to US$240,000. Research and development expenditure, excluding the impact of the write-off of capitalised development and license costs of US$6,667,000 and termination payments of US$240,000 resulting from the restructuring activities, increased to US$6,802,000 in 2007 compared to expenditure of US$6,696,000 in 2006. This represents 5% of consolidated revenues, which is consistent with 2006. For a consideration of the Company’s various R&D projects see “Research and Products under Development” in Item 5 below.

Selling, General & Administrative expenses (SG&A)

The following table outlines the breakdown of SG&A expenses in 2007 compared to a similar breakdown for 2006.

		Year ended December 31,								Increase/
		2007				2006				(decrease)
		US$’000				US$’000				US$’000				% Change
SG&A (excl. share-based payments and amortisation)			46,368				38,719				7,649				20	%
SG&A restructuring expenses and goodwill impairment			20,315				—				20,315				100	%
Share-based payments			1,224				1,016				208				20	%
Amortisation			3,418				2,687				731				27	%
Total			71,325				42,422				28,903				68	%

Selling General & Administrative Expenditure (excluding share-based payments and amortisation)

Total SG&A expenses increased from US$42,422,000 for the year ended December 31, 2006 to US$71,325,000 for the year ended December 31, 2007, which represents an increase of US$28,903,000. The increase is primarily due to the restructuring expenses and an increase in SG&A expenses excluding share-based payments and amortisation. Total SG&A expenses excluding share-based payments and amortisation increased from US$38,719,000 for the year ended December 31, 2006 to US$66,683,000 for the year ended December 31, 2007, which represents an increase of 72%. Of the total increase of US$27,964,000, US$20,315,000 relates to restructuring expenses incurred in 2007. SG&A expenses (excluding restructuring expenses, goodwill impairment, share-based payments and amortisation) increased 20% or by US$7,649,000 from US$38,719,000 to US$46,368,000, which compares to revenue growth of 21% during the same period.

The principal reasons for the increase in SG&A expenses (excluding restructuring expenses, goodwill impairment, share-based payments and amortisation) of US$7,649, 000 in 2007, are as follows:

	•		Increased SG&A costs in the Head Office/Irish operations of US$4,327,000. This is mainly due to a combination of strengthening of the Group’s marketing and central administration functions in conjunction with increased professional fees associated with the implementation of Sarbanes Oxley;
	•		An increase of US$2,057,000 in the Group’s European operations (excluding Ireland). Of this increase, US$1,465,000 related to the full year impact of the direct sales operation in France acquired in 2006. The remaining increase of US$592,000 arose principally in the UK mainly due to the increase in employee numbers and related costs associated with the expansion of this entity following the acquisition of the haemostasis business of bioMerieux in 2006;
	•		Increased SG&A costs of US$1,265,000 in the USA. This is primarily due to the full year impact of the increased personnel and related costs following the acquisition of the haemostasis business of bioMerieux in June 2006.

SG&A restructuring expenses and goodwill impairment

Arising from the 2007 impairment review, a goodwill impairment loss of US$19,156,000 was recognised in the consolidated statement of operations for the year ended December 31, 2007. This impairment loss arose in Trinity Biotech Manufacturing Limited, one of the Group’s cash generating units (“CGU’s”). Trinity Biotech Manufacturing Limited manufactures haemostasis, infectious diseases, point of care and clinical chemistry products at its plant in Bray, Ireland, which are then sold to third party distributors and other selling entities within the Group. A further US$1,094,000 was written off technology intangible assets acquired by BioMerieux and this charge is included in research and development expenses as part of the total amount written off for capitalised development and license costs of US$6,667,000. The remaining restructuring expenses of US$1,159,000 included in SG&A primarily relate to termination payments (US$842,000) and onerous lease obligations resulting from the closure of the Swedish manufacturing operation (US$116,000).

Share-based payments

The Group recorded a total charge to the statement of operations in 2007 of US$1,403,000 (2006: US$1,141,000) for share-based payments. Of the 2007 charge US$71,000 (2006: US$89,000) was charged against cost of sales. Of the remaining US$1,332,000, US$108,000 (2006: US$36,000) was charged against research and development expenses and US$1,224,000 (2006: US$1,016,000) was charged against selling general and administrative expenses.

The expense represents the value of share options granted to directors and employees which is charged to the statement of operations over the vesting period of the underlying options. The Group has used a trinomial valuation model for the purposes of valuing these share options with the key inputs to the model being the expected volatility over the life of the options, the expected life of the option and the risk free rate. The expense for 2007 is broadly in line with that of 2006 and is due to the impact of the newly issued options being offset by a reduction in the expense resulting from forfeiture of previous share options, granted to employees and key management personnel but not vested at the time of forfeiture. For further details refer to Item 18, note 19 to the consolidated financial statements.

Amortisation

The increase in amortisation of US$731,000 from US$2,687,000 to US$3,418,000 is largely attributable to the impact of amortisation of intangible assets acquired as part of the Group’s acquisitions in 2007 and 2006 (see Item 18, note 26 to the consolidated financial statements). The Group acquired the haemostasis business of BioMerieux and a direct selling operation in France in 2006 and the full year impact of these acquisitions on the 2007 amortisation charge was US$579,000. A further US$56,000 was amortised in relation to intangible assets valued on the acquisition of the immuno-technology business of Cortex and certain components of the distribution business of Sterilab, a distributor of Infectious Diseases products, in 2007. The remaining increase of US$96,000 is mainly attributable to amortisation of development costs which were capitalised and are now being amortised over the expected life of the products to which they related.

4 ( Loss)/ profit for the year

The following table sets forth selected statement of operations data for each of the periods indicated.

		Year ended December 31,
		2007				2006
		US$’000				US$’000				% Change
Operating (loss)/ profit			(29,372	)			1,941				(1613	%)
Net financing costs			(2,691	)			(1,489	)			81	%
(Loss)/ profit before tax			(32,063	)			452				(7194	%)
Income tax (expense)/ credit			(3,309	)			2,824				(217	%)
(Loss)/ profit of the year			(35,372	)			3,276				(1180	%)

Net Financing Costs

Net financing costs increased to US$2,691,000 compared to US$1,489,000 in 2006. This increase is primarily due to the impact of the additional debt financing taken on by the Group during 2006 and 2007. The loan facility was amended in July 2006, increasing the original loan facility by US$30 million to US$41.34 million due to the acquisition of the haemostasis business of bioMerieux. In October 2007, the revolver loan element of the facility increased by US$5 million from US$2,000,000 to US$7,000,000 to fund the acquisition of Cortex and Sterilab in 2007. The increased interest expense in relation to this additional debt was offset by lower interest charges in relation the Group’s convertible notes as they were being repaid during 2006. Deposit interest earned during the year decreased from US$1,164,000 in 2006 to US$457,000 due to lower cash balances held on deposit.

Taxation

The Group recorded a net tax charge of US$3,309,000 for the year ended December 31, 2007. This compared to a tax credit of US$2,824,000 for 2006. This represented a decrease in current tax of US$98,000 which is more than offset by an increase in deferred tax of US$6,231,000. The decrease in current tax is primarily attributable to current year losses in the US, Ireland and Germany resulting from the restructuring. The net deferred tax expense is primarily attributable to the derecognition of deferred tax assets in relation to unused tax losses. The derecognition of these deferred tax assets was considered appropriate due to uncertainty over the timing of the utilisation of the unused tax losses. For further details on the Group’s tax charge please refer to Item 18, note 9 and note 13 to the consolidated financial statements.

(Loss)/ profit for the year

The loss for the year amounted to US$35,372,000 which represents a decrease of US$38,648,000 when compared to the profit for year of US$3,276,000 in 2006. Excluding the after tax impact of the inventory write off, restructuring expenses and goodwill impairment of US$38,363,000, the profit for the year would have been US$2,991,000. This compares to a profit for the year ended December 31, 2006, excluding the after tax impact of the US$5.8 million inventory provision, of US$3,276,000.

Liquidity and Capital Resources

Financing

Trinity Biotech has a US$48,340,000 club banking facility with Allied Irish Bank plc and Bank of Scotland (Ireland) Limited (“the banks”). The facility consists of a five year US Dollar floating interest rate term loan of US$41,340,000 and a one year revolver of US$7,000,000.

The facility was amended in October 2008, increasing the length of the term to July 2012, and amending the repayment schedule from $4,134,000 every January and July (originally commencing January 2007) to an amount of $1,072,000 in July 2008, $2,144,000 in January 2009, $3,215,000 in July 2009 and every six months thereafter, with a final payment of US$6,430,000 payable in July 2012. Hence, during 2008 an amount of $4,134,000 and $1,072,000 were paid in January and July respectively. The revolver loan element of the facility has remained at US$7,000,000. This facility is secured on the assets of the Group.

Various covenants apply to the Group’s bank borrowings. At December 31, 2008, the total amount outstanding under the facility amounted to US$34,551,000, net of unamortised funding costs of US$314,000.

During 2008, the Group issued 7,260,816 ‘A’ Ordinary shares as part of a private placement. These shares were issued for a consideration of US$7,115,600, settled in cash. The Group incurred costs of US$438,000 in connection with the issue of these shares.

Working capital

In the Group’s opinion the Group will have access to sufficient funds to support its existing operations for at least the next 12 months. These funds will consist of the Group’s existing cash resources, cash generated from operations and where required debt and/or equity funding or the proceeds of asset disposals.

The amount of cash generated from operations will depend on a number of factors which include the following:

•

The ability of the Group to continue to generate revenue growth from its existing product lines;

•

The ability of the Group to generate revenues from new products following the successful completion of its development projects;

•

The extent to which capital expenditure is incurred on additional property plant and equipment;

•

The level of investment required to undertake both new and existing development projects;

•

Successful working capital management in the context of a growing group.

Where cash generated from operations is not sufficient to meet the Group’s obligations, additional debt or equity funding will need to be raised. The cost and availability of debt funding will depend on prevailing interest rates at the time and the size and nature of the funding being provided. The availability of debt and equity will depend on market conditions at the time, which is of relevance at present given the constraints being experienced in international funding markets.

The Group expects that it will have access to sufficient funds to repay the debt obligations which were outstanding at December 31, 2008. These obligations include the repayment of the remaining bank loans and finance leases. The timing of these repayment obligations and the expected maturity dates are set out in more detail in Item 11.

In the event that the Group makes any further acquisitions, we believe that the Group may be required to obtain additional debt and/or equity funding. The exact timing and amount of such funding will depend on the Group’s ability to identify and secure acquisition targets which fit with the Group’s growth strategy and core competencies.

Cash management

As at December 31, 2008, Trinity Biotech’s consolidated cash and cash equivalents were US$5,184,000. This compares to cash and cash equivalents, excluding restricted cash, of US$8,700,000 at December 31, 2007.

Cash generated from operations for the year ended December 31, 2008 amounted to US$12,946,000 (2007: US$18,178,000), a decrease of US$5,232,000. The decrease in cash generated from operations of US$5,232,000 is attributable to a decrease in operating cash flows before changes in working capital of US$2,396,000 and unfavourable working capital movements of US$2,836,000. The decrease in operating cash flows before changes in working capital of US$2,396,000 is primarily due to lower net profits arising from decreased revenue in 2008. The unfavourable working capital movements are primarily due to a deterioration in cash flows from trade and other receivables of US$9,357,000 which was mainly offset by decreased cash outflows with respect to inventories (US$9,163,000) and reduced cash flows from trade and other payables (US$2,642,000). The cash generated from operations was attributable to a loss before interest and taxation of US$79,575,000 (2007: loss before interest and taxation of US$29,372,000), as adjusted for non cash items of US$95,266,000 (2007: US$47,459,000) less cash outflows due to changes in working capital of US$2,745,000 (2007: cash inflows of US$91,000).

The increase in other non cash charges from US$47,459,000 for the year ended December 31, 2007 to US$95,266,000 for the year ended December 31, 2008 is mainly attributable to the impairment charge in 2008 (see Item 18, note 3 to the consolidated financial statements). An impairment loss of US$71,684,000 (2007: US$19,156,000) was recognised against the intangible assets of the Group during 2008.

The net cash outflows in 2008 due to changes in working capital of US$2,745,000 are due to the following:

•

An increase in accounts receivable by US$4,131,000 due to an increase in debtors days in the year ;

•

A decrease in trade and other payables by US$676,000 due mainly to the payment of deferred consideration during the year;

•

A decrease in inventory by US$2,062,000 due to a Group wide emphasis on inventory management.

Net interest paid amounted to US$2,576,000 (2007: US$2,373,000). This consisted of interest paid of US$2,639,000 (2007: US$2,802,000) on the Group’s interest bearing debt including bank loans, convertible notes and finance leases and was partially offset by interest received of US$63,000 (2007: US$429,000) on the Group’s cash deposits.

Net cash outflows from investing activities for the year ended December 31, 2008 amounted to US$14,688,000 (2007: US$8,415,000) which were principally made up as follows:

•

Deferred consideration of US$2,802,000 was paid to bioMerieux during 2008;

•

Payments to acquire intangible assets of US$8,981,000 (2007: US$7,851,000), which principally related to development expenditure capitalised as part of the Group’s on-going product development activities;

•

Acquisition of property, plant and equipment of US$3,713,000 (2007: US$8,262,000) incurred as part of the Group’s investment programme for its manufacturing and distribution activities;

•

Proceeds from the disposal of property, plant and equipment of US$808,000 (2007: US$84,000) mainly relating to the Group’s disposal of assets in the Swedish entity during 2008.

Net cash inflows from financing activities for the year ended December 31, 2008 amounted to US$481,000 (2007: cash outflow of US$1,108,000). The Group received US$7,116,000 from its issue of ordinary shares in 2008 (2007: US$454,000). These inflows were offset by the repayment of debt and other liabilities of US$5,224,000 (2007: US$8,285,000) and expenses paid in connection with share issues and debt financing of US$624,000 (2007: US$70,000). Also offsetting the inflows were payments in respect of finance lease liabilities of US$787,000 (2007: US$294,000).

The majority of the Group’s activities are conducted in US Dollars. The primary foreign exchange risk arises from the fluctuating value of the Group’s euro denominated expenses as a result of the movement in the exchange rate between the US Dollar and the euro. Trinity Biotech continuously monitors its exposure to foreign currency movements and based on expectations on future exchange rate exposure implements a hedging policy which may include covering a portion of this exposure through the use of forward contracts. When used, these forward contracts are cashflow hedging instruments whose objective is to cover a portion of these euro forecasted transactions.

As at December 31, 2008, total year end borrowings were US$36,121,000 (2007: US$42,133,000) and cash and cash equivalents were US$5,184,000 (2007: US$8,700,000). For a more comprehensive discussion of the Group’s level of borrowings at the end of 2008, the maturity profile of the borrowings, the Group’s use of financial instruments, its currency and interest rate structure and its funding and treasury policies please refer to Item 11 “Qualitative and Quantitative Disclosures about Market Risk”.

Contractual obligations

The following table summarises our minimum contractual obligations and commercial commitments, including interest, as of December 31, 2008:

		Payments due by Period
						less than 1												more than
		Total				year				1-3 Years				3-5 Years				5 years
Contractual Obligations		US$’000				US$’000				US$’000				US$’000				US$’000
Bank loans			36,291				13,079				13,493				9,719				—
Capital (finance) lease obligations			1,748				514				950				284				—
Operating lease obligations			57,690				4,438				7,463				6,194				39,595
Total			95,729				18,031				21,906				16,197				39,595

Trinity Biotech incurs debt and raises equity to pursue its policy of growth through acquisition. Trinity Biotech believes that, with further funds generated from operations, it will have sufficient funds to meet its capital commitments and continue existing operations for the foreseeable future, in excess of 12 months. If operating margins on sales were to decline substantially or if the Group was to make a large and unanticipated cash outlay, the Group would have further funding requirements. If this were the case, there can be no assurance that financing will be available at attractive terms, or at all. The Group believes that success in raising additional capital or obtaining profitability will be dependent on the viability of its products and their success in the market place. Since December 31, 2007 the Group has agreed amendments to its bank facility, for more information see Item 18, note 29.

Impact of Currency Fluctuation

Trinity Biotech’s revenue and expenses are affected by fluctuations in currency exchange rates especially the exchange rate between the US Dollar and the euro. Trinity Biotech’s revenues are primarily denominated in US Dollars and its expenses are incurred principally in US Dollars and euro. The weakening of the US Dollar could have an adverse impact on future profitability. Management are actively seeking to reduce the mismatch in this regard to mitigate this risk. The revenues and costs incurred by US subsidiaries are denominated in US Dollars.

Trinity Biotech holds most of its cash assets in US Dollars. As Trinity Biotech reports in US Dollars, fluctuations in exchange rates do not result in exchange differences on these cash assets. Fluctuations in the exchange rate between the euro and the US Dollar may impact on the Group’s euro monetary assets and liabilities and on euro expenses and consequently the Group’s earnings.

Off-Balance Sheet Arrangements

After consideration of the following items the Group’s management have determined that there are no off-balance sheet arrangements which need to be reflected in the financial statements.

Leases with Related Parties

The Group has entered into lease arrangements for premises in Ireland with JRJ Investments (“JRJ”), a partnership owned by Mr O’Caoimh and Dr Walsh, directors of Trinity Biotech plc, and directly with Mr O’Caoimh and Dr Walsh. Independent valuers have advised Trinity Biotech that the rent fixed with respect to these leases represents a fair market rent. Details of these leases with related parties are set out in Item 4 “Information on the Company”, Item 7 “Major Shareholders and Related Party Transactions” and Item 18, note 28 to the consolidated financial statements.

Research & Development (“R&D”) carried out by third parties

Certain of the Group’s R&D activities have been outsourced to third parties. These activities are carried out in the normal course of business with these companies.

Research and Products under Development

History

Historically, Trinity Biotech had been primarily focused on infectious diseases diagnostics. The Group acquired a broad portfolio of microtitre plate (“EIA”) and Western Blot products and has added to these over the last number of years through additional internally developed products. More recently, the Group has entered into several other diagnostic areas including haemostasis and clinical chemistry. The Research and Development (“R&D”) activities of the Group have mirrored this expansion by developing new products in these areas also.

Centres of Excellence

Trinity Biotech has research and development groups focusing separately on microtitre plate based tests, rapid tests, western blot products, clinical chemistry products, haemostasis and immunofluorescent assays. These groups are located in Ireland, Germany and the US and largely mirror the production capability at each production site, hence creating a centre of excellence for each product type. In addition to in-house activities, Trinity Biotech sub-contracts some research and development from time to time to independent researchers based in the US and Europe.

The following is a list of the principal projects which are currently being undertaken by the R&D groups within Trinity Biotech.

Microtitre Plate Development Group

Enhancement of HSV 2 of microtitre plate assay for the detection of HSV2 IgG

Trinity Biotech is already a leading supplier of diagnostic tests for the detection of infectious disease. Enhancement was recently completed on the HSV2 IgG EIA assay. Development and transfer to production was completed by December 2008 including some external evaluation work.

HIV Incidence Assay

In late 2005, Trinity entered a Biological Materials License Agreement with the Centre for Disease Control (CDC) in Atlanta, Georgia, for the rights to produce and sell the CDC devised HIV Incidence assay. The technology was transferred to Trinity during 2006 and the product was developed by the Group during 2007 with the design and development of key raw materials. Final development was completed at end of 2008.

Western Blot Development Group

A Western Blot kit is a test where antigens (usually proteins) from a specific bacteria or virus are transferred onto a nitrocellulose strip. When a patient’s plasma is added to the strip, if antibodies to that bacteria or virus are present in a patient’s sample, then they will bind to the specific antigens on the strip. If antibodies to any of the antigens are present in sufficient concentration, coloured bands corresponding to one or more of those antigens will be visible on the reacted nitrocellulose strip.

US Lyme Western Blot

For many years, Trinity Biotech’s US Domestic Lyme Western Blot has been a market leader. During 2008, a project was undertaken to further develop the product by adding additional strips per assay kit which involved incorporating the introduction of new larger production equipment. This work was successfully completed and the Group will launch the enhanced product in early 2009.

Automated Blotting Instrument and Blot Scanner

In 2006 a project was initiated to introduce the use of an automated blotting instrument with Trinity Biotech’s Western Blot tests, initially focusing on the US Lyme Western Blot allowing increased throughput for end-users. This work progressed successfully, culminating on the commencement of validation of the system in late 2006. Validation was completed in early 2007 with launch of the system, which is called TrinBlot. In 2008 the Group continued to extend the range of products which can be used on the TrinBlot, in addition to the introduction of an automated scanner to aid in the interpretation of the western blots. This system was validated and launched for use with US Lyme in 2008 and will continue for other products in 2009.

Clinical Chemistry

TriStat POC

Trinity Biotech, at its Kansas City site, has developed a point of care test called TriStat for the measurement of haemoglobin A1c for which FDA approval was obtained in late 2007. The Group continued to enhance this product during 2008 culminating in preparation for CLIA trial in late 2008. CLIA trials are planned for early 2009 followed by launch of the product worldwide following successful CLIA waiver approval.

Haemoglobin assay development

In 2007 the Group initiated a project to develop a variant haemoglobin assay for neo-natal screening. Development was completed in early 2008 and the product launched in 2008.

Medium throughput HPLC for Haemoglobin testing

This project entails the development of a new HPLC instrument to replace the current PDQ analyzer. The new instrument will allow access to markets not previously open to Trinity Biotech due to instrument price and test capability (A1c and variant). Development was initiated in 2007, continued in 2008 and is expected to continue through 2009. Launch is expected in 2010.

Haemostasis Development Group

Destiny Max Development Project

The Group is in the process of launching a new high throughput haemostasis instrument called the Destiny Max. The Destiny Max instrument is intended to meet the requirements of large laboratories, commercial laboratories, reference laboratories and anti-coagulation clinics, i.e. high volume laboratories. In so doing, Trinity Biotech will be able to compete effectively in an overall system approach whereby placement of the Destiny Max instruments will drive increased sales of the associated Trinity Biotech reagents, controls and accessories. Development of the instrument continued in 2008 when the design was finalised. The design was validated in late 2008, including external clinical trials. Non US launch was achieved in late 2008 as well as 510K submission to the FDA. FDA approval is expected in 2009 followed by US launch.

Trend Information

For information on trends in future operating expenses and capital resources, see “Results of Operations”, “Liquidity and Capital Resources” and “Impact of Inflation” under Item 5.

Item 6 Directors and Senior Management

Directors

Name		Age				Title
Ronan O’Caoimh			53			Chief Executive Officer
Rory Nealon			41			Director, Chief Operations Officer
Jim Walsh, PhD			50			Non Executive Director
Denis R. Burger, PhD			65			Non Executive Director
Peter Coyne			49			Non Executive Director
Clint Severson			60			Non Executive Director
James D. Merselis			55			Non Executive Director
Executive Officer
Kevin Tansley			38			Chief Financial Officer & Company Secretary

Board of Directors & Executive Officers

Ronan O’Caoimh, Chairman and Chief Executive Officer, co-founded Trinity Biotech in June 1992 and acted as Chief Financial Officer until March 1994 when he became Chief Executive Officer. He was also elected Chairman in May 1995. In November 2007, it was decided to separate the role of Chief Executive Officer and Chairman and Mr O’Caoimh assumed the role of Executive Chairman. In October 2008, following the resignation of the Chief Executive Officer, Mr. O’Caoimh resumed the role of Chief Executive Officer and Chairman. Prior to joining Trinity Biotech, Mr O’Caoimh was Managing Director of Noctech Limited, an Irish diagnostics company. Mr O’Caoimh was Finance Director of Noctech Limited from 1988 until January 1991 when he became Managing Director. Mr O’Caoimh holds a Bachelor of Commerce degree from University College Dublin and is a Fellow of the Institute of Chartered Accountants in Ireland.

Rory Nealon, Chief Operations Officer, joined Trinity Biotech as Chief Financial Officer and Company Secretary in January 2003. He was appointed Chief Operations Officer in November 2007. Prior to joining Trinity Biotech, he was Chief Financial Officer of Conduit plc, an Irish directory services provider with operations in Ireland, the UK, Austria and Switzerland. Prior to joining Conduit he was an Associate Director in AIB Capital Markets, a subsidiary of AIB Group plc, the Irish banking group. Mr Nealon holds a Bachelor of Commerce degree from University College Dublin, is a Fellow of the Institute of Chartered Accountants in Ireland, a member of the Institute of Taxation in Ireland and a member of the Institute of Corporate Treasurers in the UK.

Jim Walsh, PhD, Non-executive director, joined Trinity Biotech in October 1995 as Chief Operations Officer. Dr. Walsh resigned from the role of Chief Operations Officer in 2007. Prior to joining the Trinity Biotech, Dr Walsh was Managing Director of Cambridge Diagnostics Ireland Limited (CDIL). He was employed with CDIL since 1987. Before joining CDIL he worked with Fleming GmbH as Research & Development Manager. Dr Walsh has a degree in Chemistry and a PhD in Microbiology from University College Galway. Dr Walsh remains on the Board as a non executive director of the Company.

Denis R. Burger, PhD, Non-executive director, co-founded Trinity Biotech in June 1992 and acted as Chairman from June 1992 to May 1995. He is currently a non-executive director of the Company and serves as an independent director on the boards of two other NASDAQ-listed companies. Until March 2007, Dr Burger was the Chairman and Chief Executive Officer of AVI Biopharma Inc, an Oregon based bio-technology Company. He was also a co-founder and, from 1981 to 1990, Chairman of Epitope Inc. In addition, Dr Burger has held a professorship in the Department of Microbiology and Immunology and Surgery (Surgical Oncology) at the Oregon Health Sciences University in Portland. Dr Burger received his degree in Bacteriology and Immunology from the University of California in Berkeley in 1965 and his Master of Science and PhD in 1969 in Microbiology and Immunology from the University of Arizona.

Peter Coyne, Non-executive director, joined the board of Trinity Biotech in November 2001 as a non-executive director. Mr Coyne is a director of AIB Corporate Finance, a subsidiary of AIB Group plc, the Irish banking group. He has extensive experience in advising public and private groups on all aspects of corporate strategy. Prior to joining AIB, Mr Coyne trained as a chartered accountant and was a senior manager in Arthur Andersen’s Corporate Financial Services practice. Mr Coyne holds a Bachelor of Engineering degree from University College Dublin and is a Fellow of the Institute of Chartered Accountants in Ireland.

Clint Severson, Non-executive director, joined the board of Trinity Biotech in November 2008 as a non-executive director. Mr Severson is currently Chairman, President and CEO of Abaxis Inc., a NASDAQ traded diagnostics company based in Union City, California. Since November 2006, Mr. Severson has also served on the Board of Directors of CytoCore, Inc. From February 1989 to May 1996, Mr. Severson served as President and Chief Executive Officer of MAST Immunosystems, Inc., a privately-held medical diagnostic company and to date he has accumulated over 30 years experience in the medical diagnostics industry.

James D. Merselis, Non-executive director, joined the board of Trinity Biotech in February 2009 as a non-executive director. Mr Merselis is currently President and CEO of Alverix, Inc., a privately held optoelectronics company developing portable medical diagnostic instruments. Most recently, Mr. Merselis served as President and CEO of HemoSense, Inc., a point-of-care diagnostics company focused initially on providing patients and physicians with rapid test results to help manage the risk of stroke with the drug warfarin or Coumadin. Prior to his tenure at HemoSense, Mr Merselis served as President and CEO of Micronics, Inc., a microfluidics company. In addition, Mr Merselis has held a number of positions over twenty-two years with Boehringer Mannheim Diagnostics (now Roche Diagnostics).

Kevin Tansley, Chief Financial Officer, joined Trinity Biotech in June 2003 and was appointed Chief Financial Officer and Secretary to the Board of Directors in November 2007. Prior to joining Trinity Biotech in 2003, Mr Tansley held a number of financial positions in the Irish electricity utility ESB. Mr Tansley holds a Bachelor of Commerce degree from University College Dublin and is a Fellow of the Institute of Chartered Accountants in Ireland.

Compensation of Directors and Officers

The basis for the executive directors’ remuneration and level of annual bonuses is determined by the Remuneration Committee of the board. In all cases, bonuses and the granting of share options are subject to stringent performance criteria. The Remuneration Committee consists of Dr Denis Burger (committee chairman and senior independent director), Mr Peter Coyne and Mr Ronan O’Caoimh. Directors’ remuneration shown below comprises salaries, pension contributions and other benefits and emoluments in respect of executive directors. Non-executive directors are remunerated by fees and the granting of share options. Non-executive directors who perform additional services on the Audit Committee or Remuneration Committee receive additional fees. The fees payable to non-executive directors are determined by the board. Each director is reimbursed for expenses incurred in attending meetings of the board of directors.

Total directors and non-executive directors’ remuneration, excluding pension, for the year ended December 31, 2008 amounted to US$2,900,000. The pension charge for the year amounted to US$241,000. See Item 18, note 6 to the consolidated financial statements. The split of directors’ remuneration set out by director is detailed in the table below:

						Defined
		Salary/				contribution				Compensation				Total				Total
		Benefits				pension				for loss of				2008				2007
Director		US$’000				US$’000				office				US$’000				US$’000
Ronan O’Caoimh			495				98				—				593				927
Brendan Farrell			483				75				1,283				1,841				681
Rory Nealon			439				68				—				507				509
Jim Walsh			—				—				—				—				270
			1,417				241				1,283				2,941				2,387

										Total				Total
		Fees				Other				2008				2007
Non-executive director		US$’000				US$’000				US$’000				US$’000
Denis R. Burger			68				—				68				65
Peter Coyne			68				—				68				65
James Merselis			—				—				—				—
Clint Severson			5				—				5				—
Jim Walsh			59				44				103				—
			200				44				244				130

										Defined
Chief Financial		Salary/				Performance				contribution				Total				Total
Officer & Company		Benefits				related bonus				pension				2008				2007
Secretary		US$’000				US$’000				US$’000				US$’000				US$’000
Kevin Tansley			329				43				36				408				55
			329				43				36				408				55

As at December 31, 2008 there are no amounts which are set aside or accrued by the Company or its subsidiaries to provide pension, retirement or similar benefits for the directors.

The total share-based compensation expense recognised in the consolidated statement of operations in 2008 in respect of options granted to both executive and non executive directors amounted to US$776,000. See Item 18, note 6 to the consolidated financial statements.

The directors were granted 1,665,000 share options during 2008. No options were granted to the directors during 2007.

In addition, see Item 7 — Major Shareholders and Related Party Transactions for further information on the compensation of Directors and Officers.

Board Practices

The Articles of Association of Trinity Biotech provide that one third of the directors in office (other than the Managing Director or a director holding an executive office with Trinity Biotech) or, if their number is not three or a multiple of three, then the number nearest to but not exceeding one third, shall retire from office at every annual general meeting. If at any annual general meeting the number of directors who are subject to retirement by rotation is two, one of such directors shall retire and if the number of such directors is one that director shall retire. Retiring directors may offer themselves for re-election. The directors to retire at each annual general meeting shall be the directors who have been longest in office since their last appointment. As between directors of equal seniority the directors to retire shall, in the absence of agreement, be selected from among them by lot.

The board has established Audit, Remuneration and Compensation Committees. The functions and membership of the Remuneration Committee are described above. The Audit Committee reviews the Group’s annual and interim financial statements and reviews reports on the effectiveness of the Group’s internal controls. It also appoints the external auditors, reviews the scope and results of the external audit and monitors the relationship with the auditors. The Audit Committee comprises the two independent non-executive directors of the Group, Mr Peter Coyne (Committee Chairman) and Dr Denis Burger. The Compensation Committee currently comprises Mr Ronan O’Caoimh (Committee Chairman) and Mr Rory Nealon. The Compensation Committee administers the Employee Share Option Plan. The Committee determines the exercise price and the term of the options. Options granted to the members of the Committee are approved by the Remuneration Committee and individual option grants in excess of 30,000 shares are approved by the full board of directors. Share options granted to non-executive directors are decided by the other members of the board.

Because Trinity Biotech is a foreign private issuer, it is not required to comply with all of the corporate governance requirements set forth in NASDAQ Rule 4350 as they apply to U.S. domestic companies. The Group’s corporate governance measures differ in the following significant ways. The Audit Committee of the Group currently consists of two members — while U.S. domestic companies listed on NASDAQ are required to have three members on their audit committee. In addition, the Group has not appointed an independent nominations committee or adopted a board resolution addressing the nominations process. Finally, the Group’s Executive Chairman serves on the Group’s Remuneration Committee with two non-executive independent directors, while U.S. domestic companies are required to have executive officer compensation determined by a remuneration committee comprised solely of independent directors or a majority of the independent directors.

Employees

As of December 31, 2008, Trinity Biotech had 711 employees (2007: 762) consisting of 58 research scientists and technicians, 418 manufacturing and quality assurance employees, and 235 finance, administration, sales and marketing staff (2007: 48 research scientists and technicians, 450 manufacturing and quality assurance employees, and 264 finance, administration, sales and marketing staff). Trinity Biotech’s future hiring levels will depend on the growth of revenues.

The geographic spread of the Group’s employees was as follows: 310 in Bray, Co. Wicklow, Ireland, 272 in its US operations, 96 in Germany, 16 in the United Kingdom and 17 in France.

Stock Option Plan

The board of directors has adopted the Employee Share Option Plan, as most recently updated in 2006, (the “Plan”), the purpose of which is to provide Trinity Biotech’s employees, consultants, officers and directors with additional incentives to improve Trinity Biotech’s ability to attract, retain and motivate individuals upon whom Trinity Biotech’s sustained growth and financial success depends. The Plan is administered by a Compensation Committee designated by the board of directors. Options under the Plan may be awarded only to employees, officers, directors and consultants of Trinity Biotech.

The exercise price of options is determined by the Compensation Committee. The term of an option will be determined by the Compensation Committee, provided that the term may not exceed seven years from the date of grant. All options will terminate 90 days after termination of the option holder’s employment, service or consultancy with Trinity Biotech (or one year after such termination because of death or disability) except where a longer period is approved by the board of directors. Under certain circumstances involving a change in control of Trinity Biotech, the Committee may accelerate the exercisability and termination of options. As of February 28, 2009, 4,114,085 of the options outstanding were held by directors and officers of Trinity Biotech.

As of February 28, 2009 the following options were outstanding:

		Number of ‘A’				Range of		Range of
		Ordinary Shares				Exercise Price		Exercise Price
		Subject to Option				per Ordinary Share		per ADS
Total options outstanding			8,374,048			US$0.74-US$4.00		US$2.96-US$16.00

In January 2004, the Group completed a private placement and as part of this the investors were granted five year warrants to purchase an aggregate of 1,058,824 ‘A’ Ordinary Shares of Trinity Biotech at an exercise price of US$5.25 per ordinary share and the agent received 200,000 warrants to purchase 200,000 ‘A’ Ordinary Shares of Trinity Biotech at an exercise price of US$5.25 per ordinary share. As of February 28, 2009 all of these warrants had expired.

In addition, the Company granted warrants to purchase 2,178,244 Class ‘A’ Ordinary Shares (vesting immediately) in April 2008. These warrants were issued at an exercise price of US$1.39 per ordinary share and have a term of five years. As of February 28, 2009 there were warrants to purchase 2,178,244 ‘A’ Ordinary Shares in the Group outstanding.

Item 7 Major Shareholders and Related Party Transactions

As of February 28, 2009 Trinity Biotech has outstanding 82,017,581 ‘A’ Ordinary shares and 700,000 ‘B’ Ordinary shares. Such totals exclude 10,452,292 shares issuable upon the exercise of outstanding options and warrants.

The following table sets forth, as of February 28, 2009, the Trinity Biotech ‘A’ Ordinary Shares and ‘B’ Ordinary Shares beneficially held by (i) each person believed by Trinity Biotech to beneficially hold 5% or more of such shares, (ii) each director and officer of Trinity Biotech, and (iii) all officers and directors as a group.

Except as otherwise noted, all of the persons and groups shown below have sole voting and investment power with respect to the shares indicated. The Group is not controlled by another corporation or government.

		Number of ‘A’				Percentage				Number of ‘B’				Percentage
		Ordinary Shares				Outstanding				Ordinary Shares				Outstanding				Percentage
		Beneficially				‘A’ Ordinary				Beneficially				‘B’ Ordinary				Total
		Owned				Shares				Owned				Shares				Voting Power
Ronan O’Caoimh			6,395,955	(1)			7.7	%			—				—				7.5	%
Rory Nealon			650,000	(2)			0.8	%			—				—				0.8	%
Jim Walsh			1,868,198	(3)			2.3	%			—				—				2.2	%
Denis R. Burger			192,416	(4)			0.2	%			—				—				0.2	%
Peter Coyne			145,417	(5)			0.2	%			—				—				0.2	%
Kevin Tansley			134,083	(6)			0.2	%			—				—				0.2	%
Clint Severson			—				—				—				—				—
James Merselis			—				—				—				—				—
Potenza Investments Inc, (“Potenza”) Statenhof Building, Reaal 2A 23 50AA Leiderdorp Netherlands			—				—				500,000	(7)			71.4	%			1.2	%
Officers and Directors			9,386,069				11.4	%			—				—				11.1	%
as a group (6 persons)			(1)(2)(3)(4)(5)(6)