TABLE
OF CONTENTS
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Page
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PART
I
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Item
1
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Identity
of Directors, Senior Management and Advisors
|
1
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Item
2
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Offer
statistics and Expected timetable
|
1
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Item
3
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Selected
Consolidated Financial Data
|
1
|
Item
4
|
Information
on the Company
|
7
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Item
5
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Operating
and Financial Review and Prospects
|
14
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Item
6
|
Directors
and Senior Management
|
33
|
Item
7
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Major
Shareholders and Related Party Transactions
|
36
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Item
8
|
Financial
Information
|
38
|
Item
9
|
The
Offer and Listing
|
38
|
Item
10
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Memorandum
and Articles of Association
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40
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Item
11
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Qualitative
and Quantitative Disclosures about Market Risk
|
50
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Item
12
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Description
of Securities other than Equity Securities
|
52
|
PART
II
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Item
13
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Defaults,
Dividend Arrangements and Delinquencies
|
52
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Item
14
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Material
Modification to the Rights of Security Holders and Use of
Proceeds
|
52
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Item
15
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Control
and Procedures
|
52
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Item
16A
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Audit
Committee Financial Expert
|
53
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Item
16B
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Code
of Ethics
|
53
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Item
16C
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Principal
Accounting Fees and Services
|
54
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PART
III
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Item
17
|
Consolidated
Financial Statements
|
54
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Item
18
|
Consolidated
Financial Statements
|
54
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Item
19
|
Exhibits
|
126
|
Year
ended December 31
|
Year
ended December 31
|
Year
ended December 31
|
||
Consolidated
Statement of Income Data
|
2006
|
2005
|
2004
|
|
(US$’000
except for share and per share data)
|
||||
Revenues
|
118,674
|
98,560
|
80,008
|
|
Cost
of sales - including share based payments of US$89,000 (2005: US$110,000)
(2004: US$81,000)
|
(62,090)
|
(51,378)
|
(40,047)
|
|
Cost
of sales - inventory provision
|
(5,800)
|
-
|
-
|
|
Gross
profit
|
50,784
|
47,182
|
39,961
|
|
Other
operating income
|
275
|
161
|
302
|
|
Research
and development expenses - including share based payments of US$36,000
(2005: US$210,000) (2004: US$96,000)
|
(6,696)
|
(6,070)
|
(4,744)
|
|
Selling,
general and administrative - including share based payments of
US$1,016,000 (2005: US$1,048,000) (2004: US$581,000)
|
(42,422) |
(34,651) |
(29,332)
|
|
Operating
profit
|
1,941
|
6,622
|
6,187
|
|
Financial
income
|
1,164
|
389
|
302
|
|
Financial
expenses
|
(2,653)
|
(1,058)
|
(824)
|
|
Profit
before tax
|
452
|
5,953
|
5,665
|
|
Income
tax credit / (expense)
|
2,824
|
(673)
|
49
|
|
Profit
for the year
|
3,276
|
5,280
|
5,714
|
|
Basic
earnings per ‘A’ ordinary share (US Dollars)
|
0.05
|
0.09
|
0.10
|
|
Basic
earnings per ‘B’ ordinary share (US Dollars)
|
0.10
|
0.18
|
0.20
|
|
Diluted
earnings per ‘A’ ordinary share (US Dollars)
|
0.05
|
0.09
|
0.09
|
|
Diluted
earnings per ‘B’ ordinary share (US Dollars)
|
0.10
|
0.18
|
0.18
|
|
Basic
earnings per ADS (US Dollars)
|
0.19
|
0.36
|
0.41
|
|
Diluted
earnings per ADS (US Dollars)
|
0.19
|
0.35
|
0.37
|
|
Weighted
average number of shares
used
in computing basic EPS
|
70,693,753
|
58,890,084
|
55,132,024
|
|
Weighted
average number of shares
used
in computing diluted EPS
|
72,125,740
|
67,032,382
|
65,527,802
|
|
Consolidated
Balance Sheet Data
|
December
31,
2006
US$’000
|
December
31, 2005
US$’000
|
December
31, 2004
US$’000
|
|
Net
current assets (current assets less current liabilities)
|
61,435
|
44,964
|
53,448
|
|
Non
current liabilities
|
(45,928)
|
(19,083)
|
(16,636)
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|
Total
assets
|
249,131
|
184,602
|
156,040
|
|
Capital
stock
|
978
|
830
|
776
|
|
Shareholders’
equity
|
167,262
|
133,618
|
118,894
|
Year
ended December 31,
|
|||||
Consolidated
Statement of Income data
|
2006
US$’000
|
2005
US$’000
|
2004
US$’000
|
2003
US$’000
|
2002
US$’000
|
Revenues
|
118,674
|
98,560
|
80,008
|
65,531
|
51,978
|
Net
(loss) / profit
|
(1,946)
|
2,582
|
4,048
|
5,146
|
5,043
|
Basic
(loss) / earnings per ‘A’ ordinary share (US Dollar)
|
(0.03)
|
0.04
|
0.07
|
0.12
|
0.12
|
Basic
(loss) / earnings per ‘B’ ordinary share (US Dollar)
|
(0.06)
|
0.08
|
0.14
|
0.24
|
0.24
|
Diluted
(loss) / earnings per ‘A’ ordinary share
|
(0.03)
|
0.04
|
0.07
|
0.11
|
0.12
|
Diluted
(loss) / earnings per ‘B’ ordinary share
|
(0.06)
|
0.08
|
0.14
|
0.22
|
0.24
|
As
at December 31,
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|||||
Consolidated
Balance Sheet Data
|
2006
US$’000
|
2005
US$’000
|
2004
US$’000
|
2003
US$’000
|
2002
US$’000
|
Total
assets
|
239,426
|
181,699
|
158,869
|
128,650
|
99,067
|
Shareholders’
equity
|
161,303
|
132,769
|
122,033
|
87,234
|
70,944
|
·
|
Trinity
Biotech’s operating results may fluctuate as a result of many factors
related to its business, including the competitive conditions in
the
industry, 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.
|
·
|
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
recent
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 are not sufficient 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 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.
|
·
|
Trinity’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 Dade-Behring (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 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.
|
·
|
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.
|
·
|
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.
|
·
|
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 30 US patents with remaining patent lives
varying
from less than one year to 16 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 2008 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.
|
·
|
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.
|
·
|
As
a foreign private issuer whose shares are listed on the NASDAQ National
Market, we are permitted to follow certain home country corporate
governance practices instead of certain requirements of the NASDAQ
Marketplace Rules. We have elected to follow home country corporate
legislation with respect to the number of persons on our audit committee,
the number of independent directors on our Board of Directors, director
nomination procedures, and the composition of our compensation committee,
as described in more detail under Item 6 of this annual report.
|
·
|
In
addition, we may follow Irish law instead of the NASDAQ Marketplace
Rules
that require that we obtain shareholder approval for certain dilutive
events, such as for the establishment or amendment of certain equity
based
compensation plans, an issuance that will result in a change of control
of
Trinity Biotech, certain transactions other than a public offering
involving issuances of a 20% or more interest in Trinity Biotech
and
certain acquisitions of the stock or assets of another company.
|
·
|
Trinity
Biotech’s success is dependent on certain key management personnel. Our
key employees are Ronan O’Caoimh, our CEO and Chairman, Brendan Farrell,
our President, Dr Jim Walsh, our COO, and Rory Nealon, our CFO and
Secretary, with all of which we have entered into employment contracts.
We
carry a life assurance policy for Mr O’Caoimh in the amount of €533,000
(US$706,000). 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, Germany and Sweden 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 and due to the strength of the Irish
economy.
|
·
|
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 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$8,609,000) for any one accident, limited to
a maximum of €6,500,000 (US$8,609,000) 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.
|
·
|
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 is 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 2006 consolidated
revenue denominated in US Dollars was approximately 67%. Of the remaining
33% revenue, 26% relates to revenue denominated in Euro and 7% 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
warrants issued in 2004 and the total share options exercisable at
December 2006, 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.
|
·
|
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.
|
·
|
Section
404 of the Sarbanes Oxley Act of 2002 requires that the Group evaluates
and reports on the effectiveness of internal controls in providing
reasonable assurance regarding the reliability of Financial Reporting.
The
initial compliance date for management to evaluate and report on
internal
control over financial reporting under Section 404 of the Sarbanes
Oxley
Act of 2002 for Foreign Accelerated Filers is for the financial year
ending on or after July 15, 2006. The Group has prepared and implemented
an internal plan for compliance and has completed the process of
documenting and testing the system of internal controls over financial
reporting to provide the basis for this report for the year ending
December 31, 2006, which is set out in Item 15. The requirement to
provide
an auditors’ report on internal controls over financial reporting of the
Group will apply for the financial year ending December 31,
2007.
|
Haemostasis
|
Point
of Care
|
Infectious
|
Clinical
|
|
Diseases
|
Chemistry
|
|
Biopool®
|
UniGold™
|
Bartels®
|
Primus™
|
Amax™
|
Capillus™
|
CAPTIA™
|
EZ™
|
Destiny™
|
Recombigen®
|
MarDx®
|
|
|
MicroTrak™
|
|
|
|
|
MarBlot®
|
|
|
•
|
|
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.
|
Year
ended December 31,
|
|||
2006
|
2005
|
||
US$’000
|
US$’000
|
%
Change
|
|
Revenues
|
|||
Infectious
diseases
|
42,051
|
44,078
|
(5%)
|
Haemostasis
|
46,476
|
29,766
|
56%
|
Clinical
Chemistry
|
14,868
|
11,880
|
25%
|
Point
of Care
|
15,279
|
12,836
|
19%
|
Total
|
118,674
|
98,560
|
20%
|
Year
ended December 31,
|
|||
2006
|
2005
|
||
US$‘000
|
US$’000
|
%
Change
|
|
Revenues
|
|||
Americas
|
60,748
|
50,627
|
20%
|
Europe
|
34,452
|
25,301
|
36%
|
Asia/Africa
|
23,474
|
22,632
|
4%
|
Total
|
118,674
|
98,560
|
20%
|
-
|
The
inclusion of sales of US$9,822,000 of bioMerieux haemostasis products
from
the date of acquisition in June
2006;
|
-
|
The
full year impact of Primus, which was acquired in July 2005, of
US$3,012,000;
|
-
|
Partially
offset by the US$2,338,000 reduction in sales to Wampole as discussed
above.
|
Year
ended December 31,
|
|||
2006
|
2005
|
||
US$’000
|
US$’000
|
%
Change
|
|
Revenues
|
118,674
|
98,560
|
20%
|
Cost
of sales (including share-based payments )
|
(62,090)
|
(51,378)
|
21%
|
Cost
of sales - inventory provision
|
(5,800)
|
-
|
100%
|
Gross
profit
|
50,784
|
47,182
|
8%
|
Other
operating income
|
275
|
161
|
71%
|
Research
& development
|
(6,696)
|
(6,070)
|
10%
|
SG&A
expenses
|
(42,422)
|
(34,651)
|
23%
|
Operating
profit
|
1,941
|
6,622
|
(71%)
|
Year
ended December 31,
|
||||
2006
US$’000
|
2005
US$’000
|
Increase/
(decrease)
US$’000
|
%
Change
|
|
SG&A
(excl. share-based payments and amortisation)
|
38,719
|
31,800
|
6,919
|
22%
|
Share-based
payments
|
1,016
|
1,048
|
(32)
|
(3%)
|
Amortisation
|
2,687
|
1,803
|
884
|
49%
|
Total
|
42,422
|
34,651
|
7,771
|
23%
|
·
|
Increased
SG&A costs of US$3,901,000 in the USA. This is partially due to the
full year impact of Primus which was acquired in July 2005 of
US$2,524,000. The remaining increase of US$1,377,000 is mainly
attributable to increased personnel and related costs following the
acquisition of the haemostasis product line of
bioMerieux;
|
·
|
Increased
SG&A costs in the Head Office/Irish operations of US$1,390,000. This
is mainly due to a combination of strengthening of the Group’s marketing
and central administration functions in conjunction with the increase
in
scale of the Group and level of activity of the Irish manufacturing
operation;
|
·
|
An
increase of US$1,538,000 in the Group’s European operations (excluding
Ireland). Of this increase US$363,000 related to the newly established
direct sales operation in France. The remaining increase of US$1,175,000
arose principally in Germany and UK mainly due to the increase in
employee
numbers and related costs associated with the expansion of these
entities
following the acquisition of the haemostasis product line of
bioMerieux.
|
Year
ended December 31,
|
|||
2006
|
2005
|
||
US$‘000
|
US$‘000
|
%
Change
|
|
Operating
Profit
|
1,941
|
6,622
|
(71%)
|
Net
financing costs
|
(1,489)
|
(669)
|
123%
|
Profit
before tax
|
452
|
5,953
|
(92%)
|
Income
tax credit/(expense)
|
2,824
|
(673)
|
(520%)
|
Profit
of the year
|
3,276
|
5,280
|
(38%)
|
Year
ended December 31,
|
|||
2005
|
2004
|
||
US$’000
|
US$’000
|
%
Change
|
|
Revenues
|
|||
Infectious
diseases
|
44,078
|
36,402
|
21
|
Haemostasis
|
29,766
|
26,836
|
11
|
Clinical
Chemistry
|
11,880
|
6,963
|
71
|
Point
of Care
|
12,836
|
9,807
|
31
|
Total
|
98,560
|
80,008
|
23
|
Year
ended December 31,
|
|||
2005
|
2004
|
||
US$’000
|
US$’000
|
%
Change
|
|
Revenues
|
|||
USA
|
50,627
|
41,380
|
22
|
Europe
|
25,301
|
22,718
|
11
|
Asia/Africa
|
22,632
|
15,910
|
42
|
Total
|
98,560
|
80,008
|
23
|
-
|
The
full year impact of Fitzgerald which was acquired in 2004, plus a
further
increase due to the acquisition of RDI (now part of Fitzgerald) in
2005
resulting in an overall increase in Fitzgerald sales in the USA of
US$4,664,000;
|
-
|
The
inclusion of sales of US$2,900,000 of Primus products in the US from
the
date of acquisition on July 19,
2005;
|
-
|
An
increase of US$1,080,000 in sales of Adaltis products partially
attributable to 2005 being the first full year since its acquisition
in
April 2004 ;
|
-
|
Sales
of existing product ranges in the USA (excluding sales to Wampole)
have
increased by US$2,162,000. This is partially offset by the US$1,559,000
reduction in sales to Wampole as discussed above.
|
Year
ended December 31,
|
|||
2005
|
2004
|
||
US$’000
|
US$’000
|
%
Change
|
|
Revenues
|
98,560
|
80,008
|
23
|
Cost
of sales (including share-based payments)
|
(51,378)
|
(40,047)
|
28
|
Other
operating income
|
161
|
302
|
(47)
|
Research
& development
|
(6,070)
|
(4,744)
|
28
|
SG&A
expenses
|
(34,651)
|
(29,332)
|
18
|
Operating
profit
|
6,622
|
6,187
|
7
|
Year
ended December 31,
|
||||
2005
US$’000
|
2004
US$’000
|
Increase
US$’000
|
%
Change
|
|
SG&A
(excl. share-based payments and amortisation)
|
31,800
|
27,640
|
4,160
|
15
|
Share-based
payments
|
1,048
|
581
|
467
|
80
|
Amortisation
|
1,803
|
1,111
|
692
|
62
|
Total
|
34,651
|
29,332
|
5,319
|
18
|
·
|
Increased
SG&A expenditure in relation to Fitzgerald (US$1,391,000). 2005
represented the first full year for Fitzgerald compared to 2004 when
the
results were included from April 2004 (the date of acquisition).
The
increase in costs was also attributable to the acquisition of RDI,
whose
activities were absorbed into the Fitzgerald organisation from March
2005.
|
·
|
Increased
SG&A costs of US$1,164,000 in the USA. This was mainly attributable
to
costs in relation to Primus whose results have been incorporated
from the
date of acquisition on July 19, 2005. The impact of Primus has partially
been offset by cost savings in the existing US distribution and
manufacturing entities.
|
·
|
Increased
SG&A costs in the Head Office/European operations (excluding
Fitzgerald and the UK) of US$896,000. This is mainly due to a combination
of
|
·
|
An
increase of US$263,000 in the UK. The UK direct sales operation,
which was
established in 2002, was expanded during 2004. 2005 represents the
first
full year impact of increasing the sales force in late
2004.
|
·
|
A
reduction in foreign exchange gains in 2005 compared to 2004 (US$446,000).
|
|
||||
Year ended December 31, | ||||
2005
|
2004
|
|||
US$’000
|
US$’000
|
%
Change
|
||
Operating
Profit
|
6,622
|
6,187
|
7
|
|
Net
financing costs
|
(669)
|
(522)
|
28
|
|
Profit
before tax
|
5,953
|
5,665
|
||
Income
tax (expense)/credit
|
(673)
|
49
|
||
Retained
profit
|
5,280
|
5,714
|
·
|
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.
|
·
|
An
increase in accounts receivable by US$9,962,000 due to increased
Group
revenues arising from both continuing activities and acquisitions
in 2006;
|
·
|
An
increase in trade and other payables by US$8,041,000 due to the
combination of increased activity in the Group, including the impact
of
the acquisitions undertaken during the
year;
|
·
|
An
increase in inventory by US$5,434,000 due to a combination of inventory
purchased as part of the acquisition of the haemostasis product line
of
bioMerieux during 2006 (see Item 18, note 26 of the consolidated
financial
statements) and the building up safety stock levels on key finished
products.
|
·
|
Payments
for acquisitions in 2006 (US$46,136,000) principally consisting of
payments for the acquisition of the haemostasis product line of bioMerieux
of US$38,397,000 (including acquisition expenses) and payments for
the
acquisition of the assets of Nephrotek of US$936,000 (including
acquisition expenses). In addition, payments were made during 2006
relating to acquisitions in 2005 and 2004 totalling US$6,803,000.
A one
year promissory note of US$3,000,000, issued as part of the acquisition
of
Primus in 2005, was paid to the shareholders of Primus on the first
anniversary of the acquisition in 2006. As part of the acquisition
of
Primus in 2005 and Fitzgerald in 2004, additional consideration was
due to
the shareholders depending on the growth of the respective businesses
during 2005. As a result, US$2,705,000 was paid to the shareholders
of
Primus and US$1,098,000 was paid to the shareholders of Fitzgerald
in
2006;
|
·
|
Payments
to acquire intangible assets of US$6,085,000 (2005: US$5,509,000),
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$4,751,000 (2005: US$4,039,000)
incurred as part of the Group’s investment programme for its manufacturing
and distribution activities;
|
·
|
Movements
in financial fixed assets, which resulted in a cash outflow of
US$6,500,000 in 2006 (2005: US$1,852,000), was due to an increase
in the
level of cash deposits (restricted cash) which the Group agreed to
keep
with its lending banks in accordance with the terms of its bank facility.
At December 31, 2005 the Group was required to keep US$9,000,000
on
deposit as restricted cash with its lending banks. This restriction
was
increased to US$15,500,000 at December 31, 2006, resulting in a cash
outflow from investing activities of US$6,500,000 in
2006.
|
Contractual
Obligations
|
Payments
due by Period
|
||||
Total
US$’000
|
less
than
1 year US$’000
|
1-3
Years
US$’000
|
3-5
Years
US$’000
|
more
than
5 years US$’000
|
|
Bank
loans
|
46,345
|
10,989
|
17,688
|
17,668
|
-
|
Capital
(finance) lease obligations
|
535
|
278
|
257
|
-
|
-
|
Other
financial liabilities
|
5,688
|
3,120
|
2,568
|
-
|
-
|
Operating
lease obligations
|
48,266
|
3,650
|
7,201
|
5,353
|
32,062
|
Convertible
notes
|
1,836
|
1,836
|
-
|
-
|
-
|
Total
|
102,670
|
19,873
|
27,714
|
23,021
|
32,062
|
Name
|
Age
|
Title
|
|
Ronan
O'Caoimh
|
51
|
Chairman
of the Board of Directors Chief Executive Officer
|
|
Brendan
K. Farrell
|
59
|
Director,
President
|
|
Jim
Walsh, PhD
|
48
|
Director,
Chief Operating Officer
|
|
Rory
Nealon
|
39
|
Director,
Chief Financial Officer, Company Secretary
|
|
Denis
R. Burger, PhD
|
63
|
Non
Executive Director
|
|
Peter
Coyne
|
47
|
Non
Executive Director
|
Director
|
Salary/
Benefits
|
Performance
related bonus |
Defined
contribution pension |
Total
2006
|
Total
2005
|
US$’000
|
US$’000
|
US$’000
|
US$’000
|
US$’000
|
|
Ronan
O’Caoimh
|
552
|
246
|
56
|
854
|
664
|
Brendan
Farrell
|
419
|
157
|
26
|
602
|
459
|
Rory
Nealon
|
250
|
109
|
18
|
377
|
267
|
Jim
Walsh
|
257
|
123
|
19
|
399
|
433
|
1,478
|
635
|
119
|
2,232
|
1,823
|
|
Non-executive
director
|
Fees
|
Total
2006
|
Total
2005
|
||
US$’000
|
US$’000
|
US$’000
|
|||
Denis
R. Burger
|
50
|
50
|
30
|
||
Peter
Coyne
|
50
|
50
|
30
|
||
100
|
100
|
60
|
Director
|
Number
of share
options |
Fair
value at
date of grant |
US$’000
|
||
Ronan
O’Caoimh
|
350,000
|
403
|
Brendan
Farrell
|
285,000
|
328
|
Rory
Nealon
|
150,000
|
173
|
Jim
Walsh
|
25,000
|
29
|
Denis
Burger
|
25,000
|
29
|
Peter
Coyne
|
25,000
|
29
|
860,000
|
991
|
|
Number
of ‘A’
|
Range
of
|
Range
of
|
||
Ordinary
Shares
|
Exercise
Price
|
Exercise
Price
|
||
Subject
to Option
|
per
Ordinary Share
|
per
ADS
|
||
Total
options outstanding
|
8,041,070
|
US$0.98-US$4.50
|
US$3.92-US$18.00
|
Number
of ‘A’
Ordinary Shares Beneficially Owned |
Percentage
Outstanding ‘A’ Ordinary Shares |
Number
of ‘B’
Ordinary Shares Beneficially Owned |
Percentage
Outstanding ‘B’ Ordinary S hares |
Percentage
Total Voting
Power |
|
Ronan
O’Caoimh
|
4,545,621
(1)
|
6.0%
|
-
|
-
|
5.9%
|
Brendan
Farrell
|
1,726,635
(2)
|
2.3%
|
-
|
-
|
2.2%
|
Rory
Nealon
|
412,500
(3)
|
0.6%
|
-
|
-
|
0.5%
|
Jim
Walsh
|
1,852,782
(4)
|
2.5%
|
-
|
-
|
2.4%
|
Denis
R. Burger
|
153,250
(5)
|
0.2%
|
-
|
-
|
0.2%
|
Peter
Coyne
|
126,250
(6)
|
0.2%
|
-
|
-
|
0.2%
|
Potenza
Investments Inc, (“Potenza”)
Statenhof
Building, Reaal 2A
23
50AA Leiderdorp
Netherlands
|
-
|
-
|
500,000
(7)
|
71.4%
|
1.3%
|
Officers
and Directors as a group (6 persons)
|
8,817,038
(1)(2)(3)(4)(5)(6) |
11.4%
|
-
|
-
|
11.2%
|
ADSs
|
|||
High
|
Low
|
||
Year
Ended December 31
|
|||
2002
|
$7.44
|
$3.56
|
|
2003
|
$26.88
|
$5.00
|
|
2004
|
$23.96
|
$9.40
|
|
2005
|
$11.72
|
$6.28
|
|
2006
|
$9.54
|
$7.09
|
|
2005
|
|||
Quarter
ended March 31
|
$11.72
|
$10.00
|
|
Quarter
ended June 30
|
$9.88
|
$6.28
|
|
Quarter
ended September 30
|
$8.76
|
$6.34
|
|
Quarter
ended December 31
|
$8.27
|
$6.67
|
|
2006
|
|||
Quarter
ended March 31
|
$9.31
|
$8.20
|
|
Quarter
ended June 30
|
$9.51
|
$7.45
|
|
Quarter
ended September 30
|
$9.30
|
$7.09
|
|
Quarter
ended December 31
|
$9.54
|
$8.34
|
|
Month
Ended
|
|||
March
31, 2006
|
$9.31
|
$8.80
|
|
April
30, 2006
|
$9.51
|
$8.45
|
|
May
31, 2006
|
$8.81
|
$8.15
|
|
June
30, 2006
|
$8.70
|
$7.45
|
|
July
31, 2006
|
$7.76
|
$7.09
|
|
August
31, 2006
|
$8.47
|
$7.91
|
|
September
30, 2006
|
$9.30
|
$8.07
|
|
October
31, 2006
|
$9.54
|
$8.34
|
|
November
30, 2006
|
$9.31
|
$8.95
|
|
December
31, 2006
|
$9.15
|
$8.36
|
|
January
31, 2007
|
$9.28
|
$8.68
|
|
February
28, 2007
|
$10.45
|
$8.98
|
·
|
the
depository bank’s ADS register shows that the direct beneficial owner of
the dividends has a US address on the register,
or
|
·
|
there
is an intermediary between the depository bank and the beneficial
shareholder and the depository bank receives confirmation from the
intermediary that the beneficial shareholder’s address in the
intermediary’s records is in the
US.
|
·
|
an
individual resident in the US (or certain other countries with which
Ireland has a double taxation treaty) and who is neither resident
nor
ordinarily resident in Ireland; or
|
·
|
a
corporation that is not resident in Ireland and which is ultimately
controlled by persons resident in the US (or certain other countries
with
which Ireland has a double taxation treaty);
or
|
·
|
a
corporation that is not resident in Ireland and whose principal class
of
shares (or its 75% parent’s principal class of shares) are substantially
or regularly traded on a recognised stock exchange;
or
|
·
|
is
otherwise entitled to an exemption from
DWT.
|
Group
Maturity
Before
December 31
|
2007
|
2008
|
2009
|
2010
|
2011
|
After
2012 |
Total
|
Fair
value
|
Long-term
debt
|
||||||||
Variable
rate - US$000
|
10,109
|
8,146
|
8,183
|
8,221
|
8,258
|
-
|
42,917
|
42,917
|
Average
interest rate
|
6.75%
|
6.75%
|
6.75%
|
6.75%
|
6.75%
|
-
|
6.75%
|
|
Fixed
rate - US$000
|
2,109
|
243
|
25
|
-
|
-
|
-
|
2,377
|
2,373
|
Average
interest rate
|
3.30%
|
5.34%
|
6.96%
|
-
|
-
|
-
|
3.55%
|
Year
ended December 31,
2006
|
Year
ended December 31,
2005
|
|||||
KPMG
fees
US$’000
|
%
|
Ernst
& Young
Fees US$’000
|
KPMG
fees
US$’000
|
Total
Fees
US$’000
|
%
|
|
Audit
|
683
|
75%
|
511*
|
-
|
511
|
70%
|
Audit-related
|
206
|
23%
|
-
|
108
|
108
|
15%
|
Tax
|
20
|
2%
|
-
|
106
|
106
|
15%
|
Total
|
909
|
511
|
214
|
725
|
||
Year
ended December
|
||||
Notes
|
2006
US$‘000
|
2005
US$‘000
|
2004
US$‘000
|
|
Revenues
|
2
|
118,674
|
98,560
|
80,008
|
Cost
of sales - including share-based payments (note 19) of US$89,000
(2005:
US$110,000) (2004: US$81,000)
|
(62,090)
|
(51,378)
|
(40,047)
|
|
Cost
of sales - inventory provision
|
2(h)
|
(5,800)
|
-
|
-
|
Gross
profit
|
50,784
|
47,182
|
39,961
|
|
Other
operating income
|
4
|
275
|
161
|
302
|
Research
and development expenses - including share-based payments (note 19)
of
US$36,000 (2005: US$210,000) (2004: US$96,000)
|
(6,696)
|
(6,070)
|
(4,744)
|
|
Selling,
general and administrative expenses - including share-based payments
(note
19) of US$1,016,000 (2005: US$1,048,000) (2004:
US$581,000)
|
(42,422)
|
(34,651)
|
(29,332)
|
|
Operating
profit
|
1,941
|
6,622
|
6,187
|
|
Financial
income
|
3
|
1,164
|
389
|
302
|
Financial
expenses
|
2,
3
|
(2,653)
|
(1,058)
|
(824)
|
Net
financing costs
|
(1,489)
|
(669)
|
(522)
|
|
Profit
before tax
|
5
|
452
|
5,953
|
5,665
|
Income
tax credit / (expense)
|
2,
8
|
2,824
|
(673)
|
49
|
Profit
for the year (all attributable to equity holders)
|
2
|
3,276
|
5,280
|
5,714
|
Basic
earnings per ordinary share (US Dollars)
|
9
|
0.05
|
0.09
|
0.10
|
Diluted
earnings per ordinary share (US Dollars)
|
9
|
0.05
|
0.09
|
0.09
|
Basic
earnings per ADS (US Dollars)
|
9
|
0.19
|
0.36
|
0.41
|
Diluted
earnings per ADS (US Dollars)
|
9
|
0.19
|
0.35
|
0.37
|
Year
ended December 31,
|
||||
Notes
|
2006
US$‘000
|
2005
US$‘000
|
2004
US$‘000
|
|
Foreign exchange translation differences | 18 |
1,347
|
(1,740)
|
118
|
Cash
flow hedges:
|
||||
Effective
portion of changes in fair value
|
226
|
(295)
|
-
|
|
Deferred
tax on income and expenses recognised directly in equity
|
4
|
41
|
-
|
|
Net
income/ (expense) recognised directly in
equity
|
1,577
|
(1,994)
|
118
|
|
Cash
flow hedge recycled to the income statement
|
(166)
|
(183)
|
-
|
|
Profit
for the year
|
2
|
3,276
|
5,280
|
5,714
|
Total
recognised income and expense (all attributable to equity holders)
|
4,687
|
3,103
|
5,832
|
|
Notes
|
December
31,
2006 US$‘000
|
December
31,
2005 US$‘000
|
|
ASSETS
|
|||
Non-current
assets
|
|||
Property,
plant and equipment
|
10
|
22,255
|
19,202
|
Goodwill
and intangible assets
|
11
|
121,768
|
85,197
|
Deferred
tax assets
|
12
|
7,656
|
3,277
|
Other
assets
|
13
|
76
|
61
|
Total
non-current assets
|
151,755
|
107,737
|
|
Current
assets
|
|||
Inventories
|
14
|
45,572
|
36,450
|
Trade
and other receivables
|
15
|
33,115
|
20,885
|
Income
tax receivable
|
368
|
649
|
|
Financial
assets - restricted cash
|
16
|
15,500
|
9,000
|
Cash
and cash equivalents
|
17
|
2,821
|
9,881
|
Total
current assets
|
97,376
|
76,865
|
|
TOTAL
ASSETS
|
2
|
249,131
|
184,602
|
EQUITY
AND LIABILITIES
|
|||
Equity
attributable to the equity holders of the parent
|
|||
Share
capital
|
18
|
978
|
830
|
Share
premium
|
18
|
151,774
|
124,227
|
Retained
earnings
|
18
|
10,818
|
6,280
|
Translation
reserve
|
18
|
(275)
|
(1,622)
|
Other
reserves
|
18
|
3,967
|
3,903
|
Total
equity
|
167,262
|
133,618
|
|
Current
liabilities
|
|||
Interest-bearing
loans and borrowings
|
20
|
10,382
|
7,720
|
Convertible
notes-interest bearing
|
21
|
1,836
|
7,203
|
Income
tax payable
|
44
|
260
|
|
Trade
and other payables
|
22
|
20,459
|
12,768
|
Other
financial liabilities
|
23
|
3,120
|
3,707
|
Derivative
financial instruments
|
31
|
-
|
44
|
Provisions
|
24
|
100
|
199
|
Total
current liabilities
|
35,941
|
31,901
|
|
Non-current
liabilities
|
|||
Interest-bearing
loans and borrowings
|
20
|
33,076
|
10,369
|
Other
financial liabilities
|
23
|
2,568
|
-
|
Convertible
notes-interest bearing
|
21
|
-
|
1,836
|
Other
income tax payable
|
-
|
48
|
|
Other
payables
|
25
|
838
|
102
|
Deferred
tax liabilities
|
12
|
9,446
|
6,728
|
Total
non-current liabilities
|
45,928
|
19,083
|
|
TOTAL
LIABILITIES
|
2
|
81,869
|
50,984
|
TOTAL
EQUITY AND LIABILITIES
|
249,131
|
184,602
|
Year
ended December 31,
|
||||
Notes
|
2006
US$‘000
|
2005
US$‘000
|
2004
US$‘000
|
|
Cash
flows from operating activities
|
||||
Profit
for the year
|
3,276
|
5,280
|
5,714
|
|
Adjustments
to reconcile net profit to cash provided by operating
activities:
|
||||
Depreciation
|
3,736
|
2,434
|
1,629
|
|
Amortisation
|
2,687
|
1,803
|
1,111
|
|
Income
tax (credit)/ expense
|
(2,824)
|
673
|
(49)
|
|
Financial
income
|
(1,164)
|
(389)
|
(302)
|
|
Financial
expense
|
2,653
|
1,058
|
824
|
|
Share-based
payments
|
1,141
|
1,368
|
758
|
|
Foreign
exchange losses on operating cash flows
|
(100)
|
(292)
|
(131)
|
|
(Profit)/
loss on disposal / retirement of property, plant and
equipment
|
(2)
|
469
|
14
|
|
Other
non-cash items
|
6,269
|
232
|
76
|
|
Operating
cash flows before changes in working capital
|
15,672
|
12,636
|
9,644
|
|
(Increase)/
decrease in trade and other receivables
|
(9,962)
|
(8,034)
|
1,447
|
|
(Increase)/
decrease in inventories
|
(5,434)
|
1,311
|
(5,883)
|
|
Increase/
(decrease) in trade and other payables
|
8,041
|
4,689
|
(2,419)
|
|
Cash
generated from operations
|
8,317
|
10,602
|
2,789
|
|
Interest
paid
|
(1,642)
|
(972)
|
(931)
|
|
Interest
received
|
839
|
371
|
291
|
|
Income
taxes paid
|
(146)
|
(792)
|
(1,666)
|
|
Net
cash used in operating activities
|
7,368
|
9,209
|
483
|
|
Cash
flows from investing activities
|
||||
Payments
to acquire subsidiaries and businesses
|
26
|
(46,136)
|
(13,129)
|
(19,090)
|
Cash
received with subsidiary
|
-
|
127
|
-
|
|
Payments
to acquire intangible assets
|
(6,085)
|
(5,509)
|
(3,601)
|
|
(Acquisition)
/ disposal of financial assets
|
(6,500)
|
(1,852)
|
10,852
|
|
Proceeds
from disposal of property, plant and equipment
|
205
|
4
|
31
|
|
Acquisition
of property, plant and equipment
|
(4,751)
|
(4,039)
|
(3,824)
|
|
Net
cash used in investing activities
|
(63,267)
|
(24,398)
|
(15,632)
|
|
Cash
flows from financing activities
|
||||
Proceeds
from issue of ordinary share capital
|
25,265
|
4,755
|
31,708
|
|
Proceeds
from borrowings, short-term debt
|
6,000
|
1,800
|
-
|
|
Proceeds
from borrowings, long-term debt
|
24,000
|
7,200
|
-
|
|
Expenses
paid in connection with share issue and debt financing
|
(1,526)
|
(195)
|
(2,238)
|
|
Repayment
of long-term debt
|
(1,276)
|
(1,217)
|
(2,214)
|
|
Proceeds
from new finance leases
|
78
|
154
|
-
|
|
Payment
of finance lease liabilities
|
(276)
|
(348)
|
(267)
|
|
Issue
of convertible debentures
|
-
|
-
|
5,000
|
|
Repayment
of convertible debt
|
(3,644)
|
(1,822)
|
(1,822)
|
|
Repayment
of other financial liabilities
|
-
|
(648)
|
(2,675)
|
|
Net
cash from financing activities
|
48,621
|
9,679
|
27,492
|
|
(Decrease)
/ increase in cash and cash equivalents
|
(7,278)
|
(5,510)
|
12,343
|
|
Effects
of exchange rate movements on cash held
|
218
|
252
|
233
|
|
Cash
and cash equivalents at beginning of year
|
9,881
|
15,139
|
2,563
|
|
Cash
and cash equivalents at end of year
|
17
|
2,821
|
9,881
|
15,139
|
1.
|
BASIS
OF PREPARATION AND SIGNIFICANT ACCOUNTING
POLICIES
|
a)
|
Statement
of compliance
|
b)
|
Basis
of preparation
|
c)
|
Basis
of consolidation
|
Subsidiaries
|
Subsidiaries
are entities controlled by the Company. Control exists when the
Company
has the power, directly or indirectly, to govern the financial
and
reporting policies of an entity so as to obtain benefits from its
activities. In assessing control, potential voting rights that
presently
are exercisable or convertible are taken into account. The financial
statements of subsidiaries are included in the consolidated financial
statements from the date that control commences until the date
that
control ceases.
|
d)
|
Property,
plant and equipment
|
· Leasehold
improvements
|
5-10
years
|
||
· Office
equipment and fittings
|
10
years
|
||
· Buildings
|
50
years
|
||
· Computer
equipment
|
3-5
years
|
||
· Plant
and equipment
|
5-10
years
|
Leases
other than finance leases are classified as "operating leases",
and the
rentals thereunder are charged to the income statement on a straight
line
basis over the period of the leases. Lease incentives are recognised
in
the income statement on a straight-line basis over the lease
term.
|
e)
|
Business
combinations
|
f)
|
Goodwill
|
In
respect of business combinations that have occurred since January
1, 2004
(being the transition date to IFRS), goodwill represents the difference
between the cost of the acquisition and the fair value of the net
identifiable assets acquired.
|
In
respect of acquisitions prior to this date, goodwill is included
on the
basis of its deemed cost, which represents the amount recorded
under
Previous GAAP. Save for retrospective restatement of deferred tax
as an
adjustment to retained earnings in accordance with IAS 12, Income
Taxes, the
classification and accounting treatment of business combinations
undertaken prior to the transition date has not been reconsidered
in
preparing the Group’s opening IFRS balance sheet as at January 1,
2004.
|
To
the extent that the Group’s interest in the net fair value of the
identifiable assets, liabilities and contingent liabilities acquired
exceeds the cost of a business combination, the identification
and
measurement of the related assets, liabilities and contingent liabilities
are revisited accompanied by a reassessment of the cost of the
transaction, and any remaining balance is immediately recognised
in the
income statement.
|
At
the acquisition date, any goodwill is allocated to each of the
cash
generating units expected to benefit from the combination’s synergies.
Following initial recognition, goodwill is stated at cost less
any
accumulated impairment losses (see note 1(h)).
|
g)
|
Intangibles,
including research and development (other than
goodwill)
|
An
intangible asset, which is an identifiable non-monetary asset without
physical substance, is recognised to the extent that it is probable
that
the expected future economic benefits attributable to the asset
will flow
to the Group and that its cost can be measured reliably. The asset
is
deemed to be identifiable when it is separable (that is, capable
of being
divided from the entity and sold, transferred, licensed, rented
or
exchanged, either individually or together with a related contract,
asset
or liability) or when it arises from contractual or other legal
rights,
regardless of whether those rights are transferable or separable
from the
Group or from other rights and obligations.
|
Intangible
assets acquired as part of a business combination are capitalised
separately from goodwill if the intangible asset meets the definition
of
an asset and the fair value can be reliably measured on initial
recognition. Subsequent to initial recognition, these intangible
assets
are carried at cost less any accumulated amortisation and any accumulated
impairment losses (note 1(h)). Definite lived intangible assets
are
reviewed for indicators of impairment annually while indefinite
lived
assets are tested for impairment annually, either individually
or at the
cash generating unit level.
|
Research
and development
|
Expenditure
on research activities, undertaken with the prospect of gaining
new
scientific or technical knowledge and understanding, is recognised
in the
income statement as an expense as incurred. Expenditure on development
activities, whereby research findings are applied to a plan or
design for
the production of new or substantially improved products and processes,
is
capitalised if the product or process is technically and commercially
feasible and the Group has sufficient resources to complete the
development. The expenditure capitalised includes the cost of materials,
direct labour and attributable overheads and third party costs.
Subsequent
expenditure on capitalised intangible assets is capitalised only
when it
increases the future economic benefits embodied in the specific
asset to
which it relates. All other development expenditure is expensed
as
incurred. Subsequent to initial recognition, the capitalised development
expenditure is carried at cost less any accumulated amortisation
and any
accumulated impairment losses (note 1(h)).
|
Amortisation
|
Amortisation
is charged to the income statement on a straight-line basis over
the
estimated useful lives of intangible assets, unless such lives
are
indefinite. Other intangible assets are amortised from the date
they are
available for use. The estimated useful lives are as
follows:
|
§
|
Patents
and licences
|
6-15
years
|
|||
§
|
Capitalised
development costs
|
15
years
|
|||
§
|
Other
(including acquired customer and supplier lists)
|
6-15
years
|
Certain
trade names acquired are deemed to have an indefinite useful
life.
|
Where
amortisation is charged on assets with finite lives, this expense
is taken
to the income statement through the ‘selling, general and administrative
expenses’ line.
|
Useful
lives are examined on an annual basis and adjustments, where applicable,
are made on a prospective basis.
|
h)
|
Impairment
|
i)
|
Inventories
|
Inventories
are stated at the lower of cost and net realisable value. Cost
is based on
the first-in, first-out principle and includes all expenditure
which has
been incurred in bringing the products to their present location
and
condition, and includes an appropriate allocation of manufacturing
overhead based on the normal level of operating capacity. Net realisable
value is the estimated selling price of inventory on hand in the
ordinary
course of business less all further costs to completion and costs
expected
to be incurred in selling these
products.
|
j)
|
Trade
and other receivables
|
k)
|
Trade
and other payables
|
l)
|
Cash
and cash equivalents
|
m)
|
Interest-bearing
loans and borrowings
|
n)
|
Share-based
payments
|
o)
|
Government
grants
|
Grants
that compensate the Group for expenses incurred such as research
and
development, employment and training grants are recognised as revenue
or
income in the income statement on a systematic basis in the same
periods
in which the expenses are incurred. Grants that compensate the Group
for
the cost of an asset are recognised in the income statement as other
operating income on a systematic basis over the useful life of the
asset.
|
p)
|
Revenue
recognition
|
Revenue
from the sale of goods is recognised in the income statement when
the
significant risks and rewards of ownership have been transferred
to the
buyer. Revenue from products is generally recorded as of the date
of
shipment. Revenue is recognised when the Group has satisfied all
of its
obligations to the customer. Revenue, including amounts invoiced
for
shipping and handling costs, represents the value of goods supplied
to
external customers, net of discounts and excluding sales
taxes.
|
Revenue
is recognised to the extent that it is probable that economic benefit
will
flow to the Group, that the risks and rewards of ownership have passed
to
the buyer and the revenue can be measured. No revenue is recognised
if
there is uncertainty regarding recovery of the consideration due
at the
outset of the transaction or the possible return of goods.
|
q)
|
Employee
benefits
|
The
Group operates defined contribution schemes in various locations
where its
subsidiaries are based. Contributions to the defined contribution
schemes
are recognised in the income statement in the period in which they
become
payable.
|
Other
long-term benefits
|
Where
employees participate in the Group’s other long-term benefit schemes (such
as permanent health insurance schemes under which the scheme insures
the
employees), or where the Group contributes to insurance schemes for
employees, the Group pays an annual fee to a service provider, and
accordingly the Group expenses such payments as incurred.
|
r)
|
Foreign
currency
|
A
majority of the revenue of the Group is generated in US Dollars.
The
Group’s management has determined that the US dollar is the primary
currency of the economic environment in which the Company and its
subsidiaries (with the exception of the Group’s subsidiaries in Germany
and Sweden) principally operate. Thus the functional currency of
the
Company and its subsidiaries (other than those subsidiaries in Germany
and
Sweden) is the US Dollar. The functional currency of the German and
Swedish subsidiaries is the euro and the Swedish Kroner, respectively.
The
presentation currency of the Company and Group is the US
Dollar.
|
s)
|
Derivative
financial instruments
|
t)
|
Segment
reporting
|
u)
|
Tax
(current and deferred)
|
i.
|
Where
the deferred tax liability arises from goodwill not deductible
for tax
purposes or the initial recognition of an asset or a liability
in a
transaction that is not a business combination and affects neither
the
accounting profit nor the taxable profit or loss at the time of
the
transaction; and
|
ii.
|
Where,
in respect of temporary differences associated with investments
in
subsidiary undertakings, the timing of the reversal of the temporary
difference is subject to control and it is probable that the temporary
difference will not reverse in the foreseeable future.
|
v)
|
Provisions
|
w)
|
Cost
of sales
|
Cost
of sales comprises product cost including manufacturing and payroll
costs,
quality control, shipping, handling, and packaging costs and the
cost of
services provided.
|
x)
|
Finance
income and costs
|
Finance
income comprises interest income on deposits and is recognised
in the
income statement as it accrues, using the effective interest
method.
|
z)
|
New
IFRS Standards and Interpretations not
applied
|
International
Financial Reporting Standards (IFRS/IAS)
|
Effective
date
|
|
IFRS
7
|
Financial
Instruments: Disclosures
|
January
1, 2007 (adopted by the EU)
|
IFRS
8
|
Operating
Segments
|
January
1, 2009 (not adopted by the EU)
|
IAS
1
|
Amendment
to IAS 1 - Presentation of
Financial Statements: Capital Disclosures |
January
1, 2007 (adopted by the EU)
|
International
Financial Reporting Interpretations Committee
(IFRIC)
|
||
IFRIC
8
|
Scope
of IFRS 2 Share-based Payment
|
May
1, 2007 (adopted by the EU
|
IFRIC
9
|
Reassessment
of Embedded Derivatives
|
January
1, 2007 (adopted by the EU)
|
IFRIC
10
|
Interim
Financial Reporting and Impairment
|
January
1, 2007 (not adopted by the EU)
|
IFRIC
11
|
Group
and Treasury Share Transactions
|
January
1, 2008 (not adopted by the EU)
|
IFRIC
12
|
Service
Concession Arrangements
|
January
1, 2008 (not adopted by the EU)
|
The
Group does not anticipate that the adoption of these standards
and
interpretations will have a material effect on its financial statements
on
initial adoption. Upon adoption of IFRS 7 and IAS 1, the Group
will be
required to disclose additional information about its financial
instruments, their significance and the nature and extent of the
risks to
which they give rise, together with greater detail as to the fair
value of
its financial instruments and its risk exposure. There will be
no effect
on reported income or net assets.
|
Geographical
segments
|
The
Group comprises two main geographical segments (i) the Americas
and (ii)
Rest of World. The Group’s geographical segments are determined by the
location of the Group’s assets and operations.
|
The
Group has also presented a geographical analysis of the segmental
data for
Ireland on the basis of the aggregation thresholds contained in
IAS
14.
|
Business
segments
|
The
Group operates in one business segment, the market for diagnostic
tests
for a range of diseases and other medical conditions. In determining
the
nature of its segmentation, the Group has considered the nature
of the
products, their risks and rewards, the nature of the production
base, the
customer base and the nature of the regulatory environment. The
Group
acquires, manufactures and markets a range of diagnostic products.
The
Group’s products are sold to a similar customer base and the main body
whose regulation the Group’s products must comply with is the Food and
Drug Administration (“FDA”) in the
US.
|
The
following presents revenue and profit information and certain asset
and
liability information regarding the Group’s geographical
segments.
|
a)
|
The
distribution of revenue by geographical area based on location
of assets
was as follows:
|
Revenue
|
|||||
Americas
|
Rest
of World
|
||||
Year
ended December 31, 2006
|
Ireland
|
Other
|
Eliminations
|
Total
|
|
US$‘000
|
US$‘000
|
US$‘000
|
US$’000
|
US$‘000
|
|
Revenue
from external customers
|
33,247
|
55,665
|
29,762
|
-
|
118,674
|
Inter-segment
revenue
|
21,161
|
24,968
|
9,679
|
(55,808)
|
-
|
Total
revenue
|
54,408
|
80,633
|
39,441
|
(55,808)
|
118,674
|
Americas
|
Rest
of World
|
||||
Year
ended December 31, 2005
|
Ireland
|
Other
|
Eliminations
|
Total
|
|
US$‘000
|
US$‘000
|
US$‘000
|
US$’000
|
US$‘000
|
|
Revenue
from external customers
|
31,136
|
54,859
|
12,565
|
-
|
98,560
|
Inter-segment
revenue
|
22,197
|
14,402
|
6,594
|
(43,193)
|
-
|
Total
revenue
|
53,333
|
69,261
|
19,159
|
(43,193)
|
98,560
|
Americas
|
Rest
of World
|
||||
Year
ended December 31, 2004
|
Ireland
|
Other
|
Eliminations
|
Total
|
|
US$‘000
|
US$‘000
|
US$‘000
|
US$’000
|
US$‘000
|
|
Revenue
from external customers
|
28,937
|
40,985
|
10,086
|
-
|
80,008
|
Inter-segment
revenue
|
20,860
|
13,077
|
6,549
|
(40,486)
|
-
|
Total
revenue
|
49,797
|
54,062
|
16,635
|
(40,486)
|
80,008
|
b)
|
The
distribution of revenue by customers’ geographical area was as
follows:
|
Revenue
|
December
31, 2006
US$‘000
|
December
31, 2005
US$‘000
|
December
31, 2004
US$‘000
|
Americas
|
60,748
|
50,627
|
41,380
|
Europe
(including Ireland) *
|
34,452
|
25,301
|
22,718
|
Asia
/ Africa
|
23,474
|
22,632
|
15,910
|
118,674
|
98,560
|
80,008
|
|
c)
|
The
distribution of revenue by major product group was as
follows:
|
Revenue
|
December
31, 2006
US$‘000
|
December
31, 2005
US$‘000
|
December
31, 2004
US$‘000
|
Infectious
diseases
|
42,051
|
44,078
|
36,402
|
Haemostasis
|
46,476
|
29,766
|
26,836
|
Point
of care
|
15,279
|
12,836
|
9,807
|
Clinical
chemistry
|
14,868
|
11,880
|
6,963
|
118,674
|
98,560
|
80,008
|
|
d)
|
The
distribution of segment results by geographical area was as
follows:
|
Year
ended December 31, 2006
|
||||
Americas
|
Rest
of World
|
|||
Ireland
|
Other
|
Total
|
||
US$‘000
|
US$‘000
|
US$‘000
|
US$‘000
|
|
Result
|
(6,621)
|
10,790
|
(1,843)
|
2,326
|
Unallocated
expenses *
|
(385)
|
|||
Operating
profit
|
1,941
|
|||
Net
financing costs (note 3)
|
(1,489)
|
|||
Profit
before tax
|
452
|
|||
Income
tax credit (note 8)
|
2,824
|
|||
Profit
for the year
|
3,276
|
|||
Year
ended December 31, 2005
|
||||
Americas
|
Rest
of World
|
|||
Ireland
|
Other
|
Total
|
||
US$‘000
|
US$‘000
|
US$‘000
|
US$‘000
|
|
Result
|
(369)
|
10,339
|
(1,581)
|
8,389
|
Unallocated
expenses *
|
(1,767)
|
|||
Operating
profit
|
6,622
|
|||
Net
financing costs (note 3)
|
(669)
|
|||
Profit
before tax
|
5,953
|
|||
Income
tax expense (note 8)
|
(673)
|
|||
Profit
for the year
|
5,280
|
|||
Year
ended December 31, 2004
|
||||
Americas
|
Rest
of World
|
|||
Ireland
|
Other
|
Total
|
||
US$‘000
|
US$‘000
|
US$‘000
|
US$‘000
|
|
Result
|
(4,941)
|
12,205
|
667
|
7,931
|
Unallocated
expenses *
|
(1,744)
|
|||
Operating
profit
|
6,187
|
|||
Net
financing costs (note 3)
|
(522)
|
|||
Profit
before tax
|
5,665
|
|||
Income
tax credit (note 8)
|
49
|
|||
Profit
for the year
|
5,714
|
|||
e)
|
The
distribution of segment assets and segment liabilities by geographical
area was as follows:
|
As
at December 31, 2006
|
||||
Americas
|
Rest
of World
|
|||
Ireland
|
Other
|
Total
|
||
US$‘000
|
US$‘000
|
US$‘000
|
US$‘000
|
|
Assets
and liabilities
|
||||
Segment
assets
|
57,162
|
145,473
|
20,151
|
222,786
|
Unallocated
assets:
|
||||
Income
tax assets (current and deferred)
|
8,024
|
|||
Restricted
cash
|
15,500
|
|||
Cash
and cash equivalents
|
2,821
|
|||
Total
assets as reported in the Group balance sheet
|
249,131
|
|||
Segment
liabilities
|
6,268
|
17,130
|
3,687
|
27,085
|
Unallocated
liabilities:
|
||||
Income
tax liabilities (current and deferred)
|
9,490
|
|||
Interest-bearing
loans and borrowings and convertible notes (current and
non-current)
|
45,294
|
|||
Total
liabilities as reported in the Group balance sheet
|
81,869
|
|||
As
at December 31, 2005
|
||||
Americas
|
Rest
of World
|
|||
Ireland
|
Other
|
Total
|
||
US$‘000
|
US$‘000
|
US$‘000
|
US$‘000
|
|
Assets
and liabilities
|
50,501
|
99,336
|
11,958
|
161,795
|
Segment
assets
|
||||
Unallocated
assets:
|
||||
Income
tax assets (current and deferred)
|
3,926
|
|||
Restricted
cash
|
9,000
|
|||
Cash
and cash equivalents
|
9,881
|
|||
Total
assets as reported in the Group balance sheet
|
184,602
|
|||
Segment
liabilities
|
7,415
|
8,078
|
1,327
|
16,820
|
Unallocated
liabilities:
|
||||
Income
tax liabilities (current and deferred)
|
7,036
|
|||
Interest-bearing
loans and borrowings and convertible notes (current and
non-current)
|
27,128
|
|||
Total
liabilities as reported in the Group balance sheet
|
50,984
|
|||
f)
|
The
distribution of long-lived assets, which are property, plant and
equipment, goodwill and intangible assets and other non-current
assets
(excluding deferred tax assets), by geographical area was as
follows:
|
December
31, 2006
US$‘000
|
December
31, 2005
US$‘000
|
|
Rest
of World - Ireland
|
110,936
|
75,878
|
Rest
of World - Other
|
8,537
|
4,973
|
Americas
|
24,626
|
23,609
|
144,099
|
104,460
|
g)
|
The
distribution of depreciation and amortisation by geographical area
was as
follows:
|
December
31, 2006
US$‘000
|
December
31, 2005
US$‘000
|
December
31, 2004
US$‘000
|
|
Depreciation:
|
|||
Rest
of World - Ireland
|
1,336
|
1,118
|
1,023
|
Rest
of World - Other
|
1,163
|
427
|
211
|
Americas
|
1,237
|
889
|
395
|
3,736
|
2,434
|
1,629
|
|
Amortisation:
|
|||
Rest
of World - Ireland
|
2,298
|
1,569
|
997
|
Rest
of World - Other
|
104
|
87
|
59
|
Americas
|
285
|
147
|
55
|
2,687
|
1,803
|
1,111
|
h)
|
The
distribution of share-based payment expense by geographical area
was as
follows:
|
December
31, 2006
US$‘000
|
December
31, 2005
US$‘000
|
December
31, 2004
US$‘000
|
|
Rest
of World - Ireland
|
922
|
1,174
|
588
|
Rest
of World - Other
|
24
|
22
|
19
|
Americas
|
195
|
172
|
151
|
1,141
|
1,368
|
758
|
|
i)
|
The
distribution of interest expense by geographical area was as
follows:
|
December
31, 2006
US$‘000
|
December
31, 2005
US$‘000
|
December
31, 2004
US$‘000
|
|
Rest
of World - Ireland
|
1,982
|
894
|
806
|
Rest
of World - Other
|
12
|
8
|
7
|
Americas
|
659
|
156
|
11
|
2,653
|
1,058
|
824
|
j)
|
The
distribution of taxation credit/ (expense) by geographical area
was as
follows:
|
December
31, 2006
US$‘000
|
December
31, 2005
US$‘000
|
December
31, 2004
US$‘000
|
|
Rest
of World - Ireland
|
(1,156)
|
(1,105)
|
(1,167)
|
Rest
of World - Other
|
975
|
236
|
125
|
Americas
|
3,005
|
196
|
1,091
|
2,824
|
(673)
|
49
|
k)
|
During
2006, 2005 and 2004 there were no customers with 10% or more of
total
revenues.
|
l)
|
The
distribution of capital expenditure by geographical area was as
follows:
|
December
31, 2006
US$‘000
|
December
31, 2005
US$‘000
|
|
Rest
of World - Ireland
|
38,716
|
12,837
|
Rest
of World - Other
|
4,471
|
1,023
|
Americas
|
2,789
|
16,374
|
45,976
|
30,234
|
3.
|
FINANCIAL
INCOME AND EXPENSES
|
Note
|
December
31, 2006
US$‘000
|
December
31, 2005
US$‘000
|
December
31, 2004
US$‘000
|
|
Financial
income:
|
||||
Interest
income
|
1,164
|
389
|
302
|
|
Financial
expense:
|
||||
Finance
lease interest
|
(27)
|
(33)
|
(40)
|
|
Interest
payable on interest bearing loans and borrowings
|
20
|
(2,167)
|
(312)
|
(193)
|
Convertible
note interest *
|
21
|
(278)
|
(713)
|
(485)
|
Other
interest expense
|
(181)
|
-
|
(106)
|
|
(2,653)
|
(1,058)
|
(824)
|
||
(1,489)
|
(669)
|
(522)
|
4.
|
OTHER
OPERATING INCOME
|
December
31, 2006
US$‘000
|
December
31, 2005
US$‘000
|
December
31, 2004
US$‘000
|
|
Rental
income from premises
|
204
|
161
|
167
|
Employment/
training grants
|
71
|
-
|
135
|
275
|
161
|
302
|
5.
|
PROFIT
BEFORE TAX
|
December
31, 2006
US$‘000
|
December
31, 2005
US$‘000
|
December
31, 2004
US$‘000
|
|
Directors’
emoluments
(including
non- executive directors):
|
|||
Remuneration
|
2,213
|
1,752
|
1,321
|
Pension
|
119
|
131
|
172
|
Share based payments
|
732
|
828
|
339
|
Auditors’
remuneration
|
|||
Audit fees
|
629
|
688
|
419
|
Non audit fees
|
50
|
164
|
17
|
Depreciation
- leased assets
|
120
|
92
|
184
|
Depreciation
- owned assets
|
3,616
|
2,342
|
1,445
|
Amortisation
|
2,687
|
1,803
|
1,111
|
(Profit)/
loss on disposal of fixed assets
|
(2)
|
469
|
14
|
Net
foreign exchange differences
|
(240)
|
(295)
|
(741)
|
Operating
lease rentals:
|
|||
Plant and machinery
|
85
|
17
|
19
|
Land and buildings
|
2,838
|
1,800
|
1,695
|
Other equipment
|
240
|
125
|
280
|
Employment/
training grants
|
(71)
|
-
|
(135)
|
6.
|
PERSONNEL
EXPENSES
|
December
31, 2006
US$‘000
|
December
31, 2005
US$‘000
|
December
31, 2004
US$‘000
|
|
Wages
and salaries
|
42,113
|
35,595
|
31,731
|
Social
welfare costs
|
4,407
|
3,613
|
3,280
|
Pension
costs
|
987
|
761
|
450
|
Share-based
payments
|
1,141
|
1,368
|
758
|
48,648
|
41,337
|
36,219
|
December
31,
2006
|
December
31,
2005
|
December
31,
2004
|
|
Research
and development
|
44
|
42
|
41
|
Administration
and sales
|
246
|
207
|
171
|
Manufacturing
and quality
|
504
|
454
|
459
|
794
|
703
|
671
|
|
7
|
PENSION
SCHEME
|
8.
|
INCOME
TAX CREDIT / (EXPENSE)
|
December
31, 2006
US$‘000
|
December
31, 2005
US$‘000
|
December
31, 2004
US$‘000
|
|
Current
tax expense
|
|||
Corporation
tax at 12.5%
|
(519)
|
(361)
|
(1,125)
|
Manufacturing
relief
|
49
|
-
|
144
|
(470)
|
(361)
|
(981)
|
|
Overseas
tax *
|
(25)
|
172
|
139
|
Adjustment
in respect of prior years **
|
290
|
-
|
214
|
Total
current tax expense
|
(205)
|
(189)
|
(628)
|
Deferred
tax credit / (expense) ***
|
|||
Origination
and reversal of temporary differences (see note 12)
|
107
|
(926)
|
(264)
|
Benefit
of tax losses recognised (see note 12)
|
2,922
|
442
|
941
|
Total
deferred tax credit / (expense)
|
3,029
|
(484)
|
677
|
Total
income tax credit / (expense) in income statement
|
2,824
|
(673)
|
49
|
Effective
tax rate
|
December
31, 2006
|
December
31, 2005
|
December
31, 2004
|
Profit
on ordinary activities before taxation
|
452
|
5,953
|
5,665
|
As
a percentage of profit before tax:
|
|||
Current
tax
|
46.32%
|
3.17%
|
11.09%
|
Total
(current and deferred)
|
(625.44%)
|
11.31%
|
(0.86%)
|
December
31, 2006
|
December
31, 2005
|
December
31, 2004
|
|
Irish
corporation tax
|
12.50%
|
12.50%
|
12.50%
|
Manufacturing
relief
|
(10.76%)
|
-
|
(2.54%)
|
Adjustments
in respect of prior years
|
(64.15%)
|
-
|
(3.78%)
|
Effect
of tax rates on overseas earnings
|
(529.98%)
|
(5.10%)
|
(5.13%)
|
Effect
of non deductible expenses
|
43.90%
|
3.91%
|
2.72%
|
Effects
of benefit of loss carryforwards
Effect
of Irish income taxable at higher tax rate
R&D
tax credit
|
(25.18%)
2.44%
(54.21%)
|
-
-
-
|
(4.63%)
-
-
|
Effective
tax rate
|
(625.44%)
|
11.31%
|
(0.86%)
|
December
31, 2006
US$‘000 |
December
31, 2005
US$‘000
|
December
31, 2004
US$‘000
|
|
Relating
to forward contracts as hedged instruments
|
4
|
41
|
-
|
4
|
41
|
-
|
|
(b)
|
The
distribution of profit before taxes by geographical area was as
follows:
|
December
31, 2006
US$‘000
|
December
31, 2005
US$‘000
|
December
31, 2004
US$‘000
|
|
Rest
of World - Ireland
|
9,585
|
7,873
|
9,957
|
Rest
of World - Other
|
(1,855)
|
(1,567)
|
660
|
Americas
|
(7,278)
|
(353)
|
(4,952)
|
452
|
5,953
|
5,665
|
(c)
|
At
December 31, 2006, the Group had net operating loss carryforwards
of
approximately US$8,138,000 (2005: US$3,331,000, 2004: US$2,260,000)
in the
US, US$580,000 (2005: US$244,000, 2004: US$256,000) in the UK,
US$2,320,000 (2005: US$668,000, 2004: US$410,000) in Germany and
US$290,000 (2005: US$Nil, 2004: US$nil) in Ireland. The utilisation
of
these net operating loss carryforwards is limited to future profitable
operations in the US, UK, Germany and Ireland. The US net operating
loss
has a maximum carryforward of 20 years. US$3,043,000 of the net
operating
losses in the US will expire by December 31, 2024 while the balance
of
US$5,095,000 will expire by December 31, 2026. The UK, German and
Irish
losses can be carried forward indefinitely. A deferred tax asset
has been
recognised for the loss carryforwards in the US, UK, Ireland and
Germany.
The tax value of these loss carryforwards is US$4,447,000 (2005:
US$1,525,000) (see note 12). A deferred tax asset of US$87,000
(2005:
US$nil) in respect of net operating losses in France was not recognised
in
2006 due to uncertainties regarding future full utilisation of
these
losses in the related tax jurisdiction in future periods. The Group
has US
state credit carryforwards of US$326,000 at December 31, 2006 (2005:
US$331,000). A deferred tax asset of US$185,000 (2005: US$316,000)
in
respect of US state credit carryforwards was not recognised in
2006 due to
uncertainties regarding future full utilisation of these state
credit
carryforwards in the related tax jurisdiction in future periods.
Excepting
state credit carryforwards of US$39,000 which expire by December
31, 2009,
the balance of the state credits carry forward
indefinitely.
|
(d)
|
There
are no income tax consequences for the Company attaching to the
payment of
dividends by Trinity Biotech plc to shareholders of the
Company.
|
9.
|
EARNINGS
PER SHARE
|
Basic
earnings per ordinary share
|
December
31,
2006 |
December
31,
2005 |
December
31,
2004 |
|
‘A’
ordinary shares
|
69,293,753
|
57,490,084
|
53,732,024
|
‘B’
ordinary shares
|
1,400,000
|
1,400,000
|
1,400,000
|
Basic
earnings per share denominator
|
70,693,753
|
58,890,084
|
55,132,024
|
Reconciliation
to weighted average earnings per share denominator:
|
|||
Number
of A ordinary shares at January 1 (note 18)
|
60,041,521
|
54,904,318
|
45,160,640
|
Number
of B ordinary shares at January 1 (multiplied by 2)
|
1,400,000
|
1,400,000
|
1,400,000
|
Weighted
average number of shares issued during the year
|
9,252,232
|
2,585,766
|
8,571,384
|
Basic
earnings per share denominator
|
70,693,753
|
58,890,084
|
55,132,024
|
December
31,
2006
|
December
31,
2005 |
December
31,
2004 |
|
Basic
earnings per share denominator (see above)
|
70,693,753
|
58,890,084
|
55,132,024
|
Issuable
on exercise of options and warrants
|
1,431,987
|
2,168,545
|
4,156,551
|
Issuable
on conversion of convertible notes
|
-
|
5,973,753
|
6,239,227
|
Diluted
earnings per share denominator *
|
72,125,740
|
67,032,382
|
65,527,802
|
December
31,
2006 |
December
31,
2005 |
December
31,
2004 |
|
‘A’
ordinary shares - ADS
|
17,323,438
|
14,372,521
|
13,433,006
|
‘B’
ordinary shares - ADS
|
350,000
|
350,000
|
350,000
|
Basic
earnings per share denominator
|
17,673,438
|
14,722,521
|
13,783,006
|
December
31,
2006 |
December
31,
2005 |
December
31,
2004 |
|
Basic
earnings per share denominator (see above)
|
17,673,438
|
14,722,521
|
13,783,006
|
Issuable
on exercise of options and warrants
|
357,997
|
542,136
|
1,039,137
|
Issuable
on conversion of convertible notes
|
-
|
1,493,438
|
1,559,807
|
Diluted
earnings per share denominator *
|
18,031,435
|
16,758,095
|
16,381,950
|
Freehold
land
and buildings US$‘000
|
Leasehold
improvements US$‘000
|
Computers,
fixtures and fittings US$‘000
|
Plant
and
equipment
US$‘000
|
Total
US$‘000
|
|
Cost
|
|||||
At
January 1, 2005
|
5,504
|
2,699
|
3,432
|
12,795
|
24,430
|
Acquisitions
through business combinations (note 26)
|
-
|
187
|
92
|
2,116
|
2,395
|
Other
additions
|
17
|
191
|
716
|
3,398
|
4,322
|
Disposals
/ retirements
|
-
|
(36)
|
(231)
|
(571)
|
(838)
|
Exchange
adjustments
|
(457)
|
(16)
|
(34)
|
(540)
|
(1,047)
|
At
December 31, 2005
|
5,064
|
3,025
|
3,975
|
17,198
|
29,262
|
At
January 1, 2006
|
5,064
|
3,025
|
3,975
|
17,198
|
29,262
|
Acquisitions
through business combinations (note 26)
|
-
|
-
|
-
|
2,418
|
2,418
|
Other
additions
|
18
|
370
|
1,023
|
2,935
|
4,346
|
Disposals
/ retirements
|
-
|
-
|
-
|
(629)
|
(629)
|
Exchange
adjustments
|
357
|
12
|
24
|
526
|
919
|
At
December 31, 2006
|
5,439
|
3,407
|
5,022
|
22,448
|
36,316
|
Accumulated
depreciation
|
|||||
At
January 1, 2005
|
(584)
|
(760)
|
(1,738)
|
(5,331)
|
(8,413)
|
Charge
for the year
|
(119)
|
(268)
|
(444)
|
(1,603)
|
(2,434)
|
Disposals
/ retirements
|
-
|
25
|
178
|
162
|
365
|
Exchange
adjustments
|
21
|
16
|
17
|
368
|
422
|
At
December 31, 2005
|
(682)
|
(987)
|
(1,987)
|
(6,404)
|
(10,060)
|
At
January 1, 2006
|
(682)
|
(987)
|
(1,987)
|
(6,404)
|
(10,060)
|
Charge
for the year
|
(112)
|
(318)
|
(609)
|
(2,697)
|
(3,736)
|
Disposals
/ retirements
|
-
|
-
|
-
|
120
|
120
|
Exchange
adjustments
|
(24)
|
(12)
|
(18)
|
(331)
|
(385)
|
At
December 31, 2006
|
(818)
|
(1,317)
|
(2,614)
|
(9,312)
|
(14,061)
|
Carrying
amounts
|
|||||
At
December 31, 2006
|
4,621
|
2,090
|
2,408
|
13,136
|
22,255
|
At
December 31, 2005
|
4,382
|
2,038
|
1,988
|
10,794
|
19,202
|
At
December 31, 2006
|
Freehold
land and buildings US$‘000
|
Leasehold
improvements US$‘000
|
Computers,
fixtures and fittings US$‘000
|
Plant
and
equipment US$‘000
|
Total
US$‘000
|
Depreciation
charge
|
-
|
39
|
46
|
35
|
120
|
Carrying
value
|
|||||
At
December 31, 2006
|
-
|
271
|
185
|
198
|
654
|
At
December 31, 2005
|
Freehold
land and buildings US$‘000
|
Leasehold
improvements US$‘000
|
Computers,
fixtures
and
fittings US$‘000
|
Plant
and
equipment US$‘000
|
Total
US$‘000
|
Depreciation
charge
|
-
|
39
|
46
|
7
|
92
|
Carrying
value
|
|||||
At
December 31, 2005
|
-
|
310
|
231
|
155
|
696
|
11.
|
GOODWILL
AND INTANGIBLE ASSETS
|
Goodwill
US$‘000
|
Development
costs US$‘000
|
Patents
and
licences US$‘000
|
Other
US$‘000
|
Total
US$‘000
|
|
Cost
|
|||||
At
January 1,2005
|
43,472
|
7,087
|
2,835
|
12,712
|
66,106
|
Acquisitions,
through business combinations (note 26) |
11,466
|
400
|
2,140
|
3,865
|
17,871
|
Other
additions
|
-
|
4,916
|
168
|
562
|
5,646
|
Disposals
Exchange
adjustments
|
-
-
|
-
(86)
|
-
-
|
(154)
7
|
(154)
(79)
|
At
December 31, 2005
|
54,938
|
12,317
|
5,143
|
16,992
|
89,390
|
At
January 1, 2006
|
54,938
|
12,317
|
5,143
|
16,992
|
89,390
|
Acquisitions,
through business combinations (note 26) |
21,679
|
-
|
4,950
|
6,435
|
33,064
|
Other
additions
|
-
|
5,862
|
-
|
286
|
6,148
|
Disposals
|
-
|
-
|
-
|
-
|
-
|
Exchange
adjustments
|
-
|
61
|
-
|
6
|
67
|
At
December 31, 2006
|
76,617
|
18,240
|
10,093
|
23,719
|
128,669
|
Accumulated
amortisation
|
|||||
At
January 1, 2005
|
-
|
(120)
|
(1,253)
|
(1,179)
|
(2,552)
|
Charge
for the year
|
-
|
(350)
|
(259)
|
(1,194)
|
(1,803)
|
Disposals
|
-
|
-
|
-
|
154
|
154
|
Exchange
adjustments
|
-
|
6
|
-
|
2
|
8
|
At
December 31, 2005
|
-
|
(464)
|
(1,512)
|
(2,217)
|
(4,193)
|
At
January 1, 2006
|
-
|
(464)
|
(1,512)
|
(2,217)
|
(4,193)
|
Charge
for the year
|
-
|
(468)
|
(611)
|
(1,608)
|
(2,687)
|
Disposals
|
-
|
-
|
-
|
-
|
-
|
Exchange
adjustments
|
-
|
(18)
|
-
|
(3)
|
(21)
|
At
December 31, 2006
|
-
|
(950)
|
(2,123)
|
(3,828)
|
(6,901)
|
Carrying
amounts
|
|||||
At
December 31, 2006
|
76,617
|
17,290
|
7,970
|
19,891
|
121,768
|
At
December 31, 2005
|
54,938
|
11,853
|
3,631
|
14,775
|
85,197
|
December
31, 2006
US$‘000 |
December
31, 2005
US$‘000
|
|
Fitzgerald
trade name
|
970
|
970
|
RDI
trade name
|
560
|
560
|
Primus
trade name
|
1,870
|
1,870
|
3,400
|
3,400
|
December
31, 2006
US$‘000
|
December
31, 2005
US$‘000
|
|
Trinity
Biotech Manufacturing Limited
|
39,156
|
30,131
|
Benen
Trading Limited
|
12,086
|
12,086
|
Primus
Corporation
|
9,558
|
9,558
|
Biopool
US Inc
|
5,823
|
-
|
MarDx
Diagnostics Inc
|
3,571
|
3,571
|
Trinity
Biotech UK (Sales) Limited
|
3,328
|
-
|
Clark
Laboratories Inc
|
2,994
|
2,994
|
Trinity
Biotech GmbH
|
1,830
|
-
|
Trinity
Biotech France SARL
|
1,673
|
-
|
80,019
|
58,340
|
|
Assets
|
Liabilities
|
Net
|
|||
2006
|
2005
|
2006
|
2005
|
2006
|
2005
|
|
US$’000
|
US$’000
|
US$’000
|
US$’000
|
US$’000
|
US$’000
|
|
Property,
plant and equipment
|
29
|
37
|
(1,752)
|
(1,687)
|
(1,723)
|
(1,650)
|
Intangible
assets
|
-
|
-
|
(6,285)
|
(4,492)
|
(6,285)
|
(4,492)
|
Inventories
|
1,886
|
981
|
-
|
-
|
1,886
|
981
|
Provisions
and valuation allowances
|
1,055
|
640
|
-
|
-
|
1,055
|
640
|
Other
items
|
239
|
94
|
(1,409)
|
(549)
|
(1,170)
|
(455)
|
Tax
value of loss carryforwards recognised
|
4,447
|
1,525
|
-
|
-
|
4,447
|
1,525
|
Deferred
tax assets/(liabilities)
|
7,656
|
3,277
|
(9,446)
|
(6,728)
|
(1,790)
|
(3,451)
|
December
31, 2006
|
December
31, 2005
|
|
US$’000
|
US$’000
|
|
Deductible
temporary differences
|
-
|
427
|
Capital
losses
|
6,138
|
6,138
|
US
state credit carryforwards
|
185
|
316
|
Net
operating losses
|
264
|
-
|
6,587
|
6,881
|
Balance
January,
1
2006 |
Recognised
in
income |
Recognised
in
goodwill |
Recognised
in
equity |
Balance
December
31,
2006 |
|
US$’000
|
US$’000
|
US$’000
|
US$’000
|
US$’000
|
|
Property,
plant and equipment
|
(1,650)
|
(73)
|
-
|
-
|
(1,723)
|
Intangible
assets
|
(4,492)
|
(422)
|
(1,371)
|
-
|
(6,285)
|
Inventories
|
981
|
906
|
-
|
-
|
1,886
|
Provisions
and valuation allowances
|
640
|
415
|
-
|
-
|
1,055
|
Other
items
|
(455)
|
(719)
|
-
|
4
|
(1,170)
|
Tax
value of loss carryforwards recognised
|
1,525
|
2,922
|
-
|
-
|
4,447
|
(3,451)
|
3,029
|
(1,371)
|
4
|
(1,790)
|
|
Balance
January
1,
2005 |
Recognised
in
income |
Recognised
in
goodwill |
Recognised
in
equity |
Balance
December
31, 2
005 |
|
US$’000
|
US$’000
|
US$’000
|
US$’000
|
US$’000
|
|
Property,
plant and equipment
|
(1,140)
|
53
|
(563)
|
-
|
(1,650)
|
Intangible
assets
|
(2,276)
|
(459)
|
(1,757)
|
-
|
(4,492)
|
Inventories
|
1,176
|
(272)
|
77
|
-
|
981
|
Provisions
and valuation allowances
|
173
|
135
|
332
|
-
|
640
|
Other
items
|
(126)
|
(383)
|
13
|
41
|
(455)
|
Tax
value of loss carryforwards recognised
|
1,083
|
442
|
-
|
-
|
1,525
|
(1,110)
|
(484)
|
(1,898)
|
41
|
(3,451)
|
13.
|
OTHER
ASSETS
|
December
31, 2006
US$‘000
|
December
31, 2005
US$‘000
|
|
Other
assets
|
76
|
61
|
76
|
61
|
14.
|
INVENTORIES
|
December
31, 2006
US$‘000
|
December
31, 2005
US$‘000
|
|
Raw
materials and consumables
|
10,598
|
8,983
|
Work-in-progress
|
10,167
|
10,192
|
Finished
goods
|
24,807
|
17,275
|
45,572
|
36,450
|
|
15.
|
TRADE
AND OTHER RECEIVABLES
|
December
31, 2006
US$‘000
|
December
31, 2005
US$‘000
|
|
Trade
receivables, net of impairment losses
|
28,359
|
17,591
|
Prepayments
|
3,492
|
1,956
|
Value
added tax
|
422
|
29
|
Called
up share capital not received
|
-
|
61
|
Finance
lease receivables
|
707
|
1,159
|
Other
receivables
|
135
|
89
|
33,115
|
20,885
|
|
December
31, 2006
US$‘000
|
||||
Gross
investment
|
Unearned
income
|
Minimum
payments receivable
|
||
Less
than one year
|
429
|
161
|
268
|
|
Between
one and five years
|
887
|
448
|
439
|
|
1,316
|
609
|
707
|
December
31, 2005
US$’000
|
||||
Gross
investment
|
Unearned
income
|
Minimum
payments receivable
|
||
Less
than one year
|
438
|
60
|
378
|
|
Between
one and five years
|
933
|
152
|
781
|
|
1,371
|
212
|
1,159
|
December
31, 2006
US$’000
|
|||
Land
and buildings
|
Instruments
|
Total
|
|
Less
than one year
|
171
|
948
|
1,119
|
Between
one and five years
|
684
|
1,513
|
2,197
|
More
than five years
|
812
|
-
|
812
|
1,667
|
2,461
|
4,128
|
December
31, 2005
US$’000
|
|||
Land
and
buildings |
Instruments
|
Total
|
|
Less
than one year
|
153
|
1,190
|
1,343
|
Between
one and five years
|
611
|
1,589
|
2.200
|
More
than five years
|
879
|
-
|
879
|
1,643
|
2,779
|
4,422
|
December
31, 2006
US$’000
|
December
31, 2005
US$’000
|
|
Restricted
cash
|
15,500
|
9,000
|
December
31, 2006
US$’000
|
December
31, 2005
US$’000
|
|
Cash
at bank and in hand
|
2,579
|
4,916
|
Short-term
deposits
|
242
|
4,965
|
Cash
and cash equivalents in the statements of cash flows
|
2,821
|
9,881
|
|
Share
capital ‘A’
ordinary shares
|
Share
capital
‘B’
ordinary shares
|
Share
premium
|
Translation
reserve
|
Warrant
reserve
|
Owned
shares
|
Hedging
reserves
|
Convertible
notes - equity component
|
Retained
earnings
|
Total
|
|||||||||||||||||||||
|
US$’000
|
|
US$’000
|
|
US$’000
|
|
US$’000
|
|
US$’000
|
|
US$’000
|
|
US$’000
|
|
US$’000
|
|
US$’000
|
|
US$’000
|
||||||||||||
Balance
at January 1, 2004
|
658
|
12
|
87,596
|
-
|
-
|
-
|
-
|
-
|
(6,543
|
)
|
81,723
|
||||||||||||||||||||
Total
recognised income and expense
|
-
|
-
|
-
|
118
|
-
|
-
|
-
|
-
|
5,714
|
5,832
|
|||||||||||||||||||||
Options
and warrants exercised
|
12
|
-
|
1,968
|
-
|
-
|
-
|
-
|
-
|
-
|
1,980
|
|||||||||||||||||||||
Class
A shares issued on conversion of convertible notes
|
1
|
-
|
426
|
-
|
-
|
-
|
-
|
-
|
-
|
427
|
|||||||||||||||||||||
Class
A shares issued in private placement
|
63
|
-
|
24,272
|
-
|
-
|
-
|
-
|
-
|
-
|
24,335
|
|||||||||||||||||||||
Class
A shares issued to fund an acquisition
|
30
|
-
|
7,691
|
-
|
-
|
-
|
-
|
-
|
-
|
7,721
|
|||||||||||||||||||||
Share
issue expenses
|
-
|
-
|
(1,509
|
)
|
-
|
-
|
-
|
-
|
-
|
-
|
(1,509
|
)
|
|||||||||||||||||||
Share-based
payments
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
758
|
758
|
|||||||||||||||||||||
Own
shares acquired
|
-
|
-
|
-
|
-
|
-
|
(2,373
|
)
|
-
|
-
|
-
|
(2,373
|
)
|
|||||||||||||||||||
Balance
at December 31, 2004
|
764
|
12
|
120,444
|
118
|
-
|
(2,373
|
)
|
-
|
-
|
(71
|
)
|
118,894
|
|||||||||||||||||||
Balance
at December 31, 2004
|
764
|
12
|
120,444
|
118
|
-
|
(2,373
|
)
|
-
|
-
|
(71
|
)
|
118,894
|
|||||||||||||||||||
Adjustment
in respect of adoption of IAS 32 and 39 on January 1, 2005 (note
1(a))
|
-
|
-
|
(3,779
|
)
|
-
|
3,803
|
-
|
373
|
164
|
(297
|
)
|
264
|
|||||||||||||||||||
Balance
at January 1, 2005 as restated
|
764
|
12
|
116,665
|
118
|
3,803
|
(2,373
|
)
|
373
|
164
|
(368
|
)
|
119,158
|
|||||||||||||||||||
Total
recognised income and expense
|
-
|
-
|
-
|
(1,740
|
)
|
-
|
-
|
(437
|
)
|
-
|
5,280
|
3,103
|
|||||||||||||||||||
Share-based
payments
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
1,368
|
1,368
|
|||||||||||||||||||||
Options
and warrants exercised
|
27
|
-
|
2,464
|
-
|
-
|
-
|
-
|
-
|
-
|
2,491
|
|||||||||||||||||||||
Class
A shares issued on conversion of convertible notes
|
27
|
-
|
5,439
|
-
|
-
|
-
|
-
|
-
|
-
|
5,466
|
|||||||||||||||||||||
Share
issue expenses
|
-
|
-
|
(341
|
)
|
-
|
-
|
-
|
-
|
-
|
-
|
(341
|
)
|
|||||||||||||||||||
Own
shares sold
|
-
|
-
|
-
|
-
|
-
|
2,373
|
-
|
-
|
-
|
2,373
|
|||||||||||||||||||||
Balance
at December 31, 2005
|
818
|
12
|
124,227
|
(1,622
|
)
|
3,803
|
-
|
(64
|
)
|
164
|
6,280
|
133,618
|
|||||||||||||||||||
Balance
at January 1, 2006
|
818
|
12
|
124,227
|
(1,622
|
)
|
3,803
|
-
|
(64
|
)
|
164
|
6,280
|
133,618
|
|||||||||||||||||||
Total
recognised income and expense
|
-
|
-
|
-
|
1,347
|
-
|
-
|
64
|
-
|
3,276
|
4,687
|
|||||||||||||||||||||
Share-based
payments
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
1,262
|
1,262
|
|||||||||||||||||||||
Options
exercised
|
2
|
-
|
212
|
-
|
-
|
-
|
-
|
-
|
-
|
214
|
|||||||||||||||||||||
Class
A shares issued on conversion of convertible notes
|
20
|
-
|
3,624
|
-
|
-
|
-
|
-
|
-
|
-
|
3,644
|
|||||||||||||||||||||
Class
A shares issued in private placement
|
126
|
-
|
24,879
|
-
|
-
|
-
|
-
|
-
|
-
|
25,005
|
|||||||||||||||||||||
Share
issue expenses
|
-
|
-
|
(1,168
|
)
|
-
|
-
|
-
|
-
|
-
|
-
|
(1,168
|
)
|
|||||||||||||||||||
Balance
at December 31, 2006
|
966
|
12
|
151,774
|
(275
|
)
|
3,803
|
-
|
-
|
164
|
10,818
|
167,262
|
Class
‘A’ Ordinary shares
|
Class
‘A’ Ordinary shares
|
|
In
thousands of shares
|
2006
|
2005
|
|
||
In
issue at January 1
|
60,041
|
54,904
|
Issued
for cash
|
11,739
|
2,615
|
Issued
for non cash (note 21)
|
1,822
|
2,522
|
In
issue at December 31
|
73,602
|
60,041
|
Class
‘B’ Ordinary shares
|
Class
‘B’ Ordinary shares
|
|
In
thousands of shares
|
2006
|
2005
|
In
issue at January 1
|
700
|
700
|
Issued
for cash
|
-
|
-
|
In
issue at December 31
|
700
|
700
|
(a)
|
In
April 2006, Trinity Biotech completed a US$25,005,000 private placement
of
11,593,840 of Class ‘A’ Ordinary Shares of the Group. The Group issued a
further 145,156 shares from the exercise of employee options for
a
consideration of US$214,000. Transactions costs relating to the
private
placement and the exercise of employee options amounted to US$1,168,000.
1,821,980 shares (equivalent to US$3,644,000) were issued on a
non cash
basis as the Group made part of its convertible debt repayments
by way of
shares during the year (see note
21).
|
(b)
|
During
2005, the Group issued 2,615,375 ‘A’ Ordinary Shares from the exercise of
employee options for a consideration of US$2,491,000, settled in
cash. A
further 2,522,000 shares (equivalent to US$5,465,000) were issued
on a non
cash basis as the Group chose to make part of its convertible debt
repayments in 2005 by way of shares.
|
(c)
|
Since
its incorporation the Group has not declared or paid dividends
on its ‘A’
Ordinary Shares or ‘B’ Ordinary Shares. The Group anticipates, for the
foreseeable future, that it will retain any future earnings in
order to
fund its business operations. The Group does not, therefore, anticipate
paying any cash or share dividends on its ‘A’ Ordinary or ‘B’ Ordinary
shares in the foreseeable future. As provided in the Articles of
Association of the Company, dividends or other distributions will
be
declared and paid in US Dollars.
|
(d)
|
The
Class ‘B’ Ordinary Shares have two votes per share and the rights to
participate in any liquidation or sale of the Group and to receive
dividends as if each Class ‘B’ Ordinary Share were two Class ‘A’ Ordinary
Shares. In all other respects they rank pari passu with the ‘A’ ordinary
shares.
|
Fair
value at date of measurement
|
US$3.02
|
|
|
Share
price
|
US$4.78
|
Exercise
price
|
US$5.25
|
Expected
volatility
|
78.31%
|
Contractual
life
|
5
years
|
Risk
free rate
|
3.26%
|
Expected
dividend yield
|
-
|
December
31, 2006
|
December
31, 2005
|
|
Outstanding
at beginning of period
|
1,317,324
|
1,317,324
|
Granted
|
-
|
-
|
Exercised
|
-
|
-
|
Outstanding
at end of period
|
1,317,324
|
1,317,324
|
Options
and
warrants |
Weighted-
average exercise price US$
|
Range
US$
|
|
Outstanding
January 1, 2004
|
8,327,394
|
1.44
|
0.81
-5.00
|
Granted
|
3,162,824
|
3.68
|
2.33-
5.25
|
Exercised
|
(1,113,538)
|
1.82
|
0.98
- 2.75
|
Forfeited
|
(430,339)
|
1.66
|
0.98
-4.00
|
Outstanding
at end of period
|
9,946,341
|
2.10
|
0.81
-5.25
|
Exercisable
at end of year
|
5,693,844
|
2.20
|
0.81
-5.25
|
Outstanding
January 1, 2005
|
9,946,341
|
2.10
|
0.81
-5.25
|
Granted
|
1,670,000
|
1.69
|
1.59
-3.00
|
Exercised
|
(2,615,376)
|
1.00
|
0.81-1.75
|
Forfeited
|
(152,508)
|
1.99
|
0.98-4.00
|
Outstanding
at end of period
|
8,848,457
|
2.35
|
0.81-5.25
|
Exercisable
at end of year
|
4,589,342
|
US$2.69
|
0.81-5.25
|
Outstanding
January 1, 2006
|
8,848,457
|
2.35
|
0.81-5.25
|
Granted
|
1,617,000
|
2.02
|
1.35-2.30
|
Exercised
|
(145,155)
|
1.47
|
0.98-1.75
|
Forfeited
|
(708,235)
|
2.15
|
0.81-5.00
|
Outstanding
at end of period
|
9,612,067
|
US$2.32
|
0.98-5.25
|
Exercisable
at end of year
|
5,605,469
|
US$2.50
|
0.98-5.25
|
Outstanding
|
Exercisable
|
|||||
Exercise
price
range |
No.
of
options |
Weighted-
avg exercise price |
Weighted-
avg contractual life remaining (years) |
No.
of
options |
Weighted-
avg exercise price |
Weighted-
avg contractual life remaining (years) |
US$0.81-US$0.99
|
1,233,834
|
US$0.98
|
2.43
|
1,233,834
|
US$0.98
|
2.43
|
US$1.00-US$2.05
|
3,635,210
|
US$1.60
|
4.12
|
1,868,542
|
US$1.52
|
2.60
|
US$2.06-US$2.99
|
3,153,366
|
US$2.39
|
5.29
|
1,038,772
|
US$2.57
|
4.01
|
US$3.00-US$5.25
|
1,589,657
|
US$4.87
|
2.39
|
1,464,321
|
US$5.01
|
2.23
|
9,612,067
|
5,605,469
|
Outstanding
|
Exercisable
|
|||||
Exercise
price
range |
No.
of
options |
Weighted-
avg exercise price |
Weighted-a
vg contractual life remaining (years) |
No.
of
options |
Weighted-
avg exercise price |
Weighted-
avg contractual life remaining (years) |
US$0.81-US$0.99
|
1,339,322
|
US$0.97
|
3.32
|
839,322
|
US$0.97
|
3.05
|
US$1.00-US$2.05
|
3,576,340
|
US$1.57
|
4.64
|
1,580,561
|
US$1.49
|
2.74
|
US$2.06-US$2.99
|
2,262,974
|
US$2.56
|
4.79
|
746,305
|
US$2.52
|
3.53
|
US$3.00-US$5.25
|
1,669,821
|
US$4.84
|
3.35
|
1,423,154
|
US$5.12
|
3.00
|
8,848,457
|
4,589,342
|
December
31,
2006 US$‘000
|
December31,
2005 US$‘000
|
December31,
2004 US$‘000
|
|
Share-based
payments - cost of sales
|
89
|
110
|
81
|
Share-based
payments - research and development
|
36
|
210
|
96
|
Share-based
payments - selling, general and administrative
|
1,016
|
1,048
|
581
|
Total
|
1,141
|
1,368
|
758
|
Key
management personnel |
Other
employees |
Key
management personnel |
Other
employees |
|
2006
|
2006
|
2005
|
2005
|
|
Weighted
average fair value at measurement date
Total
share options granted
|
US$1.17
860,000
|
US$0.97
757,000
|
US$0.95
650,000
|
US$0.75
1,019,000
|
Weighted
average share price
|
US$2.09
|
US$1.95
|
US$1.67
|
US$1.69
|
Weighted
average exercise price
|
US$2.09
|
US$1.95
|
US$1.67
|
US$1.71
|
Weighted
average expected volatility
|
56.11%
|
54.88%
|
60.3%
|
59.72%
|
Weighted
average expected life
|
5.73
years
|
4.47
years
|
5.33
years
|
3.28
years
|
Weighted
average risk free interest rate
|
4.55%
|
4.83%
|
4.51%
|
4.01%
|
Expected
dividend yield
|
0%
|
0%
|
0%
|
0%
|
20.
|
INTEREST-BEARING
LOANS AND BORROWINGS
|
Note
|
December
31, 2006
US$’000
|
December
31, 2005
US$’000
|
|
Current
liabilities
|
|||
Finance
lease liabilities
|
256
|
241
|
|
Promissory
note
|
-
|
3,000
|
|
Bank
loans, secured
|
27(c)
|
||
-
Repayable by instalment
|
8,157
|
2,504
|
|
-
Repayable not by instalment
|
1,969
|
1,975
|
|
10,382
|
7,720
|
||
Non-current
liabilities
|
|||
Finance
lease liabilities
|
248
|
381
|
|
Bank
loans, secured
|
27(c)
|
||
-
Repayable by instalment
|
32,828
|
9,988
|
|
33,076
|
10,369
|
December
31, 2006
US$’000
|
|||
Minimum
lease payments |
Interest
|
Principal
|
|
Less
than one year
|
278
|
22
|
256
|
In
more than one year, but not more than two
|
234
|
8
|
226
|
In
more than two years but not more than three
|
23
|
1
|
22
|
535
|
31
|
504
|
December
31, 2005
US$’000
|
|||
Minimum
lease payments |
Interest
|
Principal
|
|
Less
than one year
|
267
|
26
|
241
|
In
more than one year, but not more than two
|
220
|
15
|
205
|
In
more than two years but not more than three
|
181
|
5
|
176
|
668
|
46
|
622
|
21.
|
CONVERTIBLE
NOTES - INTEREST BEARING
|
December
31, 2006
US$’000
|
December
31, 2005
US$’000
|
||
Convertible
notes
|
|||
Due
within one year
|
1,836
|
7,203
|
|
Due
greater than one year
|
-
|
1,836
|
|
Total
|
1,836
|
9,039
|
2006
US$’000
|
2005
US$’000
|
|
Proceeds
from issue of convertible notes
|
25,000
|
25,000
|
Transaction
costs
|
(1,307)
|
(1,307)
|
Net
|
23,693
|
23,693
|
Converted
to shares
|
(15,533)
|
(11,889)
|
Cash
repayments
|
(7,288)
|
(3,644)
|
Amount
classified as equity
|
(297)
|
(297)
|
Accreted
interest capitalised
|
1,261
|
1,176
|
Carrying
amount of liability at December 31
|
1,836
|
9,039
|
22.
|
TRADE
AND OTHER PAYABLES
|
December
31, 2006
US$’000
|
December
31, 2005
US$’000
|
|
Trade
payables
|
7,752
|
6,065
|
Payroll
taxes
|
415
|
296
|
Employee
related social insurance
|
438
|
347
|
Accrued
liabilities
|
8,983
|
5,345
|
Deferred
income
|
2,871
|
715
|
20,459
|
12,768
|
|
23.
|
OTHER
FINANCIAL LIABILITIES
|
December
31, 2006
US$’000
|
December
31, 2005
US$’000
|
|
Consideration
|
||
Due
within 1 year
|
3,120
|
3,707
|
Due
greater than 1 year
|
2,568
|
-
|
5,688
|
3,707
|
24.
|
PROVISIONS
|
December
31, 2006
US$’000
|
December
31, 2005
US$’000
|
|
Provisions
|
100
|
199
|
December
31, 2006
US$’000
|
||
Balance
at January 1, 2006
|
199
|
|
Provisions
made during the year
|
100
|
|
Provisions
released during the year
|
(199)
|
|
Balance
at December 31, 2006
|
100
|
25.
|
OTHER
PAYABLES
|
December
31, 2006
US$’000
|
December
31, 2005
US$’000
|
|
Other
payables
|
838
|
102
|
26.
|
BUSINESS
COMBINATIONS
|
bioMerieux
US$’000
|
Nephrotek
US$’000
|
Total
US$’000
|
|
Property,
plant and equipment
|
2,354
|
64
|
2,418
|
Inventories
|
12,529
|
345
|
12,874
|
Intangible
assets
|
11,150
|
235
|
11,385
|
26,033
|
644
|
26,677
|
|
Deferred
tax liability (see note 12)
|
1,293
|
77
|
1,370
|
Trade
and other payables
|
1,319
|
69
|
1,388
|
2,612
|
146
|
2,758
|
|
Fair
value of net assets
|
23,421
|
498
|
23,919
|
Goodwill
arising on acquisition
|
21,002
|
677
|
21,679
|
44,423
|
1,175
|
45,598
|
|
Consideration:
|
|||
Cash
payments
|
38,157
|
821
|
38,978
|
Deferred
consideration
|
5,511
|
239
|
5,750
|
Costs
associated with the acquisition
|
755
|
115
|
870
|
44,423
|
1,175
|
45,598
|
Book
values
US$’000
|
Fair
value
adjustments US$’000
|
Fair
value
US$’000
|
Consideration
US$’000
|
Goodwill
US$’000
|
|
bioMerieux
|
|||||
Property,
plant and equipment
|
2,659
|
(305)
|
2,354
|
||
Inventories
(including prepayments)*
|
12,848
|
(319)
|
12,529
|
||
Intangible
assets
|
-
|
11,150
|
11,150
|
||
15,507
|
10,526
|
26,033
|
|||
Deferred
tax liability
|
-
|
1,293
|
1,293
|
||
Trade
and other payables
|
1,219
|
100
|
1,319
|
||
14,288
|
9,133
|
23,421
|
44,423
|
21,002
|
|
Nephrotek
|
|||||
Property,
plant and equipment
|
96
|
(32)
|
64
|
||
Inventories
|
394
|
(49)
|
345
|
||
Intangible
assets
|
-
|
235
|
235
|
||
490
|
154
|
644
|
|||
Deferred
tax liability
|
-
|
77
|
77
|
||
Trade
and other payables
|
40
|
29
|
69
|
||
450
|
48
|
498
|
1,175
|
677
|
|
US$’000
|
|
Goodwill
recognised with respect to 2006 acquisitions
|
|
-
bioMerieux
|
21,002
|
-
Nephrotek
|
677
|
Total
goodwill movement in 2006
|
21,679
|
Primus
US$’000
|
RDI
US$’000
|
Total
US$
‘000
|
|
Property,
plant and equipment
|
2,395
|
-
|
2,395
|
Trade
and other receivables
|
1,848
|
-
|
1,848
|
Inventories
|
1,304
|
113
|
1,417
|
Intangible
assets
|
4,615
|
1,790
|
6,405
|
10,162
|
1,903
|
12,065
|
|
Deferred
tax liability (see note 12)
|
1,825
|
216
|
2,041
|
Trade
and other payables
|
1,649
|
-
|
1,649
|
3,474
|
216
|
3,690
|
|
Fair
value of net assets
|
6,688
|
1,687
|
8,375
|
Goodwill
arising on acquisition
|
7,688
|
2,618
|
10,306
|
14,376
|
4,305
|
18,681
|
|
Consideration:
|
|||
Cash
payments
|
8,587
|
4,200
|
12,787
|
Less
cash transferred with subsidiary
|
(127)
|
-
|
(127)
|
Deferred
consideration
|
3,000
|
-
|
3,000
|
Other
consideration (see note 23)
|
2,705
|
-
|
2,705
|
Costs
associated with the acquisition
|
211
|
105
|
316
|
14,376
|
4,305
|
18,681
|
Book
values
US$’000
|
Fair
value adjustments
US$’000
|
Fair
value
US$’000
|
Consideration
US$’000
|
Goodwill
U000
|
|
Primus
|
|||||
Property,
plant and equipment
|
2,371
|
24
|
2,395
|
||
Trade
and other receivables
|
1,848
|
-
|
1,848
|
||
Inventories
|
1,858
|
(554)
|
1,304
|
||
Intangible
assets
|
330
|
4,285
|
4,615
|
||
6,407
|
3,755
|
10,162
|
|||
Deferred
tax liability
|
-
|
1,825
|
1,825
|
||
Trade
and other payables
|
1,566
|
(33)
|
1,533
|
||
Creditors
greater than one year
|
116
|
-
|
116
|
||
4,725
|
1,963
|
6,688
|
14,376
|
7,688
|
|
RDI
|
|||||
Property,
plant and equipment
|
10
|
(10)
|
-
|
||
Inventories
|
146
|
(33)
|
113
|
||
Intangible
assets
|
-
|
1,790
|
1,790
|
||
156
|
1,747
|
1,903
|
|||
Deferred
tax liability
|
-
|
216
|
216
|
||
156
|
1,531
|
1,687
|
4,305
|
2,618
|
|
27.
|
COMMITMENTS
AND CONTINGENCIES
|
(a)
|
Capital
Commitments
|
(b)
|
Leasing
Commitments
|
Year
ended
|
||
2006
|
||
Operating
leases
|
||
US$’000
|
||
2007
|
3,650
|
|
2008
|
3,859
|
|
2009
|
3,342
|
|
2010
|
2,797
|
|
2011
|
2,556
|
|
Later
years
|
32,062
|
|
Total
lease obligations
|
48,266
|
|
Year
ended
|
||
2005
|
||
Operating
leases
|
||
US$’000
|
||
2006
|
2,277
|
|
2007
|
1,998
|
|
2008
|
1,936
|
|
2009
|
1,719
|
|
2010
|
1,539
|
|
Later
years
|
15,998
|
|
Total
lease obligations
|
25,467
|
|
(c)
|
Bank
Security
|
(d)
|
Section
17 Guarantees
|
(f)
|
Government
Grant Contingencies
|
28.
|
RELATED
PARTY TRANSACTIONS
|
December
31, 2006
|
December
31, 2005
|
|
US$’000
|
US$’000
|
|
Short-term
employee benefits
|
2,113
|
1,752
|
Post-employment
benefits
|
119
|
131
|
Equity
compensation benefits
|
665
|
828
|
2,897
|
2,711
|
‘A’
Ordinary Shares
|
Share
options
|
|
At
January 1, 2006
|
5,881,205
|
4,211,666
|
Exercised
|
-
|
-
|
Granted
|
-
|
860,000
|
Lapsed/
forfeited
|
-
|
(259,583)
|
Shares
sold
|
-
|
-
|
Shares
purchased
|
-
|
-
|
At
December 31, 2006
|
5,881,205
|
4,812,083
|
‘A’
Ordinary Shares
|
Share
options
|
|
At
January 1, 2005
|
1,379,530
|
6,108,541
|
Exercised
|
-
|
(2,546,875)
|
Granted
|
-
|
650,000
|
Shares
sold
|
-
|
-
|
Shares
purchased
|
4,501,675
|
-
|
At
December 31, 2005
|
5,881,205
|
4,211,666
|
29.
|
DERIVATIVES
AND FINANCIAL INSTRUMENTS
|
As
at December 31, 2006
US$’000
|
Note
|
Effective
interest rate |
Total
US$’000
|
1
year
US$’000
|
1-2
years
US$’000
|
2-5
years
US$’000
|
Cash
and cash equivalents
|
17
|
5.22%
|
2,821
|
2,821
|
-
|
-
|
Financial
asset - restricted cash
|
16
|
5.22%
|
15,500
|
15,500
|
-
|
-
|
Secured
bank loans - floating
|
20
|
6.87%
|
(42,917)
|
(42,917)
|
-
|
-
|
Secured
bank loans - fixed
|
20
|
5%
|
(37)
|
-
|
-
|
(37)
|
Convertible
notes - fixed
|
21
|
6.23%
|
(1,836)
|
(1,836)
|
-
|
-
|
Finance
lease liabilities - fixed
|
20
|
5.91%
|
(504)
|
(5)
|
(104)
|
(395)
|
Total
|
(26,973)
|
(26,437)
|
(104)
|
(432)
|
||
As
at December 31, 2005
US$’000
|
Note
|
Effective
interest rate |
Total
US$’000
|
1
year
US$’000
|
1-2
years
US$’000
|
2-5
years
US$’000
|
Cash
and cash equivalents
|
17
|
4.22%
|
9,881
|
9,881
|
-
|
-
|
Financial
asset - restricted cash
|
16
|
4.22%
|
9,000
|
9,000
|
-
|
-
|
Secured
bank loans - floating
|
20
|
5.65%
|
(14,414)
|
(14,414)
|
-
|
-
|
Secured
bank loans - fixed
|
20
|
5%
|
(53)
|
-
|
-
|
(53)
|
Promissory
note -
Floating
|
20
|
4.27%
|
(3,000)
|
(3,000)
|
-
|
-
|
Convertible
notes - fixed
|
21
|
6.23%
|
(9,039)
|
-
|
(9,039)
|
-
|
Finance
lease liabilities - fixed
|
20
|
5.60%
|
(622)
|
(54)
|
-
|
(568)
|
Total
|
(8,247)
|
1,413
|
(9,039)
|
(621)
|
||
Carrying
Value
US$’000
|
Fair
Value
US$’000
|
|
Convertible
notes
|
1,836
|
1,836
|
Interest
bearing loans
|
42,954
|
42,953
|
Finance
leases
|
504
|
501
|
Total
|
45,294
|
45,290
|
December
31, 2006
US$
‘000
|
December
31, 2005
US$
‘000
|
|
Floating
rate financial liabilities
|
42,917
|
17,414
|
Fixed
rate financial liabilities
|
2,377
|
9,714
|
45,294
|
27,128
|
Group
Maturity Before December 31 |
2007
|
2008
|
2009
|
2010
|
2011
|
After
2012 |
Total
|
Fair
value
|
Long-term
debt
|
||||||||
Variable
rate - US$000
|
10,109
|
8,146
|
8,183
|
8,221
|
8,258
|
-
|
42,917
|
42,917
|
Average
interest rate
|
6.75%
|
6.75%
|
6.75%
|
6.75%
|
6.75%
|
-
|
6.75%
|
|
Fixed
rate - US$000
|
2,109
|
243
|
25
|
-
|
-
|
-
|
2,377
|
2,373
|
Average
interest rate
|
3.30%
|
5.34%
|
6.96%
|
-
|
-
|
-
|
3.55%
|
December
31, 2006
|
December
31, 2005
|
|
Fixed
rate financial liabilities
|
||
Weighted
average interest rate
|
3.55%
|
3.15%
|
Weighted
average period for which rate is fixed
|
0.46
years
|
1.13
years
|
December
31, 2006
US$’000
|
December
31, 2005
US$’000
|
|
In
one year or less, or on demand
|
12,218
|
14,922
|
In
more than one year, but not more than two
|
8,389
|
4,546
|
In
more than two years, but not more than three
|
8,208
|
2,680
|
In
more than three years, but not more than four
|
8,221
|
2,492
|
In
more than four years, but not more than five
|
8,258
|
2,488
|
45,294
|
27,128
|
30.
|
ACCOUNTING
ESTIMATES AND JUDGEMENTS
|
|
•
|
|
Significant
underperformance relative to expected historical or projected future
operating results;
|
|
•
|
|
Significant
changes in the manner of our use of the acquired assets or the strategy
for our overall business;
|
|
•
|
|
Obsolescence
of products;
|
|
•
|
|
Significant
decline in our stock price for a sustained period; and our market
capitalisation relative to net book value.
|
31.
|
EXPLANATION
OF TRANSITION TO IAS 32 and IAS 39 AS ADOPTED BY THE
EU
|
·
|
Cash
and cash equivalents, accounts receivable and payable are stated
at cost,
which approximates fair value given the short-dated nature of these
assets
and liabilities;
|
·
|
Loans
are stated at cost which approximates amortised cost as the interest
rate
re-prices at regular, short
intervals.
|
US$’000
|
|
Convertible
notes
|
|
Balance
at January 1, 2005 (prior to the application of IAS 32 and IAS
39)
|
15,819
|
Accreted
interest capitalised
|
336
|
Amount
classified as equity
|
(226)
|
Transaction
costs
|
(25)
|
Balance
at January 1, 2005 (following the application of IAS 32 and IAS
39)
|
15,904
|
Current
assets - derivative financial instruments
|
|
Balance
at January 1, 2005 (prior to the application of IAS 32 and IAS
39)
|
-
|
Fair
value of hedging contracts
|
418
|
Balance
at January 1,2005 (following the application of IAS 32 and IAS
39)
|
418
|
|
|
Retained
earnings
|
|
Balance
at January 1, 2005 (prior to the application of IAS 32 and IAS
39)
|
(71)
|
Convertible
notes interest at effective rate
|
(336)
|
Deferred
tax on convertible notes
|
39
|
Balance
at January 1, 2005 (following the application of IAS 32 and IAS
39)
|
(368)
|
Deferred
tax liability
|
|
Balance
at January 1, 2005 (prior to the application of IAS 32 and IAS
39)
|
3,517
|
Deferred
tax on fair value of hedging contracts
|
45
|
Deferred
tax on convertible notes
|
24
|
Balance
at January 1, 2005 (following the application of IAS 32 and IAS
39)
|
3,586
|
Other
reserves -convertible notes equity component
|
|
Balance
at January 1, 2005 (prior to the application of IAS 32 and IAS
39)
|
-
|
Convertible
notes residual
|
226
|
Deferred
tax on convertible notes
|
(62)
|
Balance
at January 1, 2005 (following the application of IAS 32 and IAS
39)
|
164
|
Other
reserves - hedging reserve
|
|
Balance
at January 1, 2005 (prior to the application of IAS 32 and IAS
39)
|
-
|
Fair
value of hedging contracts
|
418
|
Deferred
tax on fair value of hedging contracts
|
(45)
|
Balance
at January 1, 2005 (following the application of IAS 32 and IAS
39)
|
373
|
Other
reserves - warrant reserve
|
|
Balance
at January 1, 2005 (prior to the application of IAS 32 and IAS
39)
|
-
|
Fair
value of warrants
|
3,803
|
Balance
at January 1, 2005 (following the application of IAS 32 and IAS
39)
|
3,803
|
Share
premium
|
|
Balance
at January 1, 2005 (prior to the application of IAS 32 and IAS
39)
|
120,444
|
Fair
value of warrants
|
(3,803)
|
Convertible
notes transaction costs
|
24
|
Balance
at January 1, 2005 (following the application of IAS 32 and IAS
39)
|
116,665
|
32.
|
GROUP
UNDERTAKINGS
|
Name
and registered office
|
Principal
activity
|
Principal
Country of
incorporation and operation |
Group
% holding
|
Trinity
Biotech plc
IDA
Business Park, Bray,
Co.
Wicklow, Ireland
|
Investment
and holding company
|
Ireland
|
Holding
company
|
Trinity
Biotech Manufacturing Limited
IDA
Business Park, Bray,
Co.
Wicklow, Ireland
|
Manufacture
and sale of diagnostic test kits
|
Ireland
|
100%
|
Trinity
Research Limited
IDA
Business Park, Bray,
Co.
Wicklow, Ireland
|
Research
and development
|
Ireland
|
100%
|
Benen
Trading Limited
IDA
Business Park, Bray,
Co.
Wicklow, Ireland
|
Trading
|
Ireland
|
100%
|
Trinity
Biotech Manufacturing
Services Limited IDA
Business Park, Bray,
Co.
Wicklow, Ireland
|
Engineering
services
|
Ireland
|
100%
|
Trinity
Biotech Financial Services Limited
IDA
Business Park, Bray,
Co
Wicklow, Ireland
|
Provision
of financial services
|
Ireland
|
100%
|
Trinity
Biotech Inc
Girts
Road, Jamestown, NY
14702,USA |
Holding
Company
|
U.S.A.
|
100%
|
Clark
Laboratories Inc
Trading
as Trinity Biotech (USA)
Girts
Road, Jamestown
NY14702,
USA
|
Manufacture
and sale of diagnostic test kits
|
U.S.A.
|
100%
|
Mardx
Diagnostics Inc
5919
Farnsworth Court
Carlsbad
CA
92008, USA
|
Manufacture
and sale of diagnostic test kits
|
U.S.A.
|
100%
|
Fitzgerald
Industries International, Inc
2711
Centerville Road, Suite 400
Wilmington,
New Castle
Delaware,
19808
|
Management
services company
|
U.S.A.
|
100%
|
Biopool
US Inc (trading as Trinity
Biotech Distribution) Girts
Road, Jamestown
NY14702,
USA
|
Sale
of diagnostic test kits
|
U.S.A.
|
100%
|
Primus
Corporation
4231
E 75th
Terrace
Kansas
City,
MO
64132
|
Manufacture
and sale of diagnostic test kits and instrumentation
|
U.S.A.
|
100%
|
Trinity
Biotech (UK Sales) Limited
54
Queens Road
Reading
RG1 4A2, England
|
Sale
of diagnostic kits
|
UK
|
100%
|
Trinity
Biotech GmbH
Otto
Hesse Str 19
64293
Darmstadt, Germany
|
Manufacture
of diagnostic
instrumentation
and
sale
of diagnostic test kits
|
Germany
|
100%
|
Biopool
AB
S-903
47 Umea
Sweden
|
Manufacture
and
sale
of diagnostic test kits
|
Sweden
|
100%
|
Trinity
Biotech France SARL
300A
Rue Marcel Paul
21
Des Grands Godets
93
500 Champigny sur marne
|
Sale
of diagnostic kits
|
France
|
100%
|
33.
|
DIFFERENCES
BETWEEN IFRS AS ADOPTED BY THE EU AND ACCOUNTING PRINCIPLES GENERALLY
ACCEPTED IN THE UNITED STATES
|
(a)
|
Goodwill:
|
2006
|
2005
|
2004
|
|
US$’000
|
US$’000
|
US$’000
|
|
Rest
of World
|
21,679
|
3,722
|
8,728
|
Americas
|
-
|
7,688
|
-
|
21,679
|
11,410
|
8,728
|
(b)
|
Share
Capital Not Paid:
|
(c)
|
Statement
of Comprehensive Income:
|
(d)
|
Sale
and Leaseback:
|
(e)
|
Product
Development Costs:
|
(f)
|
Share-based
Payment:
|
(g)
|
Derivatives
and Financial Instruments:
|
(h)
|
Capitalisation
of Interest Charges in Self-Constructed
Assets:
|
(i)
|
In-Process
Research and Development (“R&D”):
|
(j)
|
Deferred
Tax:
|
2006
|
2005
|
2004
|
|
US$’000
|
US$’000
|
US$’000
|
|
Total
shareholders’ equity under IFRS as adopted by the EU
|
167,262
|
133,618
|
118,894
|
US
GAAP adjustments:
|
|||
Goodwill
|
|||
-
Gross (i)
|
21,777
|
21,777
|
21,777
|
-
Gross (ii)
|
(2,500)
|
(2,500)
|
(2,500)
|
-
Gross (iii)
|
(56)
|
(56)
|
-
|
-
Aggregate amortisation
|
(9,231)
|
(9,231)
|
(9,231)
|
In
process R&D acquired in a business combination
|
|||
-
Gross
|
(400)
|
(400)
|
-
|
-
Aggregate amortisation
|
39
|
12
|
-
|
Product
development costs
|
|||
-
Gross
|
(18,219)
|
(12,296)
|
(7,416)
|
-
Aggregate amortisation
|
1,048
|
555
|
164
|
Capitalisation
of interest in self-constructed assets
|
|||
-
Gross
|
77
|
52
|
-
|
-
Aggregate depreciation
|
(7)
|
(1)
|
-
|
Property,
plant and equipment
|
256
|
176
|
119
|
Share
capital not paid
|
-
|
(61)
|
(158)
|
Adjustment
for sale and leaseback
|
(658)
|
(709)
|
(760)
|
Adjustment
for fair value of derivative instruments
|
-
|
-
|
418
|
Adjustment
for equity component of convertible debt
|
-
|
150
|
-
|
Deferred
tax
|
1,915
|
1,683
|
726
|
Shareholders’
equity under US GAAP
|
161,303
|
132,769
|
122,033
|
December
31,
2006 US$’000
|
December
31,
2005 US$’000
|
December
31,
2004 US’000
|
|
Current
deferred tax asset
|
3,780
|
1,534
|
173
|
Current
deferred tax liability
|
(91)
|
-
|
(94)
|
Non-current
deferred tax asset
|
1,388
|
813
|
1,227
|
Non-current
deferred tax liability
|
(4,952)
|
(4,116)
|
(1,621)
|
EFFECT
ON NET PROFIT
For
the year ended
|
December
31,
2006 US$’000
|
December
31,
2005 US$’000
|
December
31,
2004 US$’000
|
Profit
after taxation under IFRS as adopted by the EU
|
3,276
|
5,280
|
5,714
|
US
GAAP adjustments
|
|||
Fair
value adjustments relating to 2004 business
combinations written off |
- |
(56) |
- |
Write
back of depreciation charge for property, plant and equipment offset
by
negative goodwill
|
57
|
57
|
54
|
Recognition
of deferred gain on sale and leaseback transaction
|
51
|
51
|
51
|
Recognition
of additional fair-valued stock-based compensation
under SFAS 123R |
(71) |
- |
- |
Reversal
of fair-valued stock-based compensation
|
-
|
1,354
|
745
|
Expensing
of development costs
|
|||
-
Cost
|
(5,862)
|
(4,916)
|
(3,201)
|
-
Amortisation
|
475
|
394
|
164
|
Capitalisation
of interest in self-constructed assets
|
|||
-
Gross
|
25
|
52
|
-
|
-
Depreciation
|
(6)
|
(1)
|
-
|
In-process
R&D acquired in a business combination
|
|||
-
Gross
|
-
|
(400)
|
-
|
-
Amortisation
|
27
|
12
|
-
|
Adjustment
for fair value of derivative instruments
|
-
|
(244)
|
126
|
Adjustment
for residual value of convertible debt
|
(150)
|
64
|
-
|
Deferred
tax
|
232
|
935
|
395
|
(Loss)/
profit under US GAAP
|
(1,946)
|
2,582
|
4,048
|
(Loss)/
profit per ‘A’ ordinary share (US Dollars)
|
(0.03)
|
0.04
|
0.07
|
(Loss)/
profit per ‘B’ ordinary share (US Dollars)**
|
(0.06)
|
0.08
|
0.14
|
Diluted
(loss)/ profit per ‘A’ ordinary share (US Dollar)
|
(0.03)
|
0.04
|
0.07
|
Diluted
(loss)/ profit per ‘B’ ordinary share (US Dollar) **
|
(0.06)
|
0.08
|
0.14
|
Weighted-average
number of ‘A’ ordinary shares used in computing basic (loss)/ profit per
ordinary share
|
70,693,753
|
58,890,084
|
55,132,024
|
Diluted
weighted-average number of ‘A’ ordinary shares used in computing diluted
(loss)/ profit per ordinary share
|
74,563,197
|
67,142,527
|
65,740,993
|
December
31
2006
|
December
31
2005
|
December
31
2004
|
|
US$’000
|
US$’000
|
US$’000
|
|
(Loss)
/ profit under US GAAP
|
(1,946)
|
2,582
|
4,048
|
Translation
adjustment
|
1,327
|
(1,707)
|
116
|
Fair
value of derivative instruments (net of deferred tax)
|
64
|
(239)
|
(54)
|
Total
comprehensive income
|
(555)
|
636
|
4,110
|
MOVEMENT
IN SHAREHOLDERS’ EQUITY - US GAAP
|
December
31
2006
|
December
31
2005
|
December
31
2004
|
US$’000
|
US$’000
|
US$’000
|
|
US
GAAP Shareholders’ Equity at January 1
|
132,769
|
122,033
|
87,234
|
Net
(loss)/profit for the period
|
(1,946)
|
2,582
|
4,048
|
‘A’
shares issued for cash
|
25,005
|
-
|
24,335
|
‘A’
shares issued for conversion of debenture
|
3,644
|
5,466
|
427
|
‘A’
shares issued on conversion of warrant
|
-
|
-
|
348
|
Options
exercised
|
214
|
2,491
|
1,632
|
Share
based payments
|
1,333
|
-
|
-
|
Stock-based
compensation - additional paid-in capital
|
-
|
14
|
13
|
‘A’
shares issued as consideration for acquisition
|
-
|
-
|
7,721
|
Share
issue expenses
|
(1,168)
|
(341)
|
(1,509)
|
Share
proceeds outstanding
|
-
|
2,373
|
(2,373)
|
Share
capital now paid
|
61
|
97
|
95
|
Other
comprehensive income:
|
|||
Translation
adjustment
|
1,327
|
(1,707)
|
116
|
Fair
value of derivative instruments
|
64
|
(239)
|
(54)
|
US
GAAP Shareholders’ Equity at December 31
|
161,303
|
132,769
|
122,033
|
December
31,
2006
US$
|
December
31,
2005
US$
|
December
31,
2004
US$
|
|
Key
management personnel
|
1.17
|
0.95
|
1.15
|
Other
employees
|
0.97
|
0.75
|
1.37
|
Key
management personnel |
Key
management personnel |
Key
management personnel |
|
2006
|
2005
|
2004
|
|
Weighted
average risk-free interest rate
|
4.55%
|
4.51%
|
3.54%
|
Weighted
average expected dividend yield
|
-
|
-
|
-
|
Weighted
average expected volatility
|
55.11%
|
60.30%
|
66.48%
|
Weighted
average expected life
|
5.73
years
|
5.33
years
|
5.28
years
|
Other
employees |
Other
employees |
Other
employees |
|
2006
|
2005
|
2004
|
|
Weighted
average risk-free interest rate
|
4.83%
|
4.01%
|
2.66%
|
Weighted
average expected dividend yield
|
-
|
-
|
-
|
Weighted
average expected volatility
|
54.88%
|
59.72%
|
65.24%
|
Weighted
average expected life
|
4.47
years
|
3.28
years
|
3.17
years
|
Number
of
shares |
Weighted-
average exercise price US$
|
Aggregate
intrinsic value US$
|
Weighted
average Remaining life in years |
|
Outstanding
January
1, 2006
|
8,848,457
|
2.35
|
||
Granted
|
1,617,000
|
2.02
|
||
Exercised
|
(145,155)
|
1.47
|
||
Forfeited
|
(708,235)
|
2.15
|
||
Outstanding
December
31, 2006
|
9,612,067
|
2.32
|
3,468,000
|
4.0
|
Exercisable
at end of year
|
5,605,469
|
2.50
|
2,604,000
|
2.73
|
Share
Options
|
Weighted-
average exercise price US$
|
Weighted
average grant date fair value per ‘A’ Ordinary Share US$
|
|
Non-vested
options January 1, 2006
|
4,215,784
|
1.99
|
1.08
|
Granted
|
1,617,000
|
2.02
|
1.07
|
Vested
|
(1,471,436)
|
1.86
|
1.01
|
Forfeited
|
(354,750)
|
2.01
|
1.01
|
Non
vested options December 31, 2006
|
4,006,598
|
2.06
|
0.95
|
December
31, 2006
US$’000
|
|
Cost
of sales
|
94
|
Research
and development
|
166
|
Selling,
general and administrative
|
1,073
|
Total
|
1,333
|
December
31, 2006
US$’000
|
|
Net
loss as reported
|
(1,946)
|
Add:
Total
stock based employee compensation included in reported net income,
net of
related tax effects
|
1,333
|
Net
loss had APB 25 been applied in 2006
|
(613)
|
Earnings
per share had APB 25 been applied in 2006:
|
|
Basic
- per ‘A’ ordinary share (US Dollars)
|
(0.01)
|
Basic
- per ‘B’ ordinary share (US Dollars)
|
(0.02)
|
Diluted
- per ‘A’ ordinary share (US Dollars)
|
(0.01)
|
Diluted
- as per ‘B’ ordinary share (US Dollars)
|
(0.02)
|
December
31, 2005
US$’000
|
December
31,
2004
US$’000
|
|
Net
(loss) /income as reported
|
2,582
|
4,048
|
Add:
Total
stock based employee compensation included in reported net income,
net of
related tax effects
|
14
|
13
|
Deduct:
Total
stock based employee compensation under fair value based methods
for all
rewards,
net of related tax effects |
(1,607)
|
(1,361)
|
Proforma
net (loss) / income
|
989
|
2,700
|
Earnings
per share:
|
||
Basic
- as reported per ‘A’ ordinary share
(US
Dollars)
|
0.04
|
0.07
|
Basic
- as reported per ‘B’ ordinary share
(US
Dollars)
|
0.08
|
0.14
|
Diluted
- as reported per ‘A’ ordinary share (US Dollars)
|
0.04
|
0.07
|
Diluted
- as reported per ‘B’ ordinary share (US Dollars)
|
0.08
|
0.14
|
Basic
- proforma per ‘A’ ordinary share (US Dollars)
|
0.02
|
0.05
|
Basic
- proforma per ‘B’ ordinary share (US Dollars)
|
0.04
|
0.10
|
Diluted
- proforma per ‘A’ ordinary share
(US
Dollars)
|
0.02
|
0.05
|
Diluted
- proforma per ‘B’ ordinary share
(US
Dollars)
|
0.04
|
0.10
|
December
31, 2006
|
|
Shares
issuable on conversion of debentures
|
497,324
|
Shares
underlying outstanding stock options
|
8,294,743
|
Shares
available for grant under option plans
|
4,309,170
|
Shares
issuable upon exercise of warrants
|
1,317,324
|
14,418,561
|
·
|
Cash
and cash equivalents, trade accounts receivable and trade accounts
payable: The carrying amount reported in the balance sheet for cash
and
cash equivalents, trade accounts receivable and trade accounts payable
approximates their fair value.
|
·
|
Long
and short-term
debt: The carrying amounts of the Group’s variable interest borrowings
approximate their fair value as these borrowings bear interest at
market
rates. In the case of the Group’s fixed rate debt the fair value has been
calculated with reference to the market rates prevailing at the
year end.
|
·
|
Forward
contracts: The fair value of the Group’s forward exchange contracts is
calculated is by reference to current forward exchange rates for
contracts
with similar maturity profiles and equates the market price at the
balance
sheet date.
|
December
31, 2006
|
December
31, 2005
|
|||
Carrying
|
Fair
|
Carrying
|
Fair
|
|
Amount
|
Value
|
Amount
|
Value
|
|
US$’000
|
US$’000
|
US$’000
|
US$’000
|
|
Cash
and cash equivalents
|
2,821
|
2,821
|
9,881
|
9,881
|
Financial
assets - restricted cash
|
15,500
|
15,500
|
9,000
|
9,00
|
Trade
accounts receivable
|
28,359
|
28,359
|
17,591
|
17,591
|
Trade
accounts payable
|
7,752
|
7,752
|
6,065
|
6,065
|
Short-term
debt
|
12,218
|
12,217
|
14,922
|
14,998
|
Long-term
debt
|
33,076
|
33,073
|
12,206
|
12,099
|
Forward
contracts
|
-
|
-
|
64
|
64
|
December
31
2006
|
December
31
2005
|
|
US$’000
|
US$’000
|
|
Proforma
revenues
|
141,935
|
144,247
|
Proforma
income before extraordinary items
|
337
|
6,323
|
Proforma
net income
|
337
|
6,323
|
Proforma
earnings
per
‘A’ ordinary share (US Dollar)
|
0.05
|
0.11
|
Proforma
earnings
per
‘B’ ordinary share (US Dollar)
|
0.10
|
0.22
|
Proforma
diluted earnings
per
‘A’ ordinary share (US Dollar)
|
0.05
|
0.10
|
Proforma
diluted earnings
per
‘B’ ordinary share (US Dollar)
|
0.10
|
0.20
|
Balance
at
|
Charged
to
|
Charged
to
|
Balance
|
||
beginning
|
costs
and
|
other
|
at
end
|
||
of
period
|
expenses
|
accounts
|
Deductions
|
of
period
|
|
US$’000
|
US$’000
|
US$’000
|
US$’000
|
US$’000
|
|
(a)
|
(b)
|
||||
2006
|
587
|
896
|
(100)
|
(309)
|
1,074
|
2005
|
462
|
279
|
(36)
|
(118)
|
587
|
2004
|
478
|
180
|
(143)
|
(53)
|
462
|
(a)
|
Amounts
recovered during the year.
|
(b)
|
Amounts
written-off during the year.
|
Valuation
Allowance for Income Taxes
|
Balance
at
|
Provided
|
Reductions
|
Balance
|
|
beginning
|
at
end
|
||||
of
period
|
of
period
|
||||
US$’000
|
US$’000
|
US$’000
|
US$’000
|
||
(a)
|
(b)
|
||||
2006
|
316
|
87
|
(131)
|
272
|
|
2005
|
302
|
14
|
-
|
316
|
|
2004
|
179
|
302
|
(179)
|
302
|
|
(a)
|
Increase
in valuation allowance associated with deferred tax
asset.
|
(b)
|
Reduction
in valuation allowance associated with deferred tax
asset.
|
TRINITY
BIOTECH PLC
|
||
By:
RONAN
O’CAOIMH
|
||
Mr
Ronan O’Caoimh
|
||
|
Director/
|
|
|
Chief
Executive Officer
|
|
Date:
May 8, 2007
|
||
By:
RORY
NEALON
|
||
Mr
Rory Nealon
|
||
|
Director/
|
|
|
Chief
Financial Officer
|
|
Date:
May 8, 2007
|
12.1 |
Certification
by Chief Executive Officer Pursuant to Section 302 of the Sarbanes-
Oxley
Act of 2002.
|
12.2 |
Certification
by Chief Financial Officer Pursuant to Section 302 of the Sarbanes-
Oxley
Act of 2002.
|
13.1 |
Certification
by Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, As
Adopted
Pursuant to Section 906 of the Sarbanes-Oxley Act of
2002.
|
13.2
|
Certification
by Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, As
Adopted
Pursuant to Section 906 of the Sarbanes-Oxley Act of
2002.
|