Trinity Biotech plc

Q4 2022 Earnings Conference Call


spk_0: good morning and welcome to the trinity biotech fourth quarter twenty twenty two financial results conference call all participants will be in listen only mode should you need assistance please signal a conference specialist by pressing the start he followed by zero after today's presentation there will be an opportunity to ask questions to ask a question you a press star than one on your telephone keypad to withdraw your question please press star than to please note this event is being recorded i would now it's sort of the conference over to jody as with listen partners please go ahead
spk_1: gary anthrax all of you for joining us today to review the financial results of trinity biotech for the fourth floor and four year twenty twenty two which ended on december thirty one twenty twenty two joining us on today's call or page chief executive officer in
spk_2: john taylor
spk_1: april officer at the conclusion of today's prepared remarks the ultimate call for question and answer session before we begin statements made in this conference call maybe the forward looking statements within the meaning of federal securities laws see statements are subject to known and unknown risks and uncertainties that may cause actual results to differ from those expressed or implied in such statements these risks include but are not limited to will set forth in the risk factor statement in the company's annual report on for twenty f cloud with the securities exchange commission thirty five tech undertakes no obligation to publicly update or revise a foreigner who statements to reflect event or circumstance after today are the occurrence of one anticipated events with that i long term the following ceo eric cajun for opening remarks he will be followed by seattle john geller for review of the financial results mr schedule then for five some additional back rub which we all of the call to your questions eris the floor yours
spk_3: thanks jeff
spk_4: good morning everyone
spk_5: i like to start the car discussing t revenue commercial operate highlights i will also give context of area strategist activities we are underway java far was a deeper dive into i reported the natural than they will be happy to questions first let me discuss the revenue trance total revenue for fiscal twenty twenty two
spk_4: thank you for twenty twenty two were seven four point eight million and eighty million respectively
spk_5: excluding i quoted focus pcr viral transfer media products for your twenty twenty two revenues of selling on point five million were one percent lower than in twenty twenty one
spk_4: eddy cue for twenty twenty two revenues were less than half a percent lower than in to for twenty twenty one
spk_5: i performance and twenty twenty two was focus on our core flagship hemoglobin to business
spk_3: where diabetes brought a experience twenty seven percent overall revenue growth and over sixty percent irishman placements versus twenty twenty one as highlighted by the forty three percent growth and sales of high margin diabetes consumer those and key for twenty twenty two or sixty four twenty twenty one the increments increased instrument placements to
spk_5: addition the company for strong recurring revenue is in contrast a consumable sales or the next several years we expect expand on a strategy with the x with the u s launch of our premier resolution hemoglobin variants instruments this year as we continue to work closely with the ft a to gain clarence a lot like think a submission the company also continue to develop with next generation flagship diabetes h b a once the instruments the premier ninety two ten with expected launch and que three twenty twenty three the israel will feature an improved backward compatible reagent com system that will feature up to three times injection capacity stability limited calibration and approved user interface a lab system integration this the first step of a multi generational product development plan aimed at expanding the target market driving lower service downtime and cost law significantly expanding operating margins
spk_3: we're experiencing particularly strong demand for diabetes products in south america and asia pacific with the forty three percent year over year revenue growth in south america
spk_5: and thirty six percent year over year revenue growth in a path we can see to scale a commercial coverage in these markets where the increase in diabetes and propensity for hemoglobin variance is that some of his highest rates and are born in the city technology that particular get competitive that while our hiv business was down fourteen percent in the year
spk_4: this reflected significant non occurred in bulk orders nigerian twenty twenty one
spk_3: a runway cause you to go business continues to perform steadily with fifty percent growth on the fourth quarter vs last year and ten percent girls vs two three twenty twenty two preliminary estimates preliminary s mr que one indicate that over thirty percent improvement vs to want twenty twenty two will be expected
spk_5: i was now like to discuss an important milestone for the company that was achieved this week the company's very much focused on executing beginning to t two to twenty twenty three on a lot and distribution of our turn screen hiv test bali than else by the kenyan ministry of health of the adoption of this new hiv wrote test testing algorithm
spk_3: it establishes today but experts trinity hiv as a standard screens as in kenya on their world health organization guidelines the kenyan hiv screening program is one of the largest africa
spk_5: when an estimated seventy nine million screens as annually
spk_3: this announcement demonstrates trinity's ability to disrupt a well established in common with world class innovative high quality point to here solutions
spk_5: we aimed at the kenyan algorithm is a priority as we believe it sets a key benchmark for the region we are leveraging this smiles on was significant focus and twenty twenty three on two to three additional countries which represent a combined expected annual test volume of over twenty five million we expect shiva least twenty percent market share the hundred and fifty million african hiv screening market over the next three years now moving on to a string of activities and the transforming our us based lab platform
spk_3: was a thirteen percent keurig or of the last three years the company continues to see significant growth in it's proprietary sjogren biomarker lab developed us this has been achieved despite limited to almost no commercialization activity plans are development for distribution throughout up the margie dental and gynecologists channels at scale with party more about the coming
spk_5: months
spk_3: in january twenty twenty three the company announced a strategic partnership was i am aware
spk_5: that combines i'm a was built partner digital how platform with trinity's advanced reference laboratory facilities the aim is to power the digital health industry was private a white label at home and remote from remote testing programs we are working closely together make this operational execution reality and twenty twenty three
spk_3: finally the company intends to introduce up to it doesn't nu lab developed all tests and twenty twenty three targeted at the therapeutic drug monitoring or tdm market
spk_5: this is aimed at high growth recurring revenue opportunities and autoimmune diseases such as ib the rheumatoid arthritis and so sorry attic arthritis as well as rapidly expanding biological therapeutics tackling areas such as cancel cancer and degenerative diseases such as alzheimer's
spk_3: stay tuned for more discussion about this in the coming weeks i will not like to get it context around significant portfolio transformation and many activities that are for that we are working on obviously we can't discuss activities that are subject to confidentiality agreements are commercially sensitive or not you're flying off a lot to be announced however i can be quite direct about the company's portfolio focus going forward
spk_5: we are conducting a portfolio of you have all activities that do not align with a strategic focus ralph's reach key priorities specifically diabetes and hemoglobin for next year and digital out disruption
spk_3: and personalize therapeutic drug monitoring
spk_5: the intentional with coming months is to simplify the poor soil these three areas where the tabs are enormous the risk return profiles are asymmetrically in our favor where we have competitive advantage and were shareholder a clear on should eternity biotechs investment thesis management and sense the exit are optimized for cash it's portfolio noncore products and platforms in order maximize shareholder value and concentrate leadership's focus aware that value lies given a strong pipeline have attracted em in a opportunities and are areas a strategic focus in february we we secured a twenty million dollar flexible term facility specifically to provide the ability to move quickly when officers it's transactions arise
spk_3: this is a very opportune time to gained significant innovative product pipeline at fractions of where they were valley only two months ago our portfolio optimization efforts and opportunistic emanate i key to arthur's efforts stop optimize our capital structure and reduce or that costs and twenty twenty three now like to take a month discuss structural operational should as we have underway cost optimization president's actions have resulted in a queue for offering gross margin one rate of over forty percent excluding one time inventory justice this reflects over five points an improvement over the same quarter and twenty twenty one and over two three twenty twenty two the company has reduced headcount by approximately ten percent to queue for twenty twenty one as we continue to focus on process simplifications and automation
spk_5: or increase i t spent in the fourth quarter also reflects significant investments on their way in r m e r p and regulatory automation to drive speed and further efficiencies
spk_3: our emphasis on supply chain opposition is currently in our hemoglobin division focused at reducing the cost of the premier ninety two den diabetes estimate by approximately fifteen percent in conjunction with multi generation product development plan significant margin agreed of actions for two to twenty twenty three or the insourcing sourcing of see hemoglobin say faction prophecies a rapid transformation of our global just six operations
spk_5: one of my players it priorities are a last court has been restructuring and rural revitalization of our commercial sales organization on a global basis
spk_3: we eliminated and effective leadership overhead rebuilt commission plans and country to refresh our global distribution channels i am personally managing this effort
spk_5: finally i like to take a moment to emphasize a focus on the most important element of our transformation strategy
spk_3: namely dallas a highly motivated shareholder a line leadership team is that the core of a company strategy where in the process rolling out a revised employees share based compensation program aimed at driving significant shareholder value the plan for the same structure the c o share based compensation plan whereby sixty percent of options are stock performance based and only pay out when the stock reaches trading milestones or three four five dollars brady as
spk_5: the structure is designed to be fully ally was shareholder interests to create exponential shareholder value
spk_3: as you can tell from the structure of our performance options moderate stock price improvements to two dollars three dollars eighty as is not wearing his life
spk_5: i think it's a point to point out that we're on a better your transformation trinity biased or performance options vessel or three year period and as the timeframe the entire management is committed to when i took this role i under wrote the minimum value for which three years was worth my time that value is ten dollars higher than what we are now and five million options you can do the math
spk_6: well not two things over to john and combat answer any questions thank you figures the morning everyone now i will take you to the results for to for twenty twenty two as ours has already discussed revenue trends i will move on to discuss discuss other aspects of being from statement
spk_1: if you for twenty twenty two both profit the six point two million dollars give a gross margin of thirty four point six percent
spk_6: in two for twenty twenty one gross profit amounted to seven point two million dollars and the gross merging with thirty seven point one percent the reductions was merged is largely due to sales makes changes lower production activity and inflation increasing the price raw materials we have started to see the benefit of price increases and cost of maximize asians implemented in mid to late twenty twenty two now starting to be realize i've seen by the fact that the to for twenty twenty two margin of thirty four point six percent is higher than the adjusted to three twenty three two margin of thirty four play for for and when excluding the significance excesses obsolescence charges related to infantry a four point seven million dollars for that into three as iris mentioned into for twenty twenty two we saw run rate gross margins excluding quarter and year and inventory adjustments of approximately forty percent other operating from decreased from zero point seven million in two for twenty twenty one two zero point three million in for twenty three two
spk_1: it's quarter or the operating income comprises government grants in relation to or or in the activities
spk_6: if you for twenty twenty one we recorded zero point seven million of other operating from related to paycheck protection program known which was forgiven in that corner or the expenses increase from zero point nine million in two for twenty twenty one to one point two million when compared to four forty forty two this was because various early stage development activities did not meet the criteria for nureyev for read for capitalization as an intangible assets sgt expenses have increased significantly this quarter to for twenty twenty one sgt expenses were five or five point six million and this is increased to ten point two million dollars this corner there are a few significant contributions to this increased firstly our share up to increase expense has increased by one point two million compared to two for twenty twenty one this church isn't know for the catholic church calculated on decks chores financial model as previously said our players one is this key priorities is to build the performance culture and dr ownership and accountability in the company his share based compensation models that ensures shareholder live in his regards as courts this transformation and we're currently this out
spk_1: at this point in time is intended to see share with competition awards will be structured in a manner similar to that of the options grants to a sealed with a significant proportion of any words been performance based awards
spk_6: only become exercise but if the company's a the asked price which is a hurdle of these performance year based compensation award are intended to see line because of our team with those of our shareholders in the creation of shareholder value the majority of options grads in queue for twenty three to our performance your options and structures such that their excess exercisable only is the company's eighty as price increases to certain levels such as three four and five dollars for areas during the light of the option
spk_1: none of these performance your options are currently exercise
spk_6: also this quarter there was an unfavorable quarter on quarter variants of nine hundred thousand dollars place to foreign exchange last and euro denominated like least liabilities right use assets we're required and recounting ruse to mark to market the lease liabilities at the period and f x rays it's you for twenty twenty one this resulted in a foreign exchange eight on leases of zero point two million putting to for twenty twenty two it was a foreign exchange last of zero point seven million dollars we've also encouraged higher leave the professors he says quarter of approximately one million dollars mainly comprising nonrecurring costs for due diligence corporate development the corporate finance activities
spk_1: included in this toss a professional fees in relation to several him in a opportunities of which only the city's partnership with i am we're has been featured days
spk_6: excluding the north life rest accounting charges around cherub his compensation i do not believe that these types of charges have been some inherent in our cost base and those i don't expect them to continue into the medium term future in addition nation expenses we have seen an increase in favour cause into for for the twenty two compared to queue for free twenty one of approximately three hundred thousand dollars with the lifting of covert a to travel restrictions we have tasser their sales and marketing things to increase travel customers and trade shows as he conceded revitalize or sales activities similarly to t function leaders base maryland have resumed is a tour overseas facilities as we seek to drive operational efficiency managing believe this is a worthwhile and a fourth investments for we do not expect eleven travel to stay at this level going forward we recognize them primary charge of three million dollars into for twenty twenty two compared to mid term in charge of nine hundred thousand dollars into for twenty twenty one
spk_1: a december thirty one twenty twenty two two internally developed covered nineteenth has one on a raft of lateral so foremost a moon and eliza for most pathetic tearing values of two point two million and zero for woman respectively within intangible assets were reviewed for impairments the dry for us
spk_6: the rapid covert nineteen test is a proof of recession using the you and we believe it is a very high quality test however as ptc just goes by the company the mets the demand for our the nineteen for full tour your forest is highly uncertain very that to the district and it our experience the market has moved over the counter rapid pulls nineteen test which is product is not yet approved as such the company's efforts to commercialize is test have been on successes in addition pricing for rapid covert nineteen test the you is relatively weak stronger pricing available in for example the us market which is province is not yet approved even the market outlook for rapid covert nineteen testing front of a continued uncertainty regarding regulatory approval pathways in key market to to the u s management is chosen to not immediately pursue further regulatory approvals but doesn't tend to monitor these markets and regularly pathways would have you to potentially seeking additional rags your prove however as the company has no mm fans pursue these rag is your problems for driver race accounting rules these intangible assets were written and zero two four twenty three two the impairment tested thirty one december twenty twenty two also identified impairment last of seven hundred ak laboratories and trees you buy a text is is there were a number of factors taken into account and then chairman herman tests including the company share price of the date of test the cost of capital the future protect cash flows from individual cash generating that in the business
spk_1: operating loss for the quarter was seven point eight million which represents a decrease in profitability of a plea for meeting compared to quarter for twenty twenty one and was attributed to lower was proffers lower other offering income and higher indirect costs
spk_6: financially income for que for twenty twenty two one zero point one million compared to ten thousand dollars the queue for twenty twenty one it's you for twenty twenty two financially khamenei related to the fair value adjustments the derivative liability relays words granted the groups and splendor finance expenses and to for twenty three two for two point four million dollars compared to three million in for twenty twenty one a decrease of six their of six one thousand dollars the interest expense related to the senior security term loan and the seven year convert the nose for one point nine million dollars and zero point three million dollars respectively into for twenty three two he's amounts consists of both cash interest and noncash accretion interest as both these barring their new and twenty twenty two there was no interest expense recorded in the comparative kurds reasons that respect it's you for twenty twenty one the cash in on cash interest expense with exchange been notes was one point two million which was reduced to almost zero and que for twenty twenty two due to the debt refinancing earlier the early in the year
spk_1: in for twenty twenty one loan origination class of one point six million dollars were encouraged comprising the all commitment and professional fees
spk_6: these toss were expensive the income statement in queue for twenty twenty one as a long list of the to shareholder prove and that approval with not receiving to force the banshee face the remainder of the finance expensive to for twenty three two and two for twenty twenty one with this sub nautile interests and life least liabilities for right of use assets assets which has remained broadly stable and a hundred sixty thousand dollars i propose to just talk briefly about our full your numbers for the fiscal year twenty twenty two starting revenues as mentioned by iris total revenues for twenty twenty two were seventy four point eight million compared to ninety three minutes and twenty twenty one gross margin for the year was twenty nine point five percent compared to forty one percent for threads twenty twenty one the reduction imagine was mainly due to three factors one a four point seven million dollar inventory right down to a large adoption of eg and product sales these products had a higher than average margin free twenty one and three rising and for prices exceeding the price increases be passed on to our customers indirect costs have increased by three men and year i near the major movements here in the higher sure listed and lastly our professor sees seized mainly so see what are emanates development activity as expenses were higher by seventeen point six million three quarters of this increase comprise to nonrecurring expenses on the last of disposal of the exchange for notes and to the pair penalties for early settlement of part of our terminal i will now move on to address some of the main balance sheet movements we have seen says quarter three twenty twenty two intangible assets decreased by one point nine million is is made up of additions of six hundred thousand dollars as many comprises catalyze or and the expenditure partially offset by amortization two hundred thousand dollars and the inch permit charges for the to development projects have two point three minutes as know the last quarter the amounts the company's spending our capital already expenditure has been trending downwards and this is because several the main projects leave him working out of reach the final phase of their development and and the side of phase fewer resources are typically and or in addition some of our more recent or and he projects or phases feasibility are very early stage and those don't meet the requirements recapitalisation andrea for s imagery is decreased by one point one million equating to approximately to four percent reduction
spk_1: this is an area we are targeting a we have had and we have an ongoing projects aimed at up the missouri him entry level going forward as part of our focus on improving the overall effectiveness and efficiency and the supply
spk_6: counter seen that balances on the other hand have decreased by one point five million and this is maybe a function of the lower sales is for
spk_1: finally i will discuss our casual for the quarter a cash balance increased by seventy two thousand dollars to six point six million in queue for twenty twenty two past generations from operations for the quarter was two point three miss
spk_6: apple expenditure out for comprising t v and or and the room for woman in a reduction of one point three compared to some part of period interest payments in the corner rule for to me i set out in of press release i can assure you at as the group see a full and a member of the senior management team we are acutely aware of the relatively high cost of companies bar
spk_1: while the financial markets are fairly difficult place i believe we have a number of potential options to successfully deal with our access cause
spk_6: well at the same time raising cattle and management time to focus on high growth areas or trilogy him with i'm a globally significant player as mentioned by hours we're actively a damning the potential disposes of parts of our for of businesses that are known for for a future vision and strategy where valuations may be attractive while also examining in number of about parents of financing options it is an absolutely cheap area of focus force
spk_7: i will now how you hold you so i've now had your back the job i care of him
spk_4: i'll take it says
spk_0: i think we can open it up for questions we will now begin the question and answer session to ask a question you may press star than one on your telephone keypad if you are using a speakerphone pleased it up your handset before pressing the keys to withdraw your question please press star than to at this time we will pause momentarily to assemble our roster our first question is some gyms to out was subtlety and company please go ahead
spk_8: mrs ready the line is open on our and practice needed on years
spk_3: sorry about that how good afternoon thanks for taking the question on my to start off with the hiv business on how quickly do you think you start shipping products to ganja
spk_4: i think will start shipping and second quarter that's the intention
spk_8: any idea and won't we're we're letting somewhere in the range of about four for atlanta's for the and can can you do they may be wrong but earning up production wrap up
spk_7: didn't disclose and on a fee for the test
spk_5: i'm sorry was that the pricing protest
spk_6: gianna relocated to discuss it
spk_8: i'm be freed is indicated a gym it's around the of in and around eighty cents and it's consistent with that okay
spk_3: i matched his to kenya
spk_5: the getting ya on board help you with the the other two or three countries in the region
spk_4: thousand time strategy from the beginning of self ten years upwards of
spk_5: nine million last year on or on rate basis so ah we think you know that's our target to work toward over the next twelve eighteen months in kenya we also think that this there we just set helps establish the momentum
spk_9: around the next two to three markets that are highlighted early and we're talking about over twenty five million testicles market
spk_6: and i expect us to get at least twenty percent market share in the space next two to three years and what have they can you accept
spk_1: ty gemma to three the point like any it would be regarded as a leader in terms of hiv care am on the continent and hill we believe will be built and significant influential status in terms of proven as the quality the product and so
spk_5: the have secure that as the first country to target the a large marcus but it also we think will have significant persuasive value in terms of opening up or the markets to transcripts
spk_3: i do you think the other countries will then you pause for six or eight months see how things roll out and kenya before they make any decisions
spk_5: ah that i think some way but the reality is
spk_4: they typically i mean there's a full report you can look at the canyon authorities have put out they did extensive studies would it feel tess
spk_5: there there's a lot of work has been another last six six or seven months
spk_1: all that information now is in the hands of all the other stories to work off and get a head start on so that's that's how i would think about at this point is of his apostles some will wait to see out rolls out what potentially but like as i said we expect to start start shipping in april so i think donald maker they'll get us going around so quickly
spk_4: and then i the the him a in business the with the human bone variance and the h b
spk_3: a one see systems are where do you expect the initial sales you notice happen he said in in asia and south america and with those been us
spk_5: which sales your time i talk about the or the hemoglobin variant product or not a very
spk_3: both
spk_5: what the so that the ninety two ten product is or work was product okay we we saw it all over the world including united states we sell direct in the us and we saw direct and in brazil
spk_3: that that product is going through and eighteen months to eighteen to twenty four months
spk_5: the product upgrade strategy we expect to be working on new releases more than one over the next couple years around their flagship product that will significantly improve it i think that will make it
spk_10: attractive not just an existing i growth markets
spk_5: oh he owns in south america and asia but i think it puts us in a position to get gross at a at a level i'd be happier was in the us
spk_11: and
spk_12: and in in some of the more traditional markets outside the us potentially in europe i think the more important questions
spk_5: ah in the us at least in the short run is the timing of getting our
spk_1: from a resolution variant instruments
spk_5: basically cleared by the ft and to the market for working very closely on that and i think that one is a is a key for us in the us and with when you think about acquisitions is it is it for the gonna do this or
spk_0: or one of the other two businesses that us identified about that as a with this way okay that their three trance we care about and that where we had some game and real game
spk_5: diabetes and hemoglobin so pointy care and decentralized testing and what we see more in terms of monitoring around a lot of the therapeutic that are being introduced and all the conditions new on a chronic conditions that we're dealing with and our lives a bit of an edge in that area okay my focus is any emanate has to follow that in those categories for an intersection those categories you can you can think about what that might mean but the diabetes is the largest decentralized just the market on the planet
spk_12: so there's a lot activity up in that area
spk_1: the scenario we know it's a new understand so
spk_5: i would expect our next couple of moves will be likely in the area of diabetes
spk_13: and and decentralized year on year
spk_8: stunning
spk_1: for and then on the other side of that when you think about their futures and feminine are correct it's can you can you break out for the fitzgerald this with those sales were in twenty twenty two
spk_6: john it was you have he sits number
spk_14: about twelve billion him
spk_6: i did mm hours on for me with with the recent option grandson and warrant repricing what what do you expect to share counted be for twenty twenty three it was there's a point we please don't
spk_15: pm
spk_8: the options typically have add to your life rice same to to to your life so i wouldn't expect same i don't expect significance option exercises over the next while and to be honest with you and then you've got the heard to raise and top of that as well so
spk_16: i don't expect significant and that pay am ill in germs the warrants that's have to at of to perceptive as to what they want to do with those am but i'll tell you that it's it's it's been a whether we raise equity
spk_1: so
spk_6: does your number number move and peters within that the gym okay i guess this i did have one more so absent any acquisitions you're assuming you get nice the increasing within their revenue from the the hemoglobin at the and he hiv businesses and considering other the expense cutting you've had i do you expect to be free cash flow positive and twenty forty three
spk_17: i think as we get towards the end of the year
spk_18: i stay i'd the whole for we will aim it will depend on how quickly we can rule out of print screen
spk_6: how's your how quickly we can get the resolution am an american and us the one of the things that are
spk_8: didn't i didn't lover sir
spk_0: thread the telling
spk_19: pretty get it will be see it
spk_20: in terms of production better overhead eh the number moving parts for think as we move the and rent out the just it operationally casual positive for very focus on the cost of or days and is to cash out those associated with those interests best
spk_21: got it i thank you
spk_6: again if you have a question please press star than one the next question is from paul lawrie with double equity please go ahead a morning the inventory came down a bit in the quarter but still seems elevated
spk_1: the talk about it you know if you're expecting that to continue to come down and
spk_6: hopefully there's nothing in there that a warrant
spk_1: right off
spk_6: i all it takes as so yeah we we do intend to continue to go to whittle down as raised and we hired a very senior supply chain profession and and twenty twenty two and he's doing a lot of work in terms of of optimizing our overall supply chain okay aim it's a balancing act for us okay the for example of one side you know we want to reduce the we've intrigued at the same time though given everything we seen over the last two to three years into terms of supply chain challenges we need to make sure that we've got enough and predicting products on hand particular around raw materials aim in terms of other areas are right asked if you give you some sense
spk_20: for in total were carrying pull related is in between out of probably thought a million dollars a case in terms of carrying value don't wait we saw it about half a million of called related products in quarter for i expect we'll do something similar and for a one this year rice so fill in that sense for not hold in fig see big inventory valleys from a net basis in terms of it'll products that are that are highly uncertain and then are other him and trees your concentrated in or
spk_5: ongoing area around going main product areas so for example associated with hiv the the of the ramp of no production a trend screen and that's going to add some hey can production as well here in ireland aim the will eating freezer inventories so i think overall the picture might stay the same but i think you know with with will effectively be tried to hold lowers amount of inventories for every dollar revenue that we have gone out the door that makes sense for
spk_4: yeah and and and you don't have the the income statements to questions i think you mentioned hitting forty percent gross margin adjusted this quarters
spk_22: wondering if you expected to continue that and twenty twenty three mm operating expenses as a whole
spk_12: you think that denies you get revenue from trend screen and hopefully the diabetes business continues to perform well in the lab in the us
spk_5: do you think of our leverage off those expenses are you building more of an infrastructure to support the growth i think on the
spk_23: commit or the expense side let me just say one thing
spk_24: we're making investments for putting a lot of money and he i see right now because we think that's going to drive significant efficiency i think the poor fire rationalization
spk_6: we'll address the signature and significant amount of carrying costs associated with managing legacy products i we can address that in in revenue quite frankly is the key or there's a baseline amount of infrastructure the need for regulator the and i'm now getting a ramp up for example entrance wheel drive stick with significant operating efficiency and of itself so let's sit revenues one piece of it but there's no doubt we're putting
spk_1: significant investment in the to infrastructure the companies that we can make it much more efficient and it's easier to scales we do emily
spk_25: i don't remember there was no measures like
spk_6: are you glad glad to measure
spk_20: does that for know i i i i would i would be all for that we will continue to see that i've emerging come through and damn ancient and we made some price increases second half of twenty twenty to sometimes take some time for those roll true we have some other price increases with next to push through know the quarter to have this year as said we are significantly focusing on reducing down our costs rise i'm to between the two of those activities i do expect that we would be able to maintain at margins in around that forty percent level and some that will depend on product mix so for example as we place and increased amount of ninety two ten instruments and you know our marriage don't aim is is typically you know high margin and consume the revenue as we go forward rise so he'll do i think that number will be that and forty percent every quarter probably nast's with for us you were happy to take an element of variability particular around hemoglobin interim
spk_4: and basements as they generally deliver which higher quality at revenue both in terms of marriage in and predictability as we go forward and also look at print screen
spk_5: il is is it'd be interesting to see what impact that has in terms of our marriage and as well and how big those numbers guess of the some some honours within that were certainly much happier with see the trains we're seeing now and from the marriage and given given the hard work and the actions that people have taken over the last six months i can last question is around the strategic investments for i'm aware maybe a if you can give us the size of the overall
spk_26: money raised that they determined
spk_5: what their particular competitive advantages in this space and prior and i'm i'm kind of assuming that they're using your lab as the exclusive lab or maybe to get into that a little when our this is it's not complicated some level right i mean
spk_4: the reason we partner with them
spk_5: and we have an exclusive regiments rebuild that our lab will be dicks was a provider for the programs with are working on the entire strategy is to beat a btc private label
spk_3: white label solutions for digital providers
spk_5: our health providers and players like that okay this not a direct order mark play they do have a website but as more of a focus group operation in in males
spk_3: so we like that model
spk_20: we think that moloch and scale
spk_6: we already do a little bit of work with them were working quite closely with them to to scale up a seeley actors that as quit that has potential
spk_0: and then to ramp up across a broad spectrum of to us now ah the pace of that is is is gonna be some you know what we'll see what that what that pieces were going be careful imprudent as we roll this thing out we're not going to be delusional about the complexities of getting into the such programs we've got a t marquee a council working with them on i think it's much more
spk_3: foreign that we had miles some of these marquee accounts
spk_5: and execute properly on those and demonstrated the small from work
spk_4: so i think you'll see us wrap up the seeley access this year and romans some of the other tests
spk_5: next year okay averaged it was it it's it is important as the money raised of their private companies that were not at liberty to say that as holidays will or will point five investment is relatively minor as right they have every significantly more than that okay thank you
spk_27: once again if you have a question please press star than one please stand by as we pull for questions
spk_5: killing no further questions this includes or question and answer session i would like to turn the conference back over it eris cadets pedestrian for any closing remarks thank you
spk_0: john i appreciate the time you also today

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