R. O'Conan Thank you very much. Just one thing I'd like to add,
there, Brendon, is that with exception of the Orin research and
development program on the Unigold products, that we have talked before
about H pylori, Strep A and chlamydia and I know that the launch of these
products is awaited. The
arrival of Dr. Pranovof from Quidel has given us the opportunity of
having these products been given a finer review. And you will remember
that last time we said that were reviewing Strep A in order to make sure
that it was CLIA waived, well, Pranovoff's advice on H pylori is that we
actually call for CLIA waiving as well. There's very minor
modifications that are happening on the pylori, in order to go for the
CLIA waiving. But I just would reiterate what we said in the past, that
H. pylori, Strep and chlamydia will all have been launched by the end of
quarter '98 and I would say two of the three will probably be launched
by the end of '97. So, I'm committing myself in terms of timing and then
all three products are virtually complete and, as I say, with the
benefit of Pranovof's huge experience with just perfecting them before
we bring them out, that you will see two of the three before the end of
the year and the third in quarter one.
And if we could maybe open it for questions, operator.
Thank you, sir. Ladies and gentlemen, at this time if you have
a question you will need to press the one on your touchtone phone and
you will hear a tone acknowledging your request. Your questions will be
taken in the order they are received. If your question has already been
answered, you may remove yourself from queue by pressing the pound key.
Also if you are using a speaker phone, please pick up your handset before
pressing the buttons.
One moment please for the first question. Richard Holine of A.G. Edwards,
please state your question.
R. Holine Okay. Congratulations, all you guys, on everything that's
being done. It sounds pretty exciting. one question is, do you have a
time line on when the HIV test might be approved in the United States
and two, could you talk a little bit more about your plans to do a road
show? I think that's very important in promoting Trinity in the United
States.
R. O'Conan Brendon, do you want to take that?
B. Farrell I'll take the HIV one, which is, it's very, very difficult to
be definitive about this. We're at the mercy of the FDA and we have to
move at the pace that they dictate. I would expect to see approval
before the end of 1998, but I'm not the one who is dictating the time
line.
R. O'Conan Yes. I'll take the other question, Richard.
The road show is part of a program that we're instigating with Lippert and
Heilshorn. As a new investor relations firm, we were very keen to
broaden our group of investors in the United States. I think we all
recognize here that we've a very exciting story and things are really
coming to fruition and we did recognize maybe that message isn't getting
out to the full U.S. market, as such. And we were advised... We were given
a lot of recommendations
that Lippert and Heilshorn would be able to bring us to the right people
and introduce us to new institutions and analysts which will start
covering the company. And in that respect we're going to have a new...
we're having another look at our investor relations program. And we are
conducting a series of road shows, or more one on one meetings in
reality, with Lippert and Heilshorn and they're introducing us to people
next week and that process will continue in the next... over the next
three months, or even over the next year and that's the new approach in
the company to introduce us to more and more people by using Lippert and
Heilshorn.
R. Holine Great, thank you.
Operator Sanjay Jain of Donald and Company, please state your question.
S. Jain Hello, everybody. This is a question directed at Jonathan.
Jonathan, what are we doing about the margins here? Do you think all
the expenses related to the acquisitions, the digestion of acquisitions
and the new people that came in recent months, aboard, all those
expenses are now, you know, will plateau and so we could expect the
margins to improve going forward?
J. O'Connell. Yeah, there's a few questions there, Sanjay. I mean
margins will hopefully improve as we integrate the operations of the
company and I think that's... I mean, we're already conducting a
process of integration of the various companies and improving margins.
Meaning, I think you will see that continuing. There have been a number of
additional overheads, as well, with regards to some new people being
taken on, most of which are indeed reflected in the third quarter and
while there's maybe one or two positions the company might look to fill
in the future, I don't think you'll see the general expense level
increasing that much over the next 12 montbs.
R. O'Conan Sanjay, this is Ronan, if I could just come in for a moment.
S. Jain Yes.
R. O'Conan With respect to the Centocor acquisition, there are
rationalizations that have yet to be made with a very significant bottom
line and positive impact and you'll probably... You'll only see, really,
the first of that in probably quarter one of 1998.
S. Jane Okay, thank you.
operator Bruce Brown of Brown Capital Management, please state your
question.
B. Brown Yes, thank you. Good quarter, gentlemen, hope to see
good progress going down the road. I had a question about the status of
the Self Care litigation, if you could fill us in please where that
stands? And also if you could give us a breakdown of your total long
term and short term debt at the end of September, please.
R. O'Conan The Self Care litigation is progressing, but it hasn't come
to court yet. We actually have had an offer from Self Care for
settlement, somewhat over 50 percent, but not enough really to tempt
us. It's progressing. We're confident of the outcome. We had changed
our lawyers a number of months ago and moved to a Boston firm from a New
York firm, who are closer to Self Care and so while we are finally
taking of some depositions over the next eight weeks, we will actually
proceed for the summary judgment. But in overall terms, the
shares are still worth $11 million, the (unintelligible) in our accounts
at about $2.5 million and we are extremely, extremely positive about the
ultimate outcome. We think there can only be really one outcome to this
case. And I know everybody will think that there's no such thing as a
certainty in law, but our expectation is, that closer to. It's very
difficult to entirely succeed in the summary judgment and really it's
unclear as to whether we'd actually win a
summary judgment. I think we all know how difficult it is to
win a summary judgment. If we win, as well, then we're home and dry.
If we don't win it and we actually go to court, we would expect that
we'd probably end up settling on the steps of the court in the 80s. We're
not prepared to settle for anything less than really the high 80s ...
mid to high 80s. That's our position there. We think it is a cowboy
action and it is and we're confident. So we think that those funds will
be available to the company, but most likely in 1998, later '98.
And the second part of the question, I 'll hand to Jonathan.
J. O'Connell Yeah, Bruce, the loans... The company has some bank
borrowings outstanding at the moment in group borrowings. It
approximates to just over $1 million at this moment in time. The
company does have some other loan notes outstanding. On the acquisition
of Centocor, you might remember that the company issued loan notes to
Centocor to acquire that company. So, overall, the purchase price
was in the region of $5.5 million and a lot of that is loan notes and
debentures outstanding and they go on for over three years, you know.
They're repayable over a three to four year period. So that's the
current situation. But I think the company's confident that it will be
able to meet the loan notes, repayments out of the cash flow, out of the
operating cash flow.
B. Brown Yeah, what is the amount of the reigning loan notes on
Centocor acquisition?
J. O'Connell Well, there's $1 million payable the lst of January,
98 and then there's $837,500 repayable in year one, two and three
thereafter so it turns out over 42 months.
B. Brown Thank you very much.
J. O'Connell Thank you.
Operator At this time, we have time for one last question. our last
question comes from Lewis McDonald of Birchtree Financial, please go
ahead, sir.
L. McDonald Yes and I have three questions. Can you tell us the exact
number of shares outstanding? You've got a weighted number of shares of
eighteen eight, but what is the actual total number? The other one,
just a brief answer on what happened to the shareholders equity. How
come we had a decline when we were acquiring assets; and, lastly, just a
short answer ... what was the reasoning behind the date extension an the
warrants. I'll hang up, thanks.
R. O'Conan I'll just deal with the issue of the warrants. The logic
behind it really was, was that many of our shareholders... many of our A
warrant holders are also common shareholders in the company and they had
shown a lot of loyalty to the company over the years and while we didn't
deem it correct to extend the warrants, what we felt was, I suppose, was
as a gesture to the shareholders was that we would actually cease
trading in the warrants, but that we would just allow a window period of 40
days in which people could exercise. I think, realistically, as long as
the share was trading and
given that you've got a common share in A warrants and the B warrants
and given its complexity, it was sometimes difficult for people to
actually make the move to actually exercise, given all the relative
movement of the three. You'd want to be a sophisticated broker, almost,
to get it right. So we felt that we should make some gesture to the
shareholders and by really sort of stopping the play on the A warrant by
ceasing trading, that it would make some simpler for some people to
exercise. And I would just mention to you that, in fact, over the last
number of weeks I think we've brought in a total of about $600,000 on
the exercise of A warrants has arrived and we would expect it to be some
more over the coming weeks, although that obviously depends on price.
The other part of the question was the total number of shares.
J. O'Connell The total number of shares outstanding at the moment
is about 18.9 million. You have to remember that includes 1.4 million B
shares. There's actually 700,000 B shares outstanding, but the B shares
have two votes per share and that's included in the earnings per share
figure so there's 1.4 million B shares included in that earnings per
share figure. So it hasn't changed much since the weighted average
figure in the quarter. And the shareholders equity has decreased. As you
know, with the two acquisitions that the company has made during the year,
one of the acquisitions, in particular, Centocor, was paid for with loan
notes outstanding. And we acquired
the company, there was a goodwill charge which has been charged against
shareholders equity and that's the reason for the decrease there. So
the net assets of the company, the consideration paid was in excess of
the net assets and that gets charged to goodwill and shareholders equity
and that's [unintelligible]
R. O'Conan If I could just thank everybody, but lastly, if I could just
respond to one question that we expected might be asked but, in fact,
hasn't been so lest there's anybody out there that's wondering about
this. Some of you will have seen a Reuters announcement a couple of
weeks ago, saying that Trinity was on the road, raising some funds ...
to clarify that. And what was happening there was that there was
(unintelligible] from the Clark acquisition, there was some Clark and
some other shares which were becoming available for sale after the
merger and rather than have these shares hit the market and we sought to
place them with European institutions and that was the primary reason
behind that road show as well as obviously share price support and at
that this time the placing is not complete, but we're confident that it
is sold in the next week or so. There is virtually no dilution there in
this activity and we would hope that through a combination of our
association with Lippert Heilshorn and through the cessation of the A
warrants which you'll-see from the lst of November and through basically
the cleaning up of these shares, which would have
been an overhang and the placing of them with European institutions, and
added to all that we talked about to date, we feel that there's a basis
for the share price moving forward in the coming months.
So if I could just say thank you very much, indeed and I'll look forward
to talking to you in two months time on the next conference call.
Operator Thank you, sir. Ladies and gentlemen, that does
conclude our conference call for today. You may all disconnect and
thank you for participating.
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