Good day, and welcome to the Trinity Biotech third quarter financial results conference call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your telephone keypad. To withdraw from the question queue, please press star then two. Please note this event is being recorded. I would now like to turn the conference over to Joe Diaz with Lytham Partners. Please go ahead.
Thank you, Kate, and thanks to all of you for joining us today to review the financial results of Trinity Biotech for the third quarter of 2022, which ended on September 30, 2022. Joining us on today's call are Aris Kekedjian, Chief Executive Officer, and John Gillard, Chief Financial Officer. At the conclusion of today's prepared remarks, we will open the call for a question and answer session. Before we begin, let me inform you that statements made in this conference call may be deemed forward-looking statements within the meaning of Federal securities laws. These 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, those set forward in the risk factor statements in the company's annual report on Form 20-F, filed with the Securities and Exchange Commission. Trinity Biotech undertakes no obligation to publicly update or revise these forward-looking statements to reflect events or circumstances after today or the occurrence of unanticipated events. With that said, I will now turn the call over to John Gillard, Chief Financial Officer, for a review of the financial results. He will be followed by Mr. Aris Kekedjian, Chief Executive Officer, who will provide additional background on revenues for the quarter and the overall business. After which, we'll open the call for your questions. John, the floor is yours.
Thank you, Joe. Good morning, everyone. I will take you through the results for Q3 2022. Starting with revenues, total revenues for the quarter were $19.5 million compared to $22 million in Q3 2021. Aris will discuss revenues in further detail later on the call. I will move on to discuss other aspects of the income statement. You'll have seen from our income statement that we have recorded significant excess and obsolescence charges related to inventory of $4.7 million this quarter. As this amount is material to the results this quarter, I will now bring you through the components of this charge. Firstly, there is a viral transport media inventory write-down of $3.5 million. As we've talked about on recent earnings calls, the situation relating to COVID-19 products has been fluid and hard to predict.
Last year, when demand for PCR VTM products diminished, we cut back our production, but decided to retain the capability to flex manufacturing volumes should market conditions warrant. As part of this strategy, we maintained an inventory of critical raw materials to allow a ramping up of VTM production to meet peak demand, as it was important that we were able to fulfill high volume orders at short notice in order to retain existing customers and capture new customers at effective price points. So far, we have not seen any evidence of current or future significant peaks in demand for PCR VTM products this season. We revised our strategy of maintaining significant levels of raw materials inventory to meet demand peaks. We now intend to sell the vast majority of this inventory, which given current market conditions, is expected to be at lower prices.
Consequently, the value of inventory has been written down to our estimate of its net realizable value. Secondly, we have written down the value of certain excess raw materials and work in progress following review and update to our relevant quality assurance policy. This amounted to a charge of $900,000. The third and final charge relates to write-down of Tri-stat inventory and amounted to $300,000. We undertook a strategic review of our Tri-stat instrument as part of a broader review of our hemoglobins product portfolio. With annual sales of approximately $200,000, Tri-stat is the least significant product in the portfolio. To simplify the hemoglobins product portfolio and to allow us to focus our resources on the higher growth products, we've decided to limit sales of Tri-stat to certain targeted partnerships.
Consequently, we have written down the value of this inventory to reflect the consequently revised outlook. All of what I have mentioned so far contributed to a gross margin of 10.3% this quarter. Excluding these significant inventory write-downs, the gross margin for the quarter would have been 34.4% compared to 40.4% achieved in Q3 2021. As well as use headcounts as we pursue greater automation and simplification of processes. We are also benefiting from stronger U.S. dollar against the euro, which is reducing our substantial euro-denominated SG&A expenses. Offsetting this are additional travel and trade show-related expenditures, reflecting an increase in sales and marketing and senior operational staff travel, post the lifting of many COVID-19-related travel bans.
We believe it's important for our sales and marketing staff to resume face-to-face interaction with our customers and partners as a key component of rejuvenating our sales revenues. In addition, we also believe it is important that key operational leaders, many of which we have recently recruited, have the opportunity to visit our various sites so we can aggressively execute on our operational efficiency objectives. We've recorded impairment charges of $2.3 million this quarter compared to zero in Q3 2021. The development project for the autoimmune smart reader was paused earlier in 2022 as we reviewed other options, including the potential to proceed with a third party reader instead of our own internally developed reader.
Following this review, we determined that there were likely greater opportunities to capture more market share in a more capital efficient manner through partnering with a third party reader manufacturer for pursuing an independent strategy. At this point in time, there's significant uncertainty if we will complete the project to develop our own in-house autoimmune smart reader, thus while we may revisit this decision in the future, in the interest of prudence, we have fully impaired the project's carrying value of $1.3 million. The remainder of the impairment charge relates to Tri-stat. As I mentioned earlier, we undertook a strategic review of our Tri-stat instrument as part of a broader review of our hemoglobins product portfolio.
In order to rationalize the hemoglobins product portfolio and to allow us focus our resources on the higher growth products within that portfolio, management decided that Tri-stat sales will be restricted to only certain targeted partnerships, and this has led to an impairment to the carrying value of the Tri-stat intangible asset. This results in operating loss through our Paycheck Protection Program income, but in the comparative quarter, just under over $1 million of PPP income was recognized. The other drivers of that reduction in operating profit are the lower revenue and margin contribution from our COVID-related portfolio of products, the significant inventory write-downs and the impairment charges, as well as the aforementioned impact of inflation and under recovery of overheads. Moving on to net financial expenses of $1.9 million in Q3 2022, which compared to $1.2 million in Q3 2021.
The increase is mainly due to higher interest rates applying to our borrowers post the refinancing. We re-replaced exchangeable notes with a coupon rate of 4% with a senior secured term loan with an interest rate of approximately 13.5%, albeit the net amount now borrowed is substantially lower. In dollar terms, the interest expense is $600,000 higher this quarter when comparing the interest expense for term loan versus the exchangeable loans that it replaced. Additionally, in 2022, we issued a seven-year convertible note, and the total cash and non-cash interest expense for this debt is approximately $260,000 in Q3 2022. Lastly, we recorded a fair value adjustment on derivative balances related to the term loan, which this quarter was income of approximately $300,000.
In the comparative period, we had fair value adjustments on derivative balances related to the exchangeable notes, which was a financial income of just under $200,000. That after tax was $8.9 million in Q3, 2022, compared to a profit of $1.3 million in Q3, 2021. As in prior quarters, and as set out in the press release, we quote earnings per ADS, effectively our equivalent of EPS. In Q3, 2022, the last per ADS is $0.235, compared to a profit per ADS of $0.063 in Q3, 2021. I will now move on to address some of the main balance sheet movements we have seen since quarter two, 2022. Intangible assets decreased by $1.6 million.
This is made up of additions of $1 million, which mainly comprises capitalized R&D expenditure, partially offset by amortization of $300,000, and the impairment charges for the two development projects of $2.3 million. The amount of capital R&D expenditure reduced this quarter compared to recent quarters. This is because several of the main projects we've been working on have reached the final phase of development. In the final phase, fewer resources are typically required. Inventories decreased by $5.6 million, mainly due to the significant excess and obsolescence charges I talked about earlier. Excluding these significant inventory provisions, our level of inventory has reduced by 3% since the end of Q2 2022.
This is an area we are targeting. We have an ongoing project aimed at optimizing our inventory levels going forward as part of our focusing on improving the overall effectiveness and efficiency of our supply chain. Accounts receivable balances, on the other hand, have increased by 8%. This is mainly a function of the increased sales this quarter. Finally, I will discuss our cash flow for the quarter. Our cash balance decreased by $3.2 million- $7.3 million in Q3 2022. Cash generation from operations from the quarter was $700,000, an increase of about $100,000 compared to Q3 2021. It is the first quarter this year we reported positive cash flows from operations. This is a result of trimming our cost base and better working capital management.
Capital expenditure cash outflows comprising PPE and R&D spends were $1.3 million, a reduction of $700,000 compared to the comparative period. Interest payments in the quarter were $1.7 million. I will now hand it back to Aris, who will bring you to the revenue. Thank you.
Thank you, John. I'd like to take a few minutes before we answer any questions to go through the highlights for the quarter. Total revenues for Q3 2022 were $19.5 million . Excluding our COVID-19-focused PCR products, Q3 2022 revenues of $19.2 million were marginally higher by 2% compared to Q3 2021. We're up 6% to Q2 compared to Q2 2022, so we have some sequential growth around 6%. A strong year-over-year increase of 30% revenues attributable to both our hemoglobins and Fitzgerald businesses offset the timing impact of atypical concentrated sales associated with Uni-Gold HIV in Q3 2021.
In addition, we put through pricing changes and optimized capacity in our autoimmune products business, and that's led to a 30% increase compared to the same period last year. Quarter-over-quarter revenue momentum was once again driven by Fitzgerald at about 25%. This reflects actions that we've taken to optimize demand generation throughout the year. We've also had some strong demand for the Uni-Gold HIV product on a quarter-over-quarter basis, up 35%. As I previously mentioned, the actions we took in autoimmune resulted in a 20% quarter-over-quarter growth in the autoimmune products. We're experiencing particularly strong demand for our hemoglobin products in Asia Pac and Latin America, with a well over 50% year-over-year revenue growth in Asia Pac and over 40% in Latin America.
We continue to scale our commercial coverage in these markets, where the increase in diabetes and propensity for hemoglobin variants is at some of the highest rates. Our boronate affinity technology has a particularly competitive advantage in this area, given that it mitigates and limits interference associated with variables. Variants, excuse me. You know, the other thing that I'm particularly focused on, with respect to our global growth is in relation to distributor coverage. We've also undertaken a significant review of our gaps in distribution. I expect to meet the bulk of our distributors in February in the new year.
Preliminary estimates for Q4 indicate significant continued growth momentum in hemoglobin instrument placements and steadily improving global HIV test demand, including new Uni-Gold orders from Ethiopia and preliminary TrinScreen orders from Kenya. These increases are expected to offset lower Q4 revenues as Fitzgerald reflected the demand generation in previous quarters. We expect the year to end around $75 million run rate for on an annual basis. In late August, the company submitted its 510(k) submission to the FDA, seeking U.S. regulatory approval for Premier Resolution, our hemoglobin variance instrument. We're expecting to launch this product in Q2 of next year, and we remain on track, hopefully, in line with what your expectations are. In November 2022, the company initiated the development of its next gen flagship diabetes HbA1c instrument, the Premier 9210.
We're expecting to launch in Q3, this revised instrument of next year. It is planned to feature an improved backward-compatible reagent column system that will feature up to 3 times the injection capacity and stability. It requires limited calibration and improves user interface and lab system integration. In addition, this system should underpin the lower cost mid-throughput A1C instrument currently in development. We think this product launch and the associated redesigns associate in conjunction, will give a substantial gross margin improvement in our hemoglobins business over the next couple of years. Since the World Health Organization approval in February 2022 of our TrinScreen product, the Kenyan Ministry of Health Task Force recommended it as a first-line screening test for Kenya's new HIV testing algorithm. We expect to conclude the current pilot program that's underway.
We expect that to end probably sometime close to year-end. We believe that we're gonna be delivering Ministry of Health orders in Q1 and ramp up to approximately six million tests a year. The company is in partnership negotiations with a number of rapid test innovators. Our intention here is to leverage our lateral flow biological development and manufacturing capabilities and also provide access to our global distribution channels. In addition to capital efficient growth, this strategy provides early access to intellectual property associated with evolving user interface concepts. We've been implementing improved design for manufacturing, supply chain, and other insourcing enhancements in order to significantly optimize margins across the portfolio. In Q3, we focused on streamlining the portfolio with the elimination of loss-making legacy products and inventory, much of what John explained to you earlier.
We continue to consolidate multi-product flexible production in our Jamestown facility with the transfer of our immunofluorescence and urine tube manufacturing activities from Buffalo, New York, and Burlington, Canada, respectively. The company continues to focus on attracting and developing world-class leadership. We've recently appointed a new Chief Technology Officer, a Global Head of Quality and Regulatory Affairs, and a Global Supply Chain Leaders, all critical in driving our growth strategy that I reviewed last week at the Piper Sandler conference, where I outlined the company's strategy and our focus around key initiatives. You are welcome to take a look at a copy of the presentation. It's on our website. With that, I think we'll open it up to questions.
We will now begin the question and answer session. To ask a question, you may press star then one on your telephone keypad. Please take your phone off speaker before pressing the keypad. To withdraw from the question queue, please press star then two. The first question is from Jim Sidoti of Sidoti & Company. Please go ahead.
Hi, good afternoon. Thanks for taking the questions. It seems like you've made some pretty significant investments in the hemoglobin product line to accelerate growth there. You know, if you look out to 2024, how many different Premier instruments do you expect to have on the market? What markets do you think you'll be in?
Look, let me, I'll let John give you some context around the numbers associated with the plan. I will give you some context. Our technology is somewhat unique. You know, it keeps variant interference out of the A1C testing process. That might not be as big a deal in the U.S., but outside the U.S., where you have the highest growth rates of diabetes, whether it's in Southeast Asia or Latin America or the Middle East, for that matter, our technology is actually perfectly suited for the high growth markets that we're talking about, and that's where we're seeing significant growth. You know, we feel pretty confident that we could be placing quite a number of instruments on a consistent basis in those markets.
At the same time, behind that, we're using a fair bit of the same technology to roll out our T-20, lower cost instrument, you know, for lower throughput use. Same column technology, similar supply chain. I think we, you know, again, that gives us significant opportunity to gain share in these critical markets. You know, as you know, that... the business model, it's a bit of a razor blade model. If we get a number of placements around the world, especially where the high growth rates are, you know, it's just math. John, I don't know if you wanna give some context on some of the numbers.
Yeah. In terms of numbers, you know, like we have historically placed, you know, 200... about 200 instruments a year. You know, that has been reduced down through COVID, and we certainly have seen an uplift throughout this year. You know, I'd expect once this redesign goes through and we're also focused very much in terms of our supply chain efficiency to reduce down the cost of the instrument, our intent there would be to give a lower entry price point, right, in terms of the market. I think both of those, the redesign and the supply chain efficiency, reducing down the price point, Jim, you know, we'd expect that we would increase those number of placements from that historical run rate. In terms of the T-20 instrument-
Mm-hmm.
...the mid-level analyzer, you know, that is a lower cost instrument, and we certainly, again, would be expecting to be in the hundreds range in terms of placement of that once we've, you know, got that established in the market.
As far as the new Hb9210, I would expect we'd be running well ahead of where we were prior to COVID. Once we're up and running and properly marketing the product, you know, it wouldn't surprise me if we're starting to put 250, even higher, 300 units in the market on an annual basis. That's what I would expect from my sales team, okay? The T-20's coming later. We still have to get approvals and commercialize. You know, we to John's point, we should have a similar number of run rate unit placements with the T-20 as we are with the Hb9210. Like, if you think about doubling, you know, over time, we should be doubling our placement levels with both products compared to where we were a couple of years ago.
You know, geographically, y ou know, we expect the T-20, Jim, is probably suited more to, you know, countries where there's more dispersed testing regimes, so, you know, a lower concentration of big labs. That can generally be kind of the lower to middle-income countries, okay? Where the Hb9210 will probably continue to be strongest in, you know, higher income countries, or those with a significant level of variance. It depends on the economic factors and it also depends on the type of lab infrastructure in country. You know, we've got a good global spread of our instrumentation, and we think the T-20 gives us a chance to have even better global spread and a greater diversified placement base.
The other thing with the T-20 is, you know, we're doing some work on it now, but we think there is an interesting market opportunity in the U.S. around CLIA labs and whether or not there are, you know, the appropriate throughput levels and the right entry point. We think there's a revitalization, potentially, of our U.S. placements, potentially with the T-20. Part of the redesign effort, we've got the team together in January. The part of the redesign effort is to make sure that the features that we're incorporating really tap into where we think the sweet spot might be.
It sounds like by 2024, you will have at least three versions of the Premier systems on the market. Is that right?
That's-
Yeah.
Yeah, including the Premier Resolution. Yeah. That's the plan.
Okay. All right. In terms of-
The hemoglobin business for us right now is really all about focused product development, commercialization, and rollout. It's just execution right now. Very focused.
...in terms of facility consolidations, is there enough capacity in Jamestown to continue to consolidate?
Yeah. Just to be clear, we're not closing our Buffalo site. We are expanding our autoimmune manufacturing capability. Our Jamestown site has historically dealt with our legacy infectious disease business. I think we flagged a number of times, we do expect that business to continue to kind of, you know. It was reduced down over time, right? For that reason, we're seeking to get greater utility out of the Jamestown site. That site has been a very loyal, highly productive site for Trinity.
It's a very flexible product site as well. You can ramp up and ramp down on a number of different product lines. We're looking at it as one of these as a swing facility and a flexible site in many ways.
That flexibility increases our overall utilization. Okay? That's critical. We want that portfolio effect, you know, at as many sites as we can so that we're not left with trapped costs in particular sites dependent upon inter-quarter demand for product.
Look, our intention with the Buffalo site is, to be honest, is expansion around our lab. That's where our focus is. Using Jamestown for capacity around autoimmune products so that we can expand the lab in Buffalo actually aligns a lot better with workforce dynamics. So, we think it's the right way to go.
Okay. Any update on refinancing the remaining portion of the debt?
Continue to examine a number of options. I think as we flagged previously, we'd seek to do that as part of some kind of strategic transaction, that would be our preference. So looking at a number of different options. You know, we don't have a critical need at this point, to overly focus on that. You know, we'll make a thoughtful decision, in the context of broader strategic objectives.
A number of our, Yeah. We're having a number of dialogues with various parties about different strategic ideas. That would be... most of those should be coming to fruition one way or the other in the, you know, in the first quarter, early first quarter. That's probably the right time for us to then go seek a proper refinancing on the back of a move around the strategy we've been outlining.
Okay. Then I just wanna be clear that I heard you correctly. In terms of the guidance for the fourth quarter, it sounds like, you know, maybe a little bit weaker on Fitzgerald, a little bit stronger on some of the other product lines, but overall, it seems like, you know, guidance you gave at the end of last quarter, $19 million or so, sounds like that's similar to the guidance you're giving for the fourth quarter.
I think we'll be a little lower in the fourth quarter. I What I said last quarter was we're kind of flattening, baselining around $18 and a half million ballpark. That's why it came out. Roughly, I've done the math, roughly we're a $75 million run rate company closing out the year. Okay? It's about $18 and a half million run rate. I think that's kind. It's a little lumpy like here quarter to quarter, but that's kind of where we're averaging out. The initiatives we've been putting in place, I've been here 60 days. Initiatives we've been putting in place should start kicking in the new year. We expect to start seeing tick ups in revenue profile in 2023, you know, in early 2023.
Got it. All right, thank you.
Fitzgerald is really. To be honest, Fitzgerald is the most. It's the biggest swing from quarter to quarter. It's just we wanted to make sure the demand profile was more evenly distributed over the course of the year. We got a number of inbounds and Asia seems to be rebounding a little bit faster. We were able to book some of that stuff, but we're not banking on that with Fitzgerald in the fourth quarter, and that's the major gap.
Jim, as you know from the past, you know, some of our orders can be large value and, you know, there's uncertainty around that until we reach out into the quarter.
Understood. Thank you.
Yeah.
The next question is from Paul Nouri of Noble Equity Fund, LP. Please go ahead.
Hey, good afternoon. Wondering if you could give us any guidance on what gross margin will be compared to the third quarter going forward?
Not really at this stage, Paul. A lot of moving pieces, to be honest, between the headcount reductions that we're doing, and there's a lot of PPV variants at the moment with input price increases. At this point, I'd be reluctant to give guidance on it.
I think we gave a perspective last at Piper. It's in the presentation. I think we're targeting over the next two, three years about a 40%-45% gross margin level. That's kinda where we're our base plan lands.
Okay. The run rate of the screening test that you mentioned in the press release, is that just a number that you can do based on manufacturing or that you think you'll have based on won tenders next year?
The... Is this the TrinScreen?
Yes.
Yeah. That would be from one algorithm. That would just literally be from Kenya. you know, we are hopeful that we will be included as the screening test in the algorithm. That's what all indications suggest, that's what the Task Force recommended.
The pilot's going well, all indications are we're good to go with Kenya. Kenya, as you know, sets the tone. We've got commercial teams on the ground. We've got a whole team on the ground working all the other algorithms. We really do believe that when we get Kenya landed, it's gonna set the stage for the rest.
That's what has been indicated the most as their annual demand.
Right.
Under their current plans. Yeah, it's not driven from our manufacturing capability. It's driven from our expected demand. I mean, you know, on the basis we get the screening position.
The legacy business that's been declining for a number of years and was hit by the lockdowns in China, how large does that business remain now?
You know, it's less than $2 million a quarter, right? What we're seeing with that, Paul, is just a continued tapering off, right? I think there's some evidence of a little bit of a bounce back in that, around basically a higher level of pregnancy in China. A lot of our infectious disease tests there is used for screening pregnant mothers. Look, there'll be variability within that number, but over time, that's not an area that we're expecting to grow, and That's why we're moving to that portfolio effect in terms of our production manufacturing capability.
Look, the key for us with respect to infectious disease is, as we are examining next generation instrumentation around autoimmune, especially around a chemiluminescence type technology platform, we believe that has significant synergy and alignment and potentially rejuvenates our infectious disease business. We're looking at that as in tandem. We think that's. If we're gonna do anything significant in terms of investment in infectious disease, it'll be on the back of being smart about what we do with autoimmune on a next generation basis.
The syphilis test that you guys had FDA approved and, you know, didn't really sell much of, you know, whatever the factors were in the U.S., is it completely pulled from the market? What are your plans for syphilis point of care moving forward?
We distributed a syphilis test on behalf of a third party, demand for that product is high. We continue to have ongoing discussions with that supplier in terms of our strategic plans. Look, we are inherently an infectious disease lateral flow developer and manufacturer, right? There's clearly an element of skill set. You know, we have to weigh that up, Paul, versus the regulatory costs and development costs and challenges of going after that market. Constantly under review, but at the moment, you know, we're happy with the performance of the from a revenue perspective, of the therapeutic product that we're distributing.
Okay. I guess probably last question: How did the lab in Buffalo perform this quarter and in particular, the Sjögren's test?
Yeah, we've continued to see growth in Sjögren's test. That's typically growing quarter and quarter.
Yeah, I mean, in Sjögren's, we're probably doing, $ 3.5 million or so of revenue, we think. I mean, if you look at it just from a couple years ago, it was $2 million back in, what, 2000, was it 2020?
Yeah, it was, yeah, it was lower. Yeah.
Yeah.
Significant growth in that. Yeah.
Significant. We haven't really marketed it, to be honest with you. One of the opportunities that I've been focused on is where do we have IP? What's an interesting model going forward for our reference lab? The beauty of the Sjögren's product is that we haven't marketed, and it's been growing significantly. If we put some work behind it, I think we can significantly scale that business. It's all based on the fact that we had a partnership with the University at Buffalo, where we licensed key markers into a test. I think that's a model for us going forward, you know, where we can license promising biomarkers around the autoimmune space and develop those into tests that, you know, only we can provide.
You know, between that and partnerships with pharmaceutical companies in the autoimmune space, that's kind of where we're leaning with a broader strategy.
The lab generally, Paul, I think we've set out at the Piper conference, Aris spoke about it. You know, we are very focused on increasing the capabilities of that lab. You know, we have a huge amount of infrastructure there. We have a great asset having a New York certified lab. We think that really plays well in terms of the at home testing market that's kind of opened up post-COVID. A big strategic focus for us is finding the right partner that can help us scale that business in a way that, you know, delivers real value to Trinity in a way that's sticky and recurring, rather than a kind of merely transactional relationship that, you know, we can lose value over time. That's our strategy around that.
I mean, our plan has real growth in the lab over the next several years because we have visibility to both improving the specialized nature of what it does today around the kind of things that are growing, like autoimmune disease, and at the same time, we believe we have the capability capacity to build it out to meet the needs of the B2B2C market. It's something I discussed last week at Piper, and I really believe we're sitting on a valuable asset there.
All right. Well, thanks for answering my questions.
Thanks, Paul.
Again, if you have a question, please press star then one. The next question is from Andrew May of Wells Fargo. Please go ahead. Andrew, is your line muted?
Kate, we might all just move on.
Hello, Andrew, is your line muted? Okay. There are no additional questions at this time. This concludes our question and answer session. I would like to turn the conference back over to Aris Kekedjian for closing remarks.
Thank you. I appreciate it. Look, I just wanted to give out a comment or two around the recent 13D filing by MiCo Group. I wasn't surprised by it, given my knowledge of all the facts. I don't think it's worth seriously addressing the individual points they chose to raise. First and foremost, to be clear, I was recruited by MiCo initially as a board member and subsequently put forward by them as CEO. My assessment of the situation is this is all about control and not about shareholder economics. There's a clear table mentality at work here. A 29% stake does not entitle you to control. The tender rules are clear and are there for a reason. They're there to protect all the shareholders.
MiCo, like anyone else, has the option to make a proper bid for the company. Just remember, their market cap is about $230 million. I imagine it would take significant resources to acquire Trinity at a price that the board and shareholders would find compelling in light of the ambitious and attractive value creation opportunities available to the company. It was obvious to me when MiCo asked me to join the board and then put me forth as CEO, that while Trinity had several compelling market opportunities, that also clearly had been in a turnaround situation for several years. My focus, the focus of the board, the management team, is a complete turnaround to instill operating rigor, build partnerships, and ambitiously rejuvenate the growth potential that lies ahead of us. That's all I have to say about the matter.
With that, I'd like to thank all of you for joining us today. Enjoy the holidays. We'll look forward to an ambitious and exciting 2023. Thank you.
Thanks, everybody. The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.