Joe Diaz – Lytham Partners Ronan O'Caoimh – Chief Executive Officer Kevin Tansley – Chief Financial Officer.

Larry Solow – CJS Securities Jim Sidoti – Sidoti and Co Nicholas Jansen – Raymond James Jack Salzman – Kings Point.

Good day and welcome to the Trinity Biotech Fourth Quarter and Fiscal Year 2016 Financial Results Conference Call. All participants will be in listen-only mode. [Operator Instructions] After today's presentation, there will be an opportunity to ask questions. [Operator Instructions] Please note this event is being recorded.

I would now like to turn the conference over to Joe Diaz of Lytham Partners. Please go ahead..

Thank you, Allison, and thank all of you for joining us today to review the financial results of Trinity Biotech for the fourth quarter and year-end 2016, which ended December 31, 2016. With us on the call representing the company are Ronan O'Caoimh, Chief Executive Officer and Kevin Tansley, Chief Financial Officer.

At the conclusion of today's prepared remarks, we will open the call for question-and-answer session. Before we begin with those prepared remarks, we submit for the record the following statement.

Statements made by the management team of Trinity Biotech during the course of this conference call that are not historical facts are considered to be forward-looking statements subject to risks and uncertainties. The Private Securities Litigation Reform Act of 1995 provides a Safe Harbor for such forward-looking statements.

The words believe, expect, anticipate, estimate, will, and other similar statements of expectation identify those forward-looking statements.

Investors are cautioned that such forward-looking statements involve risks and uncertainties including, but not limited to, the results of research and development efforts, the effect of regulation by the United States Food and Drug Administration and other agencies, the impact of competitive products, product development, commercialization and technological difficulties and other risks identified in the Company's periodic reports filed with the Securities and Exchange Commission.

Forward-looking statements reflect management's analysis only as of today. The Company undertakes no obligation to publicly release the results of any revision to these forward-looking statements. With that said, let me turn the call over to Kevin Tansley, Chief Financial Officer, for a review of the results.

After Kevin's remarks, we will hear Ronan O'Caoimh and his perspectives on the quarter and the fiscal year.

Kevin?.

Thanks very much, Joe. Today I will take you all through the results for quarter four and the results for the full year 2016.

Before going into the details of the income statements, I will point out that there is a significant once-off charge this quarter which I will deal with at the end of the income statement segments and that the metrics that close in mean time are excluding the impact of this item.

I will now start on an outline of the results for the quarter and then move on to the results for the year as a whole afterwards. Beginning with our revenue, total revenues for the quarter were $23.7 million and this compares to $24.9 million in quarter four 2015.

As we have mentioned in the earnings release, this was driven by lower HIV revenues due to fluctuating nature of sales, partly offset by some growth in clinical laboratory revenues.

Ronan will provide more details on the revenues for the quarter and the year as a whole later in the call, so I'll move on now and discuss the other aspects of the income statements. The growth margin for the quarter was 40% compared to 43.2% last year.

In fact, this was a lower margin than we have shown for some time and there are number of factors which have contributed to this. Personally, we are seeing the impact of exchange rate movement. This includes the comparative weakness of the Brazilian real, Canadian dollar and post-Brexit sterling against the U.S.

dollar, but it also includes the impact the strong dollar has had on our pricing in countries where we sell in U.S. dollars. Secondly the sales mix has been adverse, particularly due to the lower level of point-of-care sales, which as you're aware tend to have higher profit margins. Apparently, production levels in our plant were lower in the quarter.

This is particularly – partly reflective of the lower revenue, but was also impacted by culling a number of products during the quarter. Moving on to our indirect costs, our R&D expenses for the quarter of $1.3 million were slightly lower than the $1.5 million in last year's quarter.

Meanwhile our SG&A expenses have increased this quarter from $6 million to $7.2 million. This is less the case of the 2016 number being high but rather the 2015 number is low. For example, the average SG&A for quarters one, two and three of 2016 was $7.4 million. The quarter four was actually below average for the year.

Meanwhile the $6 million in quarter four 2015 was artificially low, particularly due to some once-off FX gains recognized that quarter. So, in summary, we've had lower revenues and gross margins this quarter, while at the same time having higher indirect cost.

This has resulted in the lower operating profit of $600,000, which is obviously considerable lower than the $3.1 million recorded in quarter four 2015. Moving on to our financing cost, which includes the impact of the Company's exchange notes.

Our financial income for the quarter was $221,000 which was higher than the comparative of $132,000 and this was due to higher available interest rates and longer deposit periods. Financial expenses, the vast majority of which relates to the cash interest element of our exchangeable notes was static at $1.2 million.

With regards to the non-cash financial income, this consists of a gain of close to $5 million on the fair value of the derivatives embedded in the notes, partly offset by $200,000 of non-cash interest relating to the notes.

You've seen in the press that we closed EPS without non-cash amount and it is this net amount of approximately $4.9 million which we deduct. The profit after tax for the quarter was $4.9 million, however, if we were to exclude non-cash item, it is actually $0.1 million and this compares unfavorably to the $1.9 million earned in quarter four 2015.

This quarter's basic EPS was $0.216 per ADR, though excluding the non-cash financial income this would have been $0.2. Meanwhile, fully diluted EPS which is some ways the better measure was $0.043 for the quarter compared to $0.105 last year.

Earnings before interest tax deprecation amortization and share option expense for the quarter amounts to $2.6 million. I will now make some comments on the full year results. Annual revenues decreased from $100.2 million in 2015 to $99.6 million in 2016. As I mentioned earlier, Ronan will deal with this later in the call.

The gross margins for the year decreased from 46.2% to 43.3% and dropped 2.9%. You are seeing the same factors at play here as we saw earlier with respect to the quarter, namely the impact of exchange rate movements and product mix and lower production levels.

R&D expenses for the year were broadly static at just over $5 million, however SG&A expenses increased from $26.5 million to $29.5 million.

This increase is due a number of factors, increased amortization charges associated with the launch of Premier Resolution, higher sales and marketing costs, as well as the impact of once-off exchange gains in 2015, which did not recur in 2016. This is the same factor I alluded to earlier in relation to quarter four's results.

Operating profits for the year was $7.5 million, which is down on the $13.4 million in 2015. This reduction is a direct result of the lower gross margins and higher SG&A costs that I mentioned earlier. Financial income for the year almost doubled to $900,000.

This is partly due to the full year effect of the deposit interests being earned on the funds raised in early quarter two 2015, but is also reflective of higher interest rates being available.

You'll see that the financial expense has increased from $3.5 million to $4.7 million, and here you're seeing the same for Europe affect at play mainly the 2015 includes roughly three quarters of exchangeable note interest versus 2016 of a full year.

In addition to this, there was a separate non-cash financial income of $1.5 million versus $12.5 million last year. These gains are mainly just changes in the fair value of embedded derivatives in the notes and I suggest that these gains be ignored from considering the Company's performance.

The result is that the profit after-tax for the year was $5.2 million. However, if ignored the non-cash financial income, this would have been $3.6 million and this compares to $9.3 million in 2015.

As was the case with operating profit, this was due – this reduction was due to the gross margin and SG&A factors discussed earlier as well as the full year effect with respect to the exchangeable note interest. Earnings before interest, tax, depreciation, amortization and share option expense for the year was $15 million.

This resulted in a basic EPS excluding non-cash financial income of $15.7 versus approximately $40.2 in 2015, while diluted EPS was $0.29 compared to $0.46 last year. I will remind you that I said earlier that the measures that I've just given are all before the impact of once-off charges that we have recognized this quarter.

I will now talk about these charges in a bit more detail. The total charge net of tax was $105.8 million and compromised of a number of elements. Firstly, there is a charge in respect of Meritas of $66.3 million, obviously this charge which itself as a numbers of elements has arisen as a direct results of the withdrawal of a Troponin FDA submission.

Of this, $56.7 million relates to the write-off of all capitalized development costs, fixed assets, inventory and other assets associated with this project.

While we still hope to derive some future benefit from the platform, we feel that it is prudent to write-off these assets in full given the inherent uncertainty about timing and size if any of any such benefits.

But there is also a charge for closure costs of $5.8 million in relation to our Swedish facility, which closed as a direct consequence of the FDA submission withdrawal.

This consists of three main elements; redundancy cost associated with the 41 employees who were made redundant following the announcements, termination costs in respect of certain contractual obligation such as terminating property leases early and material supply contracts, so that meeting minimum purchase requirement, and finally closed out costs in relation to our BMP trial, at the time to of the Troponin enhancements were still ongoing.

Of the closure costs, $2.4 million were already paid out as prior to year end. The other sub elements within the Meritas charge related to foreign currency translations. This is a bit difference of the other elements in that it was actually recognized in previous periods, but as a reserve movement.

However, under accounting rules and a subsidiary winds down its activities such a charge has to be taken through the income statement in the period in question. So, this is affectively and, in and outs during this periods. The next most significant item relates to impairment charges of $43.4 million.

These charges arose as is part of the impairment review that we are required to undertake annually. And so doing, companies are required to assess the valuation of the individual assets on its balance sheet.

On carrying out this exercise, one important factor to consider is the summation of all these values versus the prevailing enterprise value, our market capitalization of the Company.

The significant fall in our share price post the Troponin announcement created a situation whereby the stock was actually trading at a discount to our book value, and in such circumstances of being prudent to recognize an impairment. It goes without saying that this charge is entirely non-cash in nature.

The final and smallest elements of the charges are amount of $4.8 million in respect of a product call that we have carried out in respect of a number of older products in our portfolio.

This relates to products which would have been developed or acquired many years ago and have reached the stage in our life cycle of which they have been declining for a number of years and has now become uneconomic. I have mentioned earlier that the once-off charge was net of tax in this case of credits of $8.7 million.

This was largely made up of the reversal of deferred tax liabilities that were recognized in prior periods. Just so that we're able to pre-state the impact of the once-off charges on the balance sheet, I'll give you the principle captions which have been impacted by it.

Intangibles mainly goodwill and development costs, a reduction of $87.7 million; property, plant and equipments, a reduction of $9 million; inventories, a reduction of $6.8 million; other assets, $0.8 million of a reduction; accruals and other payables, an increase of approximately $4 million; and then tax balances have been affected by approximately $8.7 million.

I will now move and talk about the significant balance sheet movements since the end of September 2016. Property, plants and equipments decreased by approximately $8.1 million, this decrease was made up of impairment charges of $9 million.

Depreciation in the quarter of $800,000 as offset by additions of $1.3 million with the remainder being translation adjustments. Meanwhile intangible assets decreased by $86 million.

In this case the impairment affects was $87.7 million, amortization $800,000 and additions were approximately $3.8 million, and again the remainder was foreign currency translation adjustments.

Moving on to inventories, you'll see that these have fallen also, in this case by $7.4 million and again the big factors is the once-off charge of $6.8 million made up of both Meritas and culled products. The underlying fall in inventories for the quarter was $600,000 and this was attributable to lower production during the quarter.

Meanwhile, trade and other receivables decreased by $3.2 million to $22.6 million. This is reflective of improved accounts receivable, collections and the write-off of all other deferred of $800,000.

Meanwhile, our trade and other payables including current and non-current have gone from $21.9 million to $25.8 million, an increase of $3.8 million and this has been largely driven by the closure provision requires in relation to our Swedish facility. Finally, I will discuss our cash flows of the quarter.

Cash generated from operations for the quarter was $4.6 million, which included positive working capital movements of approximately $1.3 million which helps to offset some of the impact of the lower profitability. Meanwhile, capital expenditure in the quarter was $4.2 million and this compares with close to $6 million for the same period last year.

Here, you are beginning to see the impact of the lower spend Meritas. This resulted in the free cash inflow for the quarter of $400,000. Other payments entering the quarter included interest payments on our exchangeable notes of $2.3 million. This represents six months of interest as these payments are made semi-annually.

Share buybacks of $3.3 million and once-off payments primarily relating to the closure of our Swedish facility. The net result of this is that we have a decrease in cash to the quarter from $84.8 million to $77.1 million. I'll now hand back to Ronan who'll take you through the revenues and other matters..

I am going to review our revenues for quarter four briefly, and then I'll review the revenues for the year before opening the call to the question-and-answer sessions. Our revenues for quarter four were $23.7 million compared to $24.9 million in the prior quarter, which is a decrease of 5%.

Point-of-care revenues at $4 million were 27% lower than the $5.4 million recorded in the prior quarter. Clinical Laboratory revenues were $19.7 million compared to $19.5 million in the prior quarter, which is a decrease of 1%.

And now if you look at the year as a whole, our revenues for 2016 were $99.6 million compared with $100.2 million which is a decrease of $600,000 or 0.5%. The negative impact of currency fluctuations during the year was $1.8 million. When this impact is taken into account, the rate of revenue growth for the year would be 1.2%.

In addition, in markets where we invoice in dollars, but where the local currency has weakened, we have been required to reduce our pricing in order to preserve our competitiveness. Our point-of-care revenue decreased from $18.8 million to $16.9 million which is a decrease for the year of 10%. Our U.S. HIV revenues decreased 11% year-on-year.

This decrease is explained by the fact that public health spend in the U.S. on HIV testing continues to decrease, meanwhile our sales into the U.S. hospital markets held up well during the year. Moving on to Africa, our sales decreased by nearly 10% during the year.

However, we do not believe that either the market or indeed our market share has diminished. We believe that this movement is consistent with the haphazard nature of NGO purchasing. In addition, funding continues to increase as more and more African are put onto antiretroviral drugs with the number now exceeding 20 million people.

For more than 15 years, we have held more than 90% of the African confirmatory market and we believe that we will continue to do so, given the status of our product as gold standard. However, we have over the past few years developed a HIV screening product, which is about to be launched in the African market.

Given the quality of the products and given the price at which we can manufacture, and given our long-held reputation as a manufacturer of gold standards on the continent, we believe that we could take significant market share in this market segment.

Moving onto our Clinical Laboratory business, our revenues for the year were $82.7 million, which is an increase of 1.6% when compared with the prior year revenues of $81.4 million.

Given that all of our point-of-care business is dollar denominated, and the entire negative impact of currency fluctuations during the year of $1.8 million was suffered by our clinical laboratory business.

When this negative currency impact is removed, the organic growth rate for the year, for our clinical laboratory business increases from 1.6% to 3.8%. Our diabetes and hemoglobin, variance businesses performed strongly during the year with revenue increasing 8%.

We had strong instrument placements in all of our principal markets with and excess of 320 instruments being placed during the year. The exception was Brazil where we made modest placement during the year despite strong demand for our product. This arises due to the weakness of the Brazilian real.

However, we plan to reenter this market when we increase our level of manufacturing activity in Brazil thereby saving on import duties, on sales taxes and by creating a natural hedge. In addition, we are seeking price increases against the backdrop of a high inflationary environment.

Meanwhile our Premier placements in the USA, Europe and China continued strongly. It is important to remember that ever instrument we place is new business. We are never replacing an existing flimsy instrument as we are in the early years of the placement cycle.

During the year we also launched our new Premier Resolution instrument which serves the hemoglobin variance market for sickle cell anemia and thalassemia. This is a high value market with few competitors and we believe that with our best in class instruments that we can take significant market share.

Since the launch of the instrument in April this year, we have made 33 placements of instruments. We are confident of our diabetes and hemoglobin business giving double digit growth in the coming years. Moving on to infectious disease revenues, our revenue share has declined 4% when compared with the prior year revenues. Our line revenues in the U.S.

performed well as did our Chinese ELISA business. However, our performance in our core U.S. business and in Western Europe continues to suffer as the major five diagnostic companies continue to add new tests to their major immunoassay instruments and these are test which compete with our existing ELISA offering.

In addition, our revenues in Canada, Russia, Turkey Colombia and the United States continue to suffer due to weakness against U.S. dollar.

As Kevin spoke earlier about the fact that we culled our MicroTrak and Bartels product lines, we had purchased both of these product lines over 15 years ago, and in the past year, both lines have suffered revenue decline in excess of 15% in once case and 16% in the other.

Given the amount of technical support that are required, they were rapidly reaching the point of being uneconomical.

In the absence of these product lines, we believe that we can eliminate the decline of our infectious disease business and maintain revenues at current levels, and then continue to benefit from the strong cash flows which this business generates.

On the subject of strong cash flows, our Fitzgerald antibody business declined marginally during the year, but continues to deliver very strong cash flows. Meanwhile our autoimmune business performed well during the year with 7% revenue growth.

We have consistently grown this business since its acquisition and believe that it will be a real growth engine for the Company and that double digit growth can be achieved this year.

The reference laboratory has been the best performing part of the business with significant growth coming from our Sjögrens test and from the growth of our business with the two U.S. mega labs. However, greatest potential in our autoimmune business is in the product revenue side, where we continue to expand our instrument offering in both the U.S.

and across the world and we believe that with this added to our best-in-class immunofluorescence analyzer product range, and that we will deliver double digit growth that I just mentioned.

So in summary when all the components of our business are taken together, we believe that we can achieve high single digit organic growth in our business during 2017 and that this growth can accelerate quickly into double digit growth in 2018 and thereafter. I now hand you back to question-and-answer session..

[Operator Instructions] Our first question will come from Larry Solow of CJS Securities. Please go ahead..

Good afternoon. Ronan, just wondering if you could just discuss little bit more about the Premier placements. I think we were expecting more like 350, so it looked like there was about 30 shortfall in the quarter. I think even last quarter. You had sort of reaffirmed that over 350.

Could you discuss the decline in the quarter and then also reagent sales are looking, trends there?.

Hi Larry. Yeah we probably came slightly short of our expectations and some instruments didn't quite pullout at your end, but I think in overall terms, you know 320 instruments by any article would be, we would certainly regard as a good year. It constitutes close to 20% of all the instruments placed in the world in the year.

I think China performed very well in terms of instrument purchasing, less so in terms of reagent purchasing. But that situation is improving. Brazil hardly performed at all, just because it's uneconomically to be taking instruments, given where the real is at 3.16 – 3.16. The USA performed very well and Europe performed well.

And then we continue to open markets the across the world and Southeast Asia, South America and in the Middle East. So, overall I think – I put basically 2016 as having been a very good year for diabetes and Premier, and all be it came up slightly short in then end. But I think a good year.

And I do believe that I think we can continue go get double digit growth in this segment, particularly given the fact that we've just launched a Premier Resolution and its being adopted very quickly.

We've updated 33 instruments this year, and so – I think we're very, but we're very positive and very confident of the performance of this segment of our business..

Do you expect to be back in Brazil in 2017 or is that not necessarily?.

We have just been approved in Belo Horizonte for a special, basically tax benefit that we can get by doing manufacturing there. So, we're in the process of moving our manufacturing from a contract manufacturer to our own base in that location, and the benefit we'll derive is that we get a reduced sales tax VAT rate on our business as a consequence.

I think the combination of that and the savings of import duties and inflation will enable to reenter the market probably within the next six months, that kind of timeframe. But all of that is contingent on the real not moving in the wrong direction..

Got it. Okay, then on HIV, I know it is up certainly quarterly fluctuations, but it's been down for – I know – I know this in currency too, but it's been down for a couple of years in a row.

Do you have any visibility on that or what you're assuming in 2017 as your overall expectation is high single-digit organic growth for the company? Are you assuming HIV will grow?.

Yeah. Remember, we talked about having developed a screening product and we believe so. So traditionally, we've really only done the confirmed – we've only been the confirmer. We basically do all the confirming give or take in Africa. And I think Uganda is the only significant HIV purchasing county that doesn't use us as a confirmer.

So over a decade, with minor fluctuations and changes, we've held our position, but we stood away from the screening market and that's something that's changed. We developed an excellent screening product based on an entirely different recombinant and we're about to enter that market.

I think on the back of that development that we believe that we can strongly grow our revenues here..

So you actually believe you expect some sales in the screening market even in 2017?.

It will be very much towards the end of the year where we are awaiting a WHO approval, but as soon as that comes through I think revenues should immediately start..

Okay. And then just last question on the gross margin, took a nice hit this quarter.

Can you just – was it the biggest factor there? The mix currency, overhead absorption or lack thereof and sort of what's the outlook going forward?.

Yeah. There were few factors and I won't describe the perfect storm, but there is a number of things just did come together and contributed to us there. No one of that's particularly dominance of those factors, it just the fact that the confluence of them all together and would expect to rebound going forward.

I don't think this is a reset of our gross margin to 40% as such. So I expect those to get back to sort of more normal levels the ones you would have seen during 2016 starting out in quarter one of 2017..

Got it. Okay, great. Thank you..

Thanks, Larry..

Our next question will come from Jim Sidoti of Sidoti and Co. Please go ahead..

Hi. Good afternoon.

Can you hear me?.

Hi, Jim, how are you?.

Good. I got cut off for a minute, so I might ask some redundant questions. I'm sorry if I do.

Can you start with the $3 million in sales of the discontinued product launch? Were those profitable sales?.

What you got to consider in relation to those sales, they were at the end of their life, they were going to get smaller and smaller, on top of that they would require investments and there would be a certain degree of profitability associated with them going forward.

We didn't believe there will be profitable because of the investment that would have been undertaking, and the fact that you're going to get that lower and lower levels production inefficiencies will kick in very quickly and thus essentially make them last making going forward. So now was the appropriate time to terminate those products..

I'll give you an example. The MicroTrak product, we purchased it from Dade Behring in 2001 at the time when they regarded us and product is having kind of being in such as a rated state of decline that they didn't want it. So we probably harvested that product over the last 15 years and it declined 16% last year.

So it had reached at the end of useful life. It's an ELISA chlamydia products and chlamydia has long ago moved to molecular. We were kind of living off crumbs. It's just come to point where you have to cull a product like that..

I understand. All right.

Now, Ronan's comments at the end saying that you expected organic level it would be up, I think mid-single digits in 2017 net, that excludes the $2 million hit than you expect to take from this product continuation, correct?.

Yeah. I think to explain where we at, I mean our revenues were $99.6 million, so I think you have to now regard a revenues as $96.6 million. I don't have your research in front of me, but I think on average, say the research – say your number was, I am not sure, but say it was in 107, it was 106, 107 for the year.

I suppose that you'd have to be taking $3 million all that, so we'll be now looking at – so that you're rejecting 107. I mean you're only hearing about this for the first time, so you'd be $3 million off that 104, 103 to 104 something like that and that's the kind of level that we anticipate we would be comfortable with..

Got it. All right. Any update on syphilis test in U. S.

and point-of-care syphilis test, how that's been doing?.

Well, I mean we are disappointed that the rate of sales are, developing, I mean then we have to quite care for a while and we are running at about $1.4 million to $1.5 million as we speak and that's obviously a significant deployment.

We still believe that we are $5 million products within a two to three year period and the reason for us believing that is because we've had to basically develop this market without CDC support and they've been really sitting on the sidelines.

Now they are just commencing a trial in which they're open to be convinced that there is usefulness to utilizing a syphilis point-of-care test, as in basically they remained to be convinced that using these tests will actually identify syphilis positive.

And we have absolutely no doubt that when they conduct the trial that they are about to conduct using I think $330,000 worth of our products. We believe that that trial will prove that, in fact when you use the product that you do find positive that otherwise wouldn't be identified.

And certainly some of the other trials that have been conducted by individual in states in the past year have very clearly demonstrated that. So we are confident that we'll get the answer that we expect and want from that trial, and hopefully that will make a significant difference.

So on balance, and despite the fact that's a hard sell, we believe that in a three year period it can become a $5 million product with possible upside beyond that. So, that's basically where we are out on it, so disappointed, but still hopeful that we can develop that level of sales..

All right.

Can you make any comment on where you think gross margin will land in 2017, if you've increment at that $104 million in revenue wise?.

Typically we provide some not – because we don't give formal guidance in this type of things. There will be a number a factor still at play, for example where the currency is going to go and what have been bought. I see it returning to the types of levels that were in 2016, and then the stronger that revenues become – you could see upside above that..

Okay.

And when you say 2016, do you mean the first three quarters of the entire year, because I know the fourth quarter was significantly low?.

I was referencing the year as a whole, I suppose swing around in quarters, but as I say there is potential upside, potential on that is the revenues do come in strong..

All right. SG&A is being running usually high, in 2016 a lot of that was Troponin development.

Should we see that number come down on absolute basis in 2017?.

No. I don't think so. I don't think you're going to see meaningful decline. You're obviously seeing a very start increase this quarter from 6 up to 7.2, but that's because last year it was artificially low quarter four of $7.2 million was lower on average from the other three quarters which were at $7.4 on average, so it is a little bit lower already.

There were some costs associated with the Meritas pre-launch cost in the P&L, a number of those costs particularly the external ones have been eliminated.

However, there are number of individuals who are carrying out the reviews of the technology to remain on the income statement also any costs which are now incurred in relation to Meritas which in the past would have been capitalize are now going to the income statement.

So there is an offset to the reduction there, so I don't think we're going to see a meaningful reduction to be honest, Jim..

How about in 2018, well any of those costs start to come off or do you think that will continue at those levels?.

I think a certain amount of those will come off, at that stage I'd be awful that with a couple of years of cumulative mid-single digit or higher organic growth that there will be a certain degree then as normal inflation in volume driven SG&A as well.

So, looked as an isolation I think those residual Meritas cost would have disappeared, but the factors will be at play at that stage given this the stage development of the Company at that point..

All right. And then my last question is on share count. I know you started buyback some shares as you indicated you're going to buy some more back.

What do you think is the leasable share count for 2017?.

I think it will depend on circumstances. It will depend on the price, and, but I mean I think we are committed to an aggressive buyback. I think that, obviously we only have a certain amount of flexibility between now and our net ATM. I think we could buy back about 1.4 million shares.

So, if wanted to buy more than that between now and June, we'd have to call an ATM and an extraordinary general meeting I guess, get the consent of shareholder that they are willing to give us to do so. And it's quite possible that we will actually do that and depending on basically where the price is and how our purchasing goes.

But just to make this point, I think we say it in the press release that we think the best use of our capital this time is actually to buyback share and we're very committed to that, more so indeed than I suppose we would have been we spoke, at which point we were entrusting ourselves very committed.

So, given the price has moved lower, we're all the more committed to that course of action..

The other factor at play and Jim will be exactly when those purchases happen, so if you are looking at another year as a whole, 2017, share counts and it will be a weighted average, so the year during the other happens a more of an impact those share repurchases have and it happens a little bit later, then it's less of an impact to just configure that as well..

Alright, so but just to be clear you ended the December quarter around 28 million shares, is that correct?.

That's a fully diluted number and that will be the average for the quarter as a whole. It will be a little bit less when you take the year end number, because the shares that would have been bought too out to the quarter four wouldn't be fully reflected in that number, only the weighted element of them..

So, 2017, you should expect it to be somewhat below that number, is that correct?.

Absolutely, yeah. Based on our intention to buy back shares, you can maybe expect it to be lower than that, meaningfully lower than that..

Thank you..

Our next question will come from Nicholas Jansen with Raymond James. Please go ahead..

My first question revolves around kind of the strategic alternatives processed for Meritas, where we stand there now and when we expect a conclusion from that regard? Has there been any sort of activity on the M&A front as we perhaps think about disposing that asset to someone who has more resources going forward, just any thoughts on kind of where we stand since the last update which was in October?.

Nicholas, we don't have any update really on this, and I mean our alternatives remain as they were before, basically sell it, and I think we get a huge amount for us in all the circumstance. I think the experience, I mean we bought this technology for $12 million and I think we probably haven't added to its value in the context of what happened.

So, like it really, I like it really what we'll do and we can basically do a joint venture with somebody where we are both involved or we can license it out for many applications, or alternatively we can continue to look to identify you know a useful and sensible parameter to put on us. So, basically look for a winner that we can put on this.

So, those are alternatives. We continue to kind of explore those various alternatives and, so it sounds like we don't have anything to report at this time. But what I will say is that, is that we believe it's a very a valuable platform. And we have – I think just about any parameter can work successfully on it.

It's possibly unfortunate that we selected probably the most difficult of all Troponin, and put that and this is a very useful tool in our armory as we move forward we believe and have no updates..

That's helpful and then thinking about the organic growth color that you commented on in terms of 2017 and kind of improvement further in 2018. It's been over two plus years and you've been delivering that type of organic growth.

I know there is a variety of factors to consider including FX, but given the stock price where it is today, you know it feels like you are setting yourself up for some higher expectations and what's necessary.

So, just wanting to kind of get your better thoughts on the actual bridge to that organic growth improvement, because from where we see it, going from low-single digit to high-single digit isn't an easy step given the lack of material new products starting here? Thanks.

I mean what we've indicated is, I said we could do and middle-single digit growth in 2017 and double digit in 2018 and thereafter. And I think given the combination of the various components of our business, we think we could do that. I mean with the risk of boring you, I'm just repeating myself.

I mean basically I – the Premier diabetes business has been growing at 8% and in the prior year higher than that, and we believe that that could certainly do double digit growth, and we think the autoimmunity business has been growing strongly and will deliver – continue to deliver strong growth.

We believe ironically that the infectious disease business will benefit probably from the cull that we've just performed and generally from the decline it's experienced has become as big and basically – as this declines and the other segments grow, it becomes a less important component of our overall business.

And, but meanwhile like the lion business has done well and the Chinese bit components has done well and we've culled some. So, we believe that we can hold that to stable now at this stage and the Fitzgerald antibody business we can believe we basically had it stable this year.

We think we could do that and continue to expense from a strong cash flow and that with HIV, and which I've explained just a moment ago, I talked we can grow given basically the emergence of our new screening products. So, I think we pull all those factors together, I think we can grow the business.

I think it is important to recognize that over the past two years, we have saved a fairly horrendous currency headwind and really factored it not just kind of as recompression of bounce back into dollars as a disadvantage, but also the fact and that you know we have customers whom we invoice in local currency, who simply can't afford the products, and we have to either walk away from the business as we did in Russia, where we've had 1.8 million translate into nothing.

Or alternatively chop our price to take market share to keep our business. So, those currency headwinds and you know they've been so significant, they've just – they hurt very badly. I don't have them.

I don't basically have a crystal ball, I'm not sure where the currency will go, but I'll just give you one simple example that our Brazilian business, based on the dollar rate two years ago, would now be $13 million, but instead is it's fixed. So, that's the extent of the impact of the movement. It's huge..

Thanks for the color..

Our next question will come from Jack Salzman of Kings Point. Please go ahead..

Ronan, you know the Company has really not executed very well the last couple of years, and most of its key major product lines with the collapse of Troponin and the more recent pass is a sort of a top of all these problem. And the Company has not been able to achieve a lot this forecast even in the smaller product lines over the last few years.

So my question is multifaceted, number one, have you thought about changing management teams, bringing in new management to achieve a more successful focus on new product flow and more successful rate of product introductions that in the past? Additionally have you changed the methodology and forecasting, you've put out forecast and for quite some time the Company has always come up short of these forecast, either substantially or small way, but never exceeding or leading the general forecast over the last two years.

And lastly, have you thought about bringing an investment banker to reassess the Company, the value of the company to achieve better enhancement of shareholder value in terms of looking at other avenues that could benefit all shareholders?.

Thank you Jack for your question. I don't think we ever met. I don't know – I'm not sure where you've come from, but thank you for your question. In terms of management changes, we continue to look to strengthen the management team and we continue to do that.

And some of the forecasting you talk about, that's forecasting, but in fact we don't forecast, we don't give guidance. And in terms of bringing an investment banker, we haven't determined to do that at this time.

And I think what we are looking to do really was to put this address brands performance [ph] which all are behind us to put at some distance in the rear view mirror to basically work hard at building the business and I think the distance put between us and that Troponin event reconsider, but to consider where we go from there.

So thank you very much for that question.

And are there any more questions?.

And at this time we are showing any more, any additional questions. [Multiple Speaker]. I was going to turn the conference back to you for closing remarks..

Thanks very much. So, I wanted to say thank you very much to everybody and thank you for your interest and attention and we look forward to talking to in a number of weeks when we announce our quarter one results. Good afternnon..

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect your lines..