Trintech Reports Third Quarter Fiscal Year 2008 Financial Results
Dublin, Ireland/Dallas, Texas - November 21, 2007- Trintech Group Plc
(NASDAQ: TTPA), a leading provider of integrated financial
governance, transaction risk management, and compliance solutions for
commercial, financial, and healthcare markets worldwide, today
announced third quarter revenues of $7.7 million, an Adjusted EBITDA
loss of $164,000 and a net loss for the quarter of $1.2 million.
Highlights:
* Revenue amounted to $7.7 million compared to $6.7 million in Q3
last year, representing 15 percent growth.
* Gross margin amounted to $5.0 million in Q3, representing 64% of
revenue, compared to $5.0 million and 75% in Q3 last year. The
fall in gross margin percentage was primarily due to the
inclusion of the healthcare business acquired in Q4 of fiscal
2007, which historically has had lower margins than our FMS
business, and an increased amortization charge which was also
related to the purchase of the healthcare business.
* Trintech reduced expenditure in research and development from
$1.3 million in Q3 last year to $1.2 million in the same quarter
this year. The decrease was primarily due to reduced staffing
costs.
* Trintech increased expenditure quarter on quarter in sales and
marketing from $2.0 million in Q3 last year to $2.5 million in
the same quarter this year. The increase was primarily due to the
inclusion of costs related to the healthcare business.
* Trintech also increased expenditure in general and administrative
from $2.0 million in Q3 last year to $2.3 million in the same
quarter this year. The increase was primarily due to the
inclusion of costs related to the healthcare business, higher
professional costs related to tax and Sarbanes-Oxley compliance
and the impact of the weakening US dollar on our euro-based costs
in Q3 this year.
* On a consolidated basis, Trintech incurred an Adjusted EBITDA
loss of $164,000 for Q3 compared to Adjusted EBITDA loss of
$782,000 for the corresponding period last year.
* Combined basic and diluted net loss per equivalent ADS for the
quarter ended October 31, 2007 was $0.07, compared with a basic
and diluted net income per equivalent ADS of $0.11 for the
quarter ended October 31, 2006.
* Following the sale of its payments systems business to VeriFone
Holdings Inc. in the third quarter of fiscal 2007, Trintech is
required to present its financial results on a continuing and
discontinued basis.
Cyril McGuire, Chairman & Chief Executive Officer said, "Trintech's
performance remains on track to return the business to EBITDA
profitability by the end of our current fiscal year, despite a
challenging and competitive marketplace. We continue to launch new
innovative products and expand our market reach to position Trintech
for broader growth opportunities in 2008."
Paul Byrne, President, added, "We continue to believe that our
investment program in our product and sales and marketing programs
will drive sufficient revenue growth to return Trintech to EBITDA
profitability by the end of the current fiscal year. Whilst there are
challenges in lengthening buying cycles as customers implement
additional procurement processes, we continue to see growing
pipelines and opportunities resulting from the investments we have
made this fiscal year and are confident in our ability to grow
revenues. We are also continuing to expand our distribution channels
and geographic reach to underpin 2008 growth."
Recent Highlights include:
Trintech announced that Lafarge selected ReconNET to automate bank
account reconciliation and to reduce exposure to risk. Lafarge
Services (UK) Limited is the Shared Services operation that provides
services to Lafarge operating entities in the UK, including Lafarge
Aggregates, Lafarge Cement UK, and Lafarge Plasterboard. Lafarge is a
leading supplier to the professional construction industry and the
home improvement market.
Trintech announced that Delhaize Group selected AssureNET GL to
shorten close cycles, reduce risk, and eliminate paper-based evidence
binders. AssureNET GL will also help Delhaize Group better satisfy
Sarbanes-Oxley compliance requirements. The Belgian food retailer,
Delhaize Group, operates approximately 2,500 stores under several
banners in the US and seven countries in Europe and Asia. At home,
Delhaize Belgium runs 723 stores under banners such as Delhaize, AD
Delhaize, Proxy Delhaize, and Tom & Co.
Trintech announced that Alimentation Couche-Tard Eastern Division
selected ReconNET to automate funds reconciliation processes, monitor
transactional risk, and optimize the resolution and reporting of
exceptions. Alimentation Couche-Tard, French for "food for those who
go to bed late," is the largest convenience store retailer in Quebec.
The selection of ReconNET by Couche-Tard Eastern Division is part of
an expansion in the convenience store sector; Circle K Divisions in
Arizona and Mac's Convenience Stores in Ohio also currently utilize
the ReconNET reconciliation system.
Trintech announced that it expanded its partnership with Prodiance
Corporation, a leading provider of solutions for financial
spreadsheet remediation and control, to deliver the XLNET spreadsheet
risk and compliance management solution to the European market. The
application complements Trintech's AssureNET GL and ReconNET
reconciliation software solutions to provide enterprises with a
compliance framework for managing critical spreadsheets associated
with account reconciliation, financial reporting, budgeting,
forecasting, revenue recognition, and other key financial processes.
Trintech announced the availability of ReconNET 7.4 which is
Trintech's latest release in its integrated suite of Financial
Governance software. The newest version of Trintech's reconciliation
and account balancing application will help clients further
streamline reconciliation workflow; reduce resource allocation to the
reconciliation and exception management process; improve auditing,
documentation, and internal control; and speed exception management
resolution.
Trintech announced significant enhancements in the new release of its
accounting compliance software solution, AssureNET GL. AssureNET GL
version 3.3 is designed to help give complex global organizations a
fully SOX-compliant transaction matching, reconciliation, and
accounting compliance platform. AssureNET GL 3.3 includes user
interface enhancements that increase efficiency and flexibility, as
well as new security, search, and reporting features. AssureNET GL is
used to automate and control key accounting activities by some of the
world's most recognized companies, including Accenture, Regis
Corporation, Rohm and Haas, Brady Corporation, JohnsonDiversey, AMC
Theatres and East West Bank.
Trintech announced the release of its innovative Lifecycle Management
(LCM) Payments solution for financial institutions. LCM Payments is a
browser-based account reconciliation and positive pay solution that
enables financial institutions to provide their clients with a more
diverse range of real-time capabilities, based on customer-specific
business requirements, while consolidating multiple existing systems
into a single integrated platform. LCM Payments supplements other
financial services solutions with advanced fraud prevention
technology to provide clients with complete visibility into the
status of their account reconciliation programs.
Trintech announced that Healthcare Financial Management Association
(HFMA) had examined ClearContracts(TM) for Hospitals and Physician
Groups, a solution that helps increase hospital revenue through the
identification and correction of payer non-compliance issues in the
contract revenue cycle, using the new HFMA Peer Review process. After
undergoing rigorous review, ClearContracts now features the notable
"Peer Reviewed by HFMA" mark. Concuity's ClearContracts(TM) is a
web-based revenue cycle management solution that allows healthcare
organizations to manage the entire contract revenue cycle.
Trintech announced the availability of Concuity Healthcare Solution
Suite for financial institutions. ClearContracts(TM) for hospitals
and ClearContracts Pro (for Professional Groups) are web-based
applications designed to fit into a healthcare organization's revenue
cycle management plan. ClearContracts enables all types of
healthcare providers to analyze overall contract performance, verify
expected reimbursement, and enhance the financial profitability of
new and proposed payer contracts.
Trintech announced the availability of ClearContracts 7.2 which
further improves Revenue Cycle Management with increased Contract
Analysis and Negotiation Capabilities.
Results Overview:
Continuing Operations:
Revenue in the third quarter was $7.7 million compared with $6.7
million for the corresponding quarter last year, an increase of 15
percent.
Software license revenue for the quarter ended October 31, 2007 was
$3.7 million compared with $4.0 million in the corresponding quarter
last year, a decrease of 6 percent. The decrease in software license
revenue was primarily due to customers extending the buy cycle as
they implement additional procurement processes for our products in
the US market. However, software license revenue has increased by 11
percent for the nine months ended October 31, 2007 compared with the
corresponding period last year.
Service revenue for the quarter ended October 31, 2007 increased 46
percent to $4.0 million from $2.7 million in the corresponding
quarter last year due primarily to revenues related to the healthcare
business and to a lesser degree, increased revenues from FMS
customers in our Europe, Middle East and Africa region.
Total gross margin for the third quarter was $5.0 million, which
represented no change from the corresponding quarter last year.
Total operating expenses from continuing operations for the third
quarter were $6.3 million, an increase of 15 percent from $5.5
million in the corresponding quarter last year. Adjusted EBITDA
operating expenses from continuing operations for the quarter ended
October 31, 2007 were $5.5 million, an increase of 11 percent on the
Adjusted EBITDA operating expenses from continuing operations for the
corresponding period last year. The increase in operating expenses
and Adjusted EBITDA operating expenses was primarily due to the
inclusion of $0.9 million operating expenses related to the
healthcare business, higher professional costs related to tax and
Sarbanes-Oxley compliance and the impact of the weakening US dollar
on our euro-based costs compared to the corresponding period in the
prior year.
Adjusted EBITDA net loss from continuing operations was $164,000 for
the third quarter compared to an adjusted EBITDA net income of
$350,000 from the corresponding quarter last year.
Trintech's balance sheet remains strong with net cash and cash
equivalent balances of $23.9 million as of October 31, 2007. Net cash
generated for the three months ended October 31, 2007 was $1.1
million.
During the quarter ended October 31, 2007, Trintech did not purchase
any shares via the share buy-back program. As a result, $2.9 million
remains available for future repurchases under this program as at
October 31, 2007.
Trintech will host a conference call to discuss its financial results
and business outlook beginning at 15:30hrs (UK Time) today,
Wednesday, November 21, 2007. Please see advisory for information on
the call.
A web simulcast of Trintech's conference call reviewing our
performance for Q3 fiscal year 2008 and our business outlook for Q4
will be broadcast live today, Wednesday, November 21, 2007 at 15:30
hrs (UK Time), 10:30 hrs (NY Time) and 07:30 hrs (CA Time) and
thereafter for 1 year at www.trintech.com. An instant telephone
replay will also be available for 10 days by dialing
+44 1452 550 000 and entering the following access number (2 4 5 1 8
0 2 2 #).
About Trintech Group
Trintech Group Plc (NASDAQ: TTPA) is a leading provider of integrated
financial governance, transaction risk management, and compliance
solutions for commercial, financial, and healthcare markets
worldwide. Trintech's recognized expertise in reconciliation
underpins its suite of financial governance solutions, enabling
businesses to address critical business objectives leading to more
informed decision making and better overall business performance.
Over 500 leading global organizations, including - North Fork Bank,
7-Eleven, Kroger, Regal Entertainment, Accor, UPMC, Farmer's
Insurance Group, YUM! Brands Restaurants, Rohm and Haas, Verizon
Wireless, and Ameren - realize the benefits of Trintech's
configurable and highly scalable solutions everyday to: improve
performance through stronger management of the revenue cycle and
disbursements; ensure the accuracy and integrity of financial data;
identify and reduce transaction risk; improve the quality and
timeliness of financial reporting; and strengthen internal controls
to support compliance requirements.
Trintech's principal business office is in Dallas, Texas, with
international offices in Ireland, the United Kingdom and the
Netherlands. Trintech can be reached at 15851 Dallas Parkway, Suite
900, Addison, TX 75001 (Tel 1.972.701.9802). Trintech's corporate
office can be contacted at Trintech Technologies, Block C, Central
Park, Leopardstown, Dublin 18, Ireland (Tel 353.1.293.9840). For more
information, please visit www.trintech.com.
Forward Looking Statement
This news release contains "forward looking statements" within the
meaning of Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934, as amended. Any
"forward looking statements" in this press release are subject to
certain risks and uncertainties that could cause actual results to
differ materially from those stated. "Forward looking statements" in
this press release include statements, among others, relating to
Trintech management's goals to return to EBITDA profitability by the
end of the current fiscal year, sales pipelines, opportunities
resulting from investments made in the current fiscal year,
Trintech's ability to grow revenues in the future, the expected
benefits from Lafarge Service's installation of ReconNET GL, Delhaize
Group's installation of AssureNET GL, Alimentation Couche-Tard
Eastern Division's installation of ReconNET and the expanded
partnership with Prodiance Corporation to the European market.
Factors that could cause or contribute to such differences include
Trintech's ability to accurately predict future sales, its ability to
accurately predict and meet customer needs and to successfully
position itself in the market, Trintech's ability to ensure the
performance of its products and services, and its ability to improve
the performance of its organization and ensure the long term health
of its business. Actual performance may also be affected by other
factors more fully discussed in Trintech's Form 20-F for the fiscal
year ended January 31, 2007 filed with the US Securities and Exchange
Commission (www.sec.gov) and subsequent filings with the US
Securities and Exchange Commission. Lastly, Trintech assumes no
obligation to update these forward-looking statements.
TRINTECH GROUP PLC
CONDENSED CONSOLIDATED BALANCE SHEETS
(U.S. dollars in thousands, except share and per share data)
October 31, January 31,
2007 2007
ASSETS
Current assets
Cash and cash
equivalents $ 23,948 $ 25,766
Accounts receivable, net
of allowance for
doubtful accounts of
$43 and $244 at
October 31, 2007 and
January 31, 2007,
respectively 5,926 6,920
Prepaid expenses and
other current assets 1,252 1,054
Net current deferred tax
asset 55 396
Assets held for sale and
in discontinued
operations - 204
Total current
assets 31,181 34,340
Non-current assets
Restricted cash 338 -
Property and equipment,
net 1,645 1,567
Intangible assets, net 5,083 6,730
Goodwill 15,985 15,531
Total
non-current assets 23,051 23,828
Total assets $ 54,232 $ 58,168
LIABILITIES AND
SHAREHOLDERS' EQUITY
Current liabilities
Bank overdraft $ 137 $ -
Accounts payable 1,172 1,263
Accrued payroll and
related expenses 1,849 2,080
Deferred consideration 75 795
Other accrued
liabilities 1,946 1,712
Deferred revenues 8,143 7,964
Liabilities held for
sale and in discontinued
operations 151 962
Total current
liabilities 13,473 14,776
Non-current liabilities
Capital leases due after
more than one year 190 -
Deferred consideration 1,954 2,003
Deferred rent less
current portion 448 511
Total
non-current liabilities 2,592 2,514
Series B preference
shares, $0.0027 par
value
10,000,000 authorized
at October 31, 2007 and
January 31, 2007,
respectively
None issued and
outstanding - -
Shareholders' equity
Ordinary Shares,
$0.0027 par value:
100,000,000 shares
authorized;
32,066,707 and
31,875,219 shares issued
and 31,474,189
and 31,159,093 shares
outstanding at October
31, 2007 and
January 31, 2007,
respectively. 87 86
Additional paid-in
capital 249,897 248,898
Treasury shares (at
cost, 592,518 and
716,126 at October 31,
2007 and
January 31, 2007,
respectively) (1,011) (1,222)
Accumulated deficit (207,429) (203,862)
Accumulated other
comprehensive loss (3,377) (3,022)
Total
shareholders' equity 38,167 40,878
Total
liabilities and
shareholders' equity $ 54,232 $ 58,168
TRINTECH GROUP PLC
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(U.S. dollars in thousands, except share and per share data)
Three months Nine months
ended October 31, ended October 31,
2007 2006 2007 2006
Revenue
License $ 3,731 $ 3,985 $ 11,750 $ 10,550
Service 3,991 2,739 12,238 7,748
Total
revenue 7,722 6,724 23,988 18,298
Cost of revenue
License 409 304 1,186 773
Amortization of
purchased
technology 164 41 491 117
Service 2,172 1,355 6,462 3,661
Total
cost of revenue 2,745 1,700 8,139 4,551
Gross margin 4,977 5,024 15,849 13,747
Operating
expenses
Research and
development 1,152 1,313 3,679 3,483
Sales and
marketing 2,527 2,025 7,994 5,423
General and
administrative 2,263 1,950 7,286 5,838
Amortization of
purchased
intangible assets 385 224 1,156 674
Total
operating
expenses 6,327 5,512 20,115 15,418
Loss from
operations (1,350) (488) (4,266) (1,671)
Interest
income, net 264 402 845 1,079
Exchange gain,
net 184 213 381 397
(Loss) income
before provision
for income taxes (902) 127 (3,040) (195)
Provision for
income taxes (253) (145) (543) (243)
Net loss from
continuing
operations $ (1,155) $ (18) $ (3,583) $ (438)
Loss from
discontinued
operations - (3,503) (13) (6,771)
Profit on sale of
discontinued
operations - 5,280 29 4,818
Net income (loss)
from discontinued
operations, net of
tax - 1,777 16 (1,953)
Net (loss) income $ (1,155) $ 1,759 $ (3,567) $ (2,391)
Basic and diluted
(loss) income per
ordinary share $ (0.04) $ 0.06 $ (0.11) $ (0.08)
Shares used in
computing basic net
(loss) income per
ordinary share 31,430,368 30,601,393 31,318,787 30,581,747
Shares used in
computing diluted
net (loss) income
per ordinary share 31,430,368 31,336,945 31,318,787 30,581,747
Basis and diluted
(loss) income per
ADS $ (0.07) $ 0.11 $ (0.23) $ (0.16)
TRINTECH GROUP PLC
RECONCILIATION OF NET LOSS TO ADJUSTED EBITDA NET LOSS
(U.S. dollars in thousands)
Three months Nine months
ended Oct 31, ended Oct 31,
2007 2006 2007 2006
Net loss from
continuing
operations $ (1,155) $ (18) $ (3,583) $ (438)
Adjustments:
Depreciation 171 124 472 277
Amortization
of purchased
intangible assets 549 265 1,647 788
Share-based
compensation 282 236 816 741
Interest
income, net (264) (402) (845) (1,079)
Income taxes 253 145 543 243
Adjusted Earnings
Before Interest,
Taxation,
Depreciation,
Amortization,
Share-based
compensation
(EBITDA) net
(loss) income for
continuing
operations $ (164) $ 350 $ (950) $ 532
Adjusted Earnings
Before Interest,
Taxation,
Depreciation,
Amortization,
Share-based
compensation
(EBITDA) net
(loss) income for
discontinued
operations - (1,132) 13 (3,491)
Adjusted Earnings
Before Interest,
Taxation,
Depreciation,
Amortization,
Share-based
compensation
(EBITDA) net loss $ (164) $ (782) $ (937) $ (2,959)
Note: Management believes Adjusted EBITDA net loss is an important
measure of Company performance without consideration of the
non-operating expense adjusted above as it presents a clearer view of
operational performance changes between the comparative periods.
TRINTECH GROUP PLC
RECONCILIATION OF OPERATING EXPENSES TO ADJUSTED EBITDA OPERATING
EXPENSES
(U.S. dollars in thousands)
Three months Nine months
ended Oct 31, ended Oct 31,
2007 2006 2007 2006
Total operating
expenses from
continuing
operations $ 6,327 $ 5,512 $ 20,115 $ 15,418
Adjustments:
Depreciation (155) (113) (430) (245)
Amortization of
purchased intangible
assets (385) (224) (1,156) (674)
Share-based
compensation (268) (215) (751) (689)
Adjusted EBITDA
operating expenses
from continuing
operations $ 5,519 $ 4,960 $ 17,778 $ 13,810
Adjusted EBITDA
operating expenses
discontinued
operations - 1,572 (29) 9,933
Adjusted EBITDA
operating expenses $ 5,519 $ 6,532 $ 17,749 $ 23,743
Note: Management believes Adjusted EBITDA operating expenses is an
important measure of Company performance without consideration of the
non-operating expense adjusted above as it presents a clearer view of
operational performance changes between the comparative periods.
TRINTECH GROUP PLC
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(U.S. dollars in thousands)
Nine months
ended October 31,
2007 2006
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (3,567) $ (2,391)
Adjustments to reconcile net loss to
net cash used in operating
activities:
Depreciation 472 496
Gain on sale of fixed assets (5) -
Amortization of purchased
intangible assets 1,647 791
Share-based compensation 816 932
Profit on sale of business, net - (4,818)
Effect of changes in foreign
currency exchange rates (15) (307)
Changes in operating assets and
liabilities:
Inventories - 430
Accounts receivable 1,054 219
Prepaid expenses and other
current assets (33) (43)
Amounts prepaid to related
parties - 440
Value added tax receivable 33 358
Accounts payable (235) (3,490)
Accrued payroll and related
expenses (310) 659
Deferred revenues 149 627
Value added tax payable (53) (441)
Warranty reserve (16) (1,691)
Other accrued liabilities (553) 2,783
Net cash used in operating activities (616) (5,446)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment (538) (555)
(Payment) proceeds relating to sale
of business (331) 5,406
Proceeds from legal settlement - 1,744
Payments relating to acquisitions (865) (3,415)
Net cash (used in) provided by (1,734) 3,180
investing activities
CASH FLOWS FROM FINANCING ACTIVITIES:
Principal payments on capital leases (45) -
Proceeds on sale of fixed assets 338 -
Issuance of ordinary shares 390 169
Proceeds under bank overdraft
facility 137 976
(Increase) decrease in restricted
cash deposits (338) 14
Net cash provided by financing 482 1,159
activities
Net decrease in cash and cash
equivalents (1,868) (1,107)
Effect of exchange rate changes on
cash and cash equivalents 50 204
Cash and cash equivalents at
beginning of period 25,766 34,745
Cash and cash equivalents at end of
period $ 23,948 $ 33,842
Supplemental disclosure of cash flow
information
Interest paid $ 53 $ 13
Taxes paid (received) $ 118 $ (75)
Supplemental disclosure of non-cash
flow information
Acquisition of property and
equipment under capital leases $ 338 $ -
- END -
Contact
Paul Byrne, President
Joseph Seery, VP Finance, Group
Trintech Group plc
+353 1 293 9840
paul.byrne@trintech.com
joseph.seery@trintech.com
The full press release including tables can be downloaded from the
following link: