DUBLIN, Ireland, Feb. 25, 2004 (PRIMEZONE) -- Trintech Group Plc (Nasdaq:TTPA) (Prime Standard: TTP), a leading provider of transaction management and payment infrastructure solutions, today announced fourth quarter revenues of $12.3 million and a return to profitability. Net income was $577,000 for Q4, equivalent to a basic and diluted net income per equivalent American Depositary Share (ADS) of $0.04.
Highlights
* Trintech achieves profitability in Q4, with a net income of $577,000 and an Adjusted EBITDA net income of $1.2 million. Adjusted EBITDA net income excludes restructuring charges, net amortization and impairment of goodwill and purchased intangible assets, depreciation, adjustment of acquisition liabilities, stock compensation, interest income, net and income taxes.
* Gross margins continue to expand to 59% in Q4, a sequential increase from 58% for the previous quarter.
* Operating expenses in Q4 fell 75% to $6.7 million compared to the corresponding quarter last year. Adjusted EBITDA operating expenses for Q4 this year were $6.2 million, a reduction of 16% on the Adjusted EBITDA operating expenses for Q4 last year. Adjusted EBITDA operating expenses exclude restructuring charges, net amortization and impairment of goodwill and purchased intangible assets, depreciation, and adjustment of acquisition liabilities and stock compensation.
* Basic and diluted net income per equivalent ADS for the quarter ended January 31, 2004 was $0.04 compared with basic and diluted net loss per equivalent ADS of $(1.55) for the corresponding quarter ended January 31, 2003.
* Trintech acquired CW & Associates, Inc, doing business as DataFlow Services, a private company, for a net consideration of $3.8 million in Q4. Future earn out payments are expected to bring the total consideration to approximately $5.3 million.
Cyril McGuire, Chairman and Chief Executive Officer commenting on the results said, "I am delighted to report a strong set of results for Q4 with Trintech returning to profitability and revenue growth. All key performance metrics were achieved creating a solid platform for future growth. Our financial position remains strong and our goal continues to be making Trintech more competitive, more focused and better positioned in the marketplace. Our solid performance in the quarter supports our strategy to focus on key core products and illustrates the robustness of our business model."
Recent highlights include:
* Trintech acquired CW & Associates, Inc, doing business as DataFlow Services, a private company, for an announced total consideration of approximately $5 million in November 2003. The announced consideration comprised initial cash consideration of $3 million, 150,000 American Depositary Shares (ADSs) issued from Trintech Treasury Shares, with a value of $570,000, and a performance based earn out over two years, estimated at $1.5 million. In January 2004, Trintech paid $200,000 additional consideration in respect of net acquired working capital in excess of targets agreed to at acquisition date, increasing the estimated total consideration to $5.3 million. The acquisition was immediately accretive to earnings not withstanding the impact of amortization of acquired intangible assets included in the purchase price.
* Trintech announced that Dubai Bank selected Trintech's PayWare CMS solution to manage all its card processing requirements. Dubai Bank, the UAE's newest and most innovative bank, plans to expand its Credit Card issuing operations through its branch network in Dubai and later through other branches across the Emirates. PayWare CMS provides Dubai Bank with an enterprise card management solution that is designed to handle multiple card products and technologies.
* Trintech announced that State Bank of Mauritius (SBM) implemented PayWare MPI to provide payment authentication to SBM merchant customers under the Verified by Visa and MasterCard SecureCodeTM programs for Internet payments. SBM's existing PayWare eCommerce environment includes Trintech's PayWare Acquirer Internet payment gateway, which securely processes card payment transactions on behalf of SBM web merchants. With the addition of PayWare MPI, SBM merchants will benefit immediately by offering Verified by Visa and SecureCode authentication services to their customers, giving them instant protection from online fraud losses.
* Trintech announced that Aston Villa F.C., one of the UK's top soccer clubs, has selected Trintech's bank-accredited PayWare Merchant to automate the processing and distribution of match tickets bought using a debit or credit card. The new system has been implemented at the club's stadium in the Midlands and will allow fans to pay for tickets at an unmanned payment KIOSK, located at the entrance to the stadium.
* Trintech announced that Manchester City F.C., another top UK Premier League club, selected Trintech's bank-accredited PayWare Merchant to process retail and mail order card payments including EMV Chip and PIN card transactions. Manchester City F.C. has implemented Trintech's PayWare solution at the club's high-tech stadium in Manchester, originally home to the Commonwealth Games 2002. The server-based solution will manage all card transactions at the club's busy retail store and mail order department.
* Trintech announced that United Cinemas International (UK) Limited ("UCI"), a division of one of the world's leading cinema exhibition groups, selected ReconNET 6.6 to automate the verification and reconciliation of its cash banking and credit card transactions. ReconNET also enables UCI to streamline its cash management processes, and provide effective risk management and reporting across its UK and Irish cinema estates. UCI (UK) is a wholly-owned subsidiary of the UCI Group, a joint venture owned equally by Universal and Paramount.
* Trintech announced that it appointed Manison Oy as a value-added-reseller (VAR) for its innovative smart card technology in Finland and Sweden. Manison will market and support Trintech's full range of EMV-certified PayWare Smart 5000 PINPads and software to banks and retailers in the region. The Helsinki-based company is working with Trintech to enable the migration to EMV Chip and PIN that is expected to take place in Finland and Sweden in 2004.
* Trintech announced that it had achieved ZKA (Zentraler Kreditausschuss) approval for its OpenPay Architecture for use in the Smart 5000 PIN Pad terminal and its new range of OEM payment security technology products. This is the first approval of its kind for a PIN Pad device using a LINUX open standard operating system. ZKA is the German regulatory body responsible for all aspects of card payments in Germany, and is widely acknowledged for setting the most stringent PIN Pad testing standards in the world.
* Trintech announced that it achieved EMV 2000 version 4 certification for its OpenPay EMV application kernel, which is used in a range of PIN Pads, point-of-sale terminals and unattended payment systems. Europay, MasterCard and Visa (EMV) have jointly developed a set of global specifications that define and certify vendors' software and hardware to ensure compatibility of chip cards and terminals throughout the world. EMV 2000 version 4 defines the latest version of these specifications.
* Trintech announced at Cartes 2003 in Paris a new range of secure payment solutions for outdoor and unattended payment environments. The PayWare OpenPay 3000 range of high security PIN Pads has been designed for unattended environments, addressing the requirements of "pay-at-pump" for petroleum companies, product and ticket vending machines, parking and prepaid mobile recharge applications.
* Trintech announced the availability of Guardian(TM) for Disbursements, the first Payment Lifecycle Management application to be developed on its web-based Guardian platform. Guardian for Disbursements enables companies to manage issued payments such as payroll checks, investment dividends, insurance claims, and other disbursements. Guardian is designed to reduce operational costs, increase protection from fraud, and provide real-time payment status visibility and control for improved service to their customers.
Results Overview:
Revenue for the year ended January 31, 2004 was $43.1 million compared with $42.9 million for the year ended January 31, 2003, an increase of 1%. Fourth quarter revenue increased 17% to $12.3 million compared with $10.5 million for the corresponding quarter last year.
Product revenue for the year ended January 31, 2004 increased 13% to $10.3 million this year from $9.2 million last year. Q4 product revenue increased 27% to $3.4 million this quarter as compared to the corresponding quarter last year.
License revenue for the year ended January 31, 2004 increased 2% to $22.9 million from $22.4 million for the prior fiscal year. Q4 software license revenue increased 2% to $5.8 million compared to the corresponding quarter last year.
Service revenue for the year ended January 31, 2004 fell 12% to $9.9 million from $11.3 million last year. Service revenue increased 48% to $3.1 million this quarter as compared to the corresponding quarter last year. This Q4 increase includes all post-acquisition revenues of the DataFlow Services business.
Total gross margin for the year ended January 31, 2004 was $24.2 million, an increase of 72% from $14.0 million in the corresponding period last year. Total gross margin for the fourth quarter was $7.3 million, an increase from $2.6 million in the corresponding quarter last year.
Total operating expenses for the year ended January 31, 2004 decreased by 54% to $27.7 million as compared to the corresponding period last year. Adjusted EBITDA operating expenses for the fiscal year were $25.6 million, a reduction of 21% on the Adjusted EBITDA operating expenses for the prior fiscal year. A reconciliation of Adjusted EBITDA operating expenses to Operating expenses is attached to this release.
Operating expenses in Q4 fell 75% compared to the corresponding quarter last year. Adjusted EBITDA operating expenses for Q4 this year were $6.2 million, a reduction of 16% on the Adjusted EBITDA operating expenses for Q4 last year.
Trintech's balance sheet remains strong with closing net cash and cash equivalent balances of $38.1 million. Net cash usage for Q4 was $3.6 million. This includes the acquisition of CW & Associates, Inc, doing business as DataFlow Services, for an initial net cash consideration of $3.2 million, other acquisition related payments of $0.7 million in respect of acquisitions made in prior periods and restructuring payments of $0.2 million. This expenditure was partially offset by cash generated from operating activities of approximately $0.5 million in Q4.
During the quarter, the Company did not repurchase shares under its ongoing stock repurchase program. As of January 31, 2004 approximately $4.4 million remained available for future repurchases under this program.
"Trintech's fourth quarter results demonstrate its continued execution in building the foundation for sustained profitability and enhanced shareholder value by focussing on revenue growth, margin expansion, stringent cost control and strong cash management. Revenue grew by 17% in Q4 compared to the prior year. Gross margins expanded again in Q4 to 59%. We are pleased that we continue to see reductions in our operating expenses and that Trintech has now been generating cash from operations for three consecutive quarters," said Paul Byrne, Chief Financial Officer.
Trintech will host a conference call to discuss its financial results and business outlook beginning at 15:30hrs (UK Time) today, February 25th 2004. Please see advisory for information on the call.
A web simulcast of Trintech's conference call reviewing our performance for Q4 fiscal year 2004 and our business outlook for Q1 fiscal year 2005 will be broadcast live today, Wednesday February 25th, 2004 at 15:30hrs (UK Time), 10:30hrs (NY Time) and 07:30hrs (CA Time) and thereafter for 1 year at www.trintech.com. An instant telephone replay will also be available for 10 days by dialing T: +44 1452 550 000 and entering the following access number (9396773#).
About Trintech
Trintech is a leading provider of transaction management and payment infrastructure solutions to financial institutions, payment processors, enterprise retailers and network operators globally. Built on over 17 years of experience, Trintech's solutions manage each area of the payment transaction cycle from authentication, authorization, settlement, dispute resolution and reconciliation - enabling our customers to reduce transactions costs, eliminate fraud, minimize risk, maximize cashflow and increase profitability. Trintech can be contacted in Ireland at Trintech Building, South County Business Park, Leopardstown, Dublin 18 (Tel: +353-1-207-4000), in the US at 15851 Dallas Parkway, Suite 855, Addison, TX 75001 (Tel: +1-972 701 9802), and in the UK at 186-192 Darkes Lane, Potters Bar, Hertfordshire, EN6 1AF (T: +44 (0) 1707 827000. www.trintech.com
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's business strategy, the amount of expected earn-out payments related to the acquisition of DataFlow Services, Trintech's ability to generate revenue growth, expand margins, reduce costs, manage cash and build a foundation for sustained profitability and enhanced shareholder value and the expected date for migration to EMV Chip and PIN in Finland and Sweden. Factors that could cause or contribute to such differences include Trintech's ability to extract costs from its business, its ability to accurately predict future sales, the long term health of Trintech's business and ability to improve performance of the organization, the ability to successfully integrate DataFlow Services, reduce costs, consolidate locations, combine operations and eliminate redundancies in the combined organization and improve efficiencies through the acquisition, the rate of migration to chip-based credit and debit cards, the ability of its customers to fulfill their commitments to adopt Trintech's secure payment technology, the availability of financial resources to continue investment in research and development and sales and marketing programs, the growth of the secure payments software and services market, Trintech's ability to develop, market and sell secure payments and treasury and cash management software, the market acceptance of the security standards for payment transactions, the ability to improve and expand the functionality of products, the ability to develop strategic relationships, the ability to react to rapid technological change rapidly, the ability to resize the organization, reduce costs, consolidate locations, combine operations and eliminate redundancies in the organization and the effects of macroeconomic uncertainty on the demand for Trintech's products. 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, 2003 and Form 6-K for the fiscal quarter ended October 31st 2003, filed with the US Securities and Exchange Commission (www.sec.gov). 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)
January 31, January 31,
2004 2003
ASSETS
Current assets:
Cash and cash equivalents 36,864 42,559
Restricted cash 1,211 3,132
Accounts receivable, net of allowance for
doubtful accounts of $1,595
and $1,884 respectively 9,800 10,085
Inventories 824 3,077
Value added taxes 471 617
Prepaid expenses and
other assets 2,706 2,665
Total current assets 51,876 62,135
Property and equipment, net 988 1,674
Other non-current assets 3,994 3,095
Goodwill, net of accumulated amortization
and impairment of $85,619 at
January 31, 2004 and 2003
respectively 7,459 6,609
Total assets 64,317 73,513
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable 4,804 4,130
Accrued payroll and related
expenses 1,864 2,439
Other accrued liabilities 5,699 10,602
Value added taxes 819 365
Warranty reserve 356 625
Deferred revenue 8,739 8,394
Total current liabilities 22,281 26,555
Non-current liabilities:
Capital leases due after more
than one year 84 343
Government grants repayable
and related loans 157 137
Deferred consideration - 475
Provision for lease
abandonment 441 920
Total non-current liabilities 682 1,875
Series B preference shares, $0.0027 par value
10,000,000 authorized;
None issued and outstanding -
Shareholders' equity:
Ordinary Shares, $0.0027 par value:
100,000,000 shares authorized;
30,596,775 and 30,523,413 shares
issued and outstanding at
January 31, 2004 and 2003
respectively) 83 83
Additional paid-in capital 245,965 245,622
Treasury shares (254,508 and 115,294 at
January 31, 2004 and
2003 respectively) (268) (140)
Accumulated deficit (202,175) (199,015)
Deferred stock compensation - (34)
Accumulated other
comprehensive loss (2,251) (1,433)
Total shareholders' equity 41,354 45,083
Total liabilities and
shareholders' 64,317 73,513
equity
TRINTECH GROUP PLC
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(U.S. dollars in thousands, except share and per share data)
Three months Twelve months
ended January 31, ended January 31,
2004 2003 2004 2003
Revenue:
Product 3,403 2,689 10,318 9,165
License 5,826 5,710 22,867 22,418
Service 3,077 2,085 9,886 11,273
Total 12,306 10,484 43,071 42,856
Revenue
Cost of revenue:
Product 2,185 4,028 7,586 11,148
License 1,226 2,176 5,313 9,248
Service 1,618 1,719 6,020 8,456
Total 5,029 7,923 18,919 28,852
Cost of Revenue
Gross Margin 7,277 2,561 24,152 14,004
Operating
expenses:
Research & 2,220 2,129 8,280 10,349
development
Sales & 1,997 2,249 8,689 10,297
marketing
General & 2,256 4,368 10,587 15,354
administrative
Restructuring 38 745 4,270
charge --
Amortization of
purchased
intangible 213 644 507 2,573
assets
Impairment of
goodwill and
purchased -- 16,535 -- 16,535
intangible assets
Adjustment of
acquisition -- 804 -- 804
liabilities
Goodwill
impairment reversal
on the adjustment
of acquisition
deferred -- -- (1,149) --
consideration
Stock (27) (43)
compensation -- 20
Total 6,697 26,686 27,659 60,202
operating expenses
Income (loss) from 580 (24,125) (3,507) (46,198)
operations
Interest 51 125 268 716
income, net
Exchange (loss) (54) 316 79 771
gain, net
Income (loss)
before
Provision for 577 (23,684) (3,160) (44,711)
income taxes
Provision for (108)
income taxes -- -- --
Net income (loss) 577 (23,684) (3,160) 44,819)
Basic net income
(loss) per Ordinary 0.02 (0.78) (0.10) (1.47)
Share
Shares used in
computing basic net
income (loss) per 30,544,851 30,540,565 30,314,419 30,559,410
Ordinary Share
Diluted net income
(loss) per Ordinary 0.02 (0.78) (0.10) (1.47)
Share
Shares used in
computing diluted
net income (loss)
per 31,284,015 30,540,565 30,499,210 0,559,410
Ordinary Share
Basic net income
(loss) per 0.04 (1.55) (0.21) (2.93)
equivalent ADS
Diluted net income
(loss) per 0.04 (1.55) (0.21) (2.93)
equivalent ADS
TRINTECH GROUP PLC
RECONCILIATION OF NET INCOME (LOSS) TO ADJUSTED EBITDA
NET INCOME (LOSS)
(U.S. dollars in thousands)
Three months Twelve months
ended January 31, ended January 31,
2004 2003 2004 2003
Net income 577 (23,684) (3,160) (44,819)
(loss)
Adjustments:
Depreciation, 651 21,399 3,061 29,461
amortization
and impairment
Stock (27) (43) -- 20
compensation
Restructuring 38 -- 745 4,270
charge
Interest (51) (125) (268) (716)
income, net
Income -- -- -- 108
taxes
Adjusted
Earnings
Before
Interest
Taxation 1,188 (2,453) 378 (11,676)
Depreciation
and
Amortization
(EBITDA) net
income (loss)
Note: Management believes Adjusted EBITDA is an important measure of
Company performance without consideration of the non-operating
expenses 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 Twelve months
ended January 31, ended January 31,
2004 2003 2004 2003
Total
operating 6,697 26,686 27,659 60,202
expenses
Adjustments:
Restructuring (38) -- (745) (4,270)
charge
Depreciation (267) (1,354) (1,972) (3,776)
Amortization
of purchased (213) (644) (507) (2,573)
intangible
assets
Impairment of
goodwill and (16,535) (16,535)
purchased -- --
intangible assets
Adjustment of
acquisition -- (804) -- (804)
liabilities
Goodwill
impairment
reversal on the
adjustment
Of
acquisition 1,149
deferred -- -- --
consideration
Stock 27 43 (20)
compensation --
Adjusted
EBITDA 6,206 7,392 25,584 32,224
operating
expenses
Note: Management believes Adjusted EBITDA operating expenses is an important measure of Company performance without consideration of the non-operating expenses adjusted above as it presents a clearer view of changes in the operational cost base between the comparative periods.
To view the full press release visit the following link:http://hugin.info/130706/R/935700/129345.pdf