DUBLIN, Ireland and DALLAS, Aug. 25, 2004 (PRIMEZONE) -- Trintech Group Plc (Nasdaq:TTPA) (Prime Standard:TTP), a leading provider of transaction management and payment infrastructure solutions, today announced second quarter revenues of $13.2 million and profits of $351,000, equivalent to a basic and diluted net income per equivalent American Depositary Share (ADS) of $0.02.
Highlights
-- Revenue growth of 31 percent in Q2 compared to corresponding quarter
last year.
-- Trintech maintains profitability in Q2, with a net income of $351,000
and an Adjusted EBITDA net income of $804,000. 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.
-- Basic and diluted net income per equivalent ADS for the quarter ended
July 31, 2004 was $0.02 compared with basic and diluted net loss per
equivalent ADS of $0.12 for the corresponding quarter ended July 31,
2003.
Cyril McGuire, Chairman and Chief Executive Officer commenting on the results said: "I am delighted to report a strong set of results for Q2 with Trintech achieving healthy revenue growth and continued profitability. Our investment in new products, especially for the Chip and PIN opportunity is achieving positive results. Our strategy is to leverage our multi-channel payment expertise and continue to build strategic relationships and expand channels of distribution globally."
Recent highlights include:
* Trintech announced that Maplin Electronics implemented Trintech's bank-accredited PayWare Merchant card payment processing solution and Smart 5000 transaction processing devices to process all its card payment transactions, including EMV Chip and PIN.
* Trintech announced a strategic alliance with SunGard Treasury Systems, whereby Trintech's data network will provide SunGard clients with seamless access to electronic daily balance transaction and balance statements from North American banks.
* Trintech announced that it had partnered with Quest Retail Technology, a leading developer and supplier of PoS (point-of-sale) technology, to provide a complete EFT and Chip and PIN solution to UK merchants. As part of the agreement, Quest will now integrate Trintech's PayWare EFT and PayWare SmartPIN Chip and PIN solution with its own range of PoS terminals, including the award-winning V-Touch, touch screen terminal.
* Trintech announced that more than 200 treasury and accounting delegates from 115 leading companies gathered in Miami, Florida for Trintech's eighth annual Customer Conference in May. Customers attended sessions and networked with other users and Trintech's experts to increase the benefits from Trintech's funds management software and services, including ReconNET, Bank Fee Analysis, and the DataFlow Transaction Network.
* Trintech held its 5th Annual General Meeting (AGM) as a public company in Dublin, Ireland. The Chairman welcomed the appointment by the Shareholders of Dr. Jim Mountjoy to the Board and the approval of the share buy back agreement with Deutsche Bank AG.
Results Overview:
Revenue for the six months ended July 31, 2004 was $25.6 million compared with $20.3 million for the six months ended July 31, 2003, an increase of 26 percent. Second quarter revenue increased 31 percent to $13.2 million compared with $10.1 million for the corresponding quarter last year.
First half product revenue increased 81 percent to $7.9 million this year from $4.4 million last year. Q2 product revenue increased 138 percent to $4.3 million compared with the corresponding quarter last year.
First half software license revenue decreased 4 percent to $10.9 million this year from $11.4 million last year. Q2 software license revenue decreased 7 percent to $5.5 million from $5.9 million for the corresponding quarter last year.
First half service revenue increased 49 percent to $6.7 million from $4.5 million last year. Service revenue increased 44 percent to $3.4 million this quarter compared with the corresponding quarter last year. The year on year increase includes post-acquisition revenues of the DataFlow Services business.
First half gross margin was $15.3 million, an increase of 42 percent from $10.8 million in the corresponding period last year. Total gross margin for the second quarter was $7.6 million, an increase of 38 percent from $5.5 million in the corresponding quarter last year.
First half operating expenses increased 11 percent to $15.1 million from $13.6 million in the corresponding period last year. Adjusted EBITDA operating expenses for the first half this year were $14.1 million, an increase of 6 percent on the Adjusted EBITDA operating expenses for the first half last year.
Operating expenses in Q2 fell 2 percent to $7.4 million compared to the corresponding quarter last year. Adjusted EBITDA operating expenses for Q2 this year were $6.9 million, an increase of 5 percent on the Adjusted EBITDA operating expenses for Q2 last year.
Trintech's balance sheet remains strong with closing net cash and cash equivalent balances of $38.6 million. Net cash generation for Q2 was $355,000. Cash generated from operating activities was approximately $584,000 which was partially used to make acquisition related payments of $123,000 in respect of acquisitions made in prior periods and to purchase capital equipment for $121,000.
During the quarter, Trintech did not repurchase shares under its ongoing stock repurchase program. As of July 31, 2004 approximately $4.4 million remained available for future repurchases under this program.
"Trintech's second quarter results demonstrate the continued successful execution of our strategy of focussing on key growth markets, such as Chip and PIN solutions and treasury and cash management solutions. Combining this strong focus with stringent cost control has enabled us to expand our net operating margins and grow profits", 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, August 25th 2004. Please see advisory for information on the call.
A web simulcast of Trintech's conference call reviewing our performance for Q2 fiscal year 2005 and our business outlook for Q3 fiscal year 2005 will be broadcast live today, Wednesday August 25th, 2004 at 3:30 PM (UK Time), 10:30 AM (NY Time) and 07:30 AM (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 (1747421 #).
About Trintech
Trintech is a leading provider of secure payment infrastructure and transaction management 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 market position and business focus, the planned roll out of Trintech's products with third parties, including SunGard Treasury Systems and Quest Retail Technology, and Trintech's ability to successfully execute its business strategy. Factors that could cause or contribute to such differences include Trintech's ability to accurately predict future sales, its ability to accurately predict customer needs and to successfully position itself in the market, the long term health of Trintech's business and ability to improve performance of the organization, the ability of its customers to fulfill their commitments to adopt Trintech's secure payment technology, delay or reduction in the size of the planned SunGard Treasury Systems and Quest Retail Technology roll outs, 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 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, 2004, and Form 6-K for the quarter ended April 30, 2004 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)
July 31, January 31,
2004 2004
ASSETS
Current assets:
Cash and cash equivalents $ 38,041 $ 36,864
Restricted cash 555 1,211
Accounts receivable, net of
allowance for doubtful
accounts of
$661 and $1,595 8,729 9,800
respectively
Inventories 486 824
Value added taxes 313 471
Prepaid expenses and other 3,025 2,706
assets
Total current 51,149 51,876
assets
Property and equipment, net 792 988
Other non-current assets 3,571 3,994
Goodwill, net of
accumulated amortization
and impairment of $84,471
at July 31, 2004 and 7,459 7,459
January 31, 2004
respectively
Total assets $ 62,971 $ 64,317
LIABILITIES AND
SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable 3,503 4,804
Accrued payroll and related 1,648 1,864
expenses
Other accrued liabilities 5,521 5,699
Value added taxes 882 819
Warranty reserve 451 356
Deferred revenue 8,617 8,739
Total current 20,622 22,281
liabilities
Non-current liabilities:
Capital leases due after 17 84
more than one year
Government grants repayable 153 157
and related loans
Provision for lease 218 441
abandonment
Total non-current 388 682
liabilities
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;
30,836,283 and
30,596,775 shares issued
and outstanding at
July 31, 2004 and 83 83
January 31, 2004
respectively
Additional paid-in capital 246,186 245,965
Treasury shares (189,082
and 254,508 at July 31,2004
and
January 31, 2004 (199) (268)
respectively)
Accumulated deficit (201,740) (202,175)
Accumulated other (2,369) (2,251)
comprehensive loss
Total 41,961 41,354
shareholders' equity
Total liabilities $ 62,971 $ 64,317
and shareholders' equity
TRINTECH GROUP PLC
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(U.S. dollars in thousands, except share and per share data)
Three months Six months
ended July 31, ended July 31,
2004 2003 2004 2003
Revenue:
Product $ 4,332 $ 1,820 $ 7,932 $ 4,393
License 5,475 5,875 10,896 11,365
Service 3,403 2,358 6,749 4,516
Total Revenue 13,210 10,053 25,577 20,274
Cost of
revenue:
Product 3,216 1,489 5,451 3,508
License 946 1,338 1,883 2,698
Service 1,467 1,719 2,890 3,263
Total Cost of
Revenue 5,629 4,546 10,224 9,469
Gross Margin 7,581 5,507 15,353 10,805
57% 55% 60% 53%
Operating
expenses:
Research & 2,153 2,007 4,331 3,945
development
Sales & 2,268 2,261 4,505 4,553
marketing
General & 2,682 2,733 5,650 5,604
administrative
45 434 351 434
Restructuring
charge
Amortization 212 98 423 196
of purchased
intangible
assets
Adjustment of -- -- (249) --
acquisition
liabilities
Adjustment of -- -- -- (1,149)
acquisition
deferred
consideration
Stock -- 6 101 20
compensation
Total
operating
expenses 7,360 7,539 15,112 13,603
Income (loss) 221 (2,032) 241 (2,798)
from operations
Interest
income, net 74 60 156 160
Exchange
(loss) gain,
net 132 159 114 155
Income (loss)
before
provision for
income taxes 427 (1,813) 511 (2,483)
Provision
for income
taxes (76) -- (76) --
Net income
(loss) $ 351 $ (1,813)$ 435 $ (2,483)
Basic net income $ 0.01 $ (0.06)$ 0.01 $ (0.08)
(loss) per
Ordinary Share
Shares used in
computing basic
net
income (loss)
per Ordinary
Share 30,791,850 30,156,466 30,734,700 30,274,558
Diluted net
income (loss)
per Ordinary
Share $ 0.01 $ (0.06)$ 0.01 $ (0.08)
Shares used in
computing
diluted net
income (loss)
per Ordinary
Share 32,296,608 30,156,466 32,285,188 30,274,558
Basic net income
(loss) per
equivalent ADS $ 0.02 $ (0.12)$ 0.03 $ (0.16)
Diluted net
income (loss)
per equivalent
ADS $ 0.02 $ (0.12)$ 0.03 $ (0.16)
TRINTECH GROUP PLC
RECONCILIATION OF NET INCOME (LOSS)
TO ADJUSTED EBITDA NET INCOME (LOSS)
(U.S. dollars in thousands)
Three months Six months
ended July 31, Ended July 31,
2004 2003 2004 2003
Net income (loss) $ 351 $(1,813) $ 435 $(2,483)
Adjustments:
Depreciation 193 410 416 804
Amortization of purchased 212 430 423 860
intangible assets
Adjustment of acquisition
liabilities -- -- (249) --
Adjustment of acquisition
deferred consideration -- -- -- (1,149)
Stock compensation -- 6 101 20
Restructuring charge 45 434 351 434
Interest income, net (73) (60) (155) (160)
Income taxes 76 -- 76 --
Adjusted earnings Before
Interest
Taxation Deprecation and $ 804 $ (593) $ 1,398 $(1,674)
Amortization (EBITDA) net
income (loss)
Note: Management believes Adjusted EBITDA 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 Six months
ended July 31, ended July 31,
2004 2003 2004 2003
Total operating expense $ 7,360 $ 7,539 $ 15,112 $ 13,603
Adjustments:
Restructuring charge (45) (434) (351) (434)
Depreciation (176) (394) (384) (769)
Amortization of
purchased intangible
assets (212) (98) (423) (196)
Impairment of
goodwill and purchased
intangible assets -- -- -- --
Adjustment of
acquisition liabilities -- -- 249 --
Adjustment of
acquisition deferred
consideration -- -- -- 1,149
Stock Compensation -- (6) (101) (20)
Adjusted EBITDA operating
expenses $ 6,927 $ 6,607 $ 14,102 $ 13,333
Note: Management believes Adjusted EBITDA 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)
Six months
ended July 31,
2004 2003
CASH FLOWS FROM
OPERATING ACTIVITIES:
Net income (loss) $ 435 $ (2,483)
Adjustments to
reconcile net income
(loss) to
net cash provided by
(used in) operating
activities:
Depreciation and 839 1,664
amortization
Stock compensation 101 20
Effect of changes (158) (880)
in foreign currency
exchange rates
Changes in
operating assets
and liabilities:
Reductions to 656 453
restricted cash
deposits
Inventories 324 1,825
Accounts 1,012 1,321
receivable
Prepaid (364) 173
expenses and
other assets
Value added tax 154 234
receivable
Accounts (1,258) (1,070)
payable
Accrued payroll (199) (493)
and related
expenses
Deferred (49) (69)
revenues
Value added tax 58 177
payable
Warranty 107 (237)
reserve
Government (395)
grants -
repayable and
related loans
Other accrued 266 (1,269)
liabilities
Net cash provided by 1,924 (1,029)
(used in) operating
activities
CASH FLOWS FROM
INVESTING ACTIVITIES:
Purchases of property (235) (329)
and equipment
Payments relating to (485) (1,763)
acquisitions
Net cash used in (720) (2,092)
investing activities
CASH FLOWS FROM
FINANCING ACTIVITIES:
Principal payments on (191) (223)
capital leases
Issuance of ordinary 199 87
shares
Repurchase of ordinary (512)
shares -
Expense of share issue (10)
-
Proceeds under bank 1,020
overdraft facility -
Net cash provided by (2) 372
(used in) financing
activities
Net 1,202 (2,749)
increase/(decrease) in
cash and cash
equivalents
Effect of exchange (25) 131
rate changes on cash
and cash equivalents
Cash and cash 36,864 42,559
equivalents at
beginning of period
Cash and cash $ 38,041 $ 39,941
equivalents at end of
period
Supplemental
disclosure of cash
flow information
Interest paid $ 17 $ 49
Taxes paid $ 256 $ 59
Supplemental
disclosure of non-cash
flow information
Acquisition of $ $ 87
property and -
equipment under
capital leases
The full press release including tables can be downloaded from the following link: http://hugin.info/130706/R/957978/137470.pdf