DUBLIN, Ireland, and DALLAS, August 27, 2003 (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 $10.1 million and a basic and diluted net loss per equivalent American Depositary Share (ADS) of ($0.12) as calculated in accordance with U.S. generally accepted accounting principles (GAAP), compared with a basic and diluted net loss per equivalent ADS of ($0.33) for the second quarter last year.
Non-GAAP pro forma reporting excludes amortization, depreciation, stock compensation, restructuring charges, acquisition adjustments and inventory write downs. The pro forma net loss per equivalent ADS for the second quarter was ($0.04) compared to ($0.16) in the corresponding quarter last year.
Highlights
* Tenth consecutive quarter of declining pro forma operating expenses, which fell strongly by 20% in Q2, compared to the corresponding period last year. * Pro forma basic and diluted net loss per equivalent ADS declined 78% in Q2, compared to the corresponding period last year. Pro forma basic and diluted net loss per equivalent ADS for the quarter ended July 31, 2003 was $(0.04) compared with pro forma basic and diluted net loss per equivalent ADS of $(0.16) for the corresponding quarter ended July 31, 2002. * Cash usage was $1.2 million for Q2 with Trintech's balance sheet remaining strong with closing net cash and cash equivalent balances of $41.6 million. This includes expenditure of $58,000 in respect of the Share Buyback Programme in the quarter.
Cyril McGuire, Chairman and Chief Executive Officer commenting on the results said: "Trintech's results for Q2 were in line with market expectations, with key performance metrics of stable revenue, improved margins, lower operating costs and reduced losses remaining on track. Our goal is to make Trintech more competitive, more responsive to customer needs and better positioned to pursue new growth opportunities. Our strategy is to focus on our key profitable products and leverage our core competency in transaction and payment solutions into new growth markets. Our financial position remains strong and we achieved an important milestone of cashflow breakeven from an operating perspective in Q2."
Recent highlights include:
* Trintech announced the release of its web-enabled ReconNET Bank Fee Analysis 6.6 system. The updated solution helps companies significantly reduce bank fees by detecting and recovering fee overcharges, as well as providing detailed analysis for optimizing banking processes and services.
* Trintech announced a distribution agreement with Box Technologies Limited, a premier supplier of IT hardware and retail integration services, in order to distribute Trintech's Chip and PIN solution (PayWare SmartPIN) throughout the UK.
* Trintech announced that Thermae Bath Spa selected and implemented Trintech's bank-accredited, PayWare Merchant, to process all its card payment transactions, including EMV Chip and PIN.
* Trintech announced that Mac's Convenience Stores LLC, a division of Alimentation Couche-Tard Inc., selected ReconNET to provide transaction reconciliation and cash management for over 500 North American locations.
* Trintech held its fourth Annual General Meeting (AGM) as a public company in Dublin, Ireland on July 18th. The resolution renewing the terms of our share buy back agreement with Deutsche Bank AG was approved.
* Toni & Guy, a wholly owned subsidiary of Mascolo Limited, chose ReconNET 6.5 to manage its store reconciliation and cash management needs for its company-owned and managed franchise businesses in the UK.
* Trintech announced that De Vere Hotels has implemented PayWare Merchant to process all card payment transactions from its 35 locations across the UK and Jersey.
Results Overview:
Revenue for the six months ended July 31, 2003 was $20.3 million compared with $21.0 million for the six months ended July 31, 2002, a decrease of 3%. Second quarter revenue decreased 8% to $10.1 million compared with $10.9 million for the corresponding quarter last year.
First half product revenue increased 21% to $4.4 million this year from $3.6 million last year. Q2 product revenue remained flat at $1.8 million compared with the corresponding quarter last year.
First half license revenue increased 3% to $11.4 million from $11.0 million. Q2 software license revenue increased 1% to $5.9 million this quarter as compared to the corresponding quarter last year.
First half service revenue fell 28% to $4.5 million from $6.3 million last year. Service revenue decreased 27% to $2.4 million this quarter as compared to the corresponding quarter last year.
First half total pro forma operating expenses decreased by 26% to $13.3 million as compared to the corresponding period last year. Total pro forma operating expenses decreased by 20% to $6.6 million this quarter as compared to the corresponding quarter last year.
First half pro forma gross margin was $11.5 million, an increase from $10.4 million in the corresponding period, last fiscal year. First half GAAP gross margin was $10.8 million, an increase from $6.8 million in the corresponding period last year. Pro forma gross margin for the second quarter was $5.9 million, an increase from $5.4 million in the corresponding quarter last year. GAAP gross margin for the second quarter was $5.5 million, an increase from $4.1 million in the corresponding quarter, last fiscal year.
"Trintech continues to take the measured steps required to turn the corner in terms of our ability to generate improved margins, cashflow and profits. In Q2, we increased our pro forma gross margins to 58% from 50% for Q2 last year and we were cashflow breakeven from operations in that our decrease in working capital was greater than the pro forma loss for the quarter. We are dedicated to differentiating our solutions to bolster our market presence and build earnings momentum. This will provide the foundation for sustained profitability and enhanced shareholder value," said Paul Byrne, Chief Financial Officer.
Trintech will host a conference call to discuss its financials results and business outlook beginning at 15:30hrs (UK Time) today, August 27, 2003. Please see advisory below for information on the call.
A web simulcast of Trintech's conference call reviewing our performance for Q2 fiscal year 2004 and our business outlook for Q3 and fiscal year 2004 will be broadcast live today, Wednesday August 27, 2003 at 15:30hrs (UK Time), 10:30hrs (NY Time) and 07:30hrs (CA Time) and thereafter for 10 days 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 (374953 #).
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 15 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 and at 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 and its ability to bolster its market presence and build earnings momentum by differentiating its solutions and financial model, and Trintech's ability to build a foundation for sustained profitability and enhanced shareholder value. 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 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 eCommerce 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 6-K for the fiscal quarter ended April 30, 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)
July 31, January 31,
2003 2003
ASSETS
Current assets:
Cash and cash equivalents $ 39,941 $ 42,559
Restricted cash 2,679 3,132
Accounts receivable, net of
allowance for doubtful
accounts of
$2,185 and $1,884 8,980 10,085
respectively
Inventories 1,299 3,077
Value added taxes 425 617
Prepaid expenses and other 2,542 2,665
assets
Total current assets 55,866 62,135
Property and equipment, net 1,247 1,674
Other non-current assets 2,235 3,095
Goodwill, net of
accumulated amortization
and impairment of $85,619
at July 31, 2003 and
January 31, 2003 6,609 6,609
respectively
Total assets $ 65,957 $ 73,513
LIABILITIES AND
SHAREHOLDERS' EQUITY
Current liabilities:
Bank overdraft $ 1,061 $ -
Accounts payable 3,172 4,130
Accrued payroll and related 2,007 2,439
expenses
Other accrued liabilities 9,320 10,602
Value added taxes 516 365
Warranty reserve 415 625
Deferred revenue 8,416 8,394
Total current liabilities 24,907 26,555
Non-current liabilities:
Capital leases due after 245 343
more than one year
Government grants repayable 144 137
and related loans
Deferred consideration - 475
Provision for lease - 920
abandonment
Total non-current liabilities 389 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;
30,156,809 and
30,523,413 shares issued
and outstanding at
July 31, 2003 and
January 31, 2003 83 83
respectively
Additional paid-in capital 245,672 245,622
Treasury shares (587,852 (621) (140)
shares)
Accumulated deficit (201,498) (199,015)
Deferred stock compensation (8) (34)
Accumulated other (2,967) (1,433)
comprehensive loss
Total shareholders' equity 40,661 45,083
Total liabilities $ 65,957 $ 73,513
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,
2003 2002 2003 2002
Revenue:
Product $ 1,820 $ 1,824 $ 4,393 $ 3,623
License 5,875 5,836 11,365 11,023
Service 2,358 3,242 4,516 6,314
10,053 10,902 20,274 20,960
Total Revenue
Cost of
revenue:
Product 1,489 2,179 3,508 4,703
License 1,338 2,424 2,698 4,773
Service 1,719 2,179 3,263 4,673
4,546 6,782 9,469 14,149
Total Cost of
Revenue
Gross Margin 5,507 4,120 10,805 6,811
Operating
expenses:
Research & 2,007 2,526 3,945 5,673
development
Sales & 2,261 2,603 4,553 5,738
marketing
General & 2,733 3,783 5,604 7,751
administrative
434 - 434 3,500
Restructuring
charge
Amortization 98 643 196 1,286
of purchased
intangible
assets
Goodwill
impairment
reversal on the
adjustment
of (1,149)
acquisition - - -
deferred
consideration
Stock compensation 6 21 20 42
Total 7,539 9,576 13,603 23,990
operating
expenses
Income (loss) (2,032) (5,456) (2,798) (17,179)
from
operations
Interest 60 205 160 402
income, net
Exchange 159 195 155 307
gain, net
Income (loss)
before
provision for (1,813) (5,056) (2,483) (16,470)
income taxes
Provision _ (48) _ (108)
for income
taxes
Net income $ (1,813) $ (5,104) $ (2,483) $(16,578)
(loss)
Basic and $ (0.06) $ (0.17) $ (0.08) $ (0.54)
diluted net
income (loss)
per Ordinary
Share
Shares used in 30,156,466 30,561,435 30,274,558 30,553,301
computing basic
and diluted net
income (loss)
per Ordinary
Share
Basic and
diluted net
income (loss)
per equivalent $ (0.12) $ (0.33) $ (0.16) $(1.09)
American
Depositary Share
TRINTECH GROUP PLC
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(U.S. dollars in thousands)
Six months
ended July 31,
2003 2002
CASH FLOWS FROM
OPERATING ACTIVITIES:
Net income (loss) $ (2,483) $ (16,578)
Adjustments to reconcile
net income (loss) to
net cash (used in)
provided by operating
activities:
Depreciation and 1,664 5,136
amortization
Stock compensation 20 42
(Profit) on marketable (303)
securities -
Purchase of marketable (168,191)
securities -
Sale of marketable 177,018
securities -
Effect of changes in (880) (1,061)
foreign currency
exchange rates
Changes in operating
assets and
liabilities:
Reductions in 453
restricted cash -
deposits
Inventories 1,825 (1,963)
Accounts receivable 1,321 5,610
Prepaid expenses 173 489
and other assets
Value added tax 234 483
receivable
Accounts payable (1,070) (1,612)
Accrued payroll and (493) (623)
related expenses
Deferred revenues (69) (136)
Value added tax 177 (212)
payable
Warranty reserve (237) (22)
Government grants (395) (20)
repayable and
related loans
Other accrued (1,269) 2,517
liabilities
Net cash (used in) (1,029) 574
provided by operating
activities
CASH FLOWS FROM
INVESTING ACTIVITIES:
Purchases of property (329) (144)
and equipment
Payments relating to (1,763) (1,211)
acquisitions
Net cash used in (2,092) (1,355)
investing activities
CASH FLOWS FROM
FINANCING ACTIVITIES:
Principal payments on (223) (300)
capital leases
Issuance of ordinary 87 77
shares
Repurchase of ordinary (512)
shares -
Expense of share issue (18)
-
Proceeds under bank 1,020
overdraft facility -
Net cash provided by 372 (241)
(used in) financing
activities
Net decrease in cash and (2,749) (1,022)
cash equivalents
Effect of exchange rate 131 344
changes on cash and cash
equivalents
Cash and cash 42,559 6,750
equivalents at beginning
of period
Cash and cash $ 39,941 $ 6,072
equivalents at end of
period
Supplemental disclosure
of cash flow information
Interest paid $ 49 $ 26
Taxes paid $ 59 $ 108
Supplemental disclosure
of non-cash flow
information
Acquisition of $ 87 $ 331
property and equipment
under capital leases
TRINTECH GROUP PLC
PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS EXCLUDING THE
EFFECT OF AMORTIZATION, DEPRECIATION, STOCK COMPENSATION, RESTRUCTURING
CHARGES, ACQUISITION ADJUSTMENTS & INVENTORY WRITE DOWNS
(U.S. dollars in thousands, except share and per share data)
Three months Six months
ended July 31, ended July 31,
2003 2002 2003 2002
Revenue:
Product $ 1,820 $ 1,824 $ 4,393 $ 3,623
License 5,875 5,836 11,365 11,023
Service 2,358 3,242 4,516 6,314
Total Revenue 10,053 10,902 20,274 20,960
Cost of
revenue:
Product 1,473 2,038 3,473 3,506
License 1,006 1,244 2,034 2,414
Service 1,719 2,179 3,263 4,673
Total Cost of
Revenue 4,198 5,461 8,770 10,593
Gross margin 5,855 5,441 11,504 10,367
Operating
expenses:
Research & 1,909 2,384 3,757 5,395
development
Sales & 2,253 2,569 4,537 5,669
marketing
General & 2,445 3,336 5,039 6,883
administrative
Total 6,607 8,289 13,333 17,947
operating
expenses
Income (loss) ( 752) (2,848) (1,829) (7,580)
from
operations
Interest 60 205 160 402
income, net
Exchange 159 195 155 307
gain, net
Income (loss)
before
provision for (533) (2,448) (1,514) (6,871)
income taxes
Provision _ (48) _ (108)
for income
taxes
Net income $ (533) $ (2,496) $ (1,514) $ (6,979)
(loss)
Basic and
diluted net
income (loss)
per Ordinary $ (0.02) $ (0.08) $ (0.05) $ (0.23)
Share
Shares used in
computing basic
and diluted net
income (loss) 30,156,466 30,561,435 30,274,558 30,553,301
per Ordinary
Share
Basic and
diluted net
income (loss)
per equivalent $ (0.04) $ (0.16) $ (0.10) $ (0.46)
American
Depositary Share
TRINTECH GROUP PLC
RECONCILIATION OF NON-GAAP PRO FORMA CONDENSED STATEMENTS OF OPERATIONS
TO GAAP CONDENSED STATEMENTS OF OPERATIONS
(U.S. dollars in thousands, except share and per share data)
Three months Three months
ended July 31, 2003 ended July 31, 2002
GAAP As Non-GAAP GAAP As Non-GAAP
Reported Adjusts Pro Forma Reported Adjusts Pro Forma
Revenue:
Product $ 1,820 $ _ $ 1,820 $ 1,824 $ _ $ 1,824
License 5,875 _ 5,875 5,836 _ 5,836
Service 2,358 _ 2,358 3,242 _ 3,242
Total Revenue 10,053 _ 10,053 10,902 _ 10,902
Cost of
revenue:
Product 1,489 (16)(1) 1,473 2,179 (141)(1) 2,038
License 1,338 (332)(2) 1,006 2,424 (1,180)(2) 1,244
Service 1,719 _ 1,719 2,179 _ 2,179
Total Cost of
Revenue 4,546 (348) 4,198 6,782 (1,321) 5,461
Gross Margin 5,507 348 5,855 4,120 1,321 5,441
Operating
expenses:
Research & 2,007 (98)(1) 1,909 2,526 (142)(1) 2,384
development
Sales & 2,261 (8)(1) 2,253 2,603 (34)(1) 2,569
marketing
General & 2,733 (288)(1) 2,445 3,783 (447)(1) 3,336
administrative
Restructuring 434 (434) _ _ _ _
charge
Amort. of 98 (98) _ 643 (643) _
purchased
intang. assets
Stock 6 (6) _ 21 (21) _
compensation
Total 7,539 (932) 6,607 9,576 (1,287) 8,289
operating
expenses
Income (loss)(2,032) 1,280 (752) (5,456) 2,608 (2,848)
from
operations
Interest 60 _ 60 205 _ 205
income, net
Exchange 159 _ 159 195 _ 195
gain, net
Income (loss)(1,813) 1,280 (533) (5,056) 2,608 (2,448)
before
provision for
income taxes
Provision _ _ _ (48) _ (48)
for income
taxes
Net income $ (1,813) 1,280 (533) $ (5,104) 2,608 (2,496)
(loss)
Basic and
diluted net
income (loss)
per Ordinary
Share $ (0.06) 0.04 (0.02) $ (0.17) 0.09 (0.08)
Shares used in
computing basic
and diluted
net income
(loss) per
Ordinary
Share 30,156,466 _ 30,156,466 30,561,435 _ 30,561,435
Basic and
diluted net
income (loss)
per
equivalent
American
Depositary
Share $ (0.12) $ 0.08 $ (0.04) $ (0.33) $ 0.17 $ (0.16)
(1) Adjusted to exclude depreciation. The total depreciation charge was
$410,000 and $764,000 in the three months ended July 31, 2003 and
2002, respectively.
(2) Adjusted to exclude the amortization of acquired technology of
$332,000 and $1,180,000 in the three months ended July 31, 2003 and
2002, respectively.
TRINTECH GROUP PLC
RECONCILIATION OF NON-GAAP PRO FORMA CONDENSED STATEMENTS OF OPERATIONS
TO GAAP CONDENSED STATEMENTS OF OPERATIONS
(U.S. dollars in thousands, except share and per share data)
Six months Six months
ended July 31, 2003 ended July 31, 2002
GAAP As Non-GAAP GAAP As Non-GAAP
Reported Adjusts Pro Forma Reported Adjusts Pro Forma
Revenue:
Product $ 4,393 $ _ $ 4,393 $ 3,623 $ _ $ 3,623
License 11,365 _ 11,365 11,023 _ 11,023
Service 4,516 _ 4,516 6,314 6,314
Total Revenue 20,274 _ 20,274 20,960 _ 20,960
Cost of
revenue:
Product 3,508 (35)(1) 3,473 4,703 (1,197)(1)(3) 3,506
License 2,698 (664)(2) 2,034 4,773 (2,359)(2) 2,414
Service 3,263 _ 3,263 4,673 _ 4,673
-
Total Cost of 9,469 (699) 8,770 14,149 (3,556) 10,593
Revenue
Gross Margin 10,805 699 11,504 6,811 3,556 10,367
Operating
expenses:
Research & 3,945 (188)(1) 3,757 5,673 (278)(1) 5,395
development
Sales & 4,553 (16)(1) 4,537 5,738 (69)(1) 5,669
marketing
General & 5,604 (565)(1) 5,039 7,751 (868)(1) 6,883
administrative
Restructuring 434 (434) _ 3,500 (3,500) _
charge
Amort. of 196 (196) _ 1,286 (1,286) _
purchased
intang. assets
Goodwill
impairment
reversal on
adjust. of
acq. deferred
consideration (1,149) 1,149 _ _ _ _
Stock
compensation 20 (20) _ 42 (42) _
Total
operating
expenses 13,603 (270) 13,333 23,990 (6,043) 17,947
Income (loss)
from
operations (2,798) 969 (1,829) (17,179) 9,599 (7,580)
Interest
income, net 160 _ 160 402 402 _
Exchange
gain, net 155 _ 155 307 _ 307
Income (loss)
before
provision for
income taxes (2,483) 969 (1,514) (16,470) 9,599 (6,871)
Provision
for income
taxes _ _ _ (108) _ (108)
Net income $ (2,483) 969 (1,514) $(16,578) 9,599 (6,979)
(loss)
Basic and
diluted net
income (loss)
per Ordinary
Share $ (0.08) 0.03 (0.05) $ (0.54) 0.31 (0.23)
Shares used in
computing basic
and diluted
net income
(loss) per
Ordinary Share 30,274,558 _ 30,274,553 30,553,301 _ 30,553,301
Basic and
diluted net
income (loss)
per equivalent
American
Depositary
Share $ (0.16) $ 0.06 $(0.10) $ (1.09) $ 0.63 $ (0.46)
(1) Adjusted to exclude depreciation. The total depreciation charge was
$804,000 and $1,492,000 in the six months ended July 31, 2003 and
2002, respectively.
(2) Adjusted to exclude the amortization of acquired technology of
$664,000 and $2,359,000 in the six months ended July 31, 2003 and
2002, respectively.
(3) Adjusted to exclude a provision for loss in net realizable value for
excess inventory of $920,000 in the six months ended July 31, 2002.
The full report with tables can be downloaded from the following link: http://reports.huginonline.com/915219/122275.pdf