DUBLIN, Ireland and DALLAS, Nov. 24, 2004 (PRIMEZONE) -- Trintech Group Plc (Nasdaq:TTPA) (Prime Standard: TTP), a leading provider of transaction reconciliation and payment infrastructure solutions, today announced third quarter revenues of $15.1 million and profits of $434,000, equivalent to a basic and diluted net income per equivalent American Depositary Share (ADS) of $0.03.
Highlights
* Revenue growth of 44 percent in Q3 compared to corresponding quarter last year.
* Trintech maintains profitability in Q3, with a net income of $434,000 and an Adjusted EBITDA net income of $836,000. 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 October 31, 2004 was $0.03 compared with basic and diluted net loss per equivalent ADS of $0.08 for the corresponding quarter ended October 31, 2003.
* Trintech repurchased 67,720 shares for $338,000 under its share buy-back programme during the quarter.
Cyril McGuire, Chairman and Chief Executive Officer commenting on the results said: "I am delighted to report another strong set of results for Q3 with Trintech achieving healthy revenue growth and continued profitability. Performance across product and license was ahead of expectations, with Chip and PIN and treasury and cash management solutions contributing strongly to the underlying growth. We are continuing to make investment in new products and key new markets to strengthen our customer franchise."
Recent highlights include:
* Trintech announced that Shell selected and has deployed Trintech's PayWare SmartPIN software solution and Smart 5000 PIN Pads to enable smart card acceptance at its company-owned petrol stations in the UK and Ireland.
* Trintech announced that CIE Group, Ireland's state owned transportation company, selected Trintech's bank-accredited PayWare Merchant to automate the processing of tickets purchased using a debit or credit card, via unattended ticket vending machines. The vending machines are currently located in DART and Commuter railway stations with a roll out schedule to include mainline and regional stations in the coming months.
* Trintech announced that HMV - voted Retail Specialist Multiple of the Year and Best Music Retail Chain - selected Trintech's EMV certified Smart 5000 card system, following acquirer accreditation, to facilitate the acceptance of Chip and PIN enabled debit and credit cards. HMV is deploying approximately 2,000 Smart 5000 card systems throughout its 190 stores across the UK and Ireland.
* Trintech announced that Select Comfort, a leading US bed retailer and creator of the SLEEP NUMBER(R) bed, has selected ReconNET to automate the verification and reconciliation of its bank deposits, credit card transactions and disbursements for its retail and distribution channels. Select Comfort has also selected Trintech's DataFlow transaction network to complete the automation of its financial processes through collection, formatting and delivery of daily banking data.
* Trintech announced that Debenhams, a large UK department store, will deploy Trintech's total smart card solution suite to facilitate the acceptance of Chip and PIN transactions. Trintech's bank-accredited Smart 5000 PIN Pads, SmartPIN Software Developers Kit (SDK) and Estate Management System (EMS) have been selected to provide Debenhams with the technology required to migrate to smart cards.
* Trintech announced that Greene King Pub Company, one of the UK's traditional pub and hotel operators, implemented ReconNET to automate the verification and reconciliation of its cash banking, ATM and credit card transactions. ReconNET has enabled Greene King Pub Company to streamline its cash management processes, and provide effective risk management and reporting across its UK pub sites.
* Trintech announced that the University of Pittsburgh Medical Center (UPMC), one of the largest, non-profit integrated health care systems in the United States, selected ReconNET to automate the verification and reconciliation of its bank deposit and credit card transactions. ReconNET enables UPMC to streamline its cash management processes and provide reporting across its health system network.
* Trintech announced the release of ReconNET 7.0, the latest version of its leading industry-standard reconciliation and account balancing system. The release adds new features that extend its existing financial controls and reporting capabilities to facilitate audits and increase customers' compliance with regulatory requirements such as the Sarbanes-Oxley Act. ReconNET 7.0 also includes a number of enhancements that further increase the system's ease of use for daily reconciliation, research and period-end reporting.
* The Association for Financial Professionals (AFP) and Trintech signed an agreement that licenses Trintech to include the 2004 AFP Service Codes CD-ROM in its product offerings. The inclusion of the AFP Service Codes enhances Trintech solutions by providing customers with a vital resource that supplements the analysis and reconciliation of their commercial banking fees.
Results Overview:
Revenue for the nine months ended October 31, 2004 was $40.7 million compared with $30.8 million for the nine months ended October 31, 2003, an increase of 32 percent. Third quarter revenue increased 44 percent to $15.1 million compared with $10.5 million for the corresponding quarter last year.
Product revenue for the nine months ended October 31, 2004 increased 96 percent to $13.5 million this year from $6.9 million last year. Q3 product revenue increased 122 percent to $5.6 million compared with the corresponding quarter last year.
Software license revenue for the nine months ended October 31, 2004 remained flat at $17.1 million. Q3 software license revenue increased 9 percent to $6.2 million from $5.7 million in the corresponding quarter last year.
Service revenue for the nine months ended October 31, 2004 increased 48 percent to $10.1 million from $6.8 million last year. Service revenue increased 45 percent to $3.3 million this quarter compared with the corresponding quarter last year. The year on year increase includes post-acquisition revenues of the DataFlow Services business.
Total gross margin for the nine months ended October 31, 2004 was $24 million, an increase of 42 percent from $16.9 million in the corresponding period last year. Total gross margin for the third quarter was $8.7 million, an increase of 43 percent from $6.1 million in the corresponding quarter last year.
Total operating expenses for the nine months ended October 31, 2004 increased 11 percent to $23.2 million from $21.0 million in the corresponding period last year. Adjusted EBITDA operating expenses for the nine months ended October 31, 2004 were $21.9 million, an increase of 9 percent on the Adjusted EBITDA operating expenses for the corresponding period last year.
Operating expenses in Q3 increased 10 percent to $8.1 million compared to the corresponding quarter last year. Adjusted EBITDA operating expenses for Q3 were $7.8 million, an increase of 17 percent on the Adjusted EBITDA operating expenses for Q3 last year.
Trintech's balance sheet remains strong with closing net cash and cash equivalent balances of $38.8 million as of October 31, 2004. Net cash generation for Q3 was $224,000. Cash generated from operating activities in the third quarter was approximately $757,000 which was primarily used to make repurchases of shares of $338,000, make acquisition related payments of $117,000 in respect of acquisitions made in prior periods and to purchase capital equipment for $150,000.
During the quarter, Trintech repurchased 67,720 shares at a total cost of $338,000 under its ongoing stock repurchase program. As of October 31, 2004, approximately $4.1 million remained available for future stock repurchases under this program.
"Trintech's third quarter results again 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. These strong results have allowed us to invest in future growth opportunities, such as OEM payment solutions, whilst still delivering increased profitability and cash generation", said Paul Byrne.
Trintech will host a conference call to discuss its financial results and business outlook beginning at 15:30hrs (UK Time) today, November 24th 2004. Please see advisory for information on the call.
A web simulcast of Trintech's conference call reviewing our performance for Q3 fiscal year 2005 and our business outlook for Q4 fiscal year 2005 will be broadcast live today, Wednesday November 24th, 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: 2136717#
About Trintech
Trintech is a leading provider of transaction reconciliation and payment infrastructure solutions to retailers, financial institutions, payment processors and network operators globally. Built on 17 years of experience, Trintech's solutions manage each area of the payment transaction cycle from authentication, authorization, settlement, dispute resolution and reconciliation -- enabling its customers to reduce transaction 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 2074000), 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 (Tel: +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, growth opportunities such as OEM payment solutions, business focus, the planned roll out of Trintech's products with third parties, including CIE Group 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 CIE roll out, 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 1standards 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 July 31, 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)
October 31, January 31,
2004 2004
ASSETS
Current assets:
Cash and cash equivalents $ 39,965 $ 36,864
Restricted cash 394 1,211
Accounts receivable, net of
allowance for doubtful
accounts of
$782 and $1,595 9,292 9,800
respectively
Inventories 895 824
Value added taxes 548 471
Prepaid expenses and other 3,237 2,706
assets
Total current 54,331 51,876
assets
Property and equipment, net 811 988
Other non-current assets 3,360 3,994
Goodwill, net of
accumulated amortization
and impairment of $84,471
at October 31, 2004 and 7,459 7,459
January 31, 2004
respectively
Total assets $ 65,961 $ 64,317
LIABILITIES AND
SHAREHOLDERS' EQUITY
Current liabilities:
Bank overdraft $ 1,539 $ -
Accounts payable 5,053 4,804
Accrued payroll and related 1,358 1,864
expenses
Other accrued liabilities 5,436 5,699
Value added taxes 1,106 819
Warranty reserve 473 356
Deferred revenue 8,578 8,739
Total current 23,543 22,281
liabilities
Non-current liabilities:
Capital leases due after 9 84
more than one year
Government grants repayable 162 157
and related loans
Provision for lease 91 441
abandonment
Total non-current 262 682
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;
30,806,079 and
30,596,775 shares issued
and outstanding at
October 31, 2004 and 83 83
January 31, 2004,
respectively
Additional paid-in capital 246,164 245,965
Treasury shares (251,456
and 254,508 at October 31,
2004 and
January 31, 2004, (416) (268)
respectively)
Accumulated deficit (201,306) (202,175)
Accumulated other (2,369) (2,251)
comprehensive loss
Total 42,156 41,354
shareholders' equity
Total liabilities $ 65,961 $ 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 Nine months
ended October 31, ended October 31,
2004 2003 2004 2003
Revenue:
Product 5,606 2,522 13,539 6,915
License 6,197 5,676 17,093 17,041
Service 3,325 2,293 10,074 6,809
15,128 10,491 40,706 30,765
Total Revenue
Cost of
revenue:
Product 4,115 1,893 9,567 5,401
License 908 1,389 2,791 4,087
Service 1,423 1,139 4,313 4,402
6,446 4,421 16,671 13,890
Total Cost of
Revenue
Gross Margin 8,682 6,070 24,035 16,875
57% 58% 59% 55%
Operating
expenses:
Research & 2,459 2,115 6,790 6,060
development
Sales & 2,376 2,139 6,881 6,692
marketing
General & 3,075 2,727 8,725 8,331
administrative
- 273 351 707
Restructuring
charge
Amortization 212 98 635 294
of purchased
intangible
assets
Adjustment of - (249)
acquisition - -
liabilities
Adjustment of - (1,149)
acquisition - -
deferred
consideration
Stock 7 101 27
compensation -
Total 8,122 7,359 23,234 20,962
operating
expenses
Income (loss) 560 (1,289) 801 (4,087)
from operations
Interest 106 57 262 217
income, net
Exchange (95) (22) 19 133
(loss) gain,
net
Income (loss)
before
provision for 571 (1,254) 1,082 (3,737)
income taxes
Provision (137) - (213) -
for income
taxes
Net income 434 (1,254) 869 (3,737)
(loss)
Basic net income 0.01 (0.04) 0.03 (0.12)
(loss) per
Ordinary Share
Shares used in
computing basic
net
income (loss) 30,810,589 30,185,255 30,766,712 30,244,629
per Ordinary
Share
Diluted net 0.01 (0.04) 0.03 (0.12)
income (loss)
per Ordinary
Share
Shares used in
computing
diluted net
income (loss) 32,323,029 30,185,255 32,304,518 30,244,629
per Ordinary
Share
Basic net income 0.03 (0.08) 0.05 (0.25)
(loss) per
equivalent ADS
Diluted net 0.03 (0.08) 0.05 (0.25)
income (loss)
per equivalent
ADS
The full press release including all financial tables can be downloaded from the following link: http://hugin.info/130706/R/970104/141900.pdf