DUBLIN, Ireland and DALLAS, Nov. 26, 2003 (PRIMEZONE) -- Trintech Group Plc (Nasdaq:TTPA) (Prime Standard:TTP), a leading provider of transaction management and payment infrastructure solutions, today announced third quarter revenues of $10.5 million and a basic and diluted net loss per equivalent American Depositary Share (ADS) of ($0.08).
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Highlights
-- Positive cashflow for Q3. Cash generated was $83,000 for Q3
with Trintech's balance sheet remaining strong with closing
net cash and cash equivalent balances of $41.6 million.
-- Gross margins continue to expand to 58% in Q3 from 55% the
previous quarter.
-- Operating expenses for Q3 fell strongly by 23%, compared to the
corresponding period last year.
-- Basic and diluted net loss per equivalent ADS declined 72%
in Q3, compared to the corresponding period last year. Basic
and diluted net loss per equivalent ADS for the quarter ended
October 31, 2003 was $(0.08) compared with basic and diluted net
loss per equivalent ADS of $(0.30) for the corresponding quarter
ended October 31, 2002.
Cyril McGuire, Chairman and Chief Executive Officer commenting on the results said "Trintech's results for Q3 were solid and in line with market expectations, with key performance metrics remaining on track. Our financial position remains strong and we achieved another important milestone in this quarter of turning cashflow positive from a group perspective. Our goal is to make Trintech more competitive, more focused and better positioned to pursue new growth opportunities. Our strategy is to concentrate on our key profitable products and leverage our core competency in transaction and payment solutions into new growth markets. I am confident that Trintech is strategically, operationally and financially well positioned to deliver profitability in the future."
Recent highlights include:
-- Trintech announced the availability of its new Statement Delivery service for business access to commercial bank account data. With this new service offering, Trintech provides businesses with timely access to validated financial data that can reduce their exposure to fraud, maximize the use of their available funds and automate manual reconciliation processes.
Following on from this announcement, Trintech expanded its position in the market by acquiring CW & Associates, Inc, trading as DataFlow Services, a private company, for a total consideration of approximately $5 million. DataFlow, based in Dallas, provides a data delivery service supporting customer's bank reconciliation processes by aggregating bank account statement data and delivering it to customers daily in electronic form. The company employs 39 staff and currently services approximately 90 customers of which 60 are also Trintech FMS customers.
-- Trintech announced that Whitbread Group PLC, the UK's leading hotel, leisure and restaurants group, selected ReconNET 6.6, ReconNET Online and ExecuNET to automate reconciliation of its deposit and credit card transactions, streamline its cash management processes, and provide effective risk management and reporting across its businesses. Whitbread Group PLC has more than 1,300 UK locations under such household names as Travel Inn, Marriott Hotels, Beefeater, Brewers Fayre, Brewsters, Costa, TGI Friday's, Pizza Hut, and the market-leading David Lloyd Leisure brand.
-- Trintech announced that Celtic F.C., one of the Scottish Premier Leagues' top clubs, selected Trintech's bank-accredited PayWare Merchant to automate the processing of all card payments related to ticket sales. Celtic F.C. deployed Trintech's PayWare solution at the club's headquarters in Glasgow. The server-based solution will manage all card transactions from all the club's ticket sale operations including tickets sold over the Internet.
-- Trintech announced that Marsh Supermarkets Inc. implemented PayWare EPS to automate the delivery of gift certificates. Marsh, a leading supermarket chain in the US, implemented PayWare EPS at its Indianapolis, Indiana, headquarters and the solution is currently being rolled out in 120 stores in the Midwest.
-- Trintech announced that Capita Business Services Ltd, part of the Capita Group Plc, the largest and fastest growing professional support service organization in the UK, implemented Trintech's bank-accredited PayWare Merchant solution to process all its card payment transactions for TV Licensing applications. PayWare Merchant, a leading EFT card processing solution, was deployed at Capita's offices to handle television license payments.
-- Trintech announced that it achieved Visa PED (PIN Entry Device) certification on its bank-accredited Smart 5000 and Compact 950 PINPad terminals. This certification followed Trintech's success in being the first company to receive acquirer approval for its integrated point-of-sale EMV Chip and PIN solution.
-- Trintech announced its upcoming release of a new platform for complete Payment Lifecycle Management (PLM). The web-based platform will give high-volume payment and disbursement issuers in financial services, insurance, healthcare and other industries increased protection from fraud, access to up-to-date payment information throughout the organization to improve customer service, and management tools that streamline their financial reporting to ensure accuracy of audits and compliance with unclaimed property laws.
-- 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.
Results Overview:
Revenue for the nine months ended October 31, 2003 was $30.8 million compared with $32.4 million for the nine months ended October 31, 2002, a decrease of 5%. Third quarter revenue decreased 8% to $10.5 million compared with $11.4 million for the corresponding quarter last year.
Product revenue for the nine months ended October 31, 2003 increased 7% to $6.9 million this year from $6.5 million last year. Q3 product revenue decreased by $0.3 million compared with the corresponding quarter last year.
License revenue for the nine months ended October 31, 2003 increased 2% to $17.0 million from $16.7 million. Q3 software license revenue was $5.7 million, a small increase compared to the corresponding quarter last year.
Service revenue for the nine months ended October 31, 2003 fell 26% to $6.8 million from $9.2 million last year. Service revenue decreased 20% to $2.3 million this quarter as compared to the corresponding quarter last year.
Total gross margin for the nine months ended October 31, 2003 was $16.9 million, an increase from $11.4 million in the corresponding period last year. Total gross margin for the third quarter was $6.1 million, an increase from $4.6 million in the corresponding quarter last year.
Total operating expenses for the nine months ended October 31, 2003 decreased by 37% to $21.0 million as compared to the corresponding period last year. Total operating expenses decreased by 23% to $7.4 million this quarter as compared to the corresponding quarter last year.
Cash generated was $83,000 for Q3 with Trintech's balance sheet remaining strong with closing net cash and cash equivalent balances of $41.6 million. The positive cashflow for Q3 was after payments relating to acquisitions and restructuring of $0.9 million. During the quarter, the Company did not repurchase shares under its ongoing stock repurchase program. As of October 31, 2003, approximately $4.4 million remained available for future repurchases under this program.
"Trintech continues to execute on building the foundation for sustained profitability and enhanced shareholder value by focussing on revenue growth, margin expansion, stringent cost control and strong cash management. Gross margins expanded to 58% for Q3, operating expenses declined for the eleventh consecutive quarter, and following on from turning cash flow positive from an operating perspective in Q2, we have now reached the milestone of being overall cash flow positive for the third quarter," 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, November 26, 2003. Please see advisory for information on the call.
A web simulcast of Trintech's conference call reviewing our performance for Q3 fiscal year 2004 and our business outlook for Q4 fiscal year 2004 will be broadcast live today, Wednesday November 26, 2003 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 (6326383#).
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. 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, its ability to deliver profitability in the future, its ability to generate improved margins, cashflows and profits, its ability to bolster its market presence and build earnings momentum, and its ability to expand margins, reduce costs and 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 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 6-K for the fiscal quarter ended July 31, 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)
October 31, 2003 January 31, 2003
ASSETS
Current assets:
Cash and cash equivalents 38,963 42,559
Restricted cash 2,679 3,132
Accounts receivable, net of 7,334 10,085
allowance for doubtful accounts of
$1,960 and $1,884 respectively
Inventories 760 3,077
Value added taxes 301 617
Prepaid expenses and other assets 2,316 2,665
Total current assets 52,353 62,135
Property and equipment, net 1,119 1,674
Other non-current assets 1,821 3,095
Goodwill, net of accumulated 6,609 6,609
amortization and impairment of
$85,619 at October 31, 2003 and
January 31, 2003 respectively
Total assets 61,902 73,513
LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Accounts payable 2,889 4,130 Accrued payroll and related 1,748 2,439 expenses Other accrued liabilities 9,177 10,602 Value added taxes 526 365 Warranty reserve 525 625 Deferred revenue 7,548 8,394
Total current liabilities 22,413 26,555
Non-current liabilities: Capital leases due after more than 158 343 one year Government grants repayable and 148 137 related loans Deferred consideration - 475 Provision for lease abandonment 263 920
Total non-current liabilities 569 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 83 83
value: 100,000,000 shares
authorized; 30,228,907 and
30,523,413 shares issued and
outstanding at October 31, 2003
and January 31, 2003 respectively
Additional paid-in capital 245,682 245,622
Treasury shares (554,508 and (585) (140)
115,294 at October 31, 2003 and
January 31, 2003 respectively)
Accumulated deficit (202,752) (199,015)
Deferred stock compensation -- (34)
Accumulated other comprehensive (3,508) (1,433)
loss
Total shareholders' equity 38,920 45,083
Total liabilities and 61,902 73,513
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,
2003 2002 2003 2002
Revenue:
Product 2,522 2,853 6,915 6,476
License 5,676 5,685 17,041 16,708
Service 2,293 2,874 6,809 9,188
Total Revenue 10,491 11,412 30,765 32,372
Cost of revenue:
Product 1,893 2,417 5,401 7,120
License 1,389 2,299 4,087 7,072
Service 1,139 2,064 4,402 6,737
Total Cost of Revenue 4,421 6,780 13,890 20,929
Gross Margin 6,070 4,632 16,875 11,443
Operating
expenses:
Research &
development 2,115 2,547 6,060 8,220
Sales &
marketing 2,139 2,310 6,692 8,048
General &
administrative 2,727 3,235 8,331 10,986
Restructuring
charge 273 770 707 4,270
Amortization
of purchased
intangible assets 98 643 294 1,929
Goodwill
impairment
reversal on the
adjustment of
acquisition
deferred
consideration -- -- (1,149) --
Stock
compensation 7 21 27 63
Total operating expenses 7,359 9,526 20,962 33,516
Income (loss) from operations (1,289) (4,894) (4,087) (22,073)
Interest
income, net 57 189 217 591
Exchange
(loss) gain, net (22) 148 133 455
Income (loss)
before
provision for
income taxes (1,254) (4,557) (3,737) (21,027)
Provision for
income taxes -- -- -- (108)
Net income (loss) (1,254) (4,557) (3,737) (21,135)
Basic and diluted net income (loss) per Ordinary Share (0.04) (0.15) (0.12) (0.69)
Shares used in computing basic and diluted net income (loss) per Ordinary Share 30,185,255 30,592,475 30,244,629 30,566,132 Basic and diluted net income (loss) per equivalent American Depositary Share (0.08) (0.30) (0.25) (1.38)
TRINTECH GROUP PLC
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (U.S. dollars in thousands)
Nine months ended October 31,
2003 2002
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) (3,737) (21,135)
Adjustments to reconcile net income
(loss) to
net cash (used in) provided by
operating activities:
Depreciation and amortization 2,410 8,062
Stock compensation 27 63
(Profit) on marketable securities -- (453)
Purchase of marketable securities -- (202,368)
Sale of marketable securities -- 211,630
Effect of changes in foreign currency
exchange rates (1,246) (1,147)
Changes in operating assets and
liabilities:
Reductions to restricted cash
deposits 453 2,237
Inventories 2,385 (1,179)
Accounts receivable 3,136 6,168
Prepaid expenses and other assets 327 1,041
Value added tax receivable 367 361
Accounts payable (1,427) (1,958)
Accrued payroll and related
expenses (691) (881)
Deferred revenues (1,037) 174
Value added tax payable 162 (134)
Warranty reserve (141) (296)
Government grants repayable and
related loans (395) (20)
Other accrued liabilities (838) 1,143
Net cash (used in) provided by
operating activities (245) 1,308
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment (506) (231)
Payments relating to acquisitions (2,344) (1,918)
Net cash used in investing activities (2,850) (2,149)
CASH FLOWS FROM FINANCING ACTIVITIES: Principal payments on capital leases (332) (390) Issuance of ordinary shares 134 103 Repurchase of ordinary shares (512) -- Expense of share issue -- (20)
Net cash used in financing activities (710) (307)
Net decrease in cash and cash equivalents (3,805) (1,148) Effect of exchange rate changes on cash and cash equivalents 209 363 Cash and cash equivalents at beginning of period 42,559 6,750 Cash and cash equivalents at end of period 38,963 5,965
Supplemental disclosure of cash flow
information
Interest paid 71 39
Taxes paid 59 108
Supplemental disclosure of non-cash
flow information
Acquisition of property and
equipment under capital leases 87 331
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