Trintech Reports Fourth Quarter and Fiscal Year 2005 Financial Results

Trintech Reports Net Income of $1.2m for the Quarter and Revenue Growth of 23% to $15.1m; Net Income of $2m for the Year and Revenue Growth of 30% to $55.8m


DUBLIN, Ireland and DALLAS, Feb. 23, 2005 (PRIMEZONE) -- Trintech Group Plc (Nasdaq:TTPA) (Prime Standard:TTP), a leading provider of transaction reconciliation and payment infrastructure solutions, today announced fourth quarter revenues of $15.1 million and full fiscal year revenues of $55.8 million. Trintech also announced profits of $1.2 million, equivalent to a basic and diluted net income per equivalent American Depositary Share (ADS) of $0.07, for the fourth quarter and profits of $2 million, equivalent to a basic and diluted net income per equivalent American Depositary Share (ADS) of $0.13 and $0.12, for the full fiscal year.

Highlights


 -- Revenue growth of 23 percent in Q4 compared to corresponding 
    quarter last year.

 -- Revenue growth of 30 percent for the full fiscal year compared to 
    the prior fiscal year.

 -- Trintech maintains profitability in Q4, with a net income of $1.2 
    million 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.

 -- Full fiscal year profitability was $2 million and Adjusted EBITDA 
    net income for the full fiscal year was $3.4 million.

 -- Basic and diluted net income per equivalent ADS for the quarter 
    ended January 31, 2005 was $0.07 compared with basic and diluted 
    net income per equivalent ADS of $0.04 for the corresponding 
    quarter ended January 31, 2004.

 -- Basic and diluted net income per equivalent ADS for the year ended 
    January 31, 2005 was $0.13 and $0.12 compared with basic and 
    diluted net loss per equivalent ADS of $0.21 for the corresponding 
    year ended January 31, 2004.

Cyril McGuire, Chairman and Chief Executive Officer commenting on the results said: "Trintech's performance in Q4 and fiscal 2005 has been very solid with strong revenue and record profit growth. Our business continues to strengthen in our core markets of Funds Management and Reconciliation solutions with Chip and PIN solutions contributing strongly to the underlying growth. These results, along with our focused product set and global customer base, demonstrate the robustness of our business model which will position the company to deliver continued profitable growth and shareholder value."

Recent highlights include:

-- Trintech announced that Shell selected Trintech's PayWare SmartPIN software solution and Smart 5000 PIN Pads to enable smart card acceptance at all its company-owned petrol stations in the U.K. and Ireland.

-- Trintech announced that Faber, Coe & Gregg, a retailer of sundries, periodicals and paperbacks, selected ReconNET to automate the verification and reconciliation of bank deposits for its 70 locations. The installation of ReconNET will enable the company to perform daily deposit verification and reconciliation to reduce costs and gain greater reporting and financial controls.

-- Trintech announced that Friendly Ice Cream Corporation, a restaurant company and ice cream manufacturer, selected ReconNET to automate the verification and reconciliation of its credit card, bank deposits and gift card transactions for its 358 company-owned Friendly's restaurants. The installation of ReconNET will enable the company to streamline its daily reconciliation processes, reduce costs and gain greater reporting and financial controls.

-- Trintech announced that Ratner Companies, one of the industry's largest salon chains with nearly 900 salons and over 10,000 stylists, selected Trintech's ReconNET, DataFlow transaction network and Bank Fee Analysis to optimize funds management processes. Ratner Companies will automate the verification and reconciliation of its bank deposits with ReconNET, using Trintech's DataFlow Transaction Network to collect, format and deliver its daily banking data.

-- Trintech announced that S&K Famous Brands, a retailer of menswear with stores in 27 states, selected Trintech's DataFlow Transaction Network to collect, format and deliver daily banking data, and ReconNET to automate the verification and reconciliation of its cash and checks with its banks.

-- Trintech announced an expanded agreement that enables SunGard Treasury Systems to offer Trintech's Bank Fee Analysis system to its customers. Trintech's Bank Fee Analysis solution is designed to help businesses reduce bank fees and standardize fee reporting through automation of the analysis of monthly electronic bank statements.

-- Trintech announced that it had been granted a Terminal Quality Management (TQM) label from MasterCard for its range of industry-leading Chip and PIN terminals for point-of-sale and unattended environments.

-- Trintech announced that its application to revoke the admission of its American Depositary Shares (ADSs) had been approved by the Frankfurt Stock Exchange. The revocation will be effective on May 11, 2005. The Company re-affirmed its commitment to maintain its listing on the NASDAQ National Market.

Results Overview: Revenue for the year ended January 31, 2005 was $55.8 million compared with $43.1 million for the year ended January 31, 2004, an increase of 30 percent. Fourth quarter revenue increased 23 percent to $15.1 million compared with $12.3 million for the corresponding quarter last year.

Product revenue for the year ended January 31, 2005 increased 83 percent to $18.8 million this year from $10.3 million last year. Q4 product revenue increased 56 percent to $5.3 million compared with the corresponding quarter last year.

Software license revenue for the year ended January 31, 2005 increased 3 percent to $23.6 million. Q4 software license revenue increased 11 percent to $6.5 million from $5.8 million in the corresponding quarter last year.

Service revenue for the year ended January 31, 2005 increased 35 percent to $13.4 million from $9.9 million last year. Service revenue increased 7 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 year ended January 31, 2005 was $33.2 million, an increase of 37 percent from $24.2 million in the corresponding period last year. Total gross margin for the fourth quarter was $9.1 million, an increase of 26 percent from $7.3 million in the corresponding quarter last year.

Total operating expenses for the year ended January 31, 2005 increased 14 percent to $31.7 million from $27.7 million in the corresponding period last year. Adjusted EBITDA operating expenses for the year ended January 31, 2005 were $30 million, an increase of 17 percent on the Adjusted EBITDA operating expenses for the corresponding period last year.

Operating expenses in Q4 increased 26 percent to $8.4 million compared to the corresponding quarter last year. Adjusted EBITDA operating expenses for Q4 were $8.1 million, an increase of 31 percent 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 $39.2 million as of January 31, 2005. Net cash generation for Q4 was $413,000. Cash generated from operating activities in the fourth quarter was approximately $587,000, cash generated from the issuance of ordinary shares was $105,000. Cash generated was partially offset by acquisition related payments of $127,000 in respect of acquisitions made in prior periods and $143,000 for the purchase of capital equipment.

During the quarter, Trintech did not repurchase shares under its ongoing stock repurchase program. As of January 31, 2005, approximately $4.1 million remained available for future stock repurchases under this program.

"Trintech's fourth 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 continued to allow us to invest in future growth opportunities, such as unattended payment solutions, whilst still delivering increased profitability and cash generation", said Paul Byrne, President and 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 23, 2005. Please see advisory for information on the call.

A web simulcast of Trintech's conference call reviewing our performance for Q4 fiscal year 2005 and our business outlook for Q1 fiscal year 2006 will be broadcast live today, Wednesday February 23rd, 2005 at 3:30 PM (U.K. 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: 2563218#

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 18 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 U.S. 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 and Trintech's ability to successfully execute its business strategy and deliver continued growth and shareholder value. 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, 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 October 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)

                                  January 31,          January 31,
                                    2005                  2004

 ASSETS
 Current assets:
 Cash and cash equivalents   $            39,407   $            36,864
 Restricted cash                             394                 1,211
 Accounts receivable, net of
 allowance for doubtful
 accounts of
    $787 and $1,595                        8,338                 9,800
 respectively
 Inventories                               1,184                   824
 Value added taxes                           531                   471
 Prepaid expenses and other                3,748                 2,706
 assets

           Total current assets           53,602                51,876
 
 Property and equipment, net                 824                   988
 Other non-current assets                  3,148                 3,994
 Goodwill, net of accumulated
 amortization and impairment
 of $84,471
  at January 31, 2005 and                  8,613                 7,459
 January 31, 2004
 respectively

          Total assets      $            66,187   $            64,317

 LIABILITIES AND
 SHAREHOLDERS' EQUITY
 Current liabilities:
 Bank overdraft              $               568   $               -
 Accounts payable                          4,806                 4,804
 Accrued payroll and related               1,884                 1,864
 expenses
 Other accrued liabilities                 5,810                 5,699
 Value added taxes                           630                   819
 Warranty reserve                            395                   356
 Deferred revenue                          8,946                 8,739

    Total current liabilities             23,039                22,281

 Non-current liabilities:
 Capital leases due after                    -                      84
 more than one year
 Government grants repayable                 -                     157
 and related loans
 Provision for lease                         -                     441
 abandonment

   Total non-current liabilities             -                     682
 
 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;
    30,908,635 and
 30,596,775 shares issued
 and outstanding at
    January 31, 2005 and                      84                    83
 January 31, 2004,
 respectively
 Additional paid-in capital              246,283               245,965
 Treasury shares (251,456
 and 254,508 at January 31,
 2005 and
 January 31, 2004,                         (416)                 (268)
 respectively)
 Accumulated deficit                   (200,154)             (202,175)
 Accumulated other                       (2,649)               (2,251)
 comprehensive loss


           Total                          43,148                41,354
 shareholders' equity

           Total liabilities $            66,187   $            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               Twelve months
                     ended January 31,           ended January 31,

                      2005           2004         2005         2004

 Revenue:
    Product       $       5,309    $   3,403   $   18,848    $  10,318
    License               6,474        5,826       23,567       22,867
    Service               3,306        3,077       13,380        9,886

                         15,089       12,306       55,795       43,071
 Total Revenue

 Cost of
 revenue:
    Product               3,521        2,185       13,088        7,586
    License                 934        1,226        3,725        5,313
    Service               1,499        1,618        5,812        6,020

           Total          5,954        5,029       22,625       18,919
 Cost of Revenue

 Gross Margin             9,135        7,277       33,170       24,152
                            61%          59%          59%          56%
 Operating
 expenses:
    Research &            2,378        2,220        9,169        8,280
 development
    Sales &               2,591        1,997        9,473        8,689
 marketing
    General &             3,283        2,256       12,008       10,587
 administrative
                           (63)           38          288          745
 Restructuring
 charge
    Amortization            212          213          846          507
 of purchased
 intangible
 assets
    Adjustment of           -            -          (249)          -
 acquisition
 liabilities
    Adjustment of           -            -            -        (1,149)
 acquisition
 deferred
 consideration
    Stock                               (27)          116          -
 compensation                15


 Total                    8,416        6,697       31,651       27,659
  operating
  expenses

 Income (loss)              719          580        1,519      (3,507)
 from operations

    Interest                166           51          428          268
 income, net
    Exchange gain           178         (54)          197           79
 (loss), net
 Income (loss)
 before
 provision for            1,063          577        2,144      (3,160)
 income taxes


    Provision for            90          -          (123)          -
 income taxes

 Net income       $       1,153    $     577   $    2,021    $ (3,160)
 (loss)


 Basic net income $        0.04    $    0.02   $     0.07    $  (0.10)
 (loss) per
 Ordinary Share


 Shares used in
 computing basic
 net
  income (loss)      30,864,544   30,544,851   30,786,268   30,314,419
 per Ordinary
 Share


 Diluted net      $        0.04    $    0.02   $     0.06    $  (0.10)
 income (loss)
 per Ordinary
 Share

 Shares used in
 computing
 diluted net
  income (loss)      32,625,270   31,284,015   32,361,102   30,314,419
 per Ordinary
 Share

 Basic net income $        0.07    $    0.04   $     0.13    $  (0.21)
 (loss) per
 equivalent ADS
 Diluted net      $        0.07    $    0.04   $     0.12    $  (0.21)
 income (loss)
 per 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,
                      2005            2004          2005       2004

 Net income      $        1,153   $         577   $  2,021   $ (3,160)
 (loss)

 Adjustments:
                            146             282        723       1,417
 Depreciation
                            212             369        846       1,643
 Amortization of
 purchased
 intangible
 assets
      Adjustment            -               -        (249)         -
 of acquisition
 liabilities
      Goodwill
 impairment
 reversal on the
 adjustment
      of                    -               -          -       (1,149)
 acquisition
 deferred
 consideration
      Stock                                (27)        116         -
 compensation                15
                           (63)                        288         745
 Restructuring                               38
 charge
      Interest            (166)            (51)      (428)       (268)
 income, net
      Income               (90)             -          123         -
 taxes

 Adjusted Earnings   $    1,207       $   1,188          $     $ (772)
 Before Interest                                     3,440
 Taxation
 Depreciation and
 Amortization
 (EBITDA) net
 income (loss)

Note: Management believes Adjusted EBITDA net income (loss) 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 OPERATING EXPENSES
                     (U.S. dollars in thousands)

                         Three months               Twelve months
                       ended January 31,          ended January 31,
                      2005            2004          2005       2004


 Total operating $        8,416   $       6,697   $ 31,651   $  27,659
 expense


 Adjustments:
                                           (38)      (288)       (745)
 Restructuring               63
 charge
                          (128)           (267)      (656)     (1,972)
 Depreciation
                          (212)           (213)      (846)       (507)
 Amortization of
 purchased
 intangible
 assets
      Adjustment            -               -          249         -
 of acquisition
 liabilities
      Goodwill
 impairment
 reversal on the
 adjustment
      of                    -               -          -         1,149
 acquisition
 deferred
 consideration
      Stock                (15)              27      (116)         -
 compensation

 Adjusted EBITDA     $    8,124       $   6,206    $  29,994    $ 25,584
 operating                                              
 expenses

Note: Management believes Adjusted EBITDA operating expenses 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)
                                         Twelve months
                                       ended January 31,
                                  2005                    2004


 CASH FLOWS FROM
 OPERATING ACTIVITIES:
 Net income (loss)        $               2,021   $            (3,160)
 Adjustments to
 reconcile net income
 (loss) to
 net cash provided by
 operating activities:
    Depreciation and                      1,567                  3,061
    amortization
    Stock compensation                      116
                                                                   -
    Effect of changes                     (384)                    673
    in foreign currency
    exchange rates
    Changes in
    operating assets
    and liabilities:
        Reductions to                       817                  1,921
        restricted cash
        deposits
        Inventories                       (324)                  2,378
        Accounts                          1,776                  1,635
        receivable
        Prepaid                           (930)                     12
        expenses and
        other assets
        Value added tax                    (32)                    223
        receivable
        Accounts                          (224)                    301
        payable
        Accrued payroll                    (19)                  (685)
        and related
        expenses
        Deferred                             52                   (73)
        revenues
        Value added tax                   (236)                    411
        payable
        Warranty                             13                  (344)
        reserve
        Government                        (168)                  (399)
        grants
        repayable and
        related loans
        Other accrued                     (574)                (4,403)
        liabilities
 Net cash provided by                     3,471                  1,551
 operating activities
 CASH FLOWS FROM
 INVESTING ACTIVITIES:
 Purchases of property                    (528)                  (605)
 and equipment
 Payments relating to                     (771)                (6,855)
 acquisitions
 Net cash used in                       (1,299)                (7,460)
 investing activities


 CASH FLOWS FROM
 FINANCING ACTIVITIES:
 Principal payments on                    (380)                  (446)
 capital leases
 Issuance of ordinary                       403                    761
 shares
 Repurchase of ordinary                   (338)                  (512)
 shares
 Expense of share issue                    (10)
                                                                   -
 Proceeds under bank                        568
 overdraft facility                                                -

 Net cash provided by                       243                  (197)
 (used in) financing
 activities


 Net                                      2,415                (6,106)
 increase/(decrease) in
 cash and cash
 equivalents
 Effect of exchange                         128                    411
 rate changes on cash
 and cash equivalents
 Cash and cash                           36,864                 42,559
 equivalents at
 beginning of period
 Cash and cash            $              39,407   $             36,864
 equivalents at end of
 period

 Supplemental
 disclosure of cash
 flow information
    Interest paid         $                  30   $                 85
    Taxes paid            $                 584   $                110

 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/981809/145813.pdf



            

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