Trintech Reports Fourth Quarter and Fiscal Year 2006 Financial Results
Dublin, Ireland/Dallas, Texas - 1 March, 2006 - Trintech Group Plc (NASDAQ: TTPA), a leading provider of transaction reconciliation and payment infrastructure solutions, today announced fourth quarter revenues of $11.5 million and net income for the quarter of $2.1 million.
Revenue amounted to $11.5 million compared to $15.1 million in Q4 last year, primarily because of lower product revenues. The technical issues associated with certain hardware products have now been resolved.
Revenue decreased 13 percent for the fiscal year to $48.6 million compared to $55.8 million in the prior fiscal year.
Gross margin amounted to $6.0 million in Q4, representing 52% of revenue, compared to 61% in Q4 last year.
Gross margin amounted to $26.3 million in the fiscal year, representing 54% of revenue, compared to 59% in the prior fiscal year.
The successful mediation of litigation against the vendors of Checkline, resulted in a net gain on the legal settlement of $3.1 million being recorded during the quarter. Additionally, Trintech booked an increase in its warranty provision of $1.0 million relating to the resolution of technical issues associated with certain hardware products.
Trintech generated net income of $2.1 million in Q4 and broke-even on an Adjusted EBITDA net income basis.
Trintech incurred a loss of $1.5 million for the fiscal year, but generated an Adjusted EBITDA net income of $0.9 million.
Basic and diluted net income per equivalent ADS for the quarter ended January 31, 2006 was $0.14 and $0.13 respectively, compared with basic and diluted net income per equivalent ADS of $0.07 for the corresponding quarter ended January 31, 2005.
Basic and diluted net loss per equivalent ADS for the year ended January 31, 2006 was ($0.10) compared with basic and diluted net income per equivalent ADS of $0.13 and $0.12 respectively for the corresponding year ended January 31, 2005.
Cyril McGuire, Chairman and Chief Executive Officer, commenting on the results said “Trintech’s performance in Q4 was solid as we continue to invest in key products and markets. Our Funds Management Business achieved its performance targets and we continue to seek investment opportunities both organically and through acquisitions to scale this business globally. Our investment in new international markets and the acquisition of Assurity Technologies Inc are milestones in that profitable growth plan.”
He added, “Our investment program for Payments is focused on building a strong market position in the emerging unattended payment systems and integrated EFT market. Our go to market strategy will be further strengthened by our recent senior management appointment in this area who will lead this plan"
Recent Highlights include:
Earlier today, Trintech announced the acquisition of Assurity Technologies Inc., a private company, for a total consideration of up to $5 million. The consideration comprises an initial cash consideration of $2 million and a performance based earn-out over three years, which is estimated at between $2 million and $3 million. Trintech expects that the transaction will be accretive to earnings for the second half of the current fiscal year excluding the impact of any amortization of the purchase price.
Trintech announced that NationsRent selected Trintech’s ReconNET, DataFlow Transaction Network and Bank Fee Analysis software solutions to optimize their funds management processes. NationsRent will use ReconNET to automate the verification and reconciliation of its bank deposits, and the DataFlow Transaction Network to collect, format and deliver its daily banking data. Bank Fee Analysis is intended to further streamline the company’s finance and treasury processes and reduce costs by detecting and recovering fee overcharges.
Trintech announced that PayWare OpenPay was awarded the new Visa, MasterCard and JCB Payment Card Industry Certification for Encrypting PIN Pads (PCI EPP). The certification is another industry first for Trintech’s Unattended Payments Business and ensures that PayWare OpenPay customers are the first to achieve compliance with the latest standards for PIN security.
Trintech unveiled its latest unattended payment terminal at the Cartes 2005 Exposition in Paris, France. The OpenPay UPT 4000 is targeted at petrol stations, convenience stores and supermarkets that need a compact, powerful, pay-at-pump terminal that is compliant with the latest terminal security standards and technologies. Trintech’s primary route to market for this product will be through channel partners including pump manufacturers, forecourt Point-of-Sale suppliers and retail system integrators.
In partnership with Kyriba Corporation, a leading provider of real time, web-based, on-demand, cash management solutions, Trintech announced the availability of Treasure eNET, a treasury and cash management system that aggregates all banking, market and third-party data to and from financial partners through a unique data exchange point enabling enterprises to manage current and future cash flows centrally. As a fully hosted solution, Treasure eNET requires no local installation and can be deployed immediately to provide businesses with rich functionality, including dynamic cash positioning, cash flow forecasting, variance analysis, administrative controls to delegate workflow and Sarbanes-Oxley compliant controls.
Paul Byrne, President of Trintech, stated “The Funds Management business continues to perform strongly and we have commenced an investment program to drive reconciliation revenue growth in new vertical markets. Whilst these investments will have a negative impact on earnings in the short term, they, combined with the acquisition of Assurity Technologies Inc, open up opportunities in the broader corporate market and position Trintech for solid long term growth for FY07 and beyond.”
Revenue for the year ended January 31, 2006 was $48.6 million compared with $55.8 million for the year ended January 31, 2005, a decrease of 13 percent.
Product revenue for the year ended January 31, 2006 decreased 43 percent to $10.8 million this year from $18.8 million last year. Product revenue in the fourth quarter decreased 49 percent to $2.7 million compared with the corresponding quarter last year.
Software license revenue for the year ended January 31, 2006 remained at $23.6 million. In the fourth quarter, software license revenue decreased 19 percent to $5.2 million from $6.5 million in the corresponding quarter last year.
Service revenue for the year ended January 31, 2006 increased 6 percent to $14.2 million from $13.4 million last year. Service revenue increased 8 percent to $3.6 million for the fourth quarter compared to $3.3 million in the corresponding quarter last year.
Total gross margin for the year ended January 31, 2006 was $26.3 million, a decrease of 21 percent from $33.2 million in the corresponding period last year. Total gross margin for the fourth quarter was $6.0 million, a decrease of 35 percent from $9.1 million in the corresponding quarter last year.
Total operating expenses for the year ended January 31, 2006 decreased 8 percent to $29.1 million from $31.7 million in the corresponding period last year. Adjusted EBITDA operating expenses for the year ended January 31, 2006 were $30.2 million, an increase of 1 percent on the Adjusted EBITDA operating expenses for last year.
Operating expenses in the fourth quarter decreased 45 percent to $4.6 million compared to $8.4 million in the corresponding quarter last year. Adjusted EBITDA operating expenses in the fourth quarter were $6.9 million, a decrease of 16 percent on the Adjusted EBITDA operating expenses for the corresponding quarter last year.
Trintech’s balance sheet remains strong with cash and cash equivalent balances of $34.7 million as of January 31, 2006. Net cash usage for the twelve months ended January 31, 2006 was $4.4 million, which includes acquisition related payments of $1.2 million made in the first quarter of the fiscal year in respect of an acquisition made in a prior period. Capital expenditure during the same twelve-month period amounted to $1.1 million and primarily related to computer and tooling equipment and improvements to leasehold premises.
During the quarter ended January 31, 2006, Trintech did not repurchase any stock under its stock repurchase program. As of January 31, 2006, $3.8 million remained available for future repurchases under this program.
Trintech received 266,860 ADRs in February, 2006 as part of the settlement of the litigation taken by the company against the vendors of Checkline.
Trintech will host a conference call to discuss its financial results and business outlook beginning at 15:30hrs (UK Time) today, Wednesday March 1, 2006. Please see advisory for information on the call.
Download the complete press release, including financials
A web simulcast of Trintech’s conference call reviewing our performance for Q4 fiscal year 2006 and our business outlook for Q1 fiscal year 2007 will be broadcast live today, Wednesday, March 1, 2006 at 15:30 hrs (UK Time), 10:30 hrs (NY Time) and 07:30 hrs (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 (5480118#).
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 US at 15851 Dallas Parkway, Suite 855, Addison, TX 75001 (Tel: +1 972 701 9802), in Uruguay at Technology & Business Park, Zona America - Ruta 8 Km. 17.500, Of. 006 - Local 310, ZIP 91.600, Montevideo (Tel: + 598 2 518 2250) and in the UK at Beaconsfield Close, Hatfield, Hertfordshire, AL 10 8YZ (Tel: +44 (0) 1707 632 900). 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 the expected impact on earnings from the launch of OpenPay 4000, Trintech’s marketing plans for OpenPay UPT 4000, the company’s search for investment opportunities both organically and through acquisition, the market strategy of the company’s payments business, the company’s expectation that the Assurity acquisition will be accretive to earnings for the second half of the current fiscal year, excluding the impact of any amortization of the purchase price, and the market opportunities opened up by the Assurity acquisition, NationsRent’s expected use of ReconNET, DataFlow transaction network and bank fee analysis software solutions, the ability of Trintech’s operational discussions with certain of its customers regarding the resolution of certain hardware technical difficulties to form the basis for strong working relationships in the future and the ability of Trintech’s investment in its funds management business to position the company for growth in the 2007 fiscal year and beyond. Factors that could cause or contribute to such differences include Trintech’s ability to accurately predict future sales, its ability to accurately predict and meet customer needs and to successfully position itself in the market, Trintech’s ability to ensure the performance of its products and services, and its ability to improve the performance of its organization and ensure the long term health of its business. 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, 2005 and Form 6-K for the quarter ended October 31, 2005, filed with the US Securities and Exchange Commission (www.sec.gov). Lastly, Trintech assumes no obligation to update these forward-looking statements.
- Contact Information
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- Trintech Media Contact
- Trintech Group Plc
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