Trintech Announces 26% Growth in Revenues for Quarter 3 Fiscal 2007
Revenues of $6.7 million and Net Income of $1.8 million for the Quarter
Dublin, Ireland/Dallas, Texas – November 22, 2006 – Trintech Group Plc (NASDAQ: TTPA), a leading provider of financial software and technology services, today announced its third quarter fiscal year 2007 financial results. Following the sale of its payments systems business to VeriFone Holdings Inc., Trintech is required to present its financial results on a continuing and discontinued basis. This requirement has resulted in the presentation of financial results showing third quarter revenues for the continuing business (the Funds Management Systems business) of $6.7 million and adjusted EBITDA for the continuing business of $321,000. The net loss incurred in the quarter for the continuing business amounted to $18,000 and the net income generated for the continuing and discontinued businesses amounted to $1.8 million.
* Revenue for the continuing business amounted to $6.7 million compared to $5.3 million in Q3 last year, representing 26% growth in the Funds Management Systems (”FMS”) business.
* Gross profit for the continuing business amounted to $5.0 million in Q3, representing 75% of revenue, compared to $4.2 million and 79% in Q3 last year.
* Trintech has increased expenditure quarter on quarter in research and development for the FMS business from $667,000 in Q3 last year to $1.3 million in the same quarter this year. This investment is focused on enhancing the functionality of the FMS software platform with a view to targeting new vertical markets for its reconciliation suite of products. The investment has had a short term negative impact on earnings and will continue to do so through the end of the second quarter of fiscal 2008.
* Trintech has also increased expenditure quarter on quarter in sales and marketing for the FMS business from $1.1 million in Q3 last year to $2.1 million in the same quarter this year. This investment is targeted at growing the sales and distribution network for Trintech’s reconciliation products both in the USA and internationally.
* Trintech generated Adjusted EBITDA net income from continuing operations of $321,000 but incurred a small net loss of $18,000.
* Trintech generated a net loss from discontinued operations for the quarter of $3.5 million. This loss resulted from trading losses of the divested payments business of $949,000, lease termination costs associated with the Dublin facilities of $2.0 million and other rationalization costs amounting to $550,000.
* Trintech generated a profit on the sale of the payments business amounting to $5.3 million. The business was sold for $12.1 million of which $2.0 million is being retained in an escrow account for 18 months to address any claims that may arise under the representations and warranties given as part of the disposal of the business. In addition, the net assets of the business sold and fees / other transaction costs associated with the sale of the business have been deducted to arrive at the profit on sale. The final outstanding issue relating to the disposal, being a working capital adjustment, is to be resolved with VeriFone Holdings Inc. in Q4 of this financial year.
* When the results of the continuing business are combined with the results of the discontinued operations and the gain on sale of the payments business, Trintech generated net income in the quarter of $1.8 million.
* Combined basic and diluted net income per equivalent ADS for the quarter ended October 31, 2006 was $0.11, compared with a basic and diluted net loss per equivalent ADS of $0.02 for the corresponding quarter ended October 31, 2005.
Cyril McGuire, Chairman and Chief Executive Officer said, “Our Q3 results reflect a solid performance in our core financial software business and the financial impact of the successful sale of our payment systems business. The future growth of Trintech will be focused on its transaction reconciliation software business which is a proven business with a strong core customer base and an established market position. We plan to expand this business aggressively through our investment in new products and markets and will continue to seek further acquisition opportunities in our target market both in the US and in Europe.”
Recent Highlights include:
Trintech announced that it had completed the sale of its payments systems business to VeriFone Holdings, Inc. Following the completion of the sale, Trintech will focus on being a leading global provider of financial software and technology services specializing in transaction verification, reconciliation management, process automation and compliance.
Trintech announced that Smart & Final Inc. had selected ReconNET to automate the verification and reconciliation of its cash banking and credit card transactions, and the DataFlow Transaction Network to provide electronic bank data delivery. Smart & Final, through various subsidiaries, sells food, foodservice products and culinary equipment through non-membership warehouse stores and wholesale stores. The 130-year old company operates over 250 non-membership warehouse grocery stores in the western United States and northwestern Mexico.
Trintech announced that General Parts, Inc., distributor of replacement auto parts, supplies and tools, had selected Trintech’s ReconNET to automate the verification and reconciliation of its credit cards and bank deposits for its more than 1,400 company-owned stores. 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 Regis Corporation had selected AssureNET GL for automating GL reconciliation, review and certification processes, and TRACKER for the recovery of unclaimed property. Regis Corporation is the world’s largest operator of hair salons.
Trintech announced the release of EOB PRO and HealthcareAR for healthcare and financial institutions. EOB PRO is a web-based remittance standardization solution that eliminates the manual process of posting paper Explanation of Benefits (EOB) payments to a healthcare billing system. HealthcareAR, a web-based solution, matches provider-payer financial transactions to corresponding payment information.
Trintech announced the release of ReconNET 7.25, the newest version of its reconciliation and account balancing application. This new release allows ReconNET to be integrated with AssureNET GL to extend existing financial controls and reporting capabilities through general ledger account reconciliation and certification.
Trintech announced enhancements to its accounting compliance application, AssureNET GL. AssureNET GL Version 3.2 broadens the scope of AssureNET GL beyond general ledger reconciliation and certification to include variance, trending and balance flux analysis; review and approval of manual journal entries; and task management for the accounting close process. The enhancements were driven by requests from Trintech clients who, having experienced the benefits of AssureNET’s account reconciliation capabilities, wanted further support to manage other accounting compliance processes.
Paul Byrne, President of Trintech, stated, “Our third quarter results clearly show that our strategy of providing value-added solutions to financial departments managing transactions, risk and compliance in an ever more complex business environment continues to gain momentum. This year, we have successfully expanded our business into the financial services market and will invest further to accelerate growth in this high opportunity market. In addition, we will continue to develop or seek to acquire solutions for the burgeoning healthcare market as well as grow our commercial market business, where we are the clear market leader, both organically and through acquisition.”
Revenue for the quarter ended October 31, 2006 was $6.7 million compared with $5.3 million for the quarter ended October 31, 2005, an increase of 26 percent.
Software license revenue for the quarter ended October 31, 2006 increased 39 percent to $4.0 million from $2.9 million in the corresponding quarter last year.
Service revenue for the quarter ended October 31, 2006 increased 10 percent to $2.7 million from $2.5 million in the corresponding quarter last year.
Gross profit for the quarter ended October 31, 2006 was $5.0 million, an increase of 18% from the corresponding period last year.
Total operating expenses of the continuing business for the quarter ended October 31, 2006 increased 42 percent to $5.5 million from $3.9 million in the corresponding period last year. Adjusted EBITDA operating expenses for the quarter ended October 31, 2006 were $5.0 million, an increase of 37 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 $33.8 million as of October 31, 2006. Net cash generated for the three months ended October 31, 2006 was $3.4 million, which includes acquisition related receipts of $5.4 million comprising the proceeds of the sale of the payments business to VeriFone Holdings Inc., net of the warranty reserve and transaction related costs.
During the quarter ended October 31, 2006, Trintech did not purchase any shares via the share buy-back program. As a result, $2.9 million remains available for future repurchases under this program as at October 31, 2006.
Trintech also announced today that Maurice Hickey, Chief Financial Officer, has tendered his resignation to take effect in February 2007. Mr Hickey is due to take up a senior management position in an unrelated industry.
Trintech will host a conference call to discuss its financial results and business outlook beginning at 15:30hrs (UK Time) today, Wednesday, November 22nd. Please see advisory for information on the call.
A web simulcast of Trintech’s conference call reviewing our performance for Q3 fiscal year 2007 and our business outlook for Q4 fiscal year 2007 will be broadcast live today, Wednesday, November 22nd, 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 (9 8 6 2 2 0 8 #).
Trintech Group Plc (NASDAQ: TTPA), a leading global provider of financial software and technology services specializing in transaction verification, reconciliation management, process automation and compliance for commercial, financial and healthcare markets. For over 20 years, Trintech has been providing comprehensive, industry-leading solutions to financial departments seeking greater insight into critical transaction processes. Trintech delivers a configurable, highly scalable platform that incorporates a company’s unique business logic, enabling managers to obtain greater visibility and more efficiently manage business risk throughout the transaction lifecycle. Trintech’s transaction management solutions include: ReconNET for high volume transaction reconciliation; AssureNET GL for general ledger reconciliation and certification; Treasure eNET for cash management; Bank Fee Analysis; and the DataFlow Transaction Network for data collection and delivery. Over 400 leading companies across a variety of industries rely on Trintech products and services. Clients include: North Fork Bank, 7-Eleven, Kroger, Regal Entertainment, Accor, UPMC, Farmer’s Insurance Group, YUM! Brands Restaurants, Rohm and Haas, Verizon Wireless and Ameren.
Trintech’s principal business office is in Dallas, Texas, with international offices in Ireland, the United Kingdom and the Netherlands. Trintech can be reached at 15851 Dallas Parkway, Suite 855, Addison, TX 75001 (Tel 1-972-701-9802). Trintech’s corporate office can be contacted at Block C, Central Park, Leopardstown, Dublin 18, Ireland (Tel 353-1-2939840.,For more information, please visit www.trintech.com.
Forward Looking Statement
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 strategic focus following the sale of its payments systems business to VeriFone Holdings, Inc and its search for acquisition opportunities in the transaction reconciliation software business, the focus of investment in research and development for the FMS business and the financial impact of such investment, the focus of investment in sales and marketing for the FMS business and the financial impact of such investment, the expected benefits from General Parts’ installation of ReconNet and Trintech’s plans to invest its current cash holdings. 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 6-K for the quarter ended July 31, 2006 filed with the US Securities and Exchange Commission (www.sec.gov). Lastly, Trintech assumes no obligation to update these forward-looking statements.
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- Trintech Group Plc
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