SOURCE: Trintech Group Plc

November 23, 2005 04:04 ET

Trintech Reports Fiscal Year 2006 Third Quarter Financial Results

LEOPARDSTOWN DUBLIN 18, GERMANY -- (MARKET WIRE) -- November 23, 2005 --

Dublin, Ireland/Dallas, Texas - November 23rd, 2005 - Trintech Group Plc (NASDAQ: TTPA), a leading provider of transaction reconciliation and payment infrastructure solutions, today announced third quarter revenues of $11.4 million and a net loss for the quarter of $387,000.

Highlights

* Revenue amounted to $11.4 million compared to $15.1 million in Q3
  last year.  As announced in August, revenue was negatively impacted
  in the quarter by technical issues associated with certain hardware
  products.  These issues have been resolved and sales of these
  products recommenced towards the end of the quarter.
* Gross margin amounted to $7.5 million in Q3, representing 66% of
  revenue.
* We continued to invest in our unattended payments business and
  announced the launch of our recent product for the petroleum
  market, OpenPay 4000, in November.  This R&D investment has had a
  short term negative impact on earnings and will continue to do so
  through the end of the 2006 fiscal year.
* Basic and diluted net loss per equivalent ADS for the quarter ended
  October 31, 2005 was ($0.02), compared with basic and diluted net
  income per equivalent ADS of $0.03 for the corresponding quarter
  ended October 31, 2004.

Cyril McGuire, Chairman and Chief Executive Officer, commenting on the results said: "Trintech's business remains solid despite a challenging Q3 performance. Trintech's performance in the quarter was adversely impacted by challenging market conditions and the product related issue announced in August which has now been successfully resolved. Our investment programme in PayWare OpenPay for the emerging unattended payment market, is building customer pipeline and market share.

During Q3, our Funds Management business performed very well. This business continues to meet and exceed its performance targets and provides a software and transaction platform for further growth for the Trintech group. We are also continuing to review various expansion opportunities, both organically and through acquisition, within the funds management area both in the US and Europe."

Recent highlights include:

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.

Trintech announced that PayWare OpenPay has been 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 announced that UK mobile communications provider O2 selected ReconNET to automate the verification and reconciliation of its cash, checks, credit card transactions and customer billing system payment receipts. O2 will also use ExecuNET for business analysis and to identify trends in funds management processes.

Trintech announced that KIT Limited Partnership selected Trintech's ReconNET to automate the verification and reconciliation of its cash and credit cards for its chain of 481 restaurants. KIT Limited Partnership also selected ReconNET to automatically assign, organize and prioritize its research incidents. ReconNET is designed to enable the company to streamline accounting processes and provide effective risk management and reporting across its enterprise.

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 Cineplex Entertainment ("Cineplex") (TSX: CGX.UN) extended its use of Trintech's ReconNET to reconcile its cash accounts and identify and resolve exceptions more efficiently. The ReconNET system is designed to provide Cineplex with a sound foundation for managing operational risk across its enterprise and reduce the potential for cash loss.

At the Sarbanes-Oxley Conference and Exposition held in Baltimore, Maryland in September, Trintech unveiled its new internal control software solution for general ledger account reconciliation.

Results Overview:

Revenue for the quarter ended October 31, 2005 was $11.4 million compared with $15.1 million for the corresponding quarter last year.

Product revenue for the quarter ended October 31, 2005 decreased 63 percent to $2.1 million compared to $5.6 million for the corresponding quarter last year.

License revenue for the quarter ended October 31, 2005 decreased 7 percent to $5.8 million from $6.2 million for Q3 last year.

Service revenue for the quarter ended October 31, 2005 increased 7 percent to $3.6 million from $3.3 million for the corresponding quarter last year.

Total gross margin for the quarter ended October 31, 2005 was $7.5 million, a decrease of 14 percent from $8.7 million in the corresponding period last year.

Operating expenses in Q3 increased to $8.2 million compared to $8.1 million in the corresponding quarter last year. Adjusted EBITDA operating expenses for Q3 this year and the corresponding quarter last year were each $7.8 million.

Trintech's balance sheet remains strong with cash and cash equivalent balances of $35.7 million as of October 31, 2005. Net cash usage for the nine months ended October 31, 2005 was $3.5 million which includes acquisition related payments of $1.2 million made in Q1 of the current fiscal year in respect of acquisitions made in prior periods. Capital expenditure during the same nine-month period amounted to $517,000 and primarily related to computer and tooling equipment.

During the quarter ended October 31, 2005, Trintech did not repurchase any stock under its stock repurchase program. As of October 31, 2005, $3.8 million remained available for future repurchases under this program.

Paul Byrne, President of Trintech, stated "We have worked closely with our customers during the quarter on the successful resolution of the technical issues that affected certain hardware products and have recommenced product shipments. We are confident that the operational discussions that have taken place in recent months will form the basis for strong working relationships with our customers moving forward.

We continue to invest in the OpenPay product range for the unattended payments market which is a major focus for management to drive growth in our Payments business. 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 position Trintech for solid long term growth for FY07 and beyond."

Trintech will host a conference call to discuss its financial results and business outlook beginning at 15:30hrs (UK Time) today, November 23rd, 2005. Please see advisory for information on the call.

A web simulcast of Trintech's conference call reviewing our performance for Q3 fiscal year 2006 and our business outlook for Q4 fiscal year 2006 will be broadcast live today, Wednesday, November 23rd, 2005 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 (2356652#).


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 US at 15851 Dallas Parkway, Suite 855, Addison, TX 75001 (Tel: +1 972 701 9802), 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 migration of Trintech's business model towards a software and transaction services business mix, the impact of investment in Trintech's unattended payments business on earnings, the ability of Trintech's fund management business to provide a software and transaction platform for further growth for the Trintech group, O2's expected use of ExecuNET, 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 July 31, 2005, 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,
                                                 2005           2005
ASSETS
Current assets:
Cash and cash equivalents                        $35,694       $39,180
Accounts receivable, net of
allowance for doubtful
accounts of
   $507 and $787 at
   October 31, 2005 and January 31,                8,125         9,479
   2005, respectively
Inventories                                        1,599         1,184
Value added taxes                                    313           531

Prepaid expenses and other assets                  2,082         2,105
Amounts prepaid to related parties                                 451
                                                      -

          Total current assets                    47,813        52,930
Restricted cash                                      622           672
Property and equipment, net                          943           824
Other non-current assets, net                      2,516         3,147
Goodwill, net of accumulated
 amortization and
 impairment of $84,471
 at October 31, 2005 and January 31, 2005,         8,613         8,613
respectively

          Total assets                           $60,507       $66,186

LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Bank overdraft                                      $339          $568
Accounts payable                                   3,732         4,806
Accrued payroll and related expenses               1,499         1,884
Deferred consideration                             1,250         2,398
Other accrued liabilities                          3,036         3,413
Value added taxes                                    242           630
Warranty reserve                                   3,233           395
Deferred revenues                                  7,586         8,946

          Total current liabilities               20,917        23,040

Series B preference shares,
 $0.0027 par value
 10,000,000 authorized at
 October 31, 2005 and January 31, 2005,
 respectively
   None issued and outstanding                         -             -


Shareholders' equity:
   Ordinary Shares, $0.0027 par value:
    100,000,000
   shares authorized;
   31,271,487 and 31,160,091 shares
   issued and 31,016,383
   and 30,908,635 shares outstanding
   at October 31, 2005 and
   January 31, 2005, respectively.                    84            84
Additional paid-in capital                       246,392       246,283
Treasury shares (at cost, 255,104
and 251,456 at
October 31, 2005 and
January 31, 2005, respectively)                    (449)         (416)
Accumulated deficit                            (203,806)     (200,154)
Accumulated other comprehensive loss             (2,631)       (2,651)

          Total shareholders' equity              39,590        43,146

          Total liabilities and
           shareholders' equity                  $60,507       $66,186





                                    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,

                         2005         2004          2005            2004
Revenue:
   Product              $2,075       $5,606        $8,107         $13,539
   License               5,766        6,197        18,368          17,093
   Service               3,557        3,325        10,649          10,074


Total revenue           11,398       15,128        37,124          40,706

Cost of
revenue:
   Product               1,731        4,115        10,211           9,567
   License                 839          908         2,692           2,791
   Service               1,328        1,423         3,927           4,313


Total cost of            3,898        6,446        16,830          16,671
revenue

Gross margin             7,500        8,682        20,294          24,035

Operating
expenses:
   Research &            2,673        2,459         7,164           6,790
development
   Sales &               2,246        2,376         7,237           6,881
marketing
   General &             2,984        3,075         9,270           8,725
administrative
                            98           -            231             351
Restructuring
charge
   Amortization            212          212           635             635
of purchased
intangible
assets
   Adjustment of            -            -              -            (249)
acquisition
liabilities
   Stock                    -            -              -             101
compensation

          Total          8,213        8,122        24,537          23,234
operating
expenses

(Loss) income            (713)          560       (4,243)             801
from operations

   Interest                269          106           743             262
income, net
   Exchange                 37         (95)          (27)              19
gain (loss),
net
(Loss) income
before provision
for income               (407)          571       (3,527)           1,082
taxes

   Provision                20        (137)         (125)           (213)
for income
taxes


Net (loss)               $(387)        $434      $(3,652)            $869
income


Basic net (loss)        $(0.01)       $0.01       $(0.12)           $0.03
income per
Ordinary Share

Shares used in
computing basic
net
(loss) income       31,000,191   30,810,589   30,988,194       30,766,712
per Ordinary
Share

Diluted net             $(0.01)       $0.01       $(0.12)           $0.03
(loss) income
per Ordinary
Share

Shares used in
computing
diluted net
(loss)
 income per         31,000,191   32,323,029   30,988,194       32,304,518
Ordinary Share

Basic net (loss)        $(0.02)       $0.03       $(0.24)           $0.06
income per
equivalent ADS
Diluted net             $(0.02)       $0.03       $(0.24)           $0.05
(loss) income
per equivalent
ADS


                        TRINTECH GROUP PLC
RECONCILIATION OF NET (LOSS) INCOME TO ADJUSTED EBITDA NET (LOSS) INCOME
                    (U.S. dollars in thousands)

                                 Three months             Nine months
                              ended October 31,         ended October 31,
                            2005          2004          2005          2004

Net (loss) income        $  (387)      $   434       $(3,652)      $   869

   Adjustments:
    Depreciation             135           159           360           575
   Amortization
    of purchased
    intangible assets        212           212           635           635
   Adjustment
    of acquisition             -             -             -          (249)
    liabilities
   Stock
    compensation               -             -             -           101

   Restructuring              98             -           231           351
    charge
   Interest                 (269)         (106)         (743)         (262)
    income, net
   Income taxes              (20)          137           125           213
   Warranty
    charge                     -             -         3,882             -

Adjusted Earnings        $  (231)      $   836       $   838       $ 2,233
Before Interest,
Taxation,
Depreciation,
Amortization and
Warranty Charge
(EBITDA) net
(loss) income

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

                                Three months              Nine months
                             ended October 31,           ended October 31,
                            2005          2004          2005          2004

Total operating          $ 8,213       $ 8,122      $ 24,537      $ 23,234
 expense

Adjustments:
 Restructuring               (98)            -          (231)         (351)
  charge
 Depreciation               (116)         (143)         (310)         (527)
 Amortization
  of purchased              (212)         (212)         (635)         (635)
  intangible assets
 Adjustment
  of acquisition               -             -             -           249
  liabilities
 Stock
  compensation                 -             -             -          (101)

Adjusted EBITDA          $ 7,787       $ 7,767      $ 23,361      $ 21,869
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)

                                                     Nine months
                                                 ended October 31,
                                             2005               2004

CASH FLOWS FROM OPERATING
ACTIVITIES:
Net (loss) income                    $        (3,652)   $         869
Adjustments to reconcile net
(loss) income to
net cash provided by operating
activities:
  Depreciation                                    360             575
  Amortization                                    635             635
  Stock compensation                               -              101
  Effect of changes in foreign                   (92)           (101)
  currency exchange rates
  Changes in operating assets
  and liabilities:
     Inventories                                (524)            (56)
     Accounts receivable                        1,451             628
     Prepaid expenses and                       (130)           (468)
     other assets
     Value added tax                              196            (62)
     receivable
     Accounts payable                           (747)             139
     Accrued payroll and                        (299)           (526)
     related expenses
     Deferred revenues                        (1,143)           (215)
     Value added tax payable                    (343)             271
     Warranty reserve                           2,952             103
     Other accrued liabilities                   (78)             175
Net cash (used in) provided by                (1,414)           2,068
operating activities
CASH FLOWS FROM INVESTING
ACTIVITIES:
Purchases of property and                       (517)           (385)
equipment
Payments relating to                          (1,194)           (644)
acquisitions
Net cash used in investing                    (1,711)         (1,029)
activities

CASH FLOWS FROM FINANCING
ACTIVITIES:
Principal payments on capital                    (74)           (289)
leases
Issuance of ordinary shares                       239             298
Purchases of treasury shares                    (164)           (338)
Expense of share issue                             -             (10)
Proceeds under bank overdraft                   (229)           1,539
facility
Decrease in restricted cash                        50             817
deposits
Net cash (used in) provided by                  (178)           2,017
financing activities


Net (decrease) increase in                    (3,303)           3,056
cash and cash equivalents
Effect of exchange rate                         (183)              45
changes on cash and cash
equivalents

Cash and cash equivalents at                   39,180          36,864
beginning of period
Cash and cash equivalents at          $        35,694   $      39,965
end of period

Supplemental disclosure of
cash flow information
  Interest paid                       $            21   $          23
  Taxes (received) paid               $          (421)  $         502

Supplemental disclosure of
non-cash flow information
  Acquisition of property and         $              -  $           -
  equipment under capital
  leases

The full press release including tables can be downloaded from the following link:

http://hugin.info/130706/R/1022544/161754.pdf

Contact
Paul Byrne, President
Maurice Hickey, CFO
Trintech Group plc
+353 1 207 4000
paul.byrne@trintech.com
maurice.hickey@trintech.com

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