SOURCE: Trintech Group Plc

February 28, 2007 02:09 ET

Trintech Reports Fourth Quarter and Fiscal Year 2007 Financial Results

DUBLIN, IRELAND and DALLAS, TX -- (MARKET WIRE) -- February 28, 2007 --



Dublin, Ireland/Dallas, Texas - February 28, 2007- Trintech Group Plc (NASDAQ: TTPA), a leading provider of financial software and services specializing in reconciliation workflow, revenue enhancement, transaction risk management, and compliance, today announced its fourth quarter and fiscal year 2007 financial results. Following the sale of its payments systems business to VeriFone Holdings Inc. in the third quarter, 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 fourth quarter revenues for the continuing business (the Funds Management Systems business) of $7.5 million and adjusted EBITDA income for the continuing business of $163,000. The net loss incurred in the quarter for the continuing business amounted to $270,000 and the net income generated for the continuing and discontinued businesses amounted to $225,000.


Highlights


  * Revenue for the continuing business amounted to $7.5 million
    compared to $5.4 million in Q4 last year, representing 38 percent
    growth in the Funds Management Systems ("FMS") business.
  * Revenue for the continuing business increased 23 percent for the
    fiscal year to $25.8 million compared to $21.0 million in the
    prior year.
  * Gross profit for the continuing business amounted to $5.3 million
    in Q4, representing 71% of revenue, compared to $4.3 million and
    79% in Q4 last year.
  * Gross profit for the continuing business amounted to $19.1
    million in the fiscal year, representing 74% of revenue, compared
    to $16.7 million and 79% in the prior year.
  * Trintech has increased expenditure in research and development
    for the FMS business from $725,000 in Q4 last year to $1.5
    million in the same quarter this year and by 97 percent for the
    fiscal year to $4.9 million compared to $2.5 million in the prior
    fiscal 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 is expected to do so through at least 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 $1.2 million in Q4
    last year to $1.7 million in the same quarter this year and by 50
    percent to $7.1 million compared to $4.7 million in the prior
    fiscal 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 income from continuing
    operations of $163,000 for Q4 and generated $65,000 on an EBITDA
    income basis.
  * Trintech generated Adjusted EBITDA income from continuing
    operations of $694,000 for the fiscal year, but incurred an
    EBITDA net loss of $2.9 million.
  * Trintech generated a net loss from discontinued operations for
    the quarter and fiscal year of $94,000 and $6.9 million,
    respectively. This loss resulted from trading losses of the
    divested payments business, lease termination costs associated
    with the Dublin facilities and other rationalization costs.
  * Trintech generated a profit on the sale of the payments business
    amounting to $589,000 for Q4 and $5.4 million for the fiscal
    year. 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 and other
    transaction costs associated with the sale of the business have
    been deducted to arrive at the profit on sale.
  * Combined basic and diluted net loss per equivalent ADS for the
    year ended January 31, 2007 was $0.16, compared with a basic and
    diluted net loss per equivalent ADS of $0.10 for the year ended
    January 31, 2006.
  * Combined basic and diluted net income per equivalent ADS for the
    quarter ended January 31, 2007 was $0.00, compared with a basic
    net income per equivalent ADS of $0.14 and a diluted net income
    per equivalent ADS of $0.13 for the corresponding quarter ended
    January 31, 2006.
Cyril McGuire, Chairman and Chief Executive Officer said, " Trintech's Q4 results reflect a solid quarter and year end performance. Our growth strategy is focused on aggressively expanding our transaction risk management and compliance solutions for our customers in the commercial, financial and health care markets. Trintech continues to invest in new emerging growth markets, such as health care where performance targets for our health care acquisition, Concuity, were achieved for the quarter."

Paul Byrne, President, added, " In addition to continuing to seek to accelerate our growth through acquisition, we are also investing significant capital to deliver new innovative products and services to our growing customer base globally and are fully committed to our recurring revenue business model which represented over 60% of revenue in Q4."


Recent Highlights include:

Trintech announced the acquisition of substantially all of the assets and assumption of certain liabilities of Concuity, Inc., a private company specializing in technology solutions for the health care industry, for an expected total cash consideration of up to $8.25 million. The acquisition has been accounted for utilizing the purchase method of accounting in accordance with Statement of Financial Accounting Standards No. 141, "Business Combinations". Under the purchase method of accounting, the purchase price is allocated to the assets acquired and liabilities assumed based on their estimated fair values. The allocation of the purchase price has been prepared based on preliminary estimates of fair values. Therefore, actual amounts recorded upon the finalization of estimates of fair values may differ materially.

Concuity, Inc. is a Chicago, Illinois based private company which provides leading-edge technology solutions to optimize contract profitability for the health care industry. Concuity's primary value proposition is providing health care providers with software applications to allow them to recover revenue that has not been paid by payers due to the complexity of the health care billing process in the United States. The acquisition of the Concuity business continues Trintech's expansion into the fast growing health care market.

Trintech announced that East West Bank, a large commercial bank headquartered in Los Angeles, selected Trintech's ReconNET to automate Federal Reserve reconciliations, and AssureNET GL to automate GL reconciliation, review and certification processes. Trintech's solution suite is expected to increase enterprise efficiencies, and enable East West Bank to more effectively manage operational risk. East West Bank, with $10 billion in assets, is a full-service commercial bank serving consumers and businesses throughout California and Houston, Texas, many of which are engaged in business in the Asia/Pacific Rim region.

Trintech announced that Plymouth & South West Co-operative Society selected ReconNET to streamline reconciliation processes and increase operational control. The Society will use ReconNET to automate the verification and reconciliation of its cash, cheque payments, and credit cards. Additionally, ReconNET will be used to reconcile supplier statements to A/P ledger and Co-op Society statements. Plymouth and South West Co-operative Society is an independent retail co-operative owned and controlled by its more than 130,000 members.

Trintech announced that a major wholesale financial institution based in the central United States selected AssureNET GL to automate their account reconciliation program and to increase efficiencies in regards to the preparation, review, and approval of manual and/or semi-manual balance sheet reconciliations. The bank funds residential mortgages and community development loans for hundreds of commercial banks, credit unions, insurance companies and thrifts.

Trintech announced that Calor Gas Limited selected Trintech's ReconNET to automate cash, check, and credit card reconciliations to reduce the risks associated with what was previously a labor-intensive manual process. ReconNET will be used to identify and resolve exceptions early within the transaction lifecycle to improve processing efficiency, and reduce exposure to operational risk. Calor Gas is the UK's leading supplier of Liquefied Petroleum Gas.

Trintech announced the opening of its new London office located at 75 Cannon Street. This office along with Trintech's other sales offices in Ireland and the Netherlands will provide the foundation for the development and expansion of European operations.

Trintech announced the availability of AssureNET Express. AssureNET Express complements Trintech's current line of On-Demand solutions, including ReconNET for high volume, transaction-intensive account reconciliation, and Treasury eNET for treasury and cash management.

Trintech announced the availability of ReconNET 7.3. The newest version of Trintech's reconciliation and account balancing application dramatically increases the security of credit card and/or personal data (e.g., Social Security number) through encryption, and provides the ability for businesses using ReconNET to pass the most stringent PCI audit.


Results Overview:

Continuing Operations:

Revenue for the year ended January 31, 2007 was $25.8 million compared with $21.0 million for the year ended January 31, 2006, an increase of 23 percent. Revenue in the fourth quarter was $7.5 million compared with $5.4 million for the corresponding quarter last year, an increase of 38 percent.

Software license revenue for the year ended January 31, 2007 was $14.4 million compared with $11.7 million for the year ended January 31, 2006, an increase of 23 percent. In the fourth quarter, software license revenue increased 26 percent to $3.8 million from $3.1 million in the previous quarter last year.

Service revenue for the year ended January 31, 2006 increased 22 percent to $11.4 million from $9.3 million last year. Service revenue for the quarter ended January 31, 2007 increased 54 percent to $3.7 million from $2.4 million in the corresponding quarter last year.

Total gross margin for the year ended January 31, 2007 was $19.1 million, an increase of 14 percent from $16.7 million in the previous year. Total gross margin for the fourth quarter was $5.3 million, an increase of 23 percent from $4.3 million in the corresponding quarter last year.

Total operating expenses from continuing operations for the year ended January 31, 2007 were $21.4 million, an increase of 42 percent from $15.1 million in the previous year. Adjusted EBITDA operating expenses for the year ended January 31, 2007 were $19.0 million, an increase of 35 percent on the Adjusted EBITDA operating expenses for last year.

Total operating expenses from continuing operations for the fourth quarter were $6.0 million, an increase of 48 percent from $4.1 million in the corresponding quarter last year. Adjusted EBITDA operating expenses for the quarter ended January 31, 2007 were $5.3 million, an increase of 39 percent on the Adjusted EBITDA operating expenses for the corresponding period last year.

Trintech's balance sheet remains strong with cash and cash equivalent balances of $25.8 million as of January 31, 2007. Net cash usage for the twelve months ended January 31, 2007 was $9.0 million, which includes acquisition related payments of $9.1 million and acquisition related receipts 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 January 31, 2007, 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 January 31, 2007.

Trintech will host a conference call to discuss its financial results and business outlook beginning at 15:30hrs (UK Time) today, Wednesday, February 28, 2007. Please see advisory for information on the call.

A web simulcast of Trintech's conference call reviewing our performance for Q4 fiscal year 2007 and our business outlook for Q1 and full fiscal year 2008 will be broadcast live today, Wednesday, February 28, 2007 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 (8 7 3 9 6 5 6 #).

About Trintech Group

Trintech Group Plc (NASDAQ: TTPA) is a leading global provider of financial software and services specializing in reconciliation workflow, revenue enhancement, transaction risk management, and compliance for commercial, financial, and health care 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 processes, enabling managers to obtain greater visibility and more efficiently manage business risk throughout the transaction lifecycle. Trintech's transaction process management solutions include: ReconNET for high volume transaction reconciliation; AssureNET GL for general ledger reconciliation and certification; On-Demand solutions for ASP ReconNET and AssureNET services and the Dataflow Transaction Network for data collection and delivery; and ClearContracts, an ASP service which enables health care providers to optimize contract profitability by reconciling payments received from their patients' insurers to amounts they should have received from claims under the terms of their respective contracts. Over 450 leading companies across a variety of industries rely on Trintech products and services. Clients include: 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 900, Addison, TX 75001 (Tel 1.972.701.9802). Trintech's corporate office can be contacted at Trintech Technologies, Block C, Central Park, Leopardstown, Dublin 18, Ireland (Tel 353.1.293.9840). For more information, please visit www.trintech.com.

Forward Looking Statements

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 estimated fair values of the assets acquired and liabilities assumed for purposes of purchase accounting related to Trintech's purchase of Concuity, 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 East West Bank's installation of ReconNet and AssureNet, the expected benefits from Plymouth & South West Co-operative Society's installation of ReconNet and the expected benefits from Calor Gas Limited's installation of ReconNet. 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, 2006 and Trintech's Form 6-K for the quarter ended October 31, 2006, each 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,
ASSETS                             2007                   2006
Current assets:
Cash and cash equivalents  $              25,766   $           34,745
Accounts receivable, net
of allowance for doubtful
accounts of
   $251 and $18 at January
31, 2007 and January 31,
2006, respectively                         6,920                3,785
Value added taxes                             43                   17
Amounts receivable on
legal settlement                             -                  2,641
Prepaid expenses and other
assets                                     1,041                  666
Net current deferred tax
assets                                       396                  217
Amounts prepaid to related
parties                                       -                   259
Assets held for sale and
in discontinued operations                   204               10,804
          Total current
assets                                    34,370               53,134

Property and equipment,
net                                        1,567                  465
Net non-current deferred
tax asset                                     -                    65
Other non-current assets,
net                                        6,730                2,300
Goodwill, net                             15,531               10,167
          Total non
current assets                            23,828               12,997

          Total assets     $              58,198   $           66,131

LIABILITIES AND
SHAREHOLDERS' EQUITY
Current liabilities:
Bank overdraft             $                  -    $              192
Accounts payable                           1,263                1,564
Accrued payroll and
related expenses                           2,080                1,051
Deferred consideration                       795                1,550
Other accrued liabilities                  1,660                1,000
Value added taxes                            120                   57
Deferred revenues                          7,964                5,084
Liabilities held for sale
and in discontinued
operations                                   924               13,847
          Total current
liabilities                               14,806               24,345

Non-current liabilities:
Deferred rent less current
portion                                      511                    -
Deferred consideration                     2,003                    -
          Total
non-current liabilities                    2,514                    -

Series B preference
shares, $0.0027 par value
   10,000,000 authorized
at January 31, 2007 and
January 31, 2006,
respectively
   None issued and
outstanding                                   -                     -

Shareholders' equity:
   Ordinary Shares,
$0.0027 par value:
100,000,000 shares
authorized;
   31,875,219 and
31,290,027 shares issued
and 31,159,093
   and 31,034,923 shares
outstanding at January 31,
2007 and
   January 31, 2006,
respectively.                                 86                   84
Additional paid-in capital               248,898              246,405
Treasury shares (at cost,
716,126 and 255,104 at
January 31, 2007 and
January 31, 2006,
respectively)                            (1,222)                (449)
Accumulated deficit                    (203,862)            (201,695)
Accumulated other
comprehensive loss                       (3,022)              (2,559)
          Total
shareholders' equity                      40,878               41,786
          Total
liabilities and
shareholders' equity       $              58,198   $           66,131




                         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
                          2007        2006         2007        2006
Revenue:
                            $
   License                3,847     $   3,065     $14,397     $11,702
   Service                3,653         2,367      11,400       9,347
          Total Revenue   7,500         5,432      25,797      21,049

Cost of revenue:
   License                  356           247       1,131         944
   Amortization of
purchased technology        143             -         258           -
   Service                1,693           869       5,354       3,405
          Total Cost of
Revenue                   2,192         1,116       6,743       4,349

Gross Margin              5,308         4,316      19,054      16,700

Operating expenses:
   Research &
development               1,465           725       4,948       2,508
   Sales & marketing      1,689         1,235       7,096       4,741
   General &
administrative            2,557         1,898       8,389       6,996
   Amortization of
purchased intangible
assets                      327           212       1,001         847
          Total
operating expenses        6,038         4,070      21,434      15,092

(Loss) income from
operations                (730)           246     (2,380)       1,608

   Interest income, net     348           341       1,425       1,084
   Exchange (loss)
gain, net                  (14)         (126)         383       (153)

(Loss) income before
provision for income
taxes                     (396)        461          (572)       2,539

   Provision for income
taxes                       126           342       (117)         270
(Loss) income from
continuing operations   $ (270)   $       803   $   (689)   $   2,809

   (Loss) income from      (94)         1,310     (6,887)     (4,350)
discontinued operations
   Profit on sale of        589             -       5,409           -
discontinued operations
Net income (loss) from      495         1,310     (1,478)     (4,350)
discontinued
operations, net of tax

Net income (loss)       $   225   $     2,113   $ (2,167)   $ (1,541)


Basic and diluted          0.00   $      0.07   $  (0.08)   $  (0.06)
income (loss) per
Ordinary Share          $

Basic income (loss) per    0.00   $      0.14   $  (0.16)   $  (0.10)
equivalent ADS          $

Diluted income (loss)      0.00   $      0.13   $  (0.16)   $  (0.10)
per equivalent ADS      $





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

                      Three months                Twelve months
                   ended January 31,            ended January 31,
                     2007          2006         2007          2006

(Loss) income
from
continuing
operations     $      (270)    $   803      $    (689)    $     2,809

Adjustments:

Depreciation            147            66          426            197

Amortization
of purchased
intangible
assets                  470           212        1,259            847

 Share-based
compensation            290            -         1,006             -
     Interest
income, net           (348)         (341)      (1,425)        (1,084)
     Income
taxes                 (126)         (342)          117          (270)
Adjusted
Earnings
Before
Interest,
Taxation,
Depreciation,
Amortization
and
Share-based
compensation
(EBITDA)
income from
continuing
operations      $       163    $      398    $     694          2,499
Adjusted
Earnings
Before
Interest,
Taxation,
Depreciation,
Amortization
and
Share-based
compensation
(EBITDA) loss
from
discontinued
operations             (98)         (379)      (3,585)        (1,641)
Adjusted
Earnings
Before
Interest,
Taxation,
Depreciation,
Amortization
and
Share-based
compensation
(EBITDA)
income (loss)   $        65    $       19    $ (2,891)    $       858

Note: Management believes Adjusted EBITDA income (loss) is an
important measure of Company performance without consideration of the
non-operating income and expenses adjusted above as it presents a
clearer view
of operational performance changes between the comparative periods.


  RECONCILIATION OF OPERATING EXPENSES TO ADJUSTED EBITDA OPERATING
                              EXPENSES
                     (U.S. dollars in thousands)

                      Three months                Twelve months
                   ended January 31,            ended January 31,
                     2007           2006        2007             2006

Total
operating
expenses from
continuing
operations     $   6,038          $ 4,070   $   21,434    $    15,092


Adjustments:

Depreciation          (136)          (56)        (380)          (174)

Amortization
of purchased
intangible
assets                (327)         (212)      (1,001)          (847)

Share-based
compensation          (290)             -      (1,006)              -

Adjusted
EBITDA
operating
expenses from
continuing
operations      $     5,285    $    3,802    $  19,047    $    14,071
Adjusted
EBITDA
operating
expenses from
discontinued
operations      $        46    $    2,859    $   9,450    $    15,572
Adjusted
EBITDA
operating
expenses        $     5,331    $    6,661    $  28,499    $    29,643

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,
                                            2007             2006
CASH FLOWS FROM OPERATING
ACTIVITIES:
Net loss                            $           (2,167)   $ (1,541)
Adjustments to reconcile loss to
net cash used in operating
activities:
    Depreciation                                    631         538
    Amortization                                  1,259         847
    Impairment loss on goodwill                       -     (3,891)
    Profit on sale of business,                 (5,409)           -
    net
    Share-based compensation                      1,240          -
    Effect of changes in foreign                  (366)        (16)
    currency exchange rates
    Changes in operating assets
    and liabilities:
          Inventories                               513     (1,595)
          Accounts receivable                     (918)         668
          Prepaid expenses and                    (281)       (191)
          other assets
          Amounts prepaid to                        440       (419)
          related parties
          Value added tax                           406         104
          receivable
          Accounts payable                      (3,023)       1,457
          Accrued payroll and                       698           5
          related expenses
          Deferred revenues                       1,771       (417)
          Value added tax payable                 (386)       (124)
          Warranty reserve                      (1,615)       3,531
          Other accrued                              54       (844)
          liabilities
Net cash used in operating                      (7,153)     (1,888)
activities

CASH FLOWS FROM INVESTING
ACTIVITIES:
Purchases of property and                         (694)     (1,072)
equipment
Proceeds from legal settlement                    1,744           -
Proceeds from sale of business                    5,406           -
Payments relating to acquisitions               (9,147)     (1,194)
Net cash used in investing                      (2,691)     (2,266)
activities

CASH FLOWS FROM FINANCING
ACTIVITIES:
Principal payments on capital                         -        (83)
leases
Issuance of ordinary shares                         820         254
Purchases of treasury shares                         -        (165)
Repayment of bank overdraft                       (192)       (376)
facility
Decrease in restricted cash                          29         261
deposits
Net cash provided by (used in)                      657       (109)
financing activities

Net decrease in cash and cash                   (9,187)     (4,263)
equivalents
Effect of exchange rate changes                     208       (172)
on cash and cash equivalents
Cash and cash equivalents at                     34,745      39,180
beginning of year
Cash and cash equivalents at end                 25,766   $  34,745
of year                             $

Supplemental disclosure of cash
flow information
    Interest paid                   $                24   $      30
    Taxes received                  $              (50)   $   (338)

Contact
Paul Byrne, President
Joseph Seery, VP Finance, Group
Trintech Group plc
+353 1 293 9840
paul.byrne@trintech.com
joseph.seery@trintech.com
The full press release including tables can be downloaded from the following link:

http://hugin.info/130706/R/1108384/200309.pdf



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