SOURCE: Trintech Group Plc

August 22, 2007 02:09 ET

Trintech Reports Second Quarter Fiscal Year 2008 Financial Results

DUBLIN, IRELAND and DALLAS, TX--(Marketwire - August 22, 2007) -



Dublin, Ireland/Dallas, Texas - August 22, 2007- Trintech Group Plc (NASDAQ: TTPA), a leading global provider of financial software and services specializing in reconciliation workflow, revenue enhancement, transaction risk management, and compliance for commercial, financial, and healthcare markets, today announced second quarter revenues of $8.9 million, an Adjusted EBITDA loss of $226,000 and a net loss for the quarter of $1.0 million.

Highlights:

  * Revenue amounted to $8.9 million compared to $6.0 million in Q2
    last year, representing 48 percent growth.
  * Gross margin amounted to $6.0 million in Q2, representing 68% of
    revenue, compared to $4.6 million and 76% in Q2 last year. The
    fall in gross margin percentage was primarily due to lower
    margins from the healthcare business acquired in the fourth
    quarter of fiscal 2007.
  * Trintech has increased expenditure in research and development
    from $1.1 million in Q2 last year to $1.3 million in the same
    quarter this year. The increase was primarily due to the
    inclusion of costs related to the healthcare business.
  * Trintech has also increased expenditure quarter on quarter in
    sales and marketing from $1.8 million in Q2 last year to $3.0
    million in the same quarter this year. The increase was primarily
    due to the inclusion of costs related to the healthcare business
    and increased investment in growing the sales and distribution
    network for Trintech's reconciliation products both in the USA
    and internationally.
  * Trintech increased expenditure in general and administrative from
    $1.9 million in Q2 last year to $2.7 million in the same quarter
    this year. The increase was primarily due to the inclusion of
    costs related to the healthcare business and higher accounting,
    legal and compliance costs in Q2 this year.
  * Trintech incurred an Adjusted EBITDA loss of $226,000 for Q2
    compared to an Adjusted EBITDA loss of $974,000 for the
    corresponding period last year.
  * Combined basic and diluted net loss per equivalent ADS for the
    quarter ended July 31, 2007 was $0.07, compared with a basic and
    diluted net loss per equivalent ADS of $0.14 for the quarter
    ended July 31, 2006.
  * Following the sale of its payments systems business to VeriFone
    Holdings Inc. in the third quarter of fiscal 2007, Trintech is
    required to present its financial results on a continuing and
    discontinued basis.

Cyril McGuire, Chairman & Chief Executive Officer said, "Trintech's performance in Q2 was solid with a strong growth of 48% in sales revenue compared to Q2 last year. We are continuing to invest in new products and markets as we position Trintech for broader market adoption especially in new growth markets of Financial Services and Healthcare. Management is focused on organic growth opportunities and synergistic accretive acquisitions in our sector to accelerate revenue and profitability growth."

Paul Byrne, President, added, "Our strong year over year growth of 48% in revenue primarily driven by organic growth, reflects the success of the investments we have made, and will continue to make, in our sales force and marketing campaigns to generate demand for our products and services. We expect this investment across all product lines to drive sufficient revenue growth to return Trintech to EBITDA profitability for the second half of the current fiscal year. We continue to seek further partnership opportunities to expand our distribution channels and geographic reach."

Recent Highlights include:

Trintech announced that Agrium Inc., had selected AssureNET GL to automate and streamline their general ledger reconciliation process. Agrium, performing more than 1,500 reconciliations per month, will use AssureNET GL for general ledger reconciliation, reviews and approvals, variance analysis, manual journal entry review and approval, and closing process tasks and activities. Calgary-based Agrium Inc., (TSX and NYSE: AGU) is the largest agricultural retailer in the United States, operating more than 400 retail farm centers, across 25 states with another 30 facilities in Argentina and Chile.

Trintech announced that the Charity Financial Services division of Charities Aid Foundation (2007 recipients of the Queen's Award for Enterprise) had selected Trintech to improve financial transaction management across its Fundraising Support business. The Trintech solution will integrate with donor and financial administration systems, as well as business ledger systems to ensure more efficient reconciliation workflow and enhanced visibility to and control of funds. The Charities Aid Foundation (CAF) is a registered UK charity that is committed to effective giving, providing a range of specialist services to donors, companies and charities. CAF manages £2.2bn of individual, company, and charity funds, and helps to distribute approximately £300m annually across six continents.

Trintech announced that Aera Energy LLC (Aera) had selected AssureNET GL to automate general ledger reconciliation, review, and certification processes for accounting compliance. One of California's largest oil and gas producers, Aera, has properties that extend from the Los Angeles Basin to Coalinga. Its daily oil and gas output accounts for approximately 30% of the Californian state's production.

Trintech announced that United States Beef Corporation had selected ReconNET to automate the reconciliation of its cash, credit card, and gift card transactions, and the DataFlow Transaction Network to collect, aggregate, and deliver bank data. The automation of manual reconciliation and streamlined data delivery will enable United States Beef Corporation to increase organizational controls, reduce exposure to risk, and improve productivity. United States Beef Corporation has rapidly grown ever since the opening of its first Arby's restaurant in 1969. Today, the company is the largest Arby's franchisee in the world with over 240 restaurants in Oklahoma, Arkansas, Kansas, Illinois, and Missouri.

Trintech announced the availability of EOB PRO for ClearContracts, its web-based, revenue cycle management system. ClearContracts helps healthcare providers identify and correct underpayments due to payer non-compliance in the contract revenue cycle. EOB PRO converts paper-based Explanation of Benefits (EOBs) into Health Insurance Portability and Accountability Act of 1996 ("HIPAA") standard 835s, eliminating the intensive, manual process of posting paper EOB payments to a healthcare billing system.

Trintech held its 8th Annual General Meeting (AGM) as a public company in Dublin, Ireland on July 25, 2007. At the AGM, Cyril McGuire, Chairman and CEO, welcomed the approval by shareholders of all the ordinary and special resolutions.

Results Overview:

Continuing Operations:

Revenue in the second quarter was $8.9 million compared with $6.0 million for the corresponding quarter last year, an increase of 48 percent.

Software license revenue for the quarter ended July 31, 2007 was $4.5 million compared with $3.3 million in the corresponding quarter last year, an increase of 36 percent.

Service revenue for the quarter ended July 31, 2007 increased 61 percent to $4.4 million from $2.7 million in the corresponding quarter last year.

Total gross margin for the second quarter was $6.0 million, an increase of 31 percent from $4.6 million in the corresponding quarter last year.

Total operating expenses from continuing operations for the second quarter were $7.3 million, an increase of 42 percent from $5.1 million in the corresponding quarter last year. Adjusted EBITDA operating expenses from continuing operations for the quarter ended July 31, 2007 were $6.5 million, an increase of 42 percent on the Adjusted EBITDA operating expenses from continuing operations for the corresponding period last year. The increase in operating expenses and Adjusted EBITDA operating expenses was primarily due to the inclusion of $1.1 million operating expenses related to the healthcare business, increased investment in growing the sales and distribution network for Trintech's reconciliation products both in the USA and internationally and higher accounting, legal and compliance costs compared to the corresponding period in the prior year.

Adjusted EBITDA net loss from continuing operations was $239,000 for the second quarter compared to an adjusted EBITDA net income of $164,000 from the corresponding quarter last year.

Trintech's balance sheet remains strong with net cash and cash equivalent balances of $23.0 million as of July 31, 2007. Net cash usage for the three months ended July 31, 2007 was $1.5 million, which included payments relating to the sale of the Payments business of $331,000.

During the quarter ended July 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 July 31, 2007.

Trintech will host a conference call to discuss its financial results and business outlook beginning at 15:30hrs (UK Time) today, Wednesday, August 22, 2007. Please see advisory for information on the call.

A web simulcast of Trintech's conference call reviewing our performance for Q2 fiscal year 2008 and our business outlook for Q3 will be broadcast live today, Wednesday, August 22, 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 (1 2 7 6 9 0 2 5 #).

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 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 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; Dataflow Transaction Network for data collection and delivery and ClearContracts, an ASP service which enables healthcare 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 480 leading companies across a variety of industries rely on Trintech products and services. Clients include: Accenture, Providence Health System, Regis Corporation, 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 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 management's goals and its plan to seek further acquisition opportunities, Trintech's plans to continue investing in expanding its sales and marketing capabilities and the expected benefits therefrom, the expected benefits from Agrium Inc.'s installation of AssureNET GL, the expected benefits from Charities Aid Foundation's installation of ReconNET and the expected benefits from United States Beef Corporation's installation of ReconNET and DataFlow Transaction Network. 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, 2007 filed with the US Securities and Exchange Commission (www.sec.gov) and subsequent filings with the US Securities and Exchange Commission. 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)
                                            July 31,      January 31,
                                              2007           2007
ASSETS
Current assets
Cash and cash equivalents                 $    23,789   $      25,766
Accounts receivable, net of allowance for
doubtful accounts of
   $93 and $244 at July 31, 2007 and
January 31, 2007, respectively                  8,029           6,920
Prepaid expenses and other current assets       1,072           1,054
Net current deferred tax asset                    195             396
Assets held for sale and in discontinued
operations                                        108             204
          Total current assets                 33,193          34,340

Restricted cash                                   338               -
Property and equipment, net                     1,752           1,567
Intangible assets, net                          5,632           6,730
Goodwill                                       16,007          15,531
          Total non-current assets             23,729          23,828

          Total assets                    $    56,922   $      58,168

LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Bank overdraft                            $     1,094   $          -
Accounts payable                                1,352           1,263
Accrued payroll and related expenses            2,169           2,080
Deferred consideration                             75             795
Other accrued liabilities                       2,258           1,712
Deferred revenues                               8,120           7,964
Liabilities held for sale and in
discontinued operations                           177             962
          Total current liabilities            15,245          14,776
Non-current liabilities
Capital leases due after more than one
year                                              217               -
Deferred consideration                          1,945           2,003
Deferred rent less current portion                469             511
          Total non-current liabilities         2,631           2,514

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

Shareholders' equity:
   Ordinary Shares, $0.0027 par value:
100,000,000 shares authorized;
   32,038,801 and 31,875,219 shares
issued and 31,386,195
   and 31,159,093 shares outstanding at
July 31, 2007 and
   January 31, 2007, respectively.                 87              86
Additional paid-in capital                    249,591         248,898
Treasury shares (at cost, 652,606 and
716,126 at July 31, 2007 and
January 31, 2007, respectively)               (1,113)         (1,222)
Accumulated deficit                         (206,273)       (203,862)
Accumulated other comprehensive loss          (3,246)         (3,022)

          Total shareholders' equity           39,046          40,878

          Total liabilities and
shareholders' equity                      $    56,922   $      58,168



                         TRINTECH GROUP PLC
           CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
    (U.S. dollars in thousands, except share and per share data)

                             Three months             Six months
                            ended July 31,          ended July 31,
                           2007        2006        2007        2006

Revenue
   License              $   4,529   $   3,322   $   8,018   $   6,564
   Service                  4,368       2,709       8,248       5,008

          Total revenue     8,897       6,031      16,266      11,572

Cost of revenue
   License                    423         250         779         463
   Amortization of
purchased technology          164          38         328          76
   Service                  2,272       1,134       4,283       2,279

          Total cost of
revenue                     2,859       1,422       5,390       2,818

Gross margin                6,038       4,609      10,876       8,754

Operating expenses
   Research and
development                 1,254       1,110       2,529       2,184
   Sales and marketing      2,951       1,819       5,467       3,386
   General and
administrative              2,680       1,946       5,025       3,904
   Amortization of
purchased intangible
assets                        385         230         770         450
          Total
operating expenses          7,270       5,105      13,791       9,924

Loss from operations      (1,232)       (496)     (2,915)     (1,170)

   Interest income, net       292         355         582         679
   Exchange gain, net          23          67         197         181
Loss before provision
for income taxes            (917)        (74)     (2,136)       (310)

   Provision for income
taxes                       (148)        (20)       (291)        (97)
Net loss from
continuing operations     (1,065)        (94)     (2,427)       (407)

Loss from discontinued
operations                   (13)     (1,545)        (13)     (3,286)
Profit (loss) on sale
of discontinued
operations                     29       (460)          29       (460)
Net income (loss) from
discontinued
operations, net of tax         16     (2,005)          16     (3,746)

Net loss                $ (1,049)   $ (2,099)   $ (2,411)   $ (4,153)

Basic and diluted loss
per ordinary share      $  (0.03)   $  (0.07)   $  (0.08)   $  (0.14)

Basic and diluted loss
per equivalent ADS      $  (0.07)   $  (0.14)   $  (0.15)   $  (0.27)





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

                         Three months                 Six months
                        ended July 31,              ended July 31,
                      2007          2006          2007         2006

Loss from
continuing
operations      $     (1,065)    $    (94)     $ (2,427)    $   (407)



Adjustments:

Depreciation              151           79           301          153

Amortization of
purchased
intangible
assets                    549          268         1,098          526

Share-based
compensation              270          246           534          501
     Interest
income, net             (292)        (355)         (582)        (679)
     Income
taxes                     148           20           291           97

Adjusted
Earnings Before
Interest,
Taxation,
Depreciation,
Amortization,
Share-based
compensation
(EBITDA) net
(loss) income
for continuing
operations              (239)          164         (785)          191

Adjusted
Earnings Before
Interest,
Taxation,
Depreciation,
Amortization,
Share-based
compensation
(EBITDA) net
income (loss)
for
discontinued
operations                 13      (1,138)            13      (2,370)

Adjusted
Earnings Before
Interest,
Taxation,
Depreciation,
Amortization,
Share-based
compensation
(EBITDA) net
loss             $      (226)    $   (974)     $   (772)    $ (2,179)

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

                       Three months                 Six months
                      ended July 31,              ended July 31,
                      2007          2006          2007         2006

Total operating
expenses from
continuing
operations        $     7,270    $   5,105    $   13,791    $   9,924


Adjustments:

Depreciation            (138)         (68)         (275)        (132)

Amortization of
purchased
intangible
assets                  (385)        (230)         (770)        (450)

Share-based
compensation            (244)        (232)         (487)        (474)
Adjusted EBITDA
operating
expenses for
continuing
operations              6,503        4,575        12,259        8,868
Adjusted EBITDA
operating
expenses for
discontinued
operations               (29)        4,088          (29)        8,178
Adjusted EBITDA
operating
expenses          $     6,474    $   8,663    $   12,230    $  17,046

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)
                                           Six month ended
                                               July 31,
                                          2007                   2006
CASH FLOWS FROM OPERATING
ACTIVITIES:
Net loss                       $       (2,411)   $            (4,153)
Adjustments to reconcile net
loss to
net cash used in operating
activities:
  Depreciation                             301                    364
  Gain on sale of fixed assets             (5)                      -
  Amortization                           1,098                    526
  Share-based compensation                 534                    637
  Effect of changes in foreign
  currency exchange rates                 (15)                  (105)
  Changes in operating assets
  and liabilities:

           Inventories                      -                     338
           Accounts receivable         (1,067)                (1,079)
           Prepaid expenses
           and other assets              (121)                     73
           Amounts prepaid to
           related parties                  -                     440
           Value added tax
           receivable                       40                    131
           Accounts payable               (46)                (1,340)
           Accrued payroll and
           related expenses                 53                    422
           Deferred revenues               138                    727
           Value added tax
           payable                          52                   (36)
           Warranty reserve               (13)                (1,657)
           Other accrued
           liabilities                   (170)                  1,080
Net cash used in operating             (1,632)                (3,632)
activities
CASH FLOWS FROM INVESTING
ACTIVITIES:
Purchases of property and
equipment                                (478)                  (291)
Payments relating to sale of
business                                 (331)                (3,415)

Proceeds from legal settlement              -                   1,744
Payments relating to
acquisitions                             (887)                      -
Net cash used in investing             (1,696)                (1,962)
activities

CASH FLOWS FROM FINANCING
ACTIVITIES:
Principal payments on capital
leases                                    (20)                      -
Proceeds from sale of fixed
assets                                     338                      -
Issuance of ordinary shares                266                     71
Proceeds under bank overdraft
facility                                 1,094                    245
(Increase) decrease in
restricted cash deposits                 (338)                     14
Net cash provided by financing           1,340                    330
activities
Net decrease in cash and cash
equivalents                            (1,990)                (5,264)
Effect of exchange rate
changes on cash and cash
equivalents                                 11                    206
Cash and cash equivalents at
beginning of period                     25,766                 34,745
Cash and cash equivalents at
end of period                  $        23,789   $             29,687

Supplemental disclosure of
cash flow information
  Interest paid                $            33   $                 11
  Taxes paid (received)        $            13   $               (56)

Supplemental disclosure of
non-cash flow information
  Acquisition of property and
  equipment under capital
  leases                       $         (338)   $                 -

- END -


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/1148229/219271.pdf



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