SOURCE: Trintech Group Plc

November 21, 2007 02:08 ET

Trintech Reports Third Quarter Fiscal Year 2008 Financial Results

DUBLIN, IRELAND and DALLAS, TX--(Marketwire - November 21, 2007) -



Dublin, Ireland/Dallas, Texas - November 21, 2007- Trintech Group Plc (NASDAQ: TTPA), a leading provider of integrated financial governance, transaction risk management, and compliance solutions for commercial, financial, and healthcare markets worldwide, today announced third quarter revenues of $7.7 million, an Adjusted EBITDA loss of $164,000 and a net loss for the quarter of $1.2 million.

Highlights:

  * Revenue amounted to $7.7 million compared to $6.7 million in Q3
    last year, representing 15 percent growth.
  * Gross margin amounted to $5.0 million in Q3, representing 64% of
    revenue, compared to $5.0 million and 75% in Q3 last year. The
    fall in gross margin percentage was primarily due to the
    inclusion of the healthcare business acquired in Q4 of fiscal
    2007, which historically has had lower margins than our FMS
    business, and an increased amortization charge which was also
    related to the purchase of the healthcare business.
  * Trintech reduced expenditure in research and development from
    $1.3 million in Q3 last year to $1.2 million in the same quarter
    this year. The decrease was primarily due to reduced staffing
    costs.
  * Trintech increased expenditure quarter on quarter in sales and
    marketing from $2.0 million in Q3 last year to $2.5 million in
    the same quarter this year. The increase was primarily due to the
    inclusion of costs related to the healthcare business.
  * Trintech also increased expenditure in general and administrative
    from $2.0 million in Q3 last year to $2.3 million in the same
    quarter this year. The increase was primarily due to the
    inclusion of costs related to the healthcare business, higher
    professional costs related to tax and Sarbanes-Oxley compliance
    and the impact of the weakening US dollar on our euro-based costs
    in Q3 this year.
  * On a consolidated basis, Trintech incurred an Adjusted EBITDA
    loss of $164,000 for Q3 compared to Adjusted EBITDA loss of
    $782,000 for the corresponding period last year.
  * Combined basic and diluted net loss per equivalent ADS for the
    quarter ended October 31, 2007 was $0.07, compared with a basic
    and diluted net income per equivalent ADS of $0.11 for the
    quarter ended October 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 remains on track to return the business to EBITDA profitability by the end of our current fiscal year, despite a challenging and competitive marketplace. We continue to launch new innovative products and expand our market reach to position Trintech for broader growth opportunities in 2008."

Paul Byrne, President, added, "We continue to believe that our investment program in our product and sales and marketing programs will drive sufficient revenue growth to return Trintech to EBITDA profitability by the end of the current fiscal year. Whilst there are challenges in lengthening buying cycles as customers implement additional procurement processes, we continue to see growing pipelines and opportunities resulting from the investments we have made this fiscal year and are confident in our ability to grow revenues. We are also continuing to expand our distribution channels and geographic reach to underpin 2008 growth."

Recent Highlights include:

Trintech announced that Lafarge selected ReconNET to automate bank account reconciliation and to reduce exposure to risk. Lafarge Services (UK) Limited is the Shared Services operation that provides services to Lafarge operating entities in the UK, including Lafarge Aggregates, Lafarge Cement UK, and Lafarge Plasterboard. Lafarge is a leading supplier to the professional construction industry and the home improvement market.

Trintech announced that Delhaize Group selected AssureNET GL to shorten close cycles, reduce risk, and eliminate paper-based evidence binders. AssureNET GL will also help Delhaize Group better satisfy Sarbanes-Oxley compliance requirements. The Belgian food retailer, Delhaize Group, operates approximately 2,500 stores under several banners in the US and seven countries in Europe and Asia. At home, Delhaize Belgium runs 723 stores under banners such as Delhaize, AD Delhaize, Proxy Delhaize, and Tom & Co.

Trintech announced that Alimentation Couche-Tard Eastern Division selected ReconNET to automate funds reconciliation processes, monitor transactional risk, and optimize the resolution and reporting of exceptions. Alimentation Couche-Tard, French for "food for those who go to bed late," is the largest convenience store retailer in Quebec. The selection of ReconNET by Couche-Tard Eastern Division is part of an expansion in the convenience store sector; Circle K Divisions in Arizona and Mac's Convenience Stores in Ohio also currently utilize the ReconNET reconciliation system.

Trintech announced that it expanded its partnership with Prodiance Corporation, a leading provider of solutions for financial spreadsheet remediation and control, to deliver the XLNET spreadsheet risk and compliance management solution to the European market. The application complements Trintech's AssureNET GL and ReconNET reconciliation software solutions to provide enterprises with a compliance framework for managing critical spreadsheets associated with account reconciliation, financial reporting, budgeting, forecasting, revenue recognition, and other key financial processes.

Trintech announced the availability of ReconNET 7.4 which is Trintech's latest release in its integrated suite of Financial Governance software. The newest version of Trintech's reconciliation and account balancing application will help clients further streamline reconciliation workflow; reduce resource allocation to the reconciliation and exception management process; improve auditing, documentation, and internal control; and speed exception management resolution.

Trintech announced significant enhancements in the new release of its accounting compliance software solution, AssureNET GL. AssureNET GL version 3.3 is designed to help give complex global organizations a fully SOX-compliant transaction matching, reconciliation, and accounting compliance platform. AssureNET GL 3.3 includes user interface enhancements that increase efficiency and flexibility, as well as new security, search, and reporting features. AssureNET GL is used to automate and control key accounting activities by some of the world's most recognized companies, including Accenture, Regis Corporation, Rohm and Haas, Brady Corporation, JohnsonDiversey, AMC Theatres and East West Bank.

Trintech announced the release of its innovative Lifecycle Management (LCM) Payments solution for financial institutions. LCM Payments is a browser-based account reconciliation and positive pay solution that enables financial institutions to provide their clients with a more diverse range of real-time capabilities, based on customer-specific business requirements, while consolidating multiple existing systems into a single integrated platform. LCM Payments supplements other financial services solutions with advanced fraud prevention technology to provide clients with complete visibility into the status of their account reconciliation programs.

Trintech announced that Healthcare Financial Management Association (HFMA) had examined ClearContracts™ for Hospitals and Physician Groups, a solution that helps increase hospital revenue through the identification and correction of payer non-compliance issues in the contract revenue cycle, using the new HFMA Peer Review process. After undergoing rigorous review, ClearContracts now features the notable "Peer Reviewed by HFMA" mark. Concuity's ClearContracts™ is a web-based revenue cycle management solution that allows healthcare organizations to manage the entire contract revenue cycle.

Trintech announced the availability of Concuity Healthcare Solution Suite for financial institutions. ClearContracts™ for hospitals and ClearContracts Pro (for Professional Groups) are web-based applications designed to fit into a healthcare organization's revenue cycle management plan. ClearContracts enables all types of healthcare providers to analyze overall contract performance, verify expected reimbursement, and enhance the financial profitability of new and proposed payer contracts.

Trintech announced the availability of ClearContracts 7.2 which further improves Revenue Cycle Management with increased Contract Analysis and Negotiation Capabilities.

Results Overview:

Continuing Operations:

Revenue in the third quarter was $7.7 million compared with $6.7 million for the corresponding quarter last year, an increase of 15 percent.

Software license revenue for the quarter ended October 31, 2007 was $3.7 million compared with $4.0 million in the corresponding quarter last year, a decrease of 6 percent. The decrease in software license revenue was primarily due to customers extending the buy cycle as they implement additional procurement processes for our products in the US market. However, software license revenue has increased by 11 percent for the nine months ended October 31, 2007 compared with the corresponding period last year.

Service revenue for the quarter ended October 31, 2007 increased 46 percent to $4.0 million from $2.7 million in the corresponding quarter last year due primarily to revenues related to the healthcare business and to a lesser degree, increased revenues from FMS customers in our Europe, Middle East and Africa region.

Total gross margin for the third quarter was $5.0 million, which represented no change from the corresponding quarter last year.

Total operating expenses from continuing operations for the third quarter were $6.3 million, an increase of 15 percent from $5.5 million in the corresponding quarter last year. Adjusted EBITDA operating expenses from continuing operations for the quarter ended October 31, 2007 were $5.5 million, an increase of 11 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 $0.9 million operating expenses related to the healthcare business, higher professional costs related to tax and Sarbanes-Oxley compliance and the impact of the weakening US dollar on our euro-based costs compared to the corresponding period in the prior year.

Adjusted EBITDA net loss from continuing operations was $164,000 for the third quarter compared to an adjusted EBITDA net income of $350,000 from the corresponding quarter last year.

Trintech's balance sheet remains strong with net cash and cash equivalent balances of $23.9 million as of October 31, 2007. Net cash generated for the three months ended October 31, 2007 was $1.1 million.

During the quarter ended October 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 October 31, 2007.

Trintech will host a conference call to discuss its financial results and business outlook beginning at 15:30hrs (UK Time) today, Wednesday, November 21, 2007. Please see advisory for information on the call.

A web simulcast of Trintech's conference call reviewing our performance for Q3 fiscal year 2008 and our business outlook for Q4 will be broadcast live today, Wednesday, November 21, 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 (2 4 5 1 8 0 2 2 #).

About Trintech Group

Trintech Group Plc (NASDAQ: TTPA) is a leading provider of integrated financial governance, transaction risk management, and compliance solutions for commercial, financial, and healthcare markets worldwide. Trintech's recognized expertise in reconciliation underpins its suite of financial governance solutions, enabling businesses to address critical business objectives leading to more informed decision making and better overall business performance.

Over 500 leading global organizations, including - North Fork Bank, 7-Eleven, Kroger, Regal Entertainment, Accor, UPMC, Farmer's Insurance Group, YUM! Brands Restaurants, Rohm and Haas, Verizon Wireless, and Ameren - realize the benefits of Trintech's configurable and highly scalable solutions everyday to: improve performance through stronger management of the revenue cycle and disbursements; ensure the accuracy and integrity of financial data; identify and reduce transaction risk; improve the quality and timeliness of financial reporting; and strengthen internal controls to support compliance requirements.

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 to return to EBITDA profitability by the end of the current fiscal year, sales pipelines, opportunities resulting from investments made in the current fiscal year, Trintech's ability to grow revenues in the future, the expected benefits from Lafarge Service's installation of ReconNET GL, Delhaize Group's installation of AssureNET GL, Alimentation Couche-Tard Eastern Division's installation of ReconNET and the expanded partnership with Prodiance Corporation to the European market. 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)

                              October 31,             January 31,
                                  2007                   2007
ASSETS
Current assets
Cash and cash
equivalents              $             23,948   $              25,766
Accounts receivable, net
of allowance for
doubtful accounts of
   $43 and $244 at
October 31, 2007 and
January 31, 2007,
respectively                            5,926                   6,920
Prepaid expenses and
other current assets                    1,252                   1,054
Net current deferred tax
asset                                      55                     396
Assets held for sale and
in discontinued
operations                                  -                     204

          Total current
assets                                 31,181                  34,340
Non-current assets
Restricted cash                           338                       -
Property and equipment,
net                                     1,645                   1,567
Intangible assets, net                  5,083                   6,730
Goodwill                               15,985                  15,531
          Total
non-current assets                     23,051                  23,828

          Total assets   $             54,232   $              58,168

LIABILITIES AND
SHAREHOLDERS' EQUITY
Current liabilities
Bank overdraft           $                137   $                  -
Accounts payable                        1,172                   1,263
Accrued payroll and
related expenses                        1,849                   2,080
Deferred consideration                     75                     795
Other accrued
liabilities                             1,946                   1,712
Deferred revenues                       8,143                   7,964
Liabilities held for
sale and in discontinued
operations                                151                     962
          Total current
liabilities                            13,473                  14,776

Non-current liabilities
Capital leases due after
more than one year                        190                      -
Deferred consideration                  1,954                   2,003
Deferred rent less
current portion                           448                     511
          Total
non-current liabilities                 2,592                   2,514

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

Shareholders' equity
   Ordinary Shares,
$0.0027 par value:
100,000,000 shares
authorized;
   32,066,707 and
31,875,219 shares issued
and 31,474,189
   and 31,159,093 shares
outstanding at October
31, 2007 and
   January 31, 2007,
respectively.                              87                      86
Additional paid-in
capital                               249,897                 248,898
Treasury shares (at
cost, 592,518 and
716,126 at  October 31,
2007 and
January 31, 2007,
respectively)                         (1,011)                 (1,222)
Accumulated deficit                 (207,429)               (203,862)
Accumulated other
comprehensive loss                    (3,377)                 (3,022)
          Total
shareholders' equity                   38,167                  40,878
          Total
liabilities and
shareholders' equity     $             54,232   $              58,168



                       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,
                        2007         2006         2007         2006
Revenue
   License          $    3,731   $    3,985   $   11,750    $  10,550
   Service               3,991        2,739       12,238        7,748
          Total
revenue                  7,722        6,724       23,988       18,298

Cost of revenue
   License                 409          304        1,186          773

   Amortization of
purchased
technology                 164           41          491          117
   Service               2,172        1,355        6,462        3,661
          Total
cost of revenue          2,745        1,700        8,139        4,551

Gross margin             4,977        5,024       15,849       13,747

Operating
expenses
   Research and
development              1,152        1,313        3,679        3,483
   Sales and
marketing                2,527        2,025        7,994        5,423
   General and
administrative           2,263        1,950        7,286        5,838
   Amortization of
purchased
intangible assets          385          224        1,156          674
          Total
operating
expenses                 6,327        5,512       20,115       15,418

Loss from
operations             (1,350)        (488)      (4,266)      (1,671)

   Interest
income, net                264          402          845        1,079
   Exchange gain,
net                        184          213          381          397

(Loss) income
before provision
for income taxes         (902)          127      (3,040)        (195)

Provision for
income taxes             (253)        (145)        (543)        (243)

Net loss from
continuing
operations          $  (1,155)   $     (18)   $  (3,583)    $   (438)

Loss from
discontinued
operations                   -      (3,503)         (13)      (6,771)
Profit on sale of
discontinued
operations                   -        5,280           29        4,818
Net income (loss)
from discontinued
operations, net of
tax                          -        1,777           16      (1,953)

Net (loss) income   $  (1,155)   $    1,759   $  (3,567)   $  (2,391)

Basic and diluted
(loss) income per
ordinary share      $  (0.04)    $   0.06     $  (0.11)    $  (0.08)

Shares used in
computing basic net
(loss) income per
ordinary share      31,430,368   30,601,393   31,318,787   30,581,747

Shares used in
computing diluted
net (loss) income
per ordinary share  31,430,368   31,336,945   31,318,787   30,581,747

Basis and diluted
(loss) income per
ADS                 $   (0.07)   $   0.11     $  (0.23)    $  (0.16)




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

                          Three months               Nine months
                         ended Oct 31,              ended Oct 31,
                       2007          2006         2007         2006

Net loss from
continuing
operations        $    (1,155)    $    (18)    $ (3,583)    $   (438)
     Adjustments:
     Depreciation          171          124          472          277
     Amortization
of purchased
intangible assets          549          265        1,647          788
     Share-based
compensation               282          236          816          741
     Interest
income, net              (264)        (402)        (845)      (1,079)
     Income taxes          253          145          543          243
Adjusted Earnings
Before Interest,
Taxation,
Depreciation,
Amortization,
Share-based
compensation
(EBITDA) net
(loss) income for
continuing
operations         $     (164)    $     350    $   (950)    $     532
Adjusted Earnings
Before Interest,
Taxation,
Depreciation,
Amortization,
Share-based
compensation
(EBITDA) net
(loss) income for
discontinued
operations                   -      (1,132)           13      (3,491)
Adjusted Earnings
Before Interest,
Taxation,
Depreciation,
Amortization,
Share-based
compensation
(EBITDA) net loss  $     (164)    $   (782)    $   (937)    $ (2,959)


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              Nine months
                           ended Oct 31,            ended Oct 31,
                            2007       2006          2007        2006

Total operating
expenses from
continuing
operations            $    6,327    $ 5,512    $   20,115    $ 15,418

     Adjustments:
     Depreciation          (155)      (113)         (430)       (245)
     Amortization of
purchased intangible
assets                     (385)      (224)       (1,156)       (674)
     Share-based
compensation               (268)      (215)         (751)       (689)

Adjusted EBITDA
operating expenses
from continuing
operations            $    5,519    $ 4,960    $   17,778    $ 13,810
Adjusted EBITDA
operating expenses
discontinued
operations                    -       1,572          (29)       9,933
Adjusted EBITDA
operating expenses    $    5,519    $ 6,532    $   17,749    $ 23,743


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,
                                        2007             2006
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss                              $      (3,567)   $      (2,391)
Adjustments to reconcile net loss to
net cash used in operating
activities:
   Depreciation                                  472              496
   Gain on sale of fixed assets                  (5)               -
   Amortization of purchased
   intangible assets                           1,647              791
   Share-based compensation                      816              932
   Profit on sale of business, net                -           (4,818)
   Effect of changes in foreign
   currency exchange rates                      (15)            (307)
   Changes in operating assets and
   liabilities:
          Inventories                             -               430
          Accounts receivable                  1,054              219
          Prepaid expenses and other
          current assets                        (33)             (43)
          Amounts prepaid to related
          parties                                 -               440
          Value added tax receivable              33              358
          Accounts payable                     (235)          (3,490)
          Accrued payroll and related
          expenses                             (310)              659
          Deferred revenues                      149              627
          Value added tax payable               (53)            (441)
          Warranty reserve                      (16)          (1,691)
          Other accrued liabilities            (553)            2,783
Net cash used in operating activities          (616)          (5,446)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment            (538)            (555)
(Payment) proceeds relating to sale
of business                                    (331)            5,406
Proceeds from legal settlement                    -             1,744
Payments relating to acquisitions              (865)          (3,415)
Net cash (used in) provided by               (1,734)            3,180
investing activities

CASH FLOWS FROM FINANCING ACTIVITIES:
Principal payments on capital leases            (45)                -
Proceeds on sale of fixed assets                 338                -
Issuance of ordinary shares                      390              169
Proceeds under bank overdraft
facility                                         137              976
(Increase) decrease in restricted
cash deposits                                  (338)               14
Net cash provided by  financing                  482            1,159
activities

Net decrease in cash and cash
equivalents                                  (1,868)          (1,107)
Effect of exchange rate changes on
cash and cash equivalents                         50              204
Cash and cash equivalents at
beginning of period                           25,766           34,745
Cash and cash equivalents at end of
period                                $       23,948   $       33,842

Supplemental disclosure of cash flow
information
   Interest paid                      $           53   $           13
   Taxes paid (received)              $          118   $         (75)

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/1169826/230420.pdf



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