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Trintech Reports Fourth Quarter and Fiscal Year 2009 Financial Results

Posted on: Tuesday, 3 March 2009, 21:00 CST

Revenues of $9.4 million for Q4 and $39.7 million for fiscal year 2009 representing growth of 5% and 20% compared to Q4 of the prior year and fiscal year 2008 respectively with adjusted EBITDA net income of $460,000 for Q4 and $1.6 million for fiscal year 2009.

DUBLIN and DALLAS, March 3 /PRNewswire-FirstCall/ -- Trintech Group Plc (Nasdaq: TTPA), a leading global provider of integrated financial governance, transaction risk management, and compliance solutions today announced revenues of $9.4 million for the fourth quarter ended January 31, 2009, an adjusted EBITDA net income from continuing operations of $460,000 and a net loss for the quarter of $334,000. Trintech is required to present its financial results on a continuing operations and discontinued operations basis due to a one-time gain of $920,000 relating to the final settlement of an escrow amount held back against any claims arising from the sale of Trintech's payments business to VeriFone Holdings, Inc. in September 2006. The remainder of this press release relates to continuing operations, unless otherwise mentioned.

Highlights:

• Revenue amounted to $9.4 million for Q4 of the 2009 fiscal year compared to $8.9 million in Q4 of the prior year, representing 5% growth.
• Revenue grew 20% for the 2009 fiscal year to $39.7 million compared to $32.9 million in the prior year.
• Trintech generated an adjusted EBITDA net income of $460,000 for Q4 of the 2009 fiscal year compared to an adjusted EBITDA net income of $595,000 for the corresponding period in the prior year. Adjusted basic and diluted net income per ADS was $0.03 for Q4 of the 2009 fiscal year compared to $0.04 for the same period in the prior year.
• Trintech generated an adjusted EBITDA net income of $1.6 million for the 2009 fiscal year compared to an adjusted EBITDA net loss of $327,000 in the prior year. Adjusted basic and diluted net income (loss) per ADS was $0.10 for the 2009 fiscal year compared to an adjusted net loss per ADS of $0.02 for the prior year.
• Trintech generated $655,000 cash from operating activities for Q4 of the 2009 fiscal year and increased its cash balances to $18.7 million (including restricted cash of $1.3 million) at the end of the year.
• Gross margin amounted to $6.1 million in Q4 of the 2009 fiscal year, representing 65% of revenue, compared to $6.4 million and 71% in Q4 of the prior year.
• Gross margin amounted to $26.4 million in the 2009 fiscal year representing 66% of revenue, compared to $22.2 million and 67% in the prior year.
• Trintech increased expenditure in research and development by 19% from $1.2 million in Q4 of the 2008 fiscal year to $1.4 million in the same quarter in the 2009 fiscal year and by 24% in the 2009 fiscal year to $6.1 million compared to $4.9 million in the prior fiscal year.
• Trintech reduced expenditure in sales and marketing by 7% from $2.7 million in Q4 in the 2008 fiscal year to $2.5 million in the same quarter in the 2009 fiscal year. Sales and marketing expenditure increased overall by 11% in the 2009 fiscal year to $11.9 million from $10.7 million in the prior fiscal year.
• General and administrative expenses decreased by 10% to $2.3 million in Q4 of the 2009 fiscal year compared to $2.6 million in Q4 of the 2008 fiscal year and by 2% in the 2009 fiscal year to $9.7 million from $9.8 million in the prior fiscal year.
• Net loss decreased by 53% from $706,000 in Q4 of the 2008 fiscal year to $334,000 in Q4 of the 2009 fiscal year and by 71% to $1.2 million in the 2009 fiscal year compared to $4.3 million in the prior year. Included in the net loss for the 2009 fiscal year is a one-time gain of $920,000 relating to the final settlement of an escrow amount held back against any claims arising from the sale of Trintech's payments business to VeriFone Holdings, Inc. in September 2006. Combined basic and diluted net loss per equivalent ADS for the quarter ended January 31, 2009 was $0.02, compared with a basic and diluted net loss per equivalent ADS of $0.04 for the quarter ended January 31, 2008.
• Combined basic and diluted net loss per equivalent ADS for the year ended January 31, 2009 was $0.08, compared with a basic and diluted net loss per equivalent ADS of $0.27 for the year ended January 31, 2008.

Cyril McGuire, Chairman & Chief Executive Officer, said, "Trintech's Q4 results reflect a solid quarter and year end performance with revenue growth and adjusted EBITDA net income of $460,000 for Q4 and $1.6 million for the 2009 fiscal year. Despite the turbulent global economic environment, our business model provides good visibility with a high level of recurring revenue, amounting to over 60% of annual revenues in the 2009 fiscal year. Trintech continues to be cash generative with net cash inflows of $523,000 during the quarter bringing our group cash reserves to $18.7 million (including restricted cash of $1.3 million) with no borrowings at 2009 fiscal year end. Our strategy will be to focus and invest in our organic Governance, Risk and Compliance (GRC) and healthcare business opportunities with management fully committed to driving growth in EBITDA profitability while maintaining strict cost control given the uncertain business outlook."

Paul Byrne, President, added, "In achieving our fifth consecutive quarter of adjusted EBITDA profitability, we continue to deliver on our strategy of adjusted EBITDA profitability growth and cash generation. Given the difficult economic environment, there is a growing need for organizations to improve operational efficiencies, reduce costs and strengthen governance platforms. Addressing these needs for our customers will enable us to continue to execute a robust financial model strategy in this changing market."

Recent Highlights include:

In November 2008, Trintech announced the availability of AssureNET GL 4.1, the latest release of their application for general ledger reconciliation, review, and certification. AssureNET GL 4.1 delivers new levels of automation in the core application and integration with Trintech's Unity Financial Close application through Unity's performance management dashboards. This integration ensures that all financial governance tasks and controls, including the status of reconciliations within AssureNET GL, are visible to the Unity user via the Close Status consoles of the Financial Close management dashboard.

Following the UK Chancellor's mandatory 2.5 per cent reduction of VAT in the UK, Trintech announced in November 2008 that its XLNET Enterprise Spreadsheet Management Solution offers a comprehensive solution for businesses wanting to rapidly locate and adjust spreadsheets to be compliant with this VAT rate reduction. By proactively inspecting spreadsheets and detecting potential VAT errors, companies can avoid fines and penalties following tax recovery audits performed by Her Majesty's Revenue and Customs.

Trintech announced that the Bay Area Users Group of Trintech customers' met in January 2009 at KPMG's offices in Mountain View, California as part of Trintech's on-going efforts to enable customers to share common experiences, discuss the latest market trends and innovations in financial governance, risk, and compliance, and provide insights towards Trintech's solution roadmap. KPMG's participation in the User Group forums enables Trintech customers to take advantage of KPMG's experience and capabilities in financial governance including knowledge gained from various joint KPMG and Trintech customers and relationships. Trintech has a large diverse customer base in California comprised of clients in various industries such as high technology, healthcare, energy, financial services and retail.

Results Overview:

Revenue for the year ended January 31, 2009 was $39.7 million compared with $32.9 million for the year ended January 31, 2008, an increase of 20%. Revenue for the fourth quarter ended January 31, 2009 was $9.4 million compared with $8.9 million for the corresponding quarter in the prior year, an increase of 5%.

Software license revenue for the year ended January 31, 2009 was $19.6 million compared with $16.6 million for the year ended January 31, 2008, an increase of 18%. The increase was primarily due to revenues generated from the Movaris business acquired in February 2008, strong FMS license sales and strong maintenance renewals for all products. Software license revenue for the quarter ended January 31, 2009 was $4.6 million compared with $4.9 million for the corresponding quarter in the prior year, a decrease of 7%. The decrease was primarily due to weaker FMS license sales in the quarter in North America and EMEA due to economic uncertainty in these markets negatively impacting our normal sale cycles with customers becoming more cautious, procurement processes lengthening and general uncertainty creating significant challenges to close new business. This fall in revenues was partially offset by strong maintenance renewals from existing customers and customers from the Movaris business.

Service revenue for the year ended January 31, 2009 was $20.1 million compared with $16.3 million for the year ended January 31, 2008, an increase of 23%. The increase was primarily due to revenues generated from the Movaris business, an increase in revenues from ASP and hosting services in our FMS and Healthcare businesses and strong FMS service revenues. Service revenue for the quarter ended January 31, 2009 was $4.9 million compared with $4.0 million for the corresponding quarter in the prior year, an increase of 20%. The increase was primarily due to an increase in revenues from ASP and hosting services in our FMS and Healthcare businesses, strong FMS service revenues and revenues generated from the Movaris business.

Total gross margin for the year ended January 31, 2009 was $26.4 million, an increase of 19% from $22.2 million for the year ended January 31, 2008. The overall gross margin percentage fell by 1% in the 2009 fiscal year to 66% from 67% in the 2008 fiscal year. Total gross margin for the fourth quarter ended January 31, 2009 was $6.1 million, a decrease of 4% from $6.4 million in the corresponding quarter in the prior year. Gross margin percentage decreased to 65% in Q4 of the 2009 fiscal year compared to 71% in the same period of the prior year. The decrease in margin and margin percentage was due to lower license revenues and a higher percentage of lower margin service revenues in Q4 of the 2009 fiscal year.

Total operating expenses for the year ended January 31, 2009 were $29.5 million, an increase of 9% from $27.0 million in the previous year. The increase was due to costs related to the acquired Movaris business. Total operating expenses for the fourth quarter ended January 31, 2009 were $6.8 million, a marginal decrease of 1% from $6.9 million in the corresponding quarter in the prior year. The impact of costs related to the Movaris business in the quarter was offset by reduced costs in other areas of the business due to restructuring changes in prior quarters.

Adjusted EBITDA operating expenses for the year ended January 31, 2009 were $26.1 million, an increase of 10% from $23.8 million in the previous year. Adjusted EBITDA operating expenses for the quarter ended January 31, 2009 were $6.0 million, flat compared to adjusted EBITDA operating expenses of $6.0 million for the corresponding period in the prior year.

Restructuring expenses were $252,000 and $98,000 for the year and quarter ended January 31, 2009 respectively. These charges related primarily to employee termination costs as a result of the company re-aligning its cost base in the current difficult economic environment.

The provision for income taxes was a credit of $356,000 and $243,000 for the year and quarter ended January 31, 2009. The tax credit was primarily due to a deferred tax credit in the US resulting from the finalization of the purchase accounting related to the acquisition of the Movaris business.

Adjusted EBITDA net income was $1.6 million for the year ended January 31, 2009 compared to an adjusted EBITDA net loss of $327,000 for the prior year. Adjusted EBITDA net income was $460,000 for the fourth quarter ended January 31, 2009 compared to an adjusted EBITDA net income of $595,000 for the corresponding quarter in the prior year.

Trintech's balance sheet remains strong with cash balances of $18.7 million (including restricted cash of $1.3 million) as of January 31, 2009. Net cash generated for the three months ended January 31, 2009 was $523,000, which included cash generated from operations of $655,000, a foreign exchange cash gain of $71,000, cash payments on the purchase of property and equipment of $27,000, capital lease payments of $37,000, acquisition costs of $67,000, increase in restricted deposits of $5,000 and $67,000 relating to purchases of the company's stock through the company share buy-back scheme.

Trintech will host a conference call to discuss its financial results and business outlook beginning at 15:30hrs (UK Time) today, Wednesday, March 4, 2009. Please see advisory for information on the call.

A web simulcast of Trintech's conference call reviewing our performance for Q4 of fiscal year 2009 and the full fiscal year 2009 and our business outlook for Q1 fiscal year 2010 will be broadcast live, Wednesday, March 4, 2009 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/investor. An instant telephone replay will also be available for 10 days by dialing +44 1452 55 00 00 and entering the following access number (8 2 7 1 4 3 3 7 #).

About Trintech Group

Trintech Group Plc (NASDAQ: TTPA) is a leading global provider of integrated financial governance, transaction risk management, and compliance solutions. The Company enables companies to achieve excellence in financial governance and performance management through a comprehensive platform of account reconciliation, accounting compliance, and financial reporting applications across the financial lifecycle.

Over 600 leading global organizations are realizing the benefits of Trintech solutions every day to gain greater control, visibility, and efficiency across financial processes; improve financial performance through stronger management of revenue and cost cycles; ensure the accuracy and integrity of financial data, thereby reducing the risk of material weaknesses and restatements and to drive immediate efficiencies and cost reductions in financial operations through automation and scalability. Trintech's customers include retail chains, commercial companies, financial institutions and healthcare providers in the United States, the UK and the Republic of Ireland, continental Europe and Australia. Top customers in recent years include Accenture, Regis Corporation, Sodexho Operations, Target Stores, Providence Health and Cleveland Clinic.

For more information on how Trintech can help you increase confidence in business performance and reduce financial risk, please contact us online at www.trintech.com or at our principal business office in Addison, Texas, or through an international office in Ireland, the United Kingdom, or the Netherlands.

Trintech - 15851 Dallas Parkway, Suite 900 - Addison, TX 75001 - Tel 1 972

701 9802

Trintech UK Ltd. - Warnford Court, 29 Throgmorton St. - London EC2N2AT, UK - Tel +44 (0) 20 7628 5235

Trintech Technologies - Block C, Central Park - Leopardstown, Dublin 18,

Ireland - Tel +353 1 293 9840

Trintech - Cypresbaan 9 - 2908 LT Capelle a/d Ijssel, The Netherlands -

Tel +31 (0) 10 8507 474

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 Trintech's growth strategy and Trintech management's belief that addressing customer needs will enable Trintech to continue to execute a robust financial model strategy. 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, 2008 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.

Contact Paul Byrne, President Joseph Seery, VP Finance, Group Trintech Group plc +353 1 293 9840 paul.byrne@trintech.com joseph.seery@trintech.com

TRINTECH GROUP PLC CONDENSED CONSOLIDATED BALANCE SHEETS (U.S. dollars in thousands, except share and per share data) January 31, January 31, ASSETS 2009 2008 Current assets Cash and cash equivalents $17,363 $23,766 Restricted cash 1,143 - Accounts receivable, net of allowance for doubtful accounts of $267 and $24 at January 31, 2009 and January 31, 2008, respectively 6,021 6,507 Prepaid expenses and other current assets 1,140 1,195 Deferred costs 296 69 Net current deferred tax asset 252 3 Total current assets 26,215 31,540 Non-current assets Restricted cash 170 338 Property and equipment, net 1,430 1,597 Deferred costs 261 109 Net non-current deferred tax asset - 136 Intangible assets, net 5,309 4,534 Goodwill 24,089 17,126 Total non-current assets 31,259 23,840 Total assets $57,474 $55,380 LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities Accounts payable 704 515 Accrued payroll and related expenses 1,878 2,156 Deferred consideration 2,970 1,049 Income taxes payable 161 184 Other accrued liabilities 1,674 1,718 Deferred revenues 10,122 8,317 Liabilities held for sale and in discontinued operations 56 141 Total current liabilities 17,565 14,080 Non-current liabilities Capital leases due after more than one year 42 190 Deferred consideration - 2,000 Income taxes payable 110 119 Net non-current deferred tax liability 252 - Deferred rent less current portion 537 427 Total non-current liabilities 941 2,736 Series B preference shares, $0.0027 par value 10,000,000 authorized at January 31, 2009 and January 31, 2008, respectively None issued and outstanding - - Shareholders' equity: Ordinary Shares, $0.0027 par value: 100,000,000 shares authorized; 33,454,385 and 32,413,719 shares issued and 31,843,333 and 31,821,201 shares outstanding at January 31, 2009 and January 31, 2008, respectively. 90 87 Additional paid-in capital 253,076 251,029 Treasury shares (at cost, 595,552 and 592,518 at January 31, 2009 and January 31, 2008, respectively) (879) (1,011) Accumulated deficit (209,367) (208,135) Accumulated other comprehensive loss (3,952) (3,406) Total shareholders' equity 38,968 38,564 Total liabilities and shareholders' equity $57,474 $55,380

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, 2009 2008 2009 2008 Revenue License $4,566 $4,891 $19,614 $16,640 Service 4,858 4,049 20,050 16,288 Total revenue 9,424 8,940 39,664 32,928 Cost of revenue License 540 387 2,246 1,573 Amortization of purchased technology 226 164 894 655 Service 2,564 2,020 10,173 8,482 Total cost of revenue 3,330 2,571 13,313 10,710 Gross margin 6,094 6,369 26,351 22,218 Operating expenses Research and development 1,439 1,213 6,069 4,890 Sales and marketing 2,506 2,696 11,875 10,690 General and administrative 2,336 2,583 9,663 9,842 Restructuring charge 98 - 252 - Amortization of purchased intangible assets 426 385 1,651 1,541 Total operating expenses 6,805 6,877 29,510 26,963 Loss from operations (711) (508) (3,159) (4,745) Interest income, net 55 192 320 1,039 Exchange gain, net 79 64 331 444 Loss before provision for income taxes (577) (252) (2,508) (3,262) Provision for income taxes 243 (454) 356 (1,011) Net loss from continuing operations (334) (706) (2,152) (4,273) Profit on sale of discontinued operations - - 920 - Net income from discontinued operations, net of tax - - 920 - Net loss $(334) $(706) $(1,232) $(4,273) Weighted-average shares used in computing basic and diluted net loss per Ordinary Share Basic and diluted 31,936,148 31,493,453 31,921,345 31,362,813 Basic and diluted loss per Ordinary Share $(0.01) $(0.02) $(0.04) $(0.14) Basic and diluted loss per equivalent ADS $(0.02) $(0.04) $(0.08) $(0.27) Basic and diluted loss from continuing operations per Ordinary Share $(0.01) $(0.02) $(0.07) $(0.14) Basic and diluted loss from continuing operations per equivalent ADS $(0.02) $(0.04) $(0.13) $(0.27) TRINTECH GROUP PLC RECONCILIATION OF NET LOSS FROM CONTINUING OPERATIONS TO ADJUSTED EBITDA NET INCOME (LOSS) FROM CONTINUING OPERATIONS (U.S. dollars in thousands, except share and per share data) Three months ended Twelve months ended January 31, January 31, 2009 2008 2009 2008 Net loss from continuing operations $(334) $(706) $(2,152) $(4,273) Adjustments: Depreciation 168 227 742 699 Amortization of purchased intangible assets 652 549 2,545 2,196 Share-based compensation 174 263 919 1,079 Restructuring charge 98 - 252 - Interest income, net (55) (192) (320) (1,039) Income taxes (243) 454 (356) 1,011 Adjusted Earnings Before Interest, Taxation, Depreciation, Amortization, Restructuring, Share-based compensation (EBITDA) net income (loss) from continuing operations $460 $595 $1,630 $(327) Adjusted basic and diluted EBITDA net income (loss) per Ordinary Share from continuing operations $0.01 $0.02 $0.05 $(0.01) Adjusted basic and diluted EBITDA net income (loss) per ADS from continuing operations $0.03 $0.04 $0.10 $(0.02) Note: Management believes adjusted EBITDA net income (loss) from continuing operations is an important measure of Company performance without consideration of the non-operating income and 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 ended Twelve months ended January 31, January 31, 2009 2008 2009 2008 Total operating expenses $6,805 $6,877 $29,510 $26,963 Adjustments: Restructuring charge (98) - (252) - Depreciation (154) (211) (668) (641) Amortization of purchased intangible assets (426) (385) (1,651) (1,541) Share-based compensation (160) (246) (857) (998) Adjusted EBITDA operating expenses $5,967 $6,035 $26,082 $23,783 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, 2009 2008 CASH FLOWS FROM OPERATING ACTIVITIES: Net loss $(1,232) $(4,273) Adjustments to reconcile net loss to net cash provided by (used in) operating activities: Depreciation 742 699 Amortization of purchased intangible assets 2,545 2,196 Share-based compensation 919 1,079 Profit on sale of business, net (920) - Effect of changes in foreign currency exchange rates (273) (35) Changes in operating assets and liabilities: Accounts receivable 804 473 Prepaid expenses and other current assets (707) (325) Value added tax receivable 24 (7) Accounts payable 193 (896) Accrued payroll and related expenses (555) (10) Deferred revenues 2,556 335 Value added tax payable 14 (67) Warranty reserve (25) (94) Other accrued liabilities (221) (477) Net cash provided by (used in) operating activities 3,864 (1,402) CASH FLOWS FROM INVESTING ACTIVITIES: Purchases of property and equipment (271) (581) Proceeds on sale of property, plant and equipment - 338 Proceeds (payments) relating to the sale of business 920 (331) Payments relating to acquisitions (8,816) (971) Net cash used in investing activities (8,167) (1,545) CASH FLOWS FROM FINANCING ACTIVITIES: Principal payments on capital leases (146) (93) Issuance of ordinary shares 124 799 Repurchase of ordinary shares (100) - Excess tax benefit from share-based compensation plans - 465 Increase in restricted cash deposits (975) (338) Net cash (used in) provided by financing activities (1,097) 833 Net decrease in cash and cash equivalents (5,400) (2,114) Effect of exchange rate changes on cash and cash equivalents (1,003) 114 Cash and cash equivalents at beginning of year 23,766 25,766 Cash and cash equivalents at end of year $17,363 $23,766 Supplemental disclosure of cash flow information Interest paid $31 $58 Taxes paid $222 $123 Supplemental disclosure of non-cash flow information Acquisition of property and equipment under capital leases $(30) $(412) Leasehold improvements funded by the landlord $249 $- Shares issued in connection with acquisition $1,239 $-

SOURCE Trintech Group Plc

Source: PR Newswire

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