Revenues of $9.2 million and Adjusted EBITDA Net Income of $693,000
DUBLIN and DALLAS, May 26 /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 $9.2 million for the first quarter ended April 30, 2009, an adjusted EBITDA net income of $693,000 and a net loss for the quarter of $411,000.
Highlights:
- Revenue amounted to $9.2 million for Q1 of the 2010 fiscal year compared to $9.6 million in Q1 of the prior year, representing a 5% reduction in revenue.
- Trintech generated an adjusted EBITDA net income of $693,000 for Q1 of the 2010 fiscal year compared to an adjusted EBITDA net income of $405,000 for the corresponding period in the prior year, an increase of 71%. Adjusted EBITDA net income per ADS was $0.04 for Q1 of the 2010 fiscal year compared to $0.03 for the same period in the prior year.
- Trintech had cash balances of $17.1 million (including restricted cash of $170,000) at April 30, 2009 after incurring $2.9 million on final acquisition payments during the quarter. The Company also generated $1.3 million cash from operating activities for Q1 of the 2010 fiscal year which was an increase of 24% compared to the same period in the prior year.
- Gross margin amounted to $6.1 million in Q1 of the 2010 fiscal year, representing 66% of revenue, compared to $6.7 million and 69% in Q1 of the prior year.
- Trintech incurred research and development expenditure of $1.5 million in Q1 of the 2010 fiscal year which was the same as Q1 in the prior year.
- Trintech reduced expenditure in sales and marketing by 27% from $3.1 million in Q1 in the 2009 fiscal year to $2.2 million in the same quarter in the 2010 fiscal year.
- General and administrative expenses decreased by 14% to $2.1 million in Q1 of the 2010 fiscal year compared to $2.5 million in Q1 of the 2009 fiscal year.
- Net loss decreased by 16% from $488,000 in Q1 of the 2009 fiscal year to $411,000 in Q1 of the 2010 fiscal year. Combined basic and diluted net loss per equivalent ADS for the quarter ended April 30, 2009 was $0.03, which was the same as for the quarter ended April 30, 2008.
Cyril McGuire, Chairman & Chief Executive Officer, said, "Trintech's Q1 results represent a solid performance with good progress on adjusted EBITDA net income of $693,000 representing growth of 71% compared to last year. Given the uncertain market environment, we have maintained a strict control on operating costs and a strong focus on adjusted EBITDA earnings and cash generation from operations. We are experiencing some stabilisation in our markets particularly healthcare with customer pipeline and bookings showing positive signs. Our product strategy of delivering real cost benefits in the finance function by driving automation and increased efficiencies is allowing our customers and partners to maximise their investment return."
Paul Byrne, President, added, "Trintech's strategy of helping senior finance executives automate more of their financial processes, resulting in greater efficiency as well as lower cost and risk is resonating with the market and driving increasing interest in our products in the current challenging economic environment. We believe that, as the growing sales opportunities develop into revenue and we maintain an efficient cost structure, Trintech will deliver year-over-year growth in EBITDA profitability."
Recent Highlights include:
Trintech announced that Altera Corporation had selected its AssureNET GL enterprise software solution to automate and streamline balance sheet and general ledger account reconciliation processes for the company's global finance organization. Altera is a pioneer of programmable logic solutions, enabling system and semiconductor companies to rapidly and cost-effectively innovate, differentiate, and win in their markets.
Trintech announced that Spotless had selected Trintech's ReconNET and AssureNET GL solutions to improve reconciliation and exception management processes and drive increased operational efficiency. Spotless Group is a global services organization comprised of Facility Services and Retailer Services employing more than 30,000 people worldwide. Spotless' Facility Services operates across Australia and New Zealand, providing Managed Services, Food Services, Cleaning Services, and Laundry Services across a broad range of industry sectors. Spotless' Retail Services, operating under the brand Braiform, provides customized garment hanger and packaging solutions to retailers and garment manufacturers in more than 30 countries worldwide.
Trintech exhibited its integrated account reconciliation, compliance, financial close and reporting, and enterprise risk management software solutions and led a panel discussion with KPMG at the annual Shared Services Week in Orlando, Florida held in March 2009. Shared Services and Outsourcing Network or SSON's Annual Shared Services Week is the largest annual gathering of shared services professionals in the world, attracting over 600 attendees from over 22 countries. Executives from start-ups, intermediate, and mature shared services organizations collaborated to share leading best practices in the rapidly growing area of financial operations.
Results Overview:
Revenue for the first quarter ended April 30, 2009 was $9.2 million compared with $9.6 million for the corresponding quarter in the prior year, a decrease of 5%. The strengthening of the dollar versus the pound and the euro accounted for approximately $150,000 of this revenue variance and the remaining revenue variance was due to the reasons outlined below.
Software license revenue for the quarter ended April 30, 2009 was $4.8 million compared with $4.9 million for the corresponding quarter in the prior year, a decrease of 2%. The decrease was primarily due to weaker governance, risk and compliance (GRC) license sales in the quarter in the US and European markets 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 stronger maintenance revenues from existing customers.
Service revenue for the quarter ended April 30, 2009 was $4.4 million compared with $4.7 million for the corresponding quarter in the prior year, a decrease of 8%. The decrease was primarily due to a fall in revenues from our GRC business in the US and European markets which was partially offset by an increase in revenues from ASP services in our Healthcare business in the US.
Total gross margin for the first quarter ended April 30, 2009 was $6.1 million, a decrease of 9% from $6.7 million in the corresponding quarter in the prior year. Gross margin percentage decreased to 66% in Q1 of the 2010 fiscal year compared to 69% in the same period of the prior year. The decrease in margin and margin percentage was due to lower service revenues and a resulting fall in service margin caused by lower utilization rates in our GRC service business in Q1 of the 2010 fiscal year.
Total operating expenses for the first quarter ended April 30, 2009 were $6.5 million, a decrease of 13% from $7.5 million in the corresponding quarter in the prior year. The decrease in costs was primarily due to headcount reductions and lower salary costs. There has also been a reduction in discretionary expenditure in all areas over the last year as the economic position worsened in the US and Europe. The strengthening of the dollar versus the pound and the euro accounted for approximately $350,000 of this operating cost reduction compared to Q1 in the prior year.
Adjusted EBITDA operating expenses for the quarter ended April 30, 2009 were $5.6 million, a decrease of 15% compared to adjusted EBITDA operating expenses of $6.6 million for the corresponding period in the prior year.
Restructuring expenses were $234,000 for the quarter ended April 30, 2009. 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 $36,000 for the quarter ended April 30, 2009 which related to state taxes payable in the US.
Adjusted EBITDA net income was $693,000 for the first quarter ended April 30, 2009 compared to an adjusted EBITDA net income of $405,000 for the corresponding quarter in the prior year. This represented a 71% increase from Q1 in the prior year and reflects the company's lower operating cost base. Trintech's balance sheet remains strong with cash balances of $17.1 million (including restricted cash of $170,000) as of April 30, 2009. Net cash utilized (including restricted cash) for the three months ended April 30 2009 was $1.6 million, which included cash generated from operations of $1.3 million and acquisition related payments of $2.9 million. These acquisition related payments represent the final settlements in respect of all prior period acquisitions.
Trintech will host a conference call to discuss its financial results and business outlook beginning at 15:30hrs (UK Time) today, Wednesday, May 27, 2009. Please see advisory for information on the call.
A web simulcast of Trintech's conference call reviewing our performance for Q1 of fiscal year 2010 and our business outlook for Q2 fiscal year 2010 will be broadcast live today, Wednesday, May 27, 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 (99452612 #).
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. Customers who have used our software in recent years include Ericsson, Blackstone Group, Regis Corporation, Providence Health Systems and Cleveland Clinic Foundation.
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 business outlook and product 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.
TRINTECH GROUP PLC
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(U.S. dollars in thousands)
April 30, January 31,
2009 2009
ASSETS
Current assets
Cash and cash equivalents $16,913 $17,363
Restricted cash - 1,143
Accounts receivable, net of allowance for
doubtful accounts of $327 and $267 at April 30,
2009 and January 31, 2009, respectively 4,714 6,021
Prepaid expenses and other current assets 1,274 1,140
Deferred costs 333 296
Net current deferred tax asset 302 252
Total current assets 23,536 26,215
Non-current assets
Restricted cash 170 170
Property and equipment, net 1,281 1,430
Deferred costs 324 261
Intangible assets, net 4,716 5,309
Goodwill 23,990 24,089
Total non-current assets 30,481 31,259
Total assets $54,017 $57,474
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Accounts payable 102 704
Accrued payroll and related expenses 1,450 1,878
Deferred consideration - 2,970
Income taxes payable 171 161
Other accrued liabilities 1,485 1,674
Deferred revenues 11,201 10,122
Liabilities held for sale and in discontinued
operations - 56
Total current liabilities 14,409 17,565
Non-current liabilities
Capital leases due after more than one year - 42
Income taxes payable 141 110
Net non-current deferred tax liability 302 252
Deferred rent less current portion 504 537
Total non-current liabilities 947 941
Series B preference shares, $0.0027 par value
10,000,000 authorized at April 30, 2009 and
January 31, 2009, respectively
None issued and outstanding - -
Shareholders' equity:
Ordinary shares, $0.0027 par value: 100,000,000
shares authorized; 33,454,385 shares issued,
32,945,761 and 31,843,333 shares outstanding
at April 30, 2009 and January 31, 2009,
respectively 90 90
Additional paid-in capital 253,087 253,076
Treasury shares (at cost, 508,624 and 595,552
at April 30, 2009 and January 31, 2009,
respectively) (750) (879)
Accumulated deficit (209,778) (209,367)
Accumulated other comprehensive loss (3,988) (3,952)
Total shareholders' equity 38,661 38,968
Total liabilities and shareholders' equity $54,017 $57,474
TRINTECH GROUP PLC
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(U.S. dollars in thousands, except share and per share data)
Three months
ended April 30,
2009 2008
Revenue:
License $4,806 $4,898
Service 4,359 4,743
Total revenue 9,165 9,641
Cost of revenue:
License 556 498
Amortization of purchased technology 181 216
Service 2,375 2,244
Total cost of revenue 3,112 2,958
Gross Margin 6,053 6,683
Operating expenses:
Research and development 1,486 1,492
Sales and marketing 2,236 3,079
General and administrative 2,146 2,489
Restructuring charge 234 -
Amortization of purchased intangible assets 412 395
Total operating expenses 6,514 7,455
Loss from operations (461) (772)
Interest income, net 25 118
Exchange gain, net 61 105
Loss before provision for income taxes (375) (549)
Provision for income taxes (36) 61
Net loss $(411) $(488)
Shares used in computing basic and diluted
net loss per Ordinary Share 32,734,874 31,889,741
Basic and diluted loss per Ordinary Share $(0.01) $(0.02)
Basic and diluted loss per equivalent ADS $(0.03) $(0.03)
TRINTECH GROUP PLC
RECONCILIATION OF NET LOSS TO ADJUSTED EBITDA NET INCOME
(U.S. dollars in thousands, except share and per share data)
Three months
ended April 30,
2009 2008
Net loss $(411) $(488)
Adjustments:
Depreciation 167 202
Amortization 593 611
Share-based compensation 99 259
Restructuring charge 234 -
Interest income, net (25) (118)
Income taxes 36 (61)
Adjusted Earnings Before Interest, Taxation,
Depreciation, Restructuring and Amortization,
(EBITDA) net income $693 $405
Shares used in computing basic net loss per
equivalent ADS 16,367,437 15,944,871
Adjusted EBITDA net income per equivalent ADS $0.04 $0.03
Note: Management believes Adjusted EBITDA net income 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 April 30,
2009 2008
Total operating expenses $6,514 $7,455
Adjustments:
Restructuring charge (234) -
Depreciation (159) (180)
Amortization (412) (395)
Share-based compensation (92) (246)
Adjusted EBITDA operating expenses $5,617 $6,634
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 (UNAUDITED)
(U.S. dollars in thousands)
Three months
ended April 30,
2009 2008
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $(411) $(488)
Adjustments to reconcile net loss to net
cash provided by operating activities:
Depreciation 167 202
Amortization 593 611
Share-based compensation 99 259
Effect of changes in foreign currency
exchange rates (21) (70)
Changes in operating assets and liabilities:
Accounts receivable 2,444 962
Prepaid expenses and other current assets (208) (309)
Accounts payable (606) 367
Accrued payroll and related expenses (441) (882)
Deferred revenues (67) 746
Other accrued liabilities (295) (388)
Net cash provided by operating activities 1,254 1,010
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment (17) (121)
Payments relating to acquisitions (2,870) (8,337)
Net cash used in investing activities (2,887) (8,458)
CASH FLOWS FROM FINANCING ACTIVITIES:
Principal payments on capital leases (39) (35)
Issuance of ordinary shares 41 65
Decrease in restricted cash deposits 1,143 -
Net cash provided by financing activities 1,145 30
Net decrease in cash and cash equivalents (488) (7,418)
Effect of exchange rate changes on cash and
cash equivalents 38 138
Cash and cash equivalents at beginning of period 17,363 23,766
Cash and cash equivalents at end of period $16,913 $16,486
Supplemental disclosure of cash flow information
Interest paid $5 $9
Taxes (received) paid $(4) $28
Supplemental disclosure of non-cash flow information
Acquisition of property and equipment under
capital leases $- $30
Shares issued in connection with acquisition $- $1,239
SOURCE Trintech Group Plc
