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Trintech Reports Fourth Quarter and Fiscal Year 2009 Financial Results

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 p


Dublin, Ireland/Dallas, Texas - March 4, 2009

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:

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 today, 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 #).

Please click here to read the press release in its entirety.

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.

Published Wednesday, March 4th, 2009 and filed under Corporate - Earnings