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Home > Trintech Reports Fourth Quarter and Fiscal Year 2008 Financial Results

Trintech Reports Fourth Quarter and Fiscal Year 2008 Financial Results

Dublin, Ireland/Dallas, Texas - February 27, 2008- 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 revenues of $8.9 million for the fourth quarter ended January 31, 2008, an Adjusted EBITDA income of $595,000 and a net loss for the quarter of $706,000.

Highlights:

  • Trintech closed the acquisition of Movaris, Inc., a venture capital backed private company based in San Jose, California on February 14, 2008. The transaction is expected to be accretive to income on an EBITDA basis (earnings before interest, tax, depreciation and amortization) for the fiscal year ending January 31, 2009.
  • Revenue amounted to $8.9 million compared to $7.5 million in Q4 last year, representing 19% growth.
  • Revenue grew 28% for the 2008 fiscal year to $32.9 million compared to $25.8 million in the prior year.
  • Gross margin amounted to $6.4 million in Q4, representing 71% of revenue, compared to $5.3 million and 71% in Q4 last year.
  • Gross margin amounted to $22.2 million in the 2008 fiscal year, representing 67% of revenue, compared to $19.1 million and 74% in the prior 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 by 17% from $1.5 million in Q4 last year to $1.2 million in the same quarter in the 2008 fiscal year and by 1% in the 2008 fiscal year to $4.9 million compared to $4.95 million in the prior fiscal year. The decrease in expenditure in Q4 was primarily due to reduced staffing costs.
  • Trintech increased expenditure in sales and marketing by 60% from $1.7 million in Q4 in the 2007 fiscal year to $2.7 million in the same quarter in the 2008 fiscal year and by 51% for the 2008 fiscal year to $10.7 million compared to $7.1 million in the prior fiscal year. The increase was primarily due to an increase in costs relating to the FMS business due to increased headcount, higher commissions, additional marketing expenses and the impact of the weakening dollar against the pound compared to the prior year. The increase was also partially due to an additional month of healthcare costs in Q4 of the 2008 fiscal year compared to the prior year quarter and an additional ten months of healthcare costs in the 2008 fiscal year.
  • General and administrative expenses increased marginally by 1% in Q4 of the 2008 fiscal year compared to Q4 of the 2007 fiscal year and by 17% for the 2008 fiscal year to $9.8 million compared to $8.4 million in the prior fiscal year. The increase in year on year expenditure was due to the impact of the weakening dollar against the euro, the inclusion of additional costs relating to the healthcare business in the current year, and higher legal and professional costs.
  • On a consolidated basis, Trintech generated an Adjusted EBITDA income of $595,000 for Q4 2008 compared to an Adjusted EBITDA income of $65,000 for the corresponding period in the prior year.
  • On a consolidated basis, Trintech incurred an Adjusted EBITDA loss of $327,000 for the 2008 fiscal year compared to an Adjusted EBITDA loss of $2.9 million for the prior fiscal year.
  • Combined basic and diluted net loss per equivalent ADS for the quarter ended January 31, 2008 was $0.04, compared with a basic and diluted net income per equivalent ADS of $0.01 for the quarter ended January 31, 2007.
  • Combined basic and diluted net loss per equivalent ADS for the year ended January 31, 2008 was $0.27, compared with a basic and diluted net loss per equivalent ADS of $0.14 for the year ended January 31, 2007.
  • Following the sale of its payments systems business to VeriFone Holdings Inc. in the third quarter of fiscal year 2007, Trintech is required to present its financial results on a continuing and discontinued operations basis.

Cyril McGuire, Chairman & Chief Executive Officer said, “Trintech’s quarter and year end performance was solid with good underlying growth and EBITDA earnings being achieved in Q4. As part of our growth strategy for fiscal year 2009, we intend to continue to invest in new innovative software products for our global customer base and expand our market reach into new markets to position Trintech for strong EBITDA earnings growth. Following our recent acquisition of Movaris, Inc., we have a strong strategic and competitive position in the growing market for financial governance, risk and compliance solutions targeted at the office of the CFO.”

Paul Byrne, President, added, “In returning to EBITDA profitability in Q4, we have started to achieve a return on the increased investment in sales and marketing programs we initiated last year. We believe that these investment programs, combined with the Movaris acquisition, will enable us to continue to drive revenue growth in the current fiscal year and consequently to grow EBITDA profitability also. The acquisition of Movaris broadens our product suite for financial governance solutions and gives us the opportunity to cross-sell the acquired products to our existing 500+ customers as well as create significant additional opportunities for new business growth”.

Results Overview:

Continuing Operations:

Revenue for the year ended January 31, 2008 was $32.9 million compared with $25.8 million for the year ended January 31, 2007, an increase of 28%. Revenue for the fourth quarter was $8.9 million compared with $7.5 million for the corresponding quarter in the prior year, an increase of 19%.

Software license revenue for the year ended January 31, 2008 was $16.6 million compared with $14.4 million for the year ended January 31, 2007, an increase of 16%. The increase was due to higher revenues from our products in the US and Europe, Middle East and Africa (”EMEA”) markets and increased revenues generated from maintenance renewals from our existing customers.

Software license revenue for the fourth quarter was $4.9 million compared with $3.8 million for the corresponding quarter in the prior year, an increase of 27%. The increase was due to higher revenues from our products in the US and EMEA markets and increased revenues generated from maintenance renewals from our existing customers.

Service revenue for the year ended January 31, 2008 increased 43% to $16.3 million from $11.4 million for the year ended January 31, 2007, which was primarily due to revenues related to the healthcare business and to a lesser degree, increased revenues from FMS customers in our EMEA region. Service revenue for the fourth quarter increased 11% to $4.0 million from $3.7 million for the corresponding quarter in the prior year, which was primarily due to revenues related to the healthcare business.

Total gross margin for the year ended January 31, 2008 was $22.2 million, an increase of 17% from $19.1 million for the year ended January 31, 2007. Total gross margin for the fourth quarter was $6.4 million, an increase of 20% from $5.3 million in the corresponding quarter in the prior year.

Total operating expenses for the year ended January 31, 2008 were $27.0 million, an increase of 26% from $21.4 million in the previous year. Total operating expenses for the fourth quarter were $6.9 million, an increase of 14% from $6.0 million in the corresponding quarter in the prior year.

Adjusted EBITDA operating expenses from continuing operations for the year ended January 31, 2008 were $23.8 million, an increase of 24% on the Adjusted EBITDA operating expenses from continuing operations for the previous year. Adjusted EBITDA operating expenses from continuing operations for the quarter ended January 31, 2008 were $6.0 million, an increase of 13% on the Adjusted EBITDA operating expenses from continuing operations for the corresponding period in the prior year. The increase in operating expenses and Adjusted EBITDA operating expenses was primarily due to additional sales and marketing costs relating to the FMS business and additional costs included for the healthcare business in the fourth quarter 2008 and full 2008 fiscal year.

Consolidated Adjusted EBITDA net loss was $327,000 for the year ended January 31, 2008 compared to an adjusted EBITDA net loss of $2.9 million from the previous year. Consolidated Adjusted EBITDA net income was $595,000 for the fourth quarter compared to an adjusted EBITDA net income of $65,000 for the corresponding quarter in the prior year.

Trintech’s balance sheet remains strong with net cash and cash equivalent balances of $23.8 million as of January 31, 2008. Net cash utilized was $2 million for the year ended January 31, 2008.

During the quarter ended January 31, 2008, 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 January 31, 2008.

Trintech will host a conference call to discuss its financial results and business outlook beginning at 15:30hrs (UK Time) today, Wednesday, February 27, 2008. Please see advisory for information on the call.

A web simulcast of Trintech’s conference call reviewing our performance for Q4 fiscal year 2008 and our business outlook for Q1 and full fiscal year 2009 will be broadcast live today, Wednesday, February 27, 2008 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 55 00 00 and entering the following access number (3 5 2 4 9 0 2 7 #).

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 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 for fiscal 2009, Trintech management’s goals to maintain EBITDA growth opportunities resulting from investments made in the 2008 fiscal year, Trintech’s ability to grow revenues in the future, the expected benefits from the acquisition of Movaris Inc. and the Edward Hospital’s installation of ClearContracts. 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.

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

Published Wednesday, February 27th, 2008 at 1:00 am and filed under Earnings, Corporate, Press Releases.