Trintech posts net loss for Q1 2008

Highlights

• Revenue amounted to $7.4 million compared to $5.5 million in Q1 last year, representing 33 percent growth.
• Gross profit amounted to $4.8 million in Q1, representing 66% of revenue, compared to $4.1 million and 75% in Q1 last year. The fall in gross margin percentage was primarily due to lower margins from the healthcare business acquired in the fourth quarter of fiscal 2007.
• Trintech has increased expenditure in research and development from $1.1 million in Q1 last year to $1.3 million in the same quarter this year. The increase was primarily due to the inclusion of costs related to the healthcare business.
• Trintech has also increased expenditure quarter on quarter in sales and marketing from $1.6 million in Q1 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 and increased investment in growing the sales and distribution network for Trintech's reconciliation products both in the USA and internationally.
• Trintech increased expenditure in general and administrative from $2.1 million in Q1 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.
• Trintech incurred an Adjusted EBITDA loss of $548,000 for Q1.
• Combined basic and diluted net loss per equivalent ADS for the quarter ended April 30, 2007 was $0.09, compared with a basic and diluted net loss per equivalent ADS of $0.13 for the quarter ended April 30, 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 and Chief Executive Officer said, "Trintech's Q1 results remained on track as we transition the business to a software and transaction services business model. Our growth in Q1 was fuelleeuelled by our continued investment in new innovative products and new growth markets as we expand the breadth of our product and services especially in the Financial Services and Healthcare markets. Our primary management goal is to deliver a profitable EBITDA growth performance in the second half of fiscal 2008."

Paul Byrne, President, added, "We continue to deliver revenue growth and expand our customer base as a result of the significant investments being made in increasing our sales force and investing in marketing campaigns to generate demand for our products and services. We expect to continue investing in expanding our sales and marketing capability to drive future revenue growth. The integration of the recent healthcare acquisition is on plan, and we continue to seek further acquisition opportunities to accelerate growth."

Recent Highlights include:
Trintech announced that Hess Corporation had selected AssureNET GL to automate and standardize general ledger reconciliation for its Exploration & Production Headquarters in Houston, Texas. AssureNET GL automates and controls key accounting activities, including account reconciliation processes; trending, variance, and balance flux analysis; manual journal entry review and approval; and closing process tasks and activities. Additionally, the accounting compliance system facilitates the creation of documents/reports necessary for audits, such as Sarbanes-Oxley.

Trintech announced that Snyder's Drug Stores, Inc. had selected ReconNET On-Demand and the DataFlow Transaction Network to streamline reconciliation processes across its enterprise. The DataFlow Transaction Network will capture, format, balance, and load daily bank data into ReconNET. ReconNET, accessible via the Internet, will be used to automate the verification and reconciliation of the company's bank deposits and credit cards. Snyder's is a leading drugstore chain in the Midwest of the US, with 110 stores reaching across Minnesota, Michigan, Illinois, Iowa, and Montana.

Trintech announced that Forever 21, Inc., had selected ReconNET to improve financial transaction management across its enterprise, including the verification and reconciliation of its cash deposits and credit cards. ReconNET will interface directly with Forever 21's point of sale and ledger systems, ensuring greater efficiency and consistency across the company. Founded in 1984, Forever 21 operates more than 400 stores in the US and Canada under the banners - Forever 21, Forever XXI, and For Love 21.

Trintech announced that it had partnered with Prodiance Corporation, a leading provider of solutions for financial spreadsheet remediation and control, to drive expansion of xlNET, a spreadsheet compliance tool. Spreadsheet compliance is a natural extension of Trintech's accounting compliance suite, which provides best-in-class solutions for automating critical accounting processes, including transaction matching, exception management, account reconciliation, and closing cycle activities. By partnering with Prodiance, Trintech further enhances its value proposition for financial departments seeking to optimize compliance processes, streamline operations, and reduce risks.

Trintech announced the appointment of Thomas S. Visotsky to Vice President of Sales. Mr. Visotsky will be responsible for all new business development efforts with healthcare entities located in the eastern half of the U.S. Most recently, Mr. Visotsky was national sales director of Besler Consulting where he was responsible for leading sales initiatives for Besler Consulting's Reimbursement, Revenue Cycle, Accreditation and Coding & Compliance product lines.

Results Overview:
Continuing Operations:

Revenue in the first quarter was $7.4 million compared with $5.5 million for the corresponding quarter last year, an increase of 33 percent.

Software license revenue for the quarter ended April 30, 2007 was $3.5 million compared with $3.2 million in the corresponding quarter last year, an increase of 8 percent.

Service revenue for the quarter ended April 30, 2007 increased 69 percent to $3.9 million from $2.3 million in the corresponding quarter last year.

Total gross margin for the first quarter was $4.8 million, an increase of 17 percent from $4.1 million in the corresponding quarter last year.

Total operating expenses from continuing operations for the first quarter were $6.5 million, an increase of 33 percent from $4.9 million in the corresponding quarter last year. Adjusted EBITDA operating expenses from continuing operations for the quarter ended April 30, 2007 were $5.8 million, an increase of 31 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 costs related to the healthcare business.

Adjusted EBITDA net loss from continuing operations was $548,000 for the first quarter, an increase of $468,000 from the corresponding quarter last year.

Trintech's balance sheet remains strong with net cash and cash equivalent balances of $24.7 million as of April 30, 2007. Net cash usage for the three months ended April 30, 2007 was $1.0 million, which included acquisition related payments of $875,000.

During the quarter ended April 30, 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 April 30, 2007.

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