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Trintech posts Q2 net income

26 August 2009  |  1957 views  |  0 Source: Trintech Group

Trintech Group (Nasdaq: TTPA), a leading global provider of integrated financial governance, transaction risk management, and compliance solutions, today announced revenues of $9.9 million for the second quarter ended July 31, 2009, an adjusted EBITDA net income of $1.5 million and a net profit for the quarter of $603,000.

Highlights:

  • Revenue amounted to $9.9 million for Q2 of the 2010 fiscal year which represented a 5% reduction compared to the same period of the prior year.
  • Trintech generated an adjusted EBITDA net income of $1.5 million for Q2 of the 2010 fiscal year compared to an adjusted EBITDA net income of $215,000 for the corresponding period in the prior year, representing growth of 595%. Adjusted EBITDA net income per ADS was $0.09 for Q2 of the 2010 fiscal year compared to $0.01 for the same period in the prior year.
  • Trintech had cash balances of $17.8 million (including restricted cash of $170,000) at July 31, 2009. The Company also generated $826,000 cash from operating activities for Q2 of the 2010 fiscal year which was an increase of $945,000 compared to the same period in the prior year.
  • Gross margin amounted to $7.0 million in Q2 of the 2010 fiscal year, representing 71% of revenue, compared to $7.1 million and 68% in Q2 of the prior year.
  • Trintech incurred research and development expenditure of $1.4 million in Q2 of the 2010 fiscal year compared with $1.6 million in Q2 of the prior year, a decrease of 11%.
  • Trintech reduced expenditure in sales and marketing by 22% from $3.5 million in Q2 in the 2009 fiscal year to $2.7 million in the same quarter in the 2010 fiscal year.
    * General and administrative expenses decreased by 18% to $2.1 million in Q2 of the 2010 fiscal year compared to $2.6 million in Q2 of the 2009 fiscal year.
  • Trintech generated a net income of $603,000 in Q2 of the 2010 fiscal year compared with a net loss of $965,000 in Q2 of the 2009 fiscal year. Combined basic and diluted net income per equivalent ADS for the quarter ended July 31, 2009 was $0.04, compared to a basic and diluted net loss of $0.06 for the same period in the prior year.

Cyril McGuire, Chief Executive Officer, said, "Our Q2 trading performance was strong with very robust growth in our EBITDA earnings of $1.5 million representing over 595% growth compared to the same period last year. Our management focus is to increase profitability and cash generation, control our operating costs while still investing in target opportunities. During the quarter, we experienced growth in our customer pipeline, an improvement in our order backlog, and some early encouraging signs of recovery in our target markets. Overall, Trintech is well positioned to execute and capitalise on future market opportunities as the broader economy recovers."

Paul Byrne, President, added, "Trintech's strategy of helping senior finance executives drive real financial returns from automating more of their financial processes continues to underpin strong EBITDA profit growth. As the economic environment begins to recover and we benefit from the launch of new products, such as Unity XFR, and develop new partnerships, we believe the Company will continue to grow EBITDA profitability."

Recent Highlights include:

Trintech announced that P.F. Chang's has selected its ReconNET software to automate their high volume revenue and treasury reconciliation process. ReconNET is a component of Trintech's Unity platform, a suite of modular software that enables companies to meet their financial governance, risk management and compliance goals. P.F. Chang's China Bistro, Inc. owns and operates two restaurant concepts in the Asian niche in the United States.

Trintech announced that Mexx has selected its ReconNET software for financial process compliance. Mexx markets an extensive range of fashion apparel and lifestyle accessories for women, men and children.

Trintech announced a strategic partnership with WNS (Holdings) Limited (NYSE: WNS - News), a leading provider of business process outsourcing (BPO) services and solutions. Under the terms of the agreement, WNS will offer its customers Trintech's financial governance applications, implementation services and technical support in order to maximize efficiencies, tighten controls and increase ROI from financial operations.

Trintech announced that Providence Health & Services had increased revenue by $35 million using Concuity ClearContracts. Trintech signed an agreement to expand the breadth of services provided to the Providence multi-hospital system. Providence Health & Services has, based on the success achieved to date, extended its agreement to include the addition of four more facilities using the ClearContracts software-as-a-service revenue management solution from Concuity. The expanded agreement includes an extension of Concuity's ClearContracts solutions to the 16 hospitals located in the Washington, Alaska, Montana and California regions of Providence Health & Services. Providence uses ClearContracts for all contract management functions including accounts receivables management, account recovery, management reporting and managed care contract negotiations.

Trintech announced the availability of Unity Xtensible Financial Reporting (XFR), a financial reporting software solution with embedded support for the tagging and output of XBRL-compliant financial statements. As global accounting standards have started to converge, businesses are increasingly being required to understand and adopt XBRL as an enabling technology in enterprise wide disclosure initiatives being mandated by global financial governing bodies, such as the SEC's Final Rule in the US and HMRC in the UK.

Trintech announced that the independent research firm Forrester Research, Inc. had included Trintech on its report "The Forrester Wave(TM): Enterprise Governance, Risk and Compliance Platforms, Q3 2009."

Trintech held its 10th Annual General Meeting (AGM) as a public company in Dublin, Ireland. At the AGM, Cyril McGuire, Chairman and CEO, welcomed the approval by shareholders of all the ordinary and special resolutions including the approval of the share buy-back agreement with First Analysis Securities Corporation. The timing and amount of any repurchase by Trintech under the share buy-back programme will be dependent upon market conditions, securities law limitations and other corporate considerations.

Trintech announced the successful conclusion of its thirteenth annual US-based Customer Conference held May 18-20 at the Omni Fort Worth Hotel in Fort Worth, Texas. The Conference, which attracted more than 200 attendees, featured finance, accounting and treasury professionals from world-class organizations, including Intel, Target, Hewlett Packard, FedEx Office, Lockheed Martin, Sprint, Yahoo!, Questar and more. This year's conference theme focused on helping clients maximize current and planned investments in governance, risk and compliance solutions to increase productivity and achieve more with existing resources.

Results Overview:

Revenue for the second quarter ended July 31, 2009 was $9.9 million compared with $10.5 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 $115,000 of this revenue variance and the remaining revenue variance was due to the reasons outlined below.

Software license revenue for the quarter ended July 31, 2009 was $5.3 million compared with $5.4 million for the corresponding quarter in the prior year, a decrease of 1%. The decrease was primarily due to weaker governance, risk and compliance (GRC) license sales in the quarter in the EMEA 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 in the US.

Service revenue for the quarter ended July 31, 2009 was $4.6 million compared with $5.1 million for the corresponding quarter in the prior year, a decrease of 10%. 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 second quarter ended July 31, 2009 was $7.0 million, a decrease of 1% from $7.1 million in the corresponding quarter in the prior year. Gross margin percentage increased to 71% in Q2 of the 2010 fiscal year compared to 68% in the same period of the prior year. The increase in margin percentage was due to a change in the revenue mix.

Total operating expenses for the second quarter ended July 31, 2009 were $6.6 million, a decrease of 18% from $8.0 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 of Trintech 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 $246,000 of this operating cost reduction compared to Q2 in the prior year.

Adjusted EBITDA operating expenses for the quarter ended July 31, 2009 were $5.9 million, a decrease of 17% compared to adjusted EBITDA operating expenses of $7.1 million for the corresponding period in the prior year.

Restructuring expenses were $19,000 for the quarter ended July 31, 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.

Adjusted EBITDA net income was $1.5 million for the second quarter ended July 31, 2009 compared to an adjusted EBITDA net income of $215,000 for the corresponding quarter in the prior year. This represented a 595% increase from Q2 in the prior year and reflects the company's lower operating cost base.

Trintech's balance sheet remains strong with cash balances of $17.8 million (including restricted cash of $170,000) as of July 31, 2009. Net cash generated from operations for the three months ended July 31 2009 was $826,000.

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