Source: Trintech Group
Trintech Group Plc (NASDAQ:TTPA), a leading provider of transaction reconciliation and payment infrastructure solutions, today announced first quarter revenues of $11.1 million and a net loss for the quarter of $2.1 million.
Highlights:
Revenue amounted to $11.1 million compared to $13.1 million in Q1 last year, primarily because of lower product and license revenues.Gross margin amounted to $7.0 million in Q1, representing 63% of revenue, which remained unchanged in percentage terms as compared to Q1 last year.The successful mediation of litigation against the vendors of Checkline resulted in net cash being received on the legal settlement of $1.7 million during the quarter.Trintech adopted FAS 123(R) from 1 February, which resulted in a stock compensation charge of $322k for the quarter.Trintech incurred a restructuring charge of $321k when it exercised the break option to exit one of its leases expiring in 2023, with effect from September 1, 2006.Trintech incurred a net loss of $2.1 million in Q1 and a net loss of $1.2 million on an Adjusted EBITDA net loss basis.Trintech completed the acquisition of Assurity Technologies Inc in March which resulted in an increased amortization charge in the quarter.Basic and diluted net loss per equivalent ADS for the quarter ended April 30, 2006 was $0.13, compared with basic and diluted net income per equivalent ADS of $0.03 and $0.02 respectively for the corresponding quarter ended April 30, 2005.
Cyril McGuire, Chairman and Chief Executive Officer, commenting on the results said, "Trintech's business remains solid despite a challenging first quarter. We remain focused on our strategy of investing in key products and market opportunities that can deliver profitable growth. To achieve this goal, we are committed to migrating the Trintech business model towards a software and services business mix. This was further helped in Q1 by a strong performance in our Funds Management Systems software division which provides reconciliation software and transaction services solutions. In addition, we continue to seek expansion opportunities in software and services both organically and through strategic acquisitions to grow Trintech's market share and profitability."
Recent Highlights include:
Trintech announced the acquisition of Assurity Technologies Inc, for a total consideration of up to $5 million. Assurity provides an enterprise process management system for general ledger account reconciliation, review and certification. The product, AssureNet, is designed to increase workflow efficiencies and mitigate risk by strengthening internal controls to support Sarbanes Oxley compliance programs.
Trintech announced that Lloyds TSB Asset Finance Division implemented Trintech's ReconNET to help increase visibility and control of internal bank reconciliation processes and to improve efficiencies through automation.
Trintech announced that Driehaus Capital Management, an institutional money management firm focusing on small cap and mid cap growth companies, selected Trintech's ReconNET to automate the verification and reconciliation of its cash activity, cash account balances, trade activity, position balances and foreign exchange trade activity.
Trintech announced that The Bargain! Shop, with more than 145 general merchandise stores across Canada, selected ReconNET to automate the verification and reconciliation of its cash, checks, debit and credit cards and disbursements.
Trintech announced a partnership with Dresser Wayne, a global leader in forecourt automation and petroleum systems, to supply the fuel retail market with a range of forecourt payment technology products that support the latest EMV smart card and PCI terminal security standards.
Trintech announced the formation of a new On-Demand Solutions business unit that provides On-Demand Solutions for cash management, reconciliation and data collection, processing, aggregation and delivery.
Trintech announced the release of I-TRACS 5.0, the latest version of its tracking, research, adjustment and collection application. The release extends existing capabilities to help customers increase the accuracy and profitability of their collection efforts.
Trintech announced the opening of a new office in The Netherlands to meet increasing European demand for Trintech's account reconciliation and process management solutions.
Trintech announced the formation of its Financial Services Group, a strategic global business unit, which will help financial institutions, brokerage firms and insurance companies optimize internal transaction reconciliation processes, workflow and compliance.
Paul Byrne, President of Trintech, stated, "Although market conditions remain challenging for Trintech's Payment division, Trintech has increased its investment levels in its Funds Management Systems ("FMS") division as we believe there are significant growth opportunities for this business. Whilst these investments, combined with the formation of our new FMS Financial Services Group and the acquisition of Assurity Technologies, will have a negative impact on FMS division earnings in the short term, they open up new market opportunities and position Trintech for growth for the second half of FY07 and beyond."
Results Overview:
Revenue for the quarter ended April 30, 2006 was $11.1 million compared with $13.1 million for the quarter ended April 30, 2005, a decrease of 16 percent.
Product revenue for the quarter ended April 30, 2006 decreased 40 percent to $1.9 million from $3.2 million in the same quarter last year.
Software license revenue for the quarter ended April 30, 2006 decreased 15 percent to $5.7 million from $6.7 million in the corresponding quarter last year.
Service revenue for the quarter ended April 30, 2006 increased 8 percent to $3.5 million from $3.2 million in the corresponding quarter last year.
Total gross margin for the quarter ended April 30, 2006 was $7.0 million, a decrease of 16 percent from $8.4 million in the corresponding period last year.
Total operating expenses for the quarter ended April 30, 2006 increased 16 percent to $9.4 million from $8.1 million in the corresponding period last year. Adjusted EBITDA operating expenses for the quarter ended April 30, 2006 were $8.4 million, an increase of 7 percent on the Adjusted EBITDA operating expenses for last year.
Trintech's balance sheet remains strong with cash and cash equivalent balances of $32.7 million as of April 30, 2006. Net cash usage for the three months ended April 30, 2006 was $2.1 million, which includes acquisition related payments of $1.9 million made in the first quarter of the fiscal year in respect of the acquisition of the business of Assurity Technologies Inc.
During the quarter ended April 30, 2006, Trintech received 266,860 ADRs as part of the settlement of the litigation taken by the company against the vendors of Checkline. For the purposes of Irish corporate law, these ADRs were received via the share buy-back program. As a result, $2.9 million remains available for future repurchases under this program as at April 30, 2006.Download the document now 41.8 kb (Adobe Acrobat Document)