Trintech Reports Fourth Quarter and Fiscal Year 2002 Financial Results
Trintech announces management reorganization to optimize the strength of its management team
SAN MATEO, California/DUBLIN, Ireland - 27th February 2002 - Trintech Group PLC (Nasdaq: TTPA; Neuer Markt: TTP), a leading provider of secure payment infrastructure solutions, today announced its fourth quarter and fiscal year results for the period ended January 31, 2002.
Trintech Group plc’s fourth quarter revenues remained flat at $15.5 million compared with $15.5 million for the corresponding quarter last year and fiscal year revenues grew by 39% to $68.3 million, compared with $49.0 million for the fiscal year ended January 31, 2001.
Fourth quarter fiscal year 2002 software license revenue decreased slightly to $6.0 million and fiscal year 2002 software license revenue increased by 47% to $30.2 million, in each case as compared to the corresponding period last year.
Pro forma gross margin for the fourth quarter fell slightly to $7.3 million and grew 39% to $34.4 million for the fiscal year ended January 31, 2002, in each case as compared to the corresponding period last year.
Pro forma operating expenses declined 22% in Q4 compared with the third quarter of the same fiscal year.
Pro forma basic and diluted net loss per ADS for the fourth quarter was $(0.04) and for the fiscal year was $(0.27).
Reported basic and diluted net loss per ADS for the fourth quarter was $(0.86) and for the fiscal year was $(1.65).
Cash usage was $13.0 million for Q4, which included $7.5 million relating to acquisitions with Trintech’s balance sheet remaining strong with year end closing cash and cash equivalent balances of $60.1 million.
Trintech has also announced a management reorganization to optimize the strength of its management team and give clear focus to the execution of its return to profitability. Cyril McGuire has been appointed Chief Executive Officer, in addition to his current role as Executive Chairman. To concentrate on new growth opportunities, John McGuire has been appointed President, with responsibility for strategic initiatives and partnerships as well as technology and product direction.
Cyril McGuire, Chairman and Chief Executive Officer, commenting on the results said: “Trintech operated in a very challenging environment this quarter. Reduced levels of IT spending as customers continue to defer software investment plans will restrain short-term growth. Fiscal year 2002 has been a year of transition for Trintech as we endeavored to bring our cost base in line with difficult market conditions. Focussed action to reduce costs resulted in approximately $20 million in annualized savings in operating expenses between Q4 last year and Q4 this year. Trintech’s steadfast emphasis on its performance, people, customers and pipeline will underpin our restructuring plans as we remain focussed on returning Trintech to profitability.”
Pro forma gross margin for the fourth quarter was $7.3 million, a decrease from $7.6 million in the corresponding quarter, last fiscal year 2001. Meanwhile, pro forma gross margin for the fiscal year was $34.4 million, up 39% from $24.8 million in the corresponding fiscal year ended January 31, 2001. This reflects the increase in high margin software license revenue for the fiscal year ended January 31, 2002.
Pro forma operating expenses declined sequentially by 22% this quarter. This is the fourth consecutive quarter of decline in pro forma operating expenses reflecting the Company’s stringent emphasis on cost control and consistent review of expenditure. For the fiscal year 2003 Trintech expects to see pro forma operating expenses continue to decline as a percentage of revenue as the Company continues to identify opportunities to reduce costs.
“The uncertain economy we currently operate in requires stringent cost controls and decisive action on operational restructuring, including headcount reductions and tightening of spending plans. We continue to press ahead with the necessary steps and measured investment required to move toward our return to profitability.” said Paul Byrne, Chief Financial Officer.
Pro forma basic and diluted net loss per equivalent American Depository Share (ADS) for the quarter ended January 31, 2002 was $(0.04) compared with the pro forma basic and diluted net loss per ADS of $(0.11) for the corresponding quarter ended January 31, 2001. Reported basic and diluted net loss per equivalent ADS for the quarter ended January 31, 2002 was $(0.86), including a goodwill and purchased intangible assets impairment charge of $(0.63), compared with the reported basic and diluted net loss per ADS of $(0.26) for the corresponding quarter ended January 31, 2001.
Pro forma basic and diluted net loss per equivalent ADS for the fiscal year ended January 31, 2002 was $(0.27) compared with the pro forma basic and diluted net loss per ADS of $(0.29) for the corresponding fiscal year ended January 31, 2001. Reported basic and diluted net loss per equivalent ADS for the fiscal year ended January 31, 2002 was $(1.65), including a goodwill and purchased intangible assets impairment charge of $(0.63), compared with the reported basic and diluted net loss per ADS of $(0.59) for the corresponding fiscal year ended January 31, 2001.
Trintech has chosen to disclose pro forma as well as reported figures, commencing in quarter one for fiscal year 2002, to increase transparency and provide information to investors on cash generation and utilization. Pro forma results this quarter exclude restructuring charges and non-cash items, such as stock compensation charges, depreciation, amortization of goodwill and purchased intangible assets and impairment charges.
In the quarter ended January 31, 2002 the Company recorded expenses totaling $49.8 million, equivalent to $0.82 per ADS, including non cash expenses of $48.5 million, which were not included in the pro forma net loss for quarter four:
Restructuring charge of $1.6 million, equivalent to $0.03 per ADS, to cover costs relating to staff reductions and the closure of excess facilities as Trintech seeks to gain optimum benefits from natural synergies with the acquired businesses and seek to concentrate on products with the highest earnings potential
Depreciation of $0.8 million, equivalent to $0.01 per ADS
Amortization of goodwill, for our four acquisitions, of $7.0 million, equivalent to $0.11 per ADS
Amortization of purchased intangible assets of $1.0 million, equivalent to $0.02 per ADS
Amortization of acquired technology of $1.3 million, equivalent to $0.02 per ADS
Impairment charge against acquired technology, purchased intangible assets and goodwill, of $38.1 million, equivalent to $0.63 per ADS
Stock compensation charge of $0.02 million, equivalent to $0.00 per ADS in relation to stock options granted in 1999 at market value to the members of the Company’s Advisory Board and to MasterCard as part of a strategic alliance with the Company
In the full year ended January 31, 2002 the Company recorded expenses totaling $83.8 million, equivalent to $1.38 per ADS, including non cash expenses of $78.8 million, which were not included in the pro forma net loss for the full year:
Restructuring charge of $5.3 million, equivalent to $0.09 per ADS, to cover the restructuring of our UK business and costs relating to staff reductions and the closure of excess facilities as Trintech seeks to gain optimum benefits from natural synergies with the acquired businesses and seek to concentrate on products with the highest earnings potential
Depreciation of $3.4 million, equivalent to $0.06 per ADS
Amortization of goodwill, for our four acquisitions, of $27.8 million, equivalent to $0.46 per ADS
Amortization of purchased intangible assets of $3.9 million, equivalent to $0.06 per ADS
Amortization of acquired technology of $4.5 million, equivalent to $0.07 per ADS
Impairment charge against acquired technology, purchased intangible assets and goodwill, of $38.1 million, equivalent to $0.63 per ADS
Stock compensation charge of $0.8 million, equivalent to $0.01 per ADS relating primarily to stock options granted in 1999 at market value to the members of the Company’s Advisory Board and to MasterCard as part of a strategic alliance with the Company.
In the quarter ended January 31, 2001 the Company recorded non cash expenses totaling $8.8 million, equivalent to $0.15 per ADS, which were not included in the pro forma net loss for quarter four:
Depreciation of $0.6 million, equivalent to $0.01 per ADS
Amortization of goodwill of $4.9 million, equivalent to $0.08 per ADS
Amortization of purchased intangible assets of $0.7 million, equivalent to $0.01 per ADS
Amortization of acquired technology of $1.4 million, equivalent to $0.03 per ADS
Stock compensation charge of $1.2 million, equivalent to $0.02 per ADS in relation to stock options granted in 1999 at market value to the members of the Company’s Advisory Board and to MasterCard as part of a strategic alliance with the Company.
In the full year ended January 31, 2001 the Company recorded non cash expenses totaling $16.5 million, equivalent to $0.30 per ADS, which were not included in the pro forma net loss for the year:
Depreciation of $1.8 million, equivalent to $0.03 per ADS
Amortization of goodwill, of $6.3 million, equivalent to $0.12 per ADS
Amortization of purchased intangible assets of $0.7 million, equivalent to $0.01 per ADS
Amortization of acquired technology of $2.4 million, equivalent to $0.04 per ADS
Stock compensation charge of $5.3 million, equivalent to $0.10 per ADS in relation to stock options granted in 1999 at market value to the members of the Company’s Advisory Board and to MasterCard as part of a strategic alliance with the Company
Trintech recorded an impairment write off of acquisition related goodwill and certain purchased intangible assets this quarter amounting to $38.1 million. The impact of the market retreating for technology companies and the performance of the related acquisitions led the Company to write these assets down to their fair value.
Trintech also announced today that it will incur a restructuring charge of $3.5 million in the first quarter of fiscal year 2003. The Company has made this decision in response to continued challenging market conditions. Trintech expects that the restructuring will improve the performance of the organization by reducing costs, consolidating locations and combining operations and other activities.
Quarterly highlights include:
Atlanta-based prepaid transaction processor, PRE Solutions Inc chose Trintech’s PayWare POS terminals and PayWare PrePay Host software solution to power its prepay replenishment services.
Trintech’s relationship with GZS, Germany's leading provider of processing services, further developed this quarter. They implemented and added PayWare Resolve IIT, to further reduce the cost, and speed up the processing of disputed transactions.
Unibanco, one of Brazil’s largest banks, selected PayWare eIssuer to power its online payment service in Q4.
Trintech joined the Mobile Payment Forum this quarter, a cross-industry group formed to enable secure, user-friendly mobile payment transactions and expand the overall market for mobile commerce.
Trintech will host a conference call to discuss its financials results, business outlook and management reorganization beginning at 15:30hrs (UK Time) today, February 27th 2002. Please see advisory below for information on the call.
A web simulcast of Trintech’s fourth quarter and fiscal year fiscal year 2002 conference call reviewing our performance for Q4 and fiscal year period and our business outlook for Q1 and fiscal year 2003 and our management reorganization will be broadcast live today,Wednesday 27th February 2002 at 15:30hrs (UK Time), 10:30hrs (NY Time) and 07:30hrs (CA Time) and thereafter for 10 days at www.trintech.com. An instant telephone replay will also be available for 10 days by dialing T: +44 207 970 8288
A full copy of this press release, including financials, is available here (PDF 52k).
About Trintech
Trintech is a leading provider of secure electronic payment infrastructure solutions for real world, Internet and wireless transactions. The Company, founded in 1987, offers a complete range of payment software products for credit, debit, commercial and procurement card applications. Trintech's secure product range is deployed in over 35 countries worldwide and covers the payment requirements of consumers, card issuing banks, merchant acquiring institutions, merchants, eMerchants, telcos, wireless operators, ISPs/CSPs, Portals and large corporations. The Group's range of scalable, open systems architecture solutions for UNIX® and Windows NT™ platforms covers consumer, merchant and financial institution requirements for all card-based payments, including eCommerce and the emerging world of mCommerce. Trintech can be contacted in the U.S. at 2755 Campus Drive, San Mateo, CA 94403 (Tel: +1-650-227-7000) and in Ireland at Trintech Building, South County Business Park, Leopardstown, Dublin 18 (Tel: +353-1-207-4000). Trintech can be reached on the Web at www.trintech.com. Investor information can be
