Trintech first-quarter revenues up 9% to $8.5 million

Trintech Group Plc (Nasdaq:TTPA), a leading provider of integrated financial governance, risk management and compliance (GRC) solutions for commercial, financial and healthcare markets, today announced its first quarter 2011 financial results. Following the sale of its healthcare business to The Advisory Board Company on April 1, 2010, Trintech is required to present its financial results on a continuing and discontinued basis. This requirement has resulted in the presentation of financial results showing first quarter revenues for the continuing business (the Financial Governance, Risk and Compliance or Financial GRC business) of $8.5 million and adjusted EBITDA net income for the continuing business of $1 million. The net income in the quarter for the continuing business amounted to $482,000 and the net income for the continuing and discontinued businesses amounted to $22.4 million, which included a gain on sale of the healthcare business of $21.8 million.

Highlights:

• Revenues from continuing operations amounted to $8.5 million for Q1 of the 2011 fiscal year which was 9% higher compared to Q1 of the prior year.
• Trintech generated an adjusted EBITDA net income from continuing operations of $1.0 million for Q1 of the 2011 fiscal year which represented 30% growth compared to $770,000 in the corresponding period in the prior year. Adjusted EBITDA basic and diluted net income from continuing operations per equivalent ADS was $0.06 for Q1 of the 2011 fiscal year compared to $0.05 for the same period in the prior year.
• Trintech generated $27.7 million cash for Q1 of the 2011 fiscal year and increased its cash balances to $47.6 million at the end of the quarter. This included net proceeds from the sale of the healthcare business of $26.7 million and compared to overall cash utilized of $450,000 for Q1 of the prior year.
• Gross margin from continuing operations amounted to $6.2 million in Q1 of the 2011 fiscal year, representing 74% of revenues, compared to $5.6 million and 72% in Q1 of the prior year.
• Trintech increased expenditure in research and development from continuing operations by 11% from $1.2 million in Q1 of the 2010 fiscal year to $1.3 million in the same quarter of the 2011 fiscal year.
• Trintech increased expenditure in sales and marketing from continuing operations by 15% from $2.0 million in Q1 of the 2010 fiscal year to $2.3 million in the same quarter of the 2011 fiscal year.
• General and administrative expenses from continuing operations remained flat for the quarter at $1.9 million compared to Q1 of the 2010 fiscal year.
• Net income from continuing operations increased to $482,000 in Q1 of the 2011 fiscal year from $33,000 in Q1 of the 2010 fiscal year. After incorporating net income from discontinued operations of $21.9 million, the total net income for the quarter ended April 30, 2010 was $22.4 million compared with a net loss of $411,000 for the same period of the prior year.
• Basic and diluted net income per equivalent ADS from continuing operations for the quarter ended April 30, 2010 was $0.03, compared with a basic and diluted net income per equivalent ADS of $0.00 for the quarter ended April 30, 2009. Basic and diluted net income per equivalent ADS from continuing and discontinued operations for the quarter ended April 30, 2010 was $1.35 and $1.30 respectively, compared with a basic and diluted net loss per equivalent ADS of $0.03 for the quarter ended April 30, 2009.

Cyril McGuire, Chairman and Chief Executive Officer said, "Our performance in Q1 of the 2011 fiscal year was strong with impressive business momentum building in our continuing operations in the Financial GRC market. Revenue grew robustly by over 9% in the first quarter due to new client wins and greater customer confidence in technology spending, with impressive growth in adjusted EBITDA net income of over $1.0 million representing 30% growth over the prior year. Net income of $22.4 million was achieved in the quarter following the successful sale of our healthcare business which was completed on April 1, 2010. Operating performance metrics continued to improve with margin expansion and cash generation exceeding our internal targets. We also boosted our investments in product development by 11% and sales and marketing activities by 15% in the quarter to deliver new innovative products and services to our growing client base in the Financial GRC market. Our outlook is positive as we create a more strategically focused Trintech in the expanding Financial GRC market which is well positioned for revenue and earnings growth as the broader global economy continues its recovery."

Paul Byrne, President, added, "Trintech continues to deliver robust revenue and profit growth through an extremely productive and highly skilled organization. This success will continue to be underpinned by the on-going need for corporate organizations to improve financial transparency and efficiency as they rebuild after the economic downturn. In addition, the evolution of and growth in corporate and financial regulation and demand for greater visibility of risk and compliance by company boards has, we believe, the potential to further accelerate demand for Trintech's financial GRC platform."

Recent Highlights include:

Trintech announced an ongoing relationship with Rackspace^® Hosting ( NYSE:RAX) to provide customers with Trintech's next-generation Unity Financial GRC Software Suite in a hosted environment via Rackspace servers.

Trintech announced that Calpine Corporation – a major U.S. power company delivering clean electricity to customers in 16 states across the United States and Canada – selected its Unity Xtensible Financial Reporting (XFR) software with embedded support for report tagging and generation of XBRL-compliant financial statements.

Trintech announced that National Vision, Inc. selected its ReconNET software for financial process compliance. 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. National Vision, Inc. (NVI) is the fourth largest optical retailer in the United States.

Trintech announced that Zebra Technologies selected its Unity Financial Close software for financial process compliance. Unity Financial Close 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.

Trintech announced that Toyota Financial Services selected its ReconNET and AssureNET GL software for financial process compliance. Both solutions are part of Trintech's Unity platform, a suite of modular software that enables companies to meet their financial governance, risk management and compliance goals.

Trintech announced the successful conclusion of its fourteenth annual US-based Customer Conference held May 12-14 at the Sandestin Golf & Beach Resort in Destin, Florida. The Conference attracted more than 230 attendees, including finance, accounting and treasury professionals from leading organizations, such as, Intel, Target, Hewlett Packard, FedEx Office, Sony Pictures Entertainment, Sprint, Yahoo!, Wal-Mart Stores, KPMG, HSBC and more.

Results Overview:

Revenues from continuing operations for the first quarter ended April 30, 2010 increased by 9% to $8.5 million compared to $7.7 million for the corresponding quarter in the prior year.

Software license revenues from continuing operations for the first quarter ended April 30, 2010 were $5.4 million compared to $4.8 million for the quarter ended April 30, 2009, representing growth of 12%. The growth was primarily due to increased new license business which grew by almost 30% compared to Q1 of the prior year.

Service revenues from continuing operations for the quarter ended April 30, 2010 were $3.1 million compared to $2.9 million for the quarter ended April 30, 2009, representing growth of 6%. The growth was primarily due to an increase in professional service revenues from our GRC business from our ReconNET and Unity products.

Total gross margin from continuing operations for the quarter ended April 30, 2010 was $6.2 million, an increase of 12% from $5.6 million for the quarter ended April 30, 2009. The overall gross margin percentage from continuing operations increased by 2% in Q1 of the 2011 fiscal year to 74% from 72% in Q1 of the 2010 fiscal year. The increase in gross margin was due to an increase in license revenue. The increase in gross margin percentage in Q1 of the 2011 fiscal year was due to an increase in service margin caused by improved utilization of staff compared to Q1 of the 2010 fiscal year.

Total operating expenses from continuing operations for the quarter ended April 30, 2010 were $5.7 million, an increase of 2% from $5.6 million in the corresponding quarter in the prior year. Adjusted EBITDA operating expenses from continuing operations for the quarter ended April 30, 2010 were $5.4 million, an increase of 9% from $4.9 million for the corresponding period in the prior year. The increase was largely due to an additional use of engineering contractors on product development, sales and marketing costs and travel due to increased sales activity.

The provision for income taxes from continuing operations was $97,000 for Q1 of the fiscal 2011 compared to $36,000 for the corresponding period in the prior year arising primarily from state taxes in the US and tax on interest income in Ireland.

Trintech's balance sheet is substantially stronger than at January 31, 2010 with cash balances of $47.6 million as of April 30, 2010. The cash flow statement has been prepared on a combined continuing and discontinued basis. Net cash generated for the three months ended April 30, 2010 was $27.7 million, which included net proceeds from the sale of the healthcare business of $26.7 million, cash generated from operations of $826,000, proceeds from the issuance of ordinary shares of $228,000, a decrease in restricted deposits of $170,000, payments on the purchase of property and equipment of $155,000, capital lease payments of $49,000 and the negative effect of exchange rate differences on cash and cash equivalents of $68,000.