Despite reporting results in line with analysts’ expectations, third quarter revenues at Irish e-payments technology firm Trintech were down 8pc to US$10.5m from US$11.4m last year. Revenue for the nine months ended 31 October was US$30.8m, a 5pc decrease from US$32.4m last year.
Trintech’s product revenue for the nine months ended October 31, 2003 increased 7pc to US$6.9m this year from US$6.5m last year. Q3 product revenue decreased by US$0.3m compared with the corresponding quarter last year. License revenue for the nine months ended October 31 increased 2pc to US$17.0m from US$16.7m. Q3 software license revenue was US$5.7m, a small increase compared to the corresponding quarter last year. Service revenue for the nine months fell 26% to $6.8 million from US$9.2m last year. Service revenue decreased 20pc to US$2.3m this quarter as compared to the corresponding quarter last year.
Total gross margin for the nine months ended October 31, 2003 was US$16.9m, an increase from US$11.4m in the corresponding period last year. Total gross margin for the third quarter was US$6.1m, an increase from US$4.6m in the corresponding quarter last year.
The company reported a cashflow positive position, with US$83,000 generated during the quarter bringing its balance sheet to US$41.6m. During the quarter, Trintech did not repurchase shares under its ongoing stock repurchase programme. As of October 31, approximately US$4.4m remained available for future repurchases under the programme.
“Trintech continues to execute on building the foundation for sustained profitability and enhanced shareholder value by focusing on revenue growth, margin expansion, stringent cost control and strong cash management. Gross margins expanded to 58pc for Q3, operating expenses declined for the eleventh consecutive quarter, and following on from turning cash flow positive from an operating perspective in Q2, we have now reached the milestone of being overall cash flow positive for the third quarter,” said Paul Byrne, chief financial officer.
Trintech’s third quarter was marked by the acquisition of Texan data delivery firm DataFlow services for US$5m as well as notable customer wins, including Celtic FC, US supermarket chain Marsh Supermarkets inc. and UK hotel chain Whitbread Group. Product highlights included the introduction of a new statement delivery services, accreditation to Visa’s Chip & PIN programme, an online bank fee analysis system and a high volume e-payments platform.
Cyril McGuire, Chairman and Chief Executive Officer commenting on the results said “Trintech’s results for Q3 were solid and in line with market expectations, with key performance metrics remaining on track.
“Our financial position remains strong and we achieved another important milestone in this quarter of turning cashflow positive from a group perspective. Our goal is to make Trintech more competitive, more focused and better positioned to pursue new growth opportunities.
“Our strategy is to concentrate on our key profitable products and leverage our core competency in transaction and payment solutions into new growth markets. I am confident that Trintech is strategically, operationally and financially well positioned to deliver profitability in the future.”
By John Kennedy