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Trintech plans further job cuts 
Wednesday, May 29 2002
by Andrew McLindon


Irish secure payments firm Trintech is to cut jobs following disappointing first
quarter results that saw its revenue fall by 41 percent.

Trintech's chairman and chief executive officer, Cyril McGuire, told
ElectricNews.Net that 25 jobs would be lost from the company's 475 strong
workforce over the coming quarters as it looks to further reduce its costs.
McGuire said that "very few, if any" jobs would be lost in Ireland. Trintech
employs over 200 people here. 



However, McGuire said he was confident that Trintech would be pro-forma
profitable by the end of the year. "This worst is behind us," he commented.
"The building blocks are now in place to build a profitable business."



The last six months have not been good ones for Trintech, which produces software
and hardware for secure credit and debit card payments. During that time it cut
eight percent of its employees, announced the replacement of its chief executive
officer, was forced into a split of its stock in order to boost its listing on
the Nasdaq, and announced a profit warning for Q1. Its latest results will have
not improved matters. 



In its results for the period ended 30 April 2002, Trintech said that revenue in
Q1 fiscal year 2003 fell to USD10.1 million compared to USD17 million for the
corresponding quarter last year. The company said the decline in revenue in its
latest quarter was mainly due to a difficult market environment and "slower
than anticipated" new product launches. 



This latter issue, added Trintech, was a factor in its product sales decreasing
from Q1 2002 by 70 percent to USD1.8 million in Q1 2003. The main factor,
however, was the weakness in its European Point of Sale (PoS) business line,
particularly in the German market. Trintech said that it expect PoS sales to
recover in coming quarters due to the introduction of new products and entrance
into new markets.



Gerry Hennigan, equity analyst with Goodbody Stockbrokers, said the results were
"very weak" and that the outlook for the company was not great at present.
"There is obviously a problem with the product line because sales in that area
for several quarters in a row were around USD6 million and USD7 million, so there
has been a huge fall," commented Hennigan. 



Trintech's software license revenue also took a hit during the quarter with it
being down from the same quarter a year ago by 31 percent to USD5.2 million.
Service revenue was relatively flat at USD3.1 million when compared with the same
quarter in fiscal year 2002, but was up sequentially by 19 percent.

 

Pro forma basic and diluted net loss per equivalent American Depository Share
(ADS) for Q1 2003 was USD0.29 compared with USD0.37 for Q1 2002. In mid-May,
Trintech announced a one-for-four reverse split of its American depository shares
and its latest results reflect that split.



However, pro forma operating expenses were down by 38 percent in Q1 in comparison
to the same quarter last year to USD9.7 million, which was the fifth consecutive
quarter of decline. 

On the Neuer Markt segment of the Frankfurt Stock Exchange, Trintech is down 16
percent in early trading on Wednesday to EUR1.68, which is a 52-week low. Its
current year high was USD8.44 and the 52-week high was USD13.92. Recently
Trintech was removed from the Neuer Markt's NEMAX50 Index.