ATLANTA, Nov. 12, 2010 /PRNewswire/ -- TRX, Inc. (www.trx.com) (OTCQB: TRXI), a world-leading provider of travel technology, process automation, consulting and data services, today reported financial results for the quarter ended 30 September 2010.
Total revenues excluding client reimbursements for the third quarter of 2010 were $13.6 million compared with $15.2 million in the third quarter of 2009. Net income for the third quarter was $797,000, compared with net income of $440,000 in the third quarter of 2009. Net income per diluted share was $0.04 compared to net income per diluted share of $0.02 for the third quarter of 2009. Revenues from transaction processing services for the third quarter of 2010 decreased to $11.1 million from $12.1 million in the third quarter of 2009. Revenues from data reporting services for the third quarter of 2010 decreased to $2.5 million from $3.2 million in the third quarter of 2009.
Adjusted EBITDA was $1.7 million for the quarter, compared with $2.1 million in the third quarter of 2009.
"The global travel environment is in the early stages of recovery, with modest gains both in corporate and leisure volumes. We continue to see strong demand for our data intelligence and consulting products," said TRX President & CEO Shane Hammond. "As we position ourselves to balance industry recovery against the previously-announced loss of a portion of our leisure transaction revenue in fiscal 2011, our operating teams continue to find ways to deliver more efficiently. We're helping our clients save money, and our efforts to secure new client revenue streams are making progress. In particular, TRX is perfecting a more nimble infrastructure that delivers client implementations at a materially faster pace.
"Looking ahead, our business objectives remain: profitable revenue growth, efficient operations, shorter cycle times on product development and project delivery, client satisfaction, and employee satisfaction."
Based on management's expectations for the calendar year, TRX revised its 2010 revenue guidance, and maintained its Adjusted EBITDA and capital expenditures guidance, as follows:
- Revenues of $55 to 56 million
- Adjusted EBITDA of $6 to 7 million
- Capital Expenditures of approximately $3 million
Use of Non-GAAP Financial Measures
TRX provides financial measures and terms not calculated in accordance with accounting principles generally accepted in the United States (GAAP). Presentation of non-GAAP measures such as EBITDA and Adjusted EBITDA provide investors with an alternative method for assessing our operating results in a manner that enables investors to more thoroughly evaluate our performance. These non-GAAP measures provide a baseline for assessing the Company's future earnings expectations. TRX management uses these non-GAAP measures for the same purpose. The non-GAAP measures included in this release are provided to give investors access to the types of measures that we use in analyzing our results.
EBITDA consists of GAAP net income adjusted for the items included in the accompanying reconciliation. EBITDA provides useful information to investors about the Company's performance because it eliminates the effects of period to period changes in the cost associated with capital investments and interest expense. Adjusted EBITDA consists of EBITDA adjusted for the items included in the accompanying reconciliation. EBITDA and Adjusted EBITDA do not give effect to the cash the Company must use to service its debt or pay its income taxes and thus do not reflect the funds generated from operations or actually available for capital expenditures.
TRX's calculation of EBITDA and Adjusted EBITDA is not necessarily comparable to similarly titled measures reported by other companies. These non-GAAP measures may be considered in addition to results prepared in accordance with GAAP, but should not be considered a substitute for or superior to GAAP results. Schedules that reconcile EBITDA and Adjusted EBITDA to GAAP net income (loss) are included with this release.
Cautionary Note Regarding Forward-Looking Statements
Certain statements in this press release may constitute "forward-looking" statements as defined in Section 27A of the Securities Act of 1933 (the "Securities Act"), Section 21E of the Securities Exchange Act of 1934 (the "Exchange Act"), the Private Securities Litigation Reform Act of 1995 (the "PSLRA"), or in releases made by the Securities and Exchange Commission, all as may be amended from time to time. Statements contained in this press release that are not historical facts may be forward-looking statements within the meaning of the PSLRA. Any such forward-looking statements reflect our beliefs and assumptions and are based on information currently available to us and are subject to risks and uncertainties that could cause actual results to differ materially, including but not limited to, the loss of key clients, volatility in the number of transactions we service, failure or interruptions of our software, hardware and other systems, industry declines, competitive pressures and other risks, including those discussed under the heading "Risk Factors" in our Annual Report on Form 10-K for the year ended December 31, 2009.
Forward-looking statements are predictions and involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements, or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. We undertake no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise. These cautionary statements are being made pursuant to the Securities Act, the Exchange Act and the PSLRA with the intention of obtaining the benefits of the "safe harbor" provisions of such laws. TRX, Inc. cautions investors that any forward-looking statements we make are not guarantees or indicative of future performance.
Pre-recorded Call Information
After the earnings release has been furnished to the SEC, a pre-recorded call, together with a slide presentation offering additional comments on the quarter will be available to all investors at www.trx.com under the Investors section of the website, both as a webcast and in the form of transcript. An archived webcast, transcript and slide presentation will remain available on the Company's website for approximately 90 days.
About TRX
TRX is a world-leading travel technology and data services provider, offering more than 20 software-as-a-service utilities for online booking, reservation processing, data intelligence, and process automation. We deliver our technology applications in an on-demand environment to travel agencies, corporations, travel suppliers, government agencies, credit card associations, credit card issuing banks, and third-party administrators. We provide patented savings maximization solutions via our travel analytics consulting practice, extending spend management services to travel buyers all over the world. We complement all of these offerings with a global workforce focused on travel process automation and re-engineering. For more information about TRX or to contact a TRX sales office, phone 404.929.6100 or visit the Company's website at www.trx.com.
TRX, INC. AND SUBSIDIARIES UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except per share data) |
||||||||||||||
Three Months |
Nine Months |
|||||||||||||
Ended September 30, |
Ended September 30, |
|||||||||||||
2010 |
2009 |
2010 |
2009 |
|||||||||||
REVENUES: |
||||||||||||||
Transaction processing |
$ |
11,063 |
$ |
12,085 |
$ |
33,949 |
$ |
36,366 |
||||||
Data reporting |
2,540 |
3,152 |
8,253 |
8,710 |
||||||||||
Transaction and other revenues |
13,603 |
15,237 |
42,202 |
45,076 |
||||||||||
Client reimbursements |
126 |
103 |
357 |
350 |
||||||||||
Total revenues |
13,729 |
15,340 |
42,559 |
45,426 |
||||||||||
EXPENSES: |
||||||||||||||
Operating |
8,207 |
9,164 |
25,026 |
27,363 |
||||||||||
Selling, general and administrative |
2,673 |
3,083 |
8,665 |
8,622 |
||||||||||
Technology development |
868 |
927 |
2,648 |
3,393 |
||||||||||
Client reimbursements |
126 |
103 |
357 |
350 |
||||||||||
Impairment of goodwill, intangible assets and other |
||||||||||||||
long-lived assets |
69 |
- |
235 |
43,692 |
||||||||||
Depreciation and amortization |
993 |
1,325 |
3,073 |
5,112 |
||||||||||
Total expenses |
12,936 |
14,602 |
40,004 |
88,532 |
||||||||||
OPERATING INCOME (LOSS) |
793 |
738 |
2,555 |
(43,106) |
||||||||||
INTEREST (EXPENSE) INCOME: |
||||||||||||||
Interest income |
- |
5 |
7 |
15 |
||||||||||
Interest expense |
(167) |
(203) |
(520) |
(595) |
||||||||||
Total interest expense, net |
(167) |
(198) |
(513) |
(580) |
||||||||||
INCOME (LOSS) BEFORE INCOME TAXES |
626 |
540 |
2,042 |
(43,686) |
||||||||||
INCOME TAX (BENEFIT) PROVISION |
(171) |
100 |
359 |
(533) |
||||||||||
NET INCOME (LOSS) |
$ |
797 |
$ |
440 |
$ |
1,683 |
$ |
(43,153) |
||||||
Net Income (Loss) per Share |
||||||||||||||
Basic and diluted |
$ |
0.04 |
$ |
0.02 |
$ |
0.09 |
$ |
(2.34) |
||||||
Weighted Average Shares Outstanding |
||||||||||||||
Basic |
18,466 |
18,442 |
18,466 |
18,425 |
||||||||||
Diluted |
18,586 |
18,627 |
18,577 |
18,425 |
||||||||||
Other Data: |
||||||||||||||
Adjusted EBITDA |
$ |
1,657 |
$ |
2,136 |
$ |
5,591 |
$ |
5,916 |
||||||
Capital expenditures |
512 |
452 |
2,174 |
2,272 |
||||||||||
As of September 30, 2010 |
As of December 31, 2009 |
|||||
Consolidated Balance Sheet Data: |
||||||
Cash and cash equivalents |
$ |
3,034 |
$ |
2,897 |
||
Total shareholders' deficit |
(1,499) |
(3,008) |
||||
TRX, INC. AND SUBSIDIARIES UNAUDITED RECONCILIATION OF GAAP FINANCIAL MEASURES TO NON-GAAP FINANCIAL MEASURES (In thousands) |
||||||||||||||
Reconciliation of Net Income (Loss) to EBITDA and Adjusted EBITDA |
||||||||||||||
Three Months |
Nine Months |
|||||||||||||
Ended September 30, |
Ended September 30, |
|||||||||||||
2010 |
2009 |
2010 |
2009 |
|||||||||||
Net income (loss) |
$ |
797 |
$ |
440 |
$ |
1,683 |
$ |
(43,153) |
||||||
Depreciation and amortization |
993 |
1,325 |
3,073 |
5,112 |
||||||||||
Interest expense, net |
167 |
198 |
513 |
580 |
||||||||||
Income tax (benefit) provision |
(171) |
100 |
359 |
(533) |
||||||||||
EBITDA |
1,786 |
2,063 |
5,628 |
(37,994) |
||||||||||
Impairment of goodwill, intangible assets and other |
||||||||||||||
long-lived assets |
69 |
- |
235 |
43,692 |
||||||||||
Stock compensation (credit) expense |
(198) |
73 |
(272) |
218 |
||||||||||
Adjusted EBITDA |
$ |
1,657 |
$ |
2,136 |
$ |
5,591 |
$ |
5,916 |
||||||
SOURCE TRX, Inc.
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