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TRX Reports First Quarter 2012 Results
May 09, 2012 (04:05 PM EDT)


Data Intelligence Leads Overall Product Portfolio Growth

ATLANTA, May 9, 2012 /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 first quarter ended 31 March 2012.

Total revenues excluding client reimbursements for the quarter were $11.9 million, compared with $12.4 million in the first quarter of 2011. Net income was $0.5 million for the first quarter of 2012 compared with $0.4 million for the first quarter of 2011. Net income per diluted share was $0.02 for both the first quarter of 2012 and 2011. Revenues from transaction processing services for the quarter were $8.6 million, compared to $10.0 million in the first quarter of 2011. Revenues from data intelligence services for the quarter were $3.3 million, compared to $2.4 million in the first quarter of 2011.

Adjusted EBITDA was $1.4 million for the quarter, compared to $1.7 million in the first quarter of 2011.

"We are excited by the continued growth in our data intelligence revenues, as feedback from current clients and new prospects alike confirms that our power, speed, features, and consulting expertise are unmatched in the industry," said Shane Hammond, President and CEO of TRX, Inc. "In fact, despite the sale of our booking solution in late 2011, year-over-year revenues declined merely 4%."

"Overall, we were pleased to see growth across our entire portfolio of core products, from data to expense reporting to agency automation tools," Hammond added. "Employee energy levels are high as our operational teams keep pace with client demands for new work. And since we have found that most companies who get to know our products become clients, we are focusing our marketing efforts in 2012 to ensure that as many decision makers as possible are introduced to our unique value proposition."

Based on management's expectations, TRX provided its calendar year 2012 financial guidance as follows:

  • Revenues of $45 to $47 million
  • Adjusted EBITDA of $4.5 to $5.5 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, Adjusted EBITDA and Free Cash Flow 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, interest expense and taxes. 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.

Free Cash Flow consists of GAAP cash flow from operating activities minus capital expenditures. Free Cash Flow provides a useful indicator about the Company's ability to fund its operations and repay its debts.

TRX's calculation of EBITDA, Adjusted EBITDA and Free Cash Flow are 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 and Free Cash Flow to Net Cash Provided by Operations 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, 2011.

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 enabling profile and itinerary management, 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 reengineering. 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





Ended March 31,





2012



2011


REVENUES:












Transaction processing

$

8,628




$

9,995




Data intelligence 


3,295





2,430





Transaction and other revenues


11,923





12,425




Client reimbursements


57





173





Total revenues


11,980





12,598















EXPENSES:












Operating



7,776





7,802




Selling, general and administrative


2,400





2,081




Technology development


813





819




Client reimbursements


57





173




Impairment of goodwill


6





64




Gain on disposal of assets


(384)





-




Depreciation and amortization


629





995





Total expenses


11,297





11,934















OPERATING INCOME



683





664















INTEREST (EXPENSE) INCOME:











Interest income


10





2




Interest expense


(97)





(133)





Total interest expense, net


(87)





(131)















INCOME BEFORE INCOME TAXES


596





533















INCOME TAX PROVISION 


134





163















NET INCOME


$

462




$

370















Net Income per Share












Basic and diluted

$

0.02




$

0.02















Weighted Average Shares Outstanding











Basic



18,515





18,466




Diluted



18,995





18,613















Other Data:












Adjusted EBITDA

$

1,351




$

1,742




Capital expenditures

$

398




$

504






























As of March 31,


As of December 31,




2012


2011

Consolidated Balance Sheet and Cash Flow Data:











Cash and cash equivalents

$

1,636




$

2,153




Total shareholders' equity

$

1,039




$

429


















Three Months





Ended March 31,






2012



2011



Free cash flow


$

(447)




$

1,990



























Other Data:












Adjusted EBITDA

$

1,456




$

1,742




Capital expenditures

$

398




$

504



























 

TRX, INC. AND SUBSIDIARIES


UNAUDITED RECONCILIATION OF GAAP FINANCIAL MEASURES


TO NON-GAAP FINANCIAL MEASURES


(In thousands)


































Reconciliation of Net Income to EBITDA and Adjusted EBITDA


















Three Months











Ended March 31,












2012




2011



































Net income

$

462



$

370










Depreciation and amortization


629




995










Interest expense, net


87




131










Income tax provision


134




163


























EBITDA


1,312




1,659










Impairment of goodwill


6




64










Stock compensation expense 


33




19










Adjusted EBITDA

$

1,351



$

1,742


























































Reconciliation of Net Cash (Used in) Provided by Operations to Free Cash Flow


Three Months











Ended March 31,












2012




2011










Net cash (used in) provided by operating activities

$

(49)



$

2,494










Capital expenditures


(398)




(504)










Free cash flow

$

(447)



$

1,990










 

SOURCE TRX, Inc.