ATLANTA, May 13 /PRNewswire-FirstCall/ -- TRX, Inc. (http://www.trx.com/) (Other OTC: TRXI), the world's leading provider of travel technology, process automation, consulting and data services, today reported financial results for the quarter ended 31 March 2010.
Total revenues excluding client reimbursements for the first quarter of 2010 were $14.6 million compared with $14.9 million in the first quarter of 2009. Net income for the first quarter was $0.5 million, compared with a net loss of ($43.6) million in the first quarter of 2009, which included a $43.7 million non-cash charge for the impairment of goodwill, intangible assets and other long-lived assets. Net income per diluted share was $0.03 compared to net loss per diluted share of ($2.37) for the first quarter of 2009. Revenues from transaction processing services for the first quarter of 2010 decreased to $11.6 million from $12.0 million in the first quarter of 2009. Revenues from data reporting services were $3.0 million, compared with $2.9 million in the prior year.
Adjusted EBITDA remained constant at $2.0 million for both the first quarter of 2010 and 2009. Adjusted EBITDA in the first quarter of 2009 includes $1.0 million of severance expenses associated with the Company's cost reduction efforts and also reflects $1.8 million of one-time reductions in personnel-related accrued expenses. Excluding $800 thousand of expense credits for the first quarter of 2009, Adjusted EBITDA improved by over 66% as compared to the first quarter 2009.
"We are pleased to see our focus on delivery for clients translate into solid financial performance," said TRX President & CEO Shane Hammond. "Our global team remains committed to our strategic priorities, and continues to add new clients and expand our services to existing clients."
Based on management's expectations for the calendar year, TRX increased its 2010 annual guidance as follows: Revenues of $57 to 58 million (from approximately $55 million), Adjusted EBITDA of $6 to 7 million (from approximately $5 million), and 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 http://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 reengineering. For more information about TRX or to contact a TRX sales office, phone 404.929.6100 or visit the company's Web site at http://www.trx.com/.
TRX, INC. AND SUBSIDIARIES UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except per share data) Three Months Ended March 31, --------------- 2010 2009 ---- ---- REVENUES: Transaction processing $11,616 $12,046 Data reporting 2,978 2,853 ----- ----- Transaction and other revenues 14,594 14,899 Client reimbursements 84 102 --- --- Total revenues 14,678 15,001 ------ ------ EXPENSES: Operating 8,552 9,004 Selling, general and administrative 3,046 2,274 Technology development 951 1,665 Client reimbursements 84 102 Impairment of goodwill, intangible assets and other long-lived assets 89 43,692 Depreciation and amortization 1,030 2,381 ----- ----- Total expenses 13,752 59,118 ------ ------ OPERATING INCOME (LOSS) 926 (44,117) INTEREST (EXPENSE) INCOME: Interest income 6 9 Interest expense (184) (191) ---- ---- Total interest expense, net (178) (182) ---- ---- INCOME (LOSS) BEFORE INCOME TAXES 748 (44,299) INCOME TAX PROVISION (BENEFIT) 265 (684) --- ---- NET INCOME (LOSS) $483 $(43,615) ==== ======== Net Income (Loss) per Share Basic and diluted $0.03 $(2.37) Weighted Average Shares Outstanding Basic 18,465 18,406 Diluted 18,643 18,406 Other Data: Adjusted EBITDA 1,991 2,026 Capital expenditures 980 1,192 As of As of March December 31, 31, 2010 2009 ---- ---- Consolidated Balance Sheet Data: Cash and cash equivalents $3,047 $2,897 Total shareholders' deficit (2,413) (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 Ended March 31, --------------- 2010 2009 ---- ---- Net income (loss) 483 (43,615) Depreciation and amortization 1,030 2,381 Interest expense, net 178 182 Income tax provision (benefit) 265 (684) EBITDA 1,956 (41,736) Impairment of goodwill, intangible assets and other long-lived assets 89 43,692 Stock compensation (credit) expense (54) 70 Adjusted EBITDA $1,991 $2,026 ====== ======
TRX, Inc.
CONTACT: Investor Contacts: David Cathcart, Chief Financial Officer,
TRX, Inc., +1-404-929-6154; Media Contacts: Stephen Carroll, Senior Director,
Product Marketing, TRX, Inc., +1-214-346-4758
Web Site: http://www.trx.com/
