Despite Another Quarterly Loss, TRX Says Finances Stabilizing

Despite its several consecutive quarters of revenue decline, travel technology firm TRX is heading toward balance sheet stabilization and acquisitive growth in a corporate travel market where demand remains strong, according to TRX president and CEO Trip Davis.

"We have seen the corporate travel marketplace be quite resilient and it seems to be in a bit of a wait-and-see mode," Davis told Business Travel News. "On a sector-by-sector basis, there has been a little more of a significant reaction in financial services, for example, in cost controls and reducing travel spending. In the other sectors and regionally, it has been pretty consistent with one exception: Europe has been a little bit softer in its corporate travel transaction growth rate than have the Americas and Asia."

Davis said European operations account for 20 percent of TRX's business and the mortgage crisis had a bigger impact in the region than originally predicted. The waning growth rate "doesn't appear to be incredibly deep or systemic yet," he said. "Everybody is waiting to see if they really needed to cut travel across the board, which we find a bit odd about this economic cycle. Normally, corporate travel is the first to get controlled and we haven't seen that yet."

TRX's financials were affected by the sale of the company's call center business, the launch of in-house operations in Bangalore, India, late last year and the 2006 acquisitions of Hi-Mark Software and Travel Analytics. TRX is considering similar "tuck-in" acquisitions, Davis said.

As a public company, Davis said, there is cash on hand with access to capital through banks and debt agreements and through its shareholders, including the company's largest single shareholder, billionaire and BCD Holdings shareholder John Fentener van Vlissingen.

During the quarter, which ended March 31, TRX increased its technology development to $3.87 million, up from $3.02 million last year. On April 30, TRX closed a non-exclusive license sale of its DataTrax product to Citibank for $3.5 million. According to Davis, TRX has handled data processing and data consolidation for some of Citibank's financial services.