Travel technology company TRX today announced a fourth-quarter income loss and revenue drop as the celerity of travel volumes' downward spiral increased at year-end. Meanwhile, the company remained profitable for the full year with a net income of $3.7 million on revenues that increased to $95.4 million, 6.6 percent higher than in 2007.
Thus far in 2009, the company is seeing travel volumes down 20 percent to 30 percent compared with a year ago. TRX will continue to diversify its client base by adding more direct corporate accounts, create products in a low-cost software-as-a-service model and pare the company's cost structure, which dropped by one-third during the year, according to new president and CEO Shane Hammond, who took the helm in December when Trip Davis transitioned to chairman of the board
(BTNonline, Dec. 10, 2008).
Hammond said the company continues to transition away from large-scale customized development and maintenance projects for its largest customers, and is targeting the corporate direct market for its data products and services. Previously, five clients, including American Express, Expedia and Citibank, made up the bulk of the company's business.
In the fourth quarter, data intelligence revenues predominately derived from direct corporate accounts increased by more than 10 percent. The company now has more than 200 direct corporate accounts, according to CFO David Cathcart.
Cathcart said the company is navigating all expenditures downward in 2009. Technology development in the fourth quarter decreased 25.8 percent to $2.3 million. The company paid $2 million in severance expenses in the quarter as part of its cost-reduction program. Hammond said the cuts primarily occurred in a two-week period in the fall and affected all regions and departments.
The Atlanta-based company lost $3.9 million during the quarter that ended Dec. 31. Quarterly total revenues, excluding client reimbursements, decreased 11.8 percent year-over-year to $16.4 million.
TRX has hit some speed bumps with the rollout of its Correx Gen6 mid-office software platform. With some components originally scheduled for release at the end of 2007, preceding a broader rollout in 2008, Hammond said the whole system "hasn't rolled out and it's also been very poorly packaged" in terms of sales and marketing. Some smaller agency users are using the software-as-a-service technology to program their versions, but the reworked system for distribution of itinerary content through e-mail will not be deployed for at least another quarter.