ATLANTA, Feb. 15 /PRNewswire-FirstCall/ -- TRX, Inc. , a global technology company that develops and hosts software applications to process data records and automate manual processes, today reported financial results for the quarter and year ended 31 December 2006.

Total revenues excluding client reimbursements for the fourth quarter of 2006 were $26.1 million compared with $26.4 million in the fourth quarter of 2005. Net income for the fourth quarter was $1.3 million compared with $0.3 million in the fourth quarter of 2005. Net income per diluted share was $0.07 compared to $0.02 per diluted share for the fourth quarter of 2005.

Revenues from transaction processing services decreased 4% to $15.6 million. Revenues from data integration services increased 16% to $5.1 million. Revenues from customer care activities decreased 5% to $5.3 million, as the Company continued to execute on its previously announced strategy of transitioning away from customer care activities.

Adjusted EBITDA was $3.8 million for the quarter, a $0.9 million increase from the fourth quarter of 2005.

For the year ended 31 December 2006, revenues excluding client reimbursements decreased to $113.5 million from $115.7 million in 2005. Net income was $7.3 million, compared with a net loss of ($6.7) million in 2005, and Adjusted EBITDA was $18.7 million, compared with $11.4 million for 2005. Net income per diluted share was $0.41 for the twelve months ended 31 December 2006 and includes non-cash stock compensation of $1.1 million, or $0.06 per share, and restructuring expense of $0.7 million, or $0.04 per share.

"I am pleased with the solid results we posted for 2006. We carefully managed our cost structure and executed on our planned migration out of the call center business," said TRX President & CEO Trip Davis. "We felt the impact of channel shifts, economic pressures, and softer leisure volumes, and anticipate that we will face these trends again in 2007."

TRX also introduced its guidance for fiscal 2007: - 2007 revenues excluding client reimbursements of $85 to $90 million, of which customer care revenues comprise $2 to $3 million. - 2007 Adjusted EBITDA of $8 to $10 million. - GAAP diluted loss per share excluding the effects of non-cash stock compensation are expected to be ($0.10) to $0.00 for the year on a base of 18.3 million diluted shares. - The guidance incorporates the contributions of Travel Analytics, Inc. and Hi-Mark Software, acquired in August 2006 and January 2007, respectively.

"We have a clear focus on technology development and growth in data reporting, reservation processing, and online booking. We are working to broaden and diversify our client base," said Davis. "The upcoming launch of a new Web-based data reporting application, TRAVELTRAX, is an exciting part of our focus - the culmination of internal innovation and integration of our recent acquisitions, Travel Analytics and Hi-Mark Software."

Concluded Davis, "2007 will be a transformational year for us. We are moving deliberately and making investments and decisions for long-term growth. We have a clear plan and growth path for TRX."

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 investors with a better 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 (loss) 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.

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.

Conference Call Information

The Company will hold a Webcast of its conference call to discuss these results on Thursday, 15 February at 9:00 a.m. Eastern Time from http://www.trx.com/. To register for the event, please go to the Investor Center on the TRX.com Website at least fifteen minutes early to register, download, and install any necessary audio software.

For those who cannot listen to the live broadcast, the TRX.com site will host an archived Webcast shortly after the conclusion of the call, which will remain available on the TRX Website at http://www.trx.com/ for 90 days.

About TRX

TRX is a global technology company. We develop and host software applications that process data records and automate manual processes, enabling our clients to optimize performance and control costs. We are a leading provider to the travel industry and are expanding into financial services and healthcare. 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. TRX is headquartered in Atlanta with operations and associates in North America, Europe, and Asia.

TRX, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except per share data) Three Months Twelve Months Ended December 31, Ended December 31, 2006 2005 2006 2005 (Unaudited) (Unaudited) REVENUES: Transaction Processing $15,636 $16,357 $72,627 $72,083 Data Integration 5,149 4,442 17,849 16,300 Customer Care 5,326 5,625 23,028 27,322 Transaction and other revenues 26,111 26,424 113,504 115,705 Client reimbursements 1,314 580 2,836 2,911 Total revenues 27,425 27,004 116,340 118,616 EXPENSES: Operating 13,511 17,285 64,673 74,443 Selling, general and administrative 5,844 3,992 20,159 19,295 Technology development 2,985 2,311 11,022 11,176 Client reimbursements 1,314 580 2,836 2,911 Restructuring - 8 691 2,327 Depreciation and amortization 2,423 2,655 10,121 9,984 Total expenses 26,077 26,831 109,502 120,136 OPERATING INCOME (LOSS) 1,348 173 6,838 (1,520) INTEREST INCOME (EXPENSE): Interest income 220 225 999 351 Interest expense (40) (96) (324) (2,597) Total interest income (expense), net 180 129 675 (2,246) DEBT CONVERSION EXPENSE - - - (2,898) INCOME (LOSS) BEFORE INCOME TAXES 1,528 302 7,513 (6,664) PROVISION FOR INCOME TAXES (213) - (213) - NET INCOME (LOSS) $1,315 $302 $7,300 $(6,664) Net Income (Loss) per Share Basic and diluted $0.07 $0.02 $0.41 $(0.48) Weighted Average Shares Outstanding Basic 17,769 17,654 17,711 13,817 Diluted 17,769 17,654 17,745 13,817 Other Data: Adjusted EBITDA $3,792 $2,850 $18,707 $11,411 Capital expenditures $2,637 $1,985 $9,151 $8,675 Transaction processing volumes 18,779 18,503 83,788 81,437 As of December 31, As of December 31, 2006 2005 Consolidated Balance Sheet Data: Cash and cash equivalents $24,444 $28,633 Convertible notes - 1,360 Total shareholders' equity 41,132 32,601 TRX, INC. AND SUBSIDIARIES RECONCILIATION OF GAAP FINANCIAL MEASURES TO NON-GAAP FINANCIAL MEASURES (In thousands) Reconciliation of Net Income (Loss) to EBITDA and Adjusted EBITDA Three Months Twelve Months Ended Ended December 31, December 31, 2006 2005 2006 2005 Net income (loss) $1,315 $302 $7,300 $(6,664) Depreciation and amortization 2,423 2,655 10,121 9,984 Interest (income) expense, net (180) (129) (675) 2,246 Debt conversion expense (1) - - - 2,898 Provision for income taxes 213 - 213 - EBITDA 3,771 2,828 16,959 8,464 Stock compensation expense 21 14 1,057 70 Restructuring expenses (2) - 8 691 2,327 IPO related bonuses (3) - - - 550 Adjusted EBITDA $3,792 $2,850 $18,707 $11,411 (1) In connection with the IPO, we made payments totaling $2.9 million to affect the conversion of convertible notes with a conversion price of $11.03. (2) Expenses for severance, lease, transition costs and accelerated depreciation associated with the closure of certain customer care operations. (3) In connection with the IPO, we paid one-time management bonuses totaling $550,000.

CONTACT: Investors: David Cathcart, Chief Financial Officer of TRX,
+1-404-929-6154; or Media: Kira Perdue of Trevelino/Keller Communications
Group for TRX, +1-404-214-0722, extension 101

Web site: http://www.trx.com/