TRX, a provider of travel-transaction processing and data services, and American Express agreed to amend and extend certain aspects of a service agreement through the end of 2014.
The TRX press release notes that the renewed agreement means American Express Business Travel will use the TRX CORREX automated quality control and electronic ticketing platform through 2014, and adds that, “The new contract provides direct growth opportunities for TRX in the South American, Asia-Pacific, and previously untapped European markets.”
All of that indeed may turn out to be true. However, a TRX filing with the U.S. Securities and Exchange Commission paints a portrait of the renegotiated agreement that has potentially darker hues.
In the SEC document, TRX states: “The Agreement does not contain volume commitments from AXP, and we can give no assurance that we will retain business from AXP during the Agreement’s term, or beyond. We currently expect our 2010 revenues from AXP, which are primarily generated from CORREX, to be approximately flat relative to 2009. Future revenue growth will depend on timing and volumes associated with global implementation of our technologies across the AXP network. Our revenues under the Agreement are dependent on AXP’s transaction volume levels, the nature and degree of consulting work requested by AXP, and AXP’s desire to continue licensing current and future versions of certain CORREX agent productivity tools.”
Disclosures like the one above are one reason that companies like Sabre, for instance, choose to be privately held companies. Private companies don’t have to be transparent about these sorts of contract terms. They can let their press releases — if they choose to issue them at all — do all of the talking.
TRX, which is majority owned by BCD Holdings, has provided CORREX services to Amex since 2000. The agreement had been slated to expire at the end of 2010, and the two sides agreed to “an amended and restated service agreement,” which “includes provisions for all services under the Agreement to be provided under separate Statements of Work, each of which will contain length of term, pricing, payment terms and service levels as applicable to those services.”
The renegotiated agreement comes as TRX — a company under pressure, with its stock trading this week at around 64 cents per share — copes with Expedia phasing out a large portion of work that TRX previously had performed for it.
Expedia has been TRX’s largest client, and Amex is another major TRX partner.
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