VRX Worldwide - financials - 2005

2005 Annual Report

President's Message

2005 posed a significant strategic challenge for VRX. At the end of 2004 we decided to shift our resources away from service-related work to focus on growing our highermargin licensing business. Twelve months later, I’m proud to report that we’ve not only made great strides in increasing our licensing revenues but we’ve also signed new service contracts that exceed those previously completed.

To fuel the growth of our Licensing business and to meet the growing demand for hotel-related content, in late 2004 we launched a new licensing product that offers extensive and consistent visual coverage of the world’s top three, four, and five-star hotels. VRX’s new archive of hotel content adheres to VRX’s stringent quality requirements and all hotel content is fully certified as being accurate and up-to-date by participating hotels.

Throughout 2005, we sought and successfully secured the participation of many of North America’s leading hospitality brands in VRX’s new Hotel Program. These partnerships are the foundation of our Hotel Program as the content that we create of each hotel comprises the final packaged product that we license to online travel intermediaries. Securing the participation of internationally recognized hotel chains as the anchor tenants of our Hotel Program set the stage for our early success with this new licensing product. The response that we’ve received to date has paralleled our ambitious expectations. Our initial target of signing up 300 hotels in the top destinations throughout North America and 50 hotels in Europe’s top five destinations was exceeded by the end of the second quarter. Driven by this early success and the growing momentum of the program, our dedicated sales team achieved our target of signing up 1,000 new hotel partners by December 31, 2005.

The hospitality companies that have joined our Hotel Program over the past year are truly industry leaders. These companies have a strong vision of what online travel should offer consumers and are committed to attaining this vision as quickly as technology and products such as ours will allow. Our hospitality partners’ brands are some of the best known in the industry, including Hyatt, Starwood (Hawaii), Kessler, Kimpton, Outrigger, Caesars, Sandals, and many more. By working with our partners and carefully targeting the top destinations for North American travelers, we have been able to assemble an extensive portfolio of three, four, and five-star hotel properties that offer online travel intermediaries broad coverage of hotels in popular destinations such as Hawaii, Florida, Las Vegas, and San Francisco.

As 2005 unfolded, we quickly began to reap the rewards of refocusing our attention on our Licensing Division and specifically our new Hotel Program. As we signed up each new hotel partner and added unrivalled coverage of their properties to our Hotel Archive, we began to attract the attention of a growing number of online travel intermediaries throughout North America, Europe, and Asia. In under a year, our Hotel Program boasted the participation of some of the industry’s most well-known and successful online travel brands including Travelocity, Priceline, Lastminute, and Southwest Airlines Vacations.

In addition to the tremendous progress that we have achieved in growing our new Hotel Program, we have also secured several new service contracts, including two contracts with Cendant Hotel Group to cover over 5,200 hotels by the end of 2006. Our proven ability to consistently produce the highest quality online visual content continues to attract service-related contracts; however, our goal over the next two years is to generate eighty percent of our revenues from licensing and twenty percent from service work. This one-hundred-and-eighty-degree shift from 2004 will significantly increase our profit margins and rapidly accelerate our base of reoccurring revenues.

In 2006 we look to build upon the success that we achieved in 2005. We have proven that there is continuing demand for our custom production services and that hotel content is an important and growing component of both hotels’ and intermediaries’ online sales and marketing plans. As complacency is not part of VRX’s corporate culture, we will stay true to our president's message core purpose of educating, inspiring, and compelling consumers and continue to provide the online travel industry with what it needs to meet the growing content demands of travel consumers.

As we head deeper into 2006, we move forward with the confidence that our custom services and licensed products are in high demand. With the success of our new Hotel Program, and new partners such as Sabre and Cendant, we expect 2006 to be our best revenue year yet.

On behalf of everyone at VRX, I would like to thank all of our shareholders for their continued support.

Regards,

David MacLaren
President, CEO, and Founder

	Financials (2005)
	2005 Annual Report Fourth Quarter Press Release Third Quarter Press Release Financials Statements Management's Discussion and Analysis Second Quarter Press Release Financials Statements Management's Discussion and Analysis First Quarter Press Release First Quarter Financials Statements Management's Discussion and Analysis

	2005 Annual Report and President's Message
	2005 Annual Report Click here to download President's Message 2005 posed a significant strategic challenge for VRX. At the end of 2004 we decided to shift our resources away from service-related work to focus on growing our highermargin licensing business. Twelve months later, I’m proud to report that we’ve not only made great strides in increasing our licensing revenues but we’ve also signed new service contracts that exceed those previously completed. To fuel the growth of our Licensing business and to meet the growing demand for hotel-related content, in late 2004 we launched a new licensing product that offers extensive and consistent visual coverage of the world’s top three, four, and five-star hotels. VRX’s new archive of hotel content adheres to VRX’s stringent quality requirements and all hotel content is fully certified as being accurate and up-to-date by participating hotels. Throughout 2005, we sought and successfully secured the participation of many of North America’s leading hospitality brands in VRX’s new Hotel Program. These partnerships are the foundation of our Hotel Program as the content that we create of each hotel comprises the final packaged product that we license to online travel intermediaries. Securing the participation of internationally recognized hotel chains as the anchor tenants of our Hotel Program set the stage for our early success with this new licensing product. The response that we’ve received to date has paralleled our ambitious expectations. Our initial target of signing up 300 hotels in the top destinations throughout North America and 50 hotels in Europe’s top five destinations was exceeded by the end of the second quarter. Driven by this early success and the growing momentum of the program, our dedicated sales team achieved our target of signing up 1,000 new hotel partners by December 31, 2005. The hospitality companies that have joined our Hotel Program over the past year are truly industry leaders. These companies have a strong vision of what online travel should offer consumers and are committed to attaining this vision as quickly as technology and products such as ours will allow. Our hospitality partners’ brands are some of the best known in the industry, including Hyatt, Starwood (Hawaii), Kessler, Kimpton, Outrigger, Caesars, Sandals, and many more. By working with our partners and carefully targeting the top destinations for North American travelers, we have been able to assemble an extensive portfolio of three, four, and five-star hotel properties that offer online travel intermediaries broad coverage of hotels in popular destinations such as Hawaii, Florida, Las Vegas, and San Francisco. As 2005 unfolded, we quickly began to reap the rewards of refocusing our attention on our Licensing Division and specifically our new Hotel Program. As we signed up each new hotel partner and added unrivalled coverage of their properties to our Hotel Archive, we began to attract the attention of a growing number of online travel intermediaries throughout North America, Europe, and Asia. In under a year, our Hotel Program boasted the participation of some of the industry’s most well-known and successful online travel brands including Travelocity, Priceline, Lastminute, and Southwest Airlines Vacations. In addition to the tremendous progress that we have achieved in growing our new Hotel Program, we have also secured several new service contracts, including two contracts with Cendant Hotel Group to cover over 5,200 hotels by the end of 2006. Our proven ability to consistently produce the highest quality online visual content continues to attract service-related contracts; however, our goal over the next two years is to generate eighty percent of our revenues from licensing and twenty percent from service work. This one-hundred-and-eighty-degree shift from 2004 will significantly increase our profit margins and rapidly accelerate our base of reoccurring revenues. In 2006 we look to build upon the success that we achieved in 2005. We have proven that there is continuing demand for our custom production services and that hotel content is an important and growing component of both hotels’ and intermediaries’ online sales and marketing plans. As complacency is not part of VRX’s corporate culture, we will stay true to our president's message core purpose of educating, inspiring, and compelling consumers and continue to provide the online travel industry with what it needs to meet the growing content demands of travel consumers. As we head deeper into 2006, we move forward with the confidence that our custom services and licensed products are in high demand. With the success of our new Hotel Program, and new partners such as Sabre and Cendant, we expect 2006 to be our best revenue year yet. On behalf of everyone at VRX, I would like to thank all of our shareholders for their continued support. Regards, David MacLaren President, CEO, and Founder