VRX Worldwide - financials - 2006

2006 Annual Report

President's Message

2006 was a tremendous year for VRX. We continued to lead the industry in quality, consistency, and capacity; we raised the content bar yet again by being the first to date-stamp hotel content; we shot over 4,000 hotels in less than 12 months; and we signed licensing agreements with two of the top three online travel agencies. On top of all of this, we posted the highest licensing and service revenues in the history of VRX.

No other company can rival VRX’s rich media production experience, our ability to maintain industry-leading production standards across tens of thousands of images, and our capacity to scale our business to meet the needs of any sized project. This know-how and experience is the core of VRX’s competitive advantage and drives our licensing and custom service offerings.

In 2006 our licensing revenues increased by 41 per cent to $850,000. This increase was driven by our hotel partners who licensed the content for use on their own websites. In addition to online usage, our hotel partners actively purchased highresolution versions of our still images for use in their brochures and traditional print campaigns.

Throughout VRX’s history, service work has been a strong component of our business. Our ability to consistently produce premium rich media across thousands of hotel properties continues to attract custom service work from leading hospitality brands around the world. In January 2006 we signed the second phase of our agreement with the Wyndham Hotel Group to shoot an additional 4,500 hotels. This project—along with others for companies such as Starwood Hotels and Resorts—drove VRX’s service revenues to $4.3 million in 2006, surpassing the company’s previous record of $3.5 million, achieved in 2003.

Overall, VRX’s revenues grew 183 per cent in 2006 to $5.2 million, eclipsing the $4.2 million recorded in 2003 when the company was the exclusive production partner of the world’s leading online travel agency.

In 2005 VRX caught the industry by surprise by signing up over 1,000 hotels in the first 12 months of our new Hotel Program. We maintained this momentum in 2006 by signing licensing agreements with two of the three largest online travel agencies. In February 2006 we signed an agreement with Sabre Holdings, the parent company of Travelocity, the second largest online travel agency in the world. Six months later, in August 2006, we signed an agreement with the third largest, Orbitz. These two licensing agreements—along with partnerships with leading hospitality brands such as Hyatt, Millennium, Sandals, and Kimpton—have solidified VRX as the leading provider of premium rich media to the online travel industry.

As the demand for our hotel content steadily increased throughout 2006, one of the prevailing factors that emerged was the freshness of our content. The fact that our Hotel Program successfully addressed consumer trust issues regarding the reliability of hotel content was the deciding factor for many new licensing customers. To emphasize the “freshness” of our content to both consumers and customers, in November 2006 we launched our “Always Fresh” campaign. Each image in our hotel archive is now accompanied by a date stamp telling consumers exactly when the image was certified as being accurate and up-to-date by the corresponding hotel. This program has been a tremendous success for us as it has further distinguished our hotel content from others and has given us another major competitive advantage.

2007 holds a lot of promise for VRX as the demand for premium rich media of hotels, cruise ships and attractions continues to grow. With our licensing clients actively integrating our content into their websites, new licensing clients signing up each month, and our archive of hotel content now including extensive coverage of many well-known hotel brands, we expect strong growth in our licensing revenues this year.

On the custom service side, we continue to shoot new properties for the Wyndham Hotel Group and maintain the freshness of the archive that we’ve created for them over the past two years. Our agreement with Wyndham—combined with other ongoing custom projects and new projects currently under negotiation—gives us confidence we will generate strong service revenues in 2007.

Year after year, we continue to lead our industry through the drive, inspiration, and creativity of everyone at VRX. On behalf of our Board of Directors and all of us at VRX, I would like to thank our investors and our customers for their continued support.

Yours truly,

David MacLaren
President and CEO

	Financials (2006)
	2006 Annual Report Fourth Quarter Press Release Financials Statements Management's Discussion and Analysis 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 Financials Statements Management's Discussion and Analysis

	2006 Annual Report and President's Message
	2006 Annual Report Click here to download President's Message 2006 was a tremendous year for VRX. We continued to lead the industry in quality, consistency, and capacity; we raised the content bar yet again by being the first to date-stamp hotel content; we shot over 4,000 hotels in less than 12 months; and we signed licensing agreements with two of the top three online travel agencies. On top of all of this, we posted the highest licensing and service revenues in the history of VRX. No other company can rival VRX’s rich media production experience, our ability to maintain industry-leading production standards across tens of thousands of images, and our capacity to scale our business to meet the needs of any sized project. This know-how and experience is the core of VRX’s competitive advantage and drives our licensing and custom service offerings. In 2006 our licensing revenues increased by 41 per cent to $850,000. This increase was driven by our hotel partners who licensed the content for use on their own websites. In addition to online usage, our hotel partners actively purchased highresolution versions of our still images for use in their brochures and traditional print campaigns. Throughout VRX’s history, service work has been a strong component of our business. Our ability to consistently produce premium rich media across thousands of hotel properties continues to attract custom service work from leading hospitality brands around the world. In January 2006 we signed the second phase of our agreement with the Wyndham Hotel Group to shoot an additional 4,500 hotels. This project—along with others for companies such as Starwood Hotels and Resorts—drove VRX’s service revenues to $4.3 million in 2006, surpassing the company’s previous record of $3.5 million, achieved in 2003. Overall, VRX’s revenues grew 183 per cent in 2006 to $5.2 million, eclipsing the $4.2 million recorded in 2003 when the company was the exclusive production partner of the world’s leading online travel agency. In 2005 VRX caught the industry by surprise by signing up over 1,000 hotels in the first 12 months of our new Hotel Program. We maintained this momentum in 2006 by signing licensing agreements with two of the three largest online travel agencies. In February 2006 we signed an agreement with Sabre Holdings, the parent company of Travelocity, the second largest online travel agency in the world. Six months later, in August 2006, we signed an agreement with the third largest, Orbitz. These two licensing agreements—along with partnerships with leading hospitality brands such as Hyatt, Millennium, Sandals, and Kimpton—have solidified VRX as the leading provider of premium rich media to the online travel industry. As the demand for our hotel content steadily increased throughout 2006, one of the prevailing factors that emerged was the freshness of our content. The fact that our Hotel Program successfully addressed consumer trust issues regarding the reliability of hotel content was the deciding factor for many new licensing customers. To emphasize the “freshness” of our content to both consumers and customers, in November 2006 we launched our “Always Fresh” campaign. Each image in our hotel archive is now accompanied by a date stamp telling consumers exactly when the image was certified as being accurate and up-to-date by the corresponding hotel. This program has been a tremendous success for us as it has further distinguished our hotel content from others and has given us another major competitive advantage. 2007 holds a lot of promise for VRX as the demand for premium rich media of hotels, cruise ships and attractions continues to grow. With our licensing clients actively integrating our content into their websites, new licensing clients signing up each month, and our archive of hotel content now including extensive coverage of many well-known hotel brands, we expect strong growth in our licensing revenues this year. On the custom service side, we continue to shoot new properties for the Wyndham Hotel Group and maintain the freshness of the archive that we’ve created for them over the past two years. Our agreement with Wyndham—combined with other ongoing custom projects and new projects currently under negotiation—gives us confidence we will generate strong service revenues in 2007. Year after year, we continue to lead our industry through the drive, inspiration, and creativity of everyone at VRX. On behalf of our Board of Directors and all of us at VRX, I would like to thank our investors and our customers for their continued support. Yours truly, David MacLaren President and CEO