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Travelzoo Reports First Quarter 2018 Results

NEW YORK--(BUSINESS WIRE)--

Travelzoo® (TZOO):

  • Revenue of $30.9 million, up 9% year-over-year
  • Operating profit of $3.7 million
  • Earnings per share (EPS) of $0.20
  • Cash flow from operations of $179,000

Travelzoo, a global publisher of exclusive offers and experiences for members, today announced financial results for the first quarter ended March 31, 2018, with revenue of $30.9 million and operating profit of $3.7 million. In nominal terms, revenue increased by 9% year-over-year. In constant currencies, revenue increased by 4% year-over-year. Net income was $2.5 million, with EPS from continuing operations of $0.20, up from $0.07 in the prior-year period.

"Revenue growth accelerated in all three regions, leading to much stronger earnings," said Dr. Holger Bartel, Travelzoo's Global CEO. "With the travel and tourism industry worldwide showing steady growth, we like to leverage Travelzoo's global reach and trusted brand to further improve earnings in future periods."

Asia Pacific

Asia Pacific business segment revenue increased 12% year-over-year to $2.0 million. In constant currencies, revenue increased 4% year-over-year. Operating loss for the first quarter was $1.7 million, compared to an operating loss of $1.5 million in the prior-year period.

Europe

Europe business segment revenue increased 13% year-over-year to $10.3 million. In constant currencies, revenue was flat year-over-year. Operating profit for the first quarter was $2.0 million, or 19% of revenue, compared to an operating profit of $949,000, or 10% of revenue in the prior-year period.

North America

North America business segment revenue increased 6% year-over-year to $18.6 million. Operating profit for the first quarter was $3.4 million, or 18% of revenue, compared to an operating profit of $2.7 million, or 15% of revenue in the prior-year period.

Members

As of March 31, 2018, Travelzoo had a worldwide unduplicated number of members of 29.7 million. In Asia Pacific, unduplicated number of members was 3.6 million as of March 31, 2018, consistent with March 31, 2017. In Europe, unduplicated number of members was 8.7 million as of March 31, 2018, up 5% from March 31, 2017. In North America, unduplicated number of members was 17.5 million as of March 31, 2018, up 1% from March 31, 2017.

Income Taxes

Income tax expense was $1.3 million, compared to a $1.2 million income tax expense in the prior-year period.

Asset Management

During the first quarter of 2018, Travelzoo generated $179,000 of cash from operating activities. Accounts receivable decreased by $1.3 million over the prior-year period to $12.9 million. Accounts payable decreased by $1.8 million over the prior-year period to $14.8 million. Capital expenditures were $65,000, down from $120,000 in the prior-year period. As of March 31, 2018, cash and cash equivalents were $22.4 million.

Conference Call

Travelzoo will host a conference call to discuss first quarter results today at 11:00 a.m. ET. Please visit http://www.travelzoo.com/earnings to

  • download the management presentation (PDF format) to be discussed in the conference call;
  • access the webcast.

About Travelzoo

Travelzoo® provides our 28 million members insider deals and one-of-a-kind experiences personally reviewed by one of our deal experts around the globe. With more than 25 offices worldwide, we have our finger on the pulse of outstanding travel, entertainment, and lifestyle experiences. For over 15 years we have worked in partnership with more than 2,000 top travel suppliers—our long-standing relationships give Travelzoo members access to the very best deals.

Certain statements contained in this press release that are not historical facts may be forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities and Exchange Act of 1934. These forward-looking statements may include, but are not limited to, statements about our plans, objectives, expectations, prospects and intentions, markets in which we participate and other statements contained in this press release that are not historical facts. When used in this press release, the words “expect”, “predict”, “project”, “anticipate”, “believe”, “estimate”, “intend”, “plan”, “seek” and similar expressions are generally intended to identify forward-looking statements. Because these forward-looking statements involve risks and uncertainties, there are important factors that could cause actual results to differ materially from those expressed or implied by these forward-looking statements, including changes in our plans, objectives, expectations, prospects and intentions and other factors discussed in our filings with the SEC. We cannot guarantee any future levels of activity, performance or achievements. Travelzoo undertakes no obligation to update forward-looking statements to reflect events or circumstances occurring after the date of this press release.

Travelzoo and Top 20 are registered trademarks of Travelzoo.

 

Travelzoo

Condensed Consolidated Statements of Operations

(Unaudited)

(In thousands, except per share amounts)

 

  Three months ended
March 31,
2018   2017
Net revenues $ 30,884 $   28,429
Cost of net revenues 3,385   3,207
Gross profit 27,499   25,222
Operating expenses:
Sales and marketing 15,542 15,356
Product development 2,511 2,357
General and administrative 5,789     5,447
Total operating expenses 23,842     23,160
Income from continuing operations 3,657 2,062
Other income, net 161   7
Income from continuing operations before income taxes 3,818 2,069
Income tax expense 1,316     1,209
Income from continuing operations $ 2,502 $ 860

Income from discontinued operations including gain on sale
of Fly.com domain name, net of income taxes

    1,884
Net income $ 2,502   $   2,744
 
Income per share—basic:
Continuing operations $ 0.20 $ 0.07
Discontinued operations     0.14
Net income per share—basic $ 0.20     $   0.21
 
Income per share—diluted:
Continuing operations $ 0.20 $ 0.07
Discontinued operations     0.14
Net income per share—diluted $ 0.20     $   0.21
 
Weighted average shares:
Basic 12,462 13,288
Diluted 12,462 13,288
 
 

Travelzoo

Condensed Consolidated Balance Sheets

(Unaudited)

(In thousands)

 
  March 31,
2018
  December 31,
2017
Assets
Current assets:
Cash and cash equivalents $         22,394 $ 22,553
Accounts receivable, net 12,898 11,769
Income taxes receivable 89 517
Deposits 174 259
Prepaid expenses and other 2,189   2,141  
Total current assets 37,744 37,239
Deposits and other 637 548
Deferred tax assets 1,437 1,516
Restricted cash 2,177 1,448
Property and equipment, net 4,641   4,921  
Total assets $         46,636   $ 45,672  
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable $ 14,817 $ 19,105
Accrued expenses and other 9,688 8,702
Deferred revenue 931 825
Income tax payable 1,202   961  
Total current liabilities 26,638 29,593
Long-term tax liabilities 380 373
Long-term deferred rent and other 2,734   2,628  
Total liabilities 29,752   32,594  
Common stock 125 125
Additional paid-in capital 173
Accumulated other comprehensive loss (3,780 ) (3,597 )
Retained earnings 20,366   16,550  
Total stockholders’ equity 16,884   13,078  
Total liabilities and stockholders’ equity $         46,636   $ 45,672  
 
 

Travelzoo

Condensed Consolidated Statements of Cash Flows

(Unaudited)

(In thousands)

 
  Three months ended
March 31,
2018   2017
Cash flows from operating activities:
Net income $ 2,502 $ 2,744
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization 384 579
Discontinued operations gain on sale of Fly.com domain name (2,890 )
Deferred income taxes (110 ) (36 )
Stock-based compensation 173 240
Provision for losses on accounts receivable (83 ) 7
Net foreign currency effects (171 ) (89 )
Changes in operating assets and liabilities:
Accounts receivable (997 ) 287
Income tax receivable 428 544
Prepaid expenses and other (10 ) (86 )
Accounts payable (3,185 ) (3,263 )
Accrued expenses and other 1,024 990
Income tax payable 217 1,466
Other non-current liabilities 7   62  
Net cash provided by operating activities 179   555  
Cash flows from investing activities:
Proceeds from sale of Fly.com domain name 2,890
Purchases of property and equipment (65 ) (120 )
Net cash provided by (used in) investing activities (65 ) 2,770  
Cash flows from financing activities:
Repurchase of common stock, net   (1,762 )
Net cash used in financing activities   (1,762 )
Effect of exchange rate on cash and cash equivalents 456   171  
Net increase in cash and cash equivalents 570 1,734
Cash, cash equivalents and restricted cash at beginning of period 24,001   28,236  
Cash, cash equivalents and restricted cash at end of period $ 24,571   $ 29,970  
Supplemental disclosure of cash flow information:
Cash paid for income taxes, net $ 779 $ 310
 
 

Travelzoo

Segment Information

(Unaudited)

(In thousands)

 
Three months ended March 31, 2018   Asia Pacific   Europe   North
America
  Consolidated
Revenue from unaffiliated customers $   2,042 $         10,332 $           18,510 $ 30,884
Intersegment revenue (20 ) (52 ) 72  
Total net revenues 2,022   10,280   18,582   30,884
Operating income (loss) $   (1,740 ) $         1,966   $           3,431   $ 3,657
Three months ended March 31, 2017 Asia Pacific Europe North
America
Consolidated
Revenue from unaffiliated customers $ 1,844 $ 9,218 $ 17,367 $ 28,429
Intersegment revenue (31 ) (147 ) 178  
Total net revenues 1,813   9,071   17,545   28,429
Operating income (loss) $   (1,541 ) $         949   $           2,654   $ 2,062
 

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