U.S. markets closed
  • S&P 500

    3,269.96
    -40.15 (-1.21%)
     
  • Dow 30

    26,501.60
    -157.51 (-0.59%)
     
  • Nasdaq

    10,911.59
    -274.00 (-2.45%)
     
  • Russell 2000

    1,538.48
    -23.10 (-1.48%)
     
  • Crude Oil

    35.72
    -0.45 (-1.24%)
     
  • Gold

    1,878.80
    +10.80 (+0.58%)
     
  • Silver

    23.72
    +0.35 (+1.52%)
     
  • EUR/USD

    1.1650
    -0.0029 (-0.24%)
     
  • 10-Yr Bond

    0.8600
    +0.0250 (+2.99%)
     
  • GBP/USD

    1.2951
    +0.0028 (+0.22%)
     
  • USD/JPY

    104.6620
    +0.0520 (+0.05%)
     
  • BTC-USD

    13,593.52
    +46.53 (+0.34%)
     
  • CMC Crypto 200

    265.42
    +1.78 (+0.68%)
     
  • FTSE 100

    5,577.27
    -4.48 (-0.08%)
     
  • Nikkei 225

    22,977.13
    -354.81 (-1.52%)
     

Travelzoo Reports Second Quarter 2019 Results

NEW YORK, July 24, 2019 (GLOBE NEWSWIRE) -- Travelzoo® (TZOO):

  • Revenue of $28.2 million; up 3% year-over-year in constant currencies

  • Operating profit of $2.4 million, up 125% year-over-year

  • Earnings per share (EPS) of $0.11

Travelzoo, a global publisher of exclusive offers and experiences for members, today announced financial results for the second quarter ended June 30, 2019, with revenue of $28.2 million and operating profit of $2.4 million. In nominal terms, revenue increased $109,000 year-over-year. In constant currencies, revenue increased by 3% year-over-year. Travelzoo's reported revenue consists of advertising revenues and commissions, derived from or generated in connection with a much larger amount of purchases made by Travelzoo® members. Net income was $1.3 million. EPS was $0.11, up from $0.04 in the prior-year period.

"Our attractive core business in North America and Europe generated an operating profit of $4.2 million, with an operating margin of 16%, of which $1.8 million was re-invested in our Asia Pacific business. We are strongly committed to driving up shareholder value by implementing a successful strategy to achieve profitable growth in Asia Pacific faster," said Holger Bartel, Global CEO of Travelzoo.

Core Business versus Development Business
Our businesses in Europe and North America (the “Core Business”) and our business in Asia Pacific (the “Development Business”) are in very different situations. The following table illustrates how the Core Business compares to the Development Business:

Core Business

Development Business

Q2 2019 Operating profit / loss

+$4.2 million

-$1.8 million

Q2 2019 Operating margin

16%

N/A

Contribution to Q2 2019 EPS

+$0.25

-$0.14

Contribution to six months EPS

+$0.66

-$0.30

Europe
Europe business segment revenue increased 2% year-over-year to $8.7 million. In constant currencies, revenue increased 8% year-over-year. Revenue growth was primarily driven by the rollout of Travelzoo’s expanded vacations offering. Operating profit for the second quarter was $584,000, or 7% of revenue, compared to an operating profit of $441,000, or 5% of revenue in the prior-year period.

North America
North America business segment revenue increased 2% year-over-year to $17.9 million. Operating profit for the second quarter was $3.6 million, or 20% of revenue, compared to an operating profit of $2.1 million, or 12% of revenue in the prior-year period.

Asia Pacific
For the Asia Pacific business segment, a new management team was installed during the quarter and Travelzoo has engaged a top management consulting firm in China to conduct a strategic review of its business. Our development business in Asia Pacific, which is currently in transition, saw a decrease in revenue of 23% year-over-year to $1.6 million. In constant currencies, revenue decreased 20% year-over-year. The operating loss in Asia Pacific for the second quarter was $1.8 million, compared to an operating loss of $1.5 million in the prior-year period.

Members
As of June 30, 2019, Travelzoo had a worldwide unduplicated number of members of 30.2 million. In Asia Pacific, unduplicated number of members was 3.6 million as of June 30, 2019, consistent with June 30, 2018. In Europe, unduplicated number of members was 9.1 million as of June 30, 2019, up 4% from June 30, 2018. In North America, unduplicated number of members was 17.6 million as of June 30, 2019, consistent with June 30, 2018.

Income Taxes
Income tax expense was $953,000, compared to a $631,000 income tax expense in the prior-year period.

Asset Management
During the second quarter of 2019, Travelzoo used $1.8 million of cash in operating activities. Accounts receivable increased by $2.8 million over the prior-year period to $15.3 million. Accounts payable increased by $168,000 over the prior-year period to $14.4 million. Cash used in investing activities was $743,000, down from $3.5 million in the prior-year period. As of June 30, 2019, cash and cash equivalents were $14.1 million.

Share Repurchase Program
During the second quarter of 2019, the company repurchased 250,000 shares of its common stock. In May 2019, the company’s board of directors had authorized the repurchase of up to 1,000,000 shares of its outstanding common stock. 750,000 shares of common stock remain that are authorized to be repurchased.

Conference Call
Travelzoo will host a conference call to discuss second quarter results today at 11:00 a.m. ET. Please visit http://ir.travelzoo.com/events-presentations 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 irresistible 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

Six months ended

June 30,

June 30,

2019

2018

2019

2018

Revenues

$

28,184

$

28,075

$

59,009

$

58,959

Cost of revenues

2,757

3,016

5,703

6,401

Gross profit

25,427

25,059

53,306

52,558

Operating expenses:

Sales and marketing

15,357

15,628

30,963

31,170

Product development

1,799

2,386

3,502

4,897

General and administrative

5,847

5,967

11,446

11,756

Total operating expenses

23,003

23,981

45,911

47,823

Income from operations

2,424

1,078

7,395

4,735

Other income (loss), net

(143

)

30

(242

)

191

Income before income taxes

2,281

1,108

7,153

4,926

Income tax expense

953

631

2,705

1,947

Net income

$

1,328

$

477

$

4,448

$

2,979

Basic income per share

$

0.11

$

0.04

$

0.37

$

0.24

Diluted income per share

$

0.11

$

0.04

$

0.36

$

0.24

Weighted average shares:

Basic

12,003

12,462

11,959

12,462

Diluted

12,278

12,780

12,251

12,622


Travelzoo

Condensed Consolidated Balance Sheets

(Unaudited)

(In thousands)

June 30,
2019

December 31,
2018

Assets

Current assets:

Cash and cash equivalents

$

14,113

$

18,017

Accounts receivable, net

15,323

12,646

Income taxes receivable

817

389

Deposits

84

167

Prepaid expenses and other

1,739

1,947

Total current assets

32,076

33,166

Deposits and other

744

685

Deferred tax assets

1,359

1,645

Restricted cash

1,331

1,444

Investment in WeekenGO

2,958

2,694

Operating lease right-of-use assets

14,110

Property and equipment, net

3,346

3,790

Total assets

$

55,924

$

43,424

Liabilities and Stockholders’ Equity

Current liabilities:

Accounts payable

$

14,419

$

17,129

Accrued expenses and other

8,720

7,853

Deferred revenue

1,165

1,339

Operating lease liabilities

5,693

Income tax payable

395

489

Total current liabilities

30,392

26,810

Long-term tax liabilities

434

418

Long-term operating lease liabilities

10,788

Other long-term liabilities

83

2,137

Total liabilities

41,697

29,365

Common stock

119

120

Additional paid-in capital

Accumulated other comprehensive loss

(4,229

)

(4,214

)

Retained earnings

18,337

18,153

Total stockholders’ equity

14,227

14,059

Total liabilities and stockholders’ equity

$

55,924

$

43,424


Travelzoo

Condensed Consolidated Statements of Cash Flows

(Unaudited)

(In thousands)

Three months

Six months

ended

ended

June 30,

June 30,

2019

2018

2019

2018

Cash flows from operating activities:

Net income

$

1,328

$

477

$

4,448

$

2,979

Adjustments to reconcile net income to net cash provided by (used in) operating activities:

Depreciation and amortization

333

443

663

827

Stock-based compensation

319

349

482

522

Deferred income tax

4

(39

)

345

(149

)

Loss on equity investment in WeekenGO

238

397

Net foreign currency effects

(5

)

35

(26

)

(136

)

Other

(51

)

40

26

(43

)

Changes in operating assets and liabilities:

Accounts receivable

201

100

(2,779

)

(897

)

Income tax receivable

(816

)

(705

)

(428

)

(277

)

Prepaid expenses and other

(186

)

428

239

418

Accounts payable

(1,688

)

(15

)

(2,788

)

(3,200

)

Accrued expenses and other

(296

)

(299

)

1,291

725

Income tax payable

(1,084

)

(48

)

(96

)

169

Other liabilities

(103

)

(165

)

(174

)

(158

)

Net cash provided by (used in) operating activities

(1,806

)

601

1,600

780

Cash flows from investing activities:

Investment in WeekenGO

(673

)

(3,083

)

(673

)

(3,083

)

Purchases of property and equipment

(70

)

(442

)

(201

)

(507

)

Net cash used in investing activities

(743

)

(3,525

)

(874

)

(3,590

)

Cash flows from financing activities:

Repurchase of common stock

(4,869

)

(6,460

)

Exercise of stock options and taxes paid for net share settlement of equity awards

1,738

1,712

Net cash used in financing activities

(3,131

)

(4,748

)

Effect of exchange rate on cash, cash equivalents and restricted cash

(147

)

(780

)

5

(324

)

Net decrease in cash, cash equivalents and restricted cash

(5,827

)

(3,704

)

(4,017

)

(3,134

)

Cash, cash equivalents and restricted cash at beginning of period

21,271

24,571

19,461

24,001

Cash, cash equivalents and restricted cash at end of period

$

15,444

$

20,867

$

15,444

$

20,867

Supplemental disclosure of cash flow information:

Cash paid for income taxes, net

$

2,919

$

1,417

$

2,859

$

2,196


Travelzoo

Segment Information

(Unaudited)

(In thousands)

Three months ended June 30, 2019

Asia
Pacific

Europe

North
America

Consolidated

Revenue from unaffiliated customers

$

1,557

$

9,133

$

17,494

$

28,184

Intersegment revenue

23

(451

)

428

Total net revenues

1,580

8,682

17,922

28,184

Operating income (loss)

$

(1,783

)

$

584

$

3,623

$

2,424

Three months ended June 30, 2018

Asia
Pacific

Europe

North
America

Consolidated

Revenue from unaffiliated customers

$

2,073

$

8,527

$

17,475

$

28,075

Intersegment revenue

(9

)

(27

)

36

Total net revenues

2,064

8,500

17,511

28,075

Operating income (loss)

$

(1,472

)

$

441

$

2,109

$

1,078


Six months ended June 30, 2019

Asia
Pacific

Europe

North
America

Consolidated

Revenue from unaffiliated customers

$

3,192

$

20,187

$

35,630

$

59,009

Intersegment revenue

53

(932

)

879

Total net revenues

3,245

19,255

36,509

59,009

Operating income (loss)

$

(3,418

)

$

2,721

$

8,092

$

7,395

Six months ended June 30, 2018

Asia
Pacific

Europe

North
America

Consolidated

Revenue from unaffiliated customers

$

4,115

$

18,859

$

35,985

$

58,959

Intersegment revenue

(29

)

(79

)

108

Total net revenues

4,086

18,780

36,093

58,959

Operating income (loss)

$

(3,212

)

$

2,407

$

5,540

$

4,735

Investor Relations:
Lijun Qi
ir@travelzoo.com