• 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 pulse on outstanding travel, entertainment, and lifestyle experiences. For over 15 years we have worked in partnership with more than 2,000 top travel vendors—our long-standing relationships allow us access to the very best deals.

Travelzoo Reports Fourth Quarter 2018 Results

Press Releases

Travelzoo Reports Fourth Quarter 2018 Results

NEW YORK, Feb. 06, 2019 (GLOBE NEWSWIRE) -- Travelzoo® (NASDAQ: TZOO):

  • Revenue of $27.1 million, up 2% year-over-year in constant currencies
  • Operating profit of $2.8 million, up 158% year-over-year
  • Cash flow from operations of $5.3 million
  • Earnings per share (EPS) of $0.13

Travelzoo, a global publisher of exclusive offers and experiences for members, today announced financial results for the fourth quarter ended December 31, 2018, with revenue of $27.1 million and operating profit of $2.8 million. In nominal terms, revenue increased $65,000 year-over-year. In constant currencies, revenue increased by 2% year-over-year. Net income was $1.6 million, with EPS from continuing operations of $0.13, up from $0.05 in the prior-year period.

"Our attractive core business in North America and Europe generated an operating profit of $4.3 million, with an operating margin of 17%, of which $1.5 million was re-invested in our Asia Pacific business. As previously announced, project 'Asia Pacific 2020' is underway with the goal of creating shareholder value from the investment," said Holger Bartel, Global CEO of Travelzoo.

Asia Pacific
Asia Pacific business segment revenue decreased 10% year-over-year to $1.8 million. In constant currencies, revenue decreased 7% year-over-year. Revenue trends were mixed. While revenue increased 4% in Japan, 5% in Hong Kong and 217% in Southeast Asia, revenue in mainland China decreased 29%. The operating loss in Asia Pacific for the fourth quarter was $1.5 million, compared to an operating loss of $1.6 million in the prior-year period.

Europe
Europe business segment revenue increased 3% year-over-year to $9.0 million. In constant currencies, revenue increased 6% year-over-year. Operating profit for the fourth quarter was $1.6 million, or 18% of revenue, compared to an operating profit of $764,000, or 9% of revenue in the prior-year period.

North America
North America business segment revenue for the fourth quarter was $16.3 million, consistent with the prior-year period. Operating profit for the fourth quarter was $2.7 million, or 16% of revenue, compared to an operating profit of $1.9 million, or 12% of revenue in the prior-year period.

Members
As of December 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 December 31, 2018, consistent with December 31, 2017. In Europe, unduplicated number of members was 8.8 million as of December 31, 2018, up 3% from December 31, 2017. In North America, unduplicated number of members was 17.5 million as of December 31, 2018, up 1% from December 31, 2017.

Income Taxes
Income tax expense was $1.2 million, compared to a $466,000 income tax expense in the prior-year period.

Asset Management
During the fourth quarter of 2018, Travelzoo generated $5.3 million of cash from operating activities. Accounts receivable increased by $877,000 over the prior-year period to $12.6 million. Accounts payable decreased by $2.0 million over the prior-year period to $17.1 million. Capital expenditures were $86,000, down from $252,000 in the prior-year period. As of December 31, 2018, cash and cash equivalents were $18.0 million.

Conference Call
Travelzoo will host a conference call to discuss fourth 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 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   Twelve months ended
  December 31,   December 31,
  2018   2017   2018   2017
Revenues $ 27,062     $ 26,997     $ 111,322     $ 106,524  
Cost of revenues 2,880     3,462     12,268     12,909  
Gross profit 24,182     23,535     99,054     93,615  
Operating expenses:              
Sales and marketing 13,974     13,746     58,519     57,288  
Product development 1,799     2,208     8,993     9,224  
General and administrative 5,620     6,502     23,304     22,558  
Total operating expenses 21,393     22,456     90,816     89,070  
Operating income from continuing operations 2,789     1,079     8,238     4,545  
Other income (loss), net (52 )   62     48     173  
Income from continuing operations before income taxes 2,737     1,141     8,286     4,718  
Income tax expense 1,173     466     3,625     3,126  
Income from continuing operations $ 1,564     $ 675     $ 4,661     $ 1,592  
Income from discontinued operations including gain on sale of Fly.com domain name, net of income taxes             1,938  
Net income $ 1,564     $ 675     $ 4,661     $ 3,530  
               
Income per share—basic:              
Continuing operations $ 0.13     $ 0.05     $ 0.38     $ 0.12  
Discontinued operations               0.15  
Net income per share—basic $ 0.13     $ 0.05     $ 0.38     $ 0.27  
               
Income per share—diluted:              
Continuing operations $ 0.13     $ 0.05     $ 0.37     $ 0.12  
Discontinued operations               0.15  
Net income per share—diluted $ 0.13     $ 0.05     $ 0.37     $ 0.27  
               
Weighted average shares:              
Basic 12,059     12,462     12,323     12,882  
Diluted 12,151     12,462     12,510     12,894  
                       

Travelzoo
Condensed Consolidated Balance Sheets
(Unaudited)
(In thousands)

  December 31,
 2018
  December 31,
 2017
Assets      
Current assets:      
Cash and cash equivalents $ 18,017     $ 22,553  
Accounts receivable, net 12,646     11,769  
Income taxes receivable 389     517  
Deposits 167     259  
Prepaid expenses and other 1,947     2,141  
Total current assets 33,166     37,239  
Deposits and other 685     548  
Deferred tax assets 1,645     1,516  
Restricted cash 1,444     1,448  
Investment in WeekenGO 2,694      
Property and equipment, net 3,790     4,921  
Total assets $ 43,424     $ 45,672  
Liabilities and Stockholders’ Equity      
Current liabilities:      
Accounts payable $ 17,129     $ 19,105  
Accrued expenses and other 7,853     8,702  
Deferred revenue 1,339     825  
Income tax payable 489     961  
Total current liabilities 26,810     29,593  
Long-term tax liabilities 418     373  
Long-term deferred rent and other 2,137     2,628  
Total liabilities 29,365     32,594  
Common stock 120     125  
Additional paid-in capital      
Accumulated other comprehensive loss (4,214 )   (3,597 )
Retained earnings 18,153     16,550  
Total stockholders’ equity 14,059     13,078  
Total liabilities and stockholders’ equity $ 43,424     $ 45,672  
               

Travelzoo
Condensed Consolidated Statements of Cash Flows
(Unaudited)
(In thousands)

  Three months ended   Twelve months ended
  December 31,   December 31,
  2018   2017   2018   2017
Cash flows from operating activities:              
Net income $ 1,564     $ 675     $ 4,661     $ 3,530  
Adjustments to reconcile net income to net cash provided by operating activities:              
Depreciation and amortization 438     470     1,828     2,075  
Discontinued operations gain on sale of Fly.com domain name             (2,890 )
Deferred income tax (240 )   281     (336 )   309  
Stock-based compensation 152     321     915     1,006  
Losses (gains) from sale and impairment of long-lived assets         (143 )    
Other 80     152     242     118  
Net foreign currency effects 119     (61 )   42     (354 )
Changes in operating assets and liabilities:              
Accounts receivable (433 )   (323 )   (1,519 )   3,065  
Income tax receivable 479     896     129     28  
Prepaid expenses and other (316 )   (70 )   104     (487 )
Accounts payable 3,575     3,105     (25 )   (1,588 )
Accrued expenses and other 248     534         (475 )
Income tax payable (327 )   152     (392 )   261  
Other non-current liabilities (58 )   (2,173 )   (189 )   (2,522 )
Net cash provided by operating activities 5,281     3,959     5,317     2,076  
Cash flows from investing activities:              
Proceeds from sale of Fly.com domain name             2,890  
Proceeds from sale of property and equipment         150      
Investment in WeekenGO         (3,083 )    
Purchases of property and equipment (86 )   (252 )   (752 )   (738 )
Net cash provided by (used in) investing activities (86 )   (252 )   (3,685 )   2,152  
Cash flows from financing activities:              
Repurchase of common stock, net (2,419 )   (155 )   (5,292 )   (9,712 )
Net cash used in financing activities (2,419 )   (155 )   (5,292 )   (9,712 )
Effect of exchange rate on cash, cash equivalents and restricted cash (547 )   189     (880 )   1,249  
Net increase (decrease) in cash, cash equivalents and restricted cash 2,229     3,741     (4,540 )   (4,235 )
Cash, cash equivalents and restricted cash at beginning of period 17,232     20,260     24,001     28,236  
Cash, cash equivalents and restricted cash at end of period $ 19,461     $ 24,001     $ 19,461     $ 24,001  
Supplemental disclosure of cash flow information:              
Cash paid for income taxes, net $ 1,098     $ 1,343     $ 4,061     $ 6,201  
                               

Travelzoo
Segment Information
(Unaudited)
(In thousands)

Three months ended December 31, 2018 Asia Pacific   Europe   North
America
  Consolidated
Revenue from unaffiliated customers $ 1,777     $ 9,213     $ 16,072     $ 27,062  
Intersegment revenue 9     (222 )   213      
Total net revenues 1,786     8,991     16,285     27,062  
Operating income (loss) $ (1,510 )   $ 1,626     $ 2,673     $ 2,789  
               
Three months ended December 31, 2017 Asia Pacific   Europe   North
America
  Consolidated
Revenue from unaffiliated customers $ 1,979     $ 8,803     $ 16,215     $ 26,997  
Intersegment revenue 4     (36 )   32      
Total net revenues 1,983     8,767     16,247     26,997  
Operating income (loss) $ (1,582 )   $ 764     $ 1,897     $ 1,079  

 

Twelve months ended December 31, 2018 Asia Pacific   Europe   North
America
  Consolidated
Revenue from unaffiliated customers $ 7,869     $ 36,468     $ 66,985     $ 111,322  
Intersegment revenue (10 )   (319 )   329      
Total net revenues 7,859     36,149     67,314     111,322  
Operating income (loss) $ (6,322 )   $ 4,973     $ 9,587     $ 8,238  
               
Twelve months ended December 31, 2017 Asia Pacific   Europe   North
America
  Consolidated
Revenue from unaffiliated customers $ 7,553     $ 34,034     $ 64,937     $ 106,524  
Intersegment revenue (34 )   (353 )   387      
Total net revenues 7,519     33,681     65,324     106,524  
Operating income (loss) $ (5,967 )   $ 2,290     $ 8,222     $ 4,545  
                               

Investor Relations:
Lijun Qi
ir@travelzoo.com

Travelzoo-Logo 11_30_2017 (1).jpg

 

Source: Travelzoo