• 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 Second Quarter 2019 Results

Press Releases

Travelzoo Reports Second Quarter 2019 Results

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

 

Travelzoo-Logo 11_30_2017 (1).jpg

 

Source: Travelzoo