• Travelzoo® provides its 30 million members exclusive offers and one-of-a-kind experiences personally reviewed by our deal experts around the globe. We have our finger on the pulse of outstanding travel, entertainment, and lifestyle experiences. We work in partnership with more than 5,000 top travel suppliers—our long-standing relationships give Travelzoo members access to irresistible deals.

Travelzoo Reports First Quarter 2022 Results

Press Releases

Travelzoo Reports First Quarter 2022 Results

NEW YORK, April 26, 2022 /PRNewswire/ --

Travelzoo® (NASDAQ: TZOO):

  • Consolidated revenue of $18.5 million, up 29% year-over-year
  • Non-GAAP consolidated operating profit of $2.7 million
  • Earnings per share (EPS) of $0.19 attributable to Travelzoo from continuing operations

Travelzoo, a global Internet media company that provides exclusive offers and experiences for members, today announced financial results for the first quarter ended March 31, 2022. Consolidated revenue was $18.5 million, up 29% from $14.3 million year-over-year. Travelzoo's reported revenue consists of advertising revenues and commissions, derived from and generated in connection with purchases made by Travelzoo members.

The reported net income attributable to Travelzoo from continuing operations was $2.4 million for Q1 2022. At the consolidated level, including minority interests, the reported net income from continuing operations was $2.4 million. EPS from continuing operations was $0.19, compared to ($0.14) in the prior-year period.

Non-GAAP operating profit was $2.7 million. The calculation of non-GAAP operating profit excludes amortization of intangibles ($0.2 million) and stock option expenses ($0.5 million). See section "Non-GAAP Financial Measures" below.

"We see continued improvement in our business. We seize the exceptional industry opportunities for providing 30 million Travelzoo members exclusive and irresistible travel, entertainment, and local offers and experiences. Travelzoo members are affluent, active, and open to new experiences. 84% say Travelzoo influences their travel destinations because they trust Travelzoo", said Holger Bartel, Global CEO.

Cash Position
As of March 31, 2022, consolidated cash, cash equivalents and restricted cash were $36.7 million. Net cash used in operations was $6.8 million. Cash was used primarily in connection with a decrease of merchant payables by $8.0 million. The Company also used cash of $1.0 million to acquire intangible assets in Q1 2022.

Reserve
Reported revenues include a reserve of $3.8 million related to commissions to be earned from vouchers sold. The reserve is booked as contra revenue.

Travelzoo North America
North America business segment revenue increased 19% year-over-year to $11.7 million. Operating profit for Q1 2022 was $1.7 million, or 15% of revenue, compared to an operating profit of $39,000 in the prior-year period.

Travelzoo Europe
Europe business segment revenue increased 66% year-over-year to $5.9 million. Operating profit for Q1 2022 was $178,000, or 3% of revenue, compared to an operating loss of $696,000 in the prior-year period.

Jack's Flight Club
On January 13, 2020, Travelzoo acquired 60% of Jack's Flight Club, a membership subscription service. Jack's Flight Club revenue decreased 7% year-over-year to $823,000. Non-GAAP operating profit for Q1 2022 was $249,000, compared to a non-GAAP operating profit of $174,000 in the prior-year period. After consolidation with Travelzoo, Jack's Flight Club's net income was $11,000, with $7,000 attributable to Travelzoo as a result of recording $226,000 of amortization of intangible assets related to the acquisition.

Licensing
In June 2020, Travelzoo entered into a royalty-bearing licensing agreement with a local licensee in Japan for the exclusive use of Travelzoo's brand, business model, and members in Japan. In August of 2020, Travelzoo entered into a royalty-bearing licensing agreement with a local licensee in Australia for the exclusive use of Travelzoo's brand, business models, and members in Australia, New Zealand, and Singapore. Under these arrangements, Travelzoo's existing members in Australia, Japan, New Zealand, and Singapore will continue to be owned by Travelzoo as the licensor. Licensing revenue is booked with a lag of one quarter. Travelzoo recorded $9,000 in licensing revenue from the licensee in Japan in Q1 2021. Travelzoo recorded $7,000 in licensing revenue from the licensee in Australia, New Zealand, and Singapore in Q1 2022. Licensing revenue is expected to increase going forward.

Members and Subscribers
As of March 31, 2022, we had 30.7 million members worldwide. In North America, the unduplicated number of Travelzoo members was 16.7 million as of March 31, 2022, down 8% from March 31, 2021. In Europe, the unduplicated number of Travelzoo members was 9.1 million as of March 31, 2022, up 5% from March 31, 2021. Jack's Flight Club had 1.7 million subscribers as of March 31, 2022, up 6% from March 31, 2021.

Discontinued Operations
As announced in a press release on March 10, 2020, Travelzoo decided to exit its Asia Pacific business and operate it as a licensing business going forward. Consequently, the Asia Pacific business has been classified as discontinued operations since March 31, 2020. Prior periods have been reclassified to conform with the current presentation. Certain reclassifications have been made for current and prior periods between the continued operations and the discontinued operations in accordance with U.S. GAAP.

Income Taxes
Income tax expense was $968,000 in Q1 2022, compared to an income tax expense of $742,000 in the prior-year period.

Non-GAAP Financial Measures
Management calculates non-GAAP operating income when evaluating the financial performance of the business. Travelzoo's calculation of non-GAAP operating income, also called "non-GAAP operating profit" in this press release and today's earnings conference call, excludes the following items: impairment of intangibles and goodwill, amortization of intangibles, stock option expenses, and severance- related expenses. This press release includes a table which reconciles GAAP operating income to the calculation of non-GAAP operating income. Non-GAAP operating income is not required by, or presented in accordance with, generally accepted accounting principles in the United States of America ("GAAP"). This information should be considered as supplemental in nature and should not be considered in isolation or as a substitute for the financial information prepared in accordance with GAAP. In addition, these non-GAAP financial measures may not be the same as similarly titled measures reported by other companies.

Looking Ahead
We currently expect higher revenue and profitability in Q2 2022. We continue to see a trend of recovery of our revenue. However, there could be unexpected fluctuations in the short term. During the pandemic, we have been able to lower our fixed costs. We believe we can keep our fixed costs relatively low in the foreseeable future—while revenue is expected to grow.

Conference Call
Travelzoo will host a conference call to discuss first quarter results and provide an update on Travelzoo META 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; and
  • access the webcast.

About Travelzoo
Travelzoo® provides its 30 million members with exclusive offers and one-of-a-kind experiences personally reviewed by our deal experts around the globe. We have our finger on the pulse of outstanding travel, entertainment, and lifestyle experiences. We work in partnership with more than 5,000 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, Top 20, and Jack's Flight Club are registered trademarks of Travelzoo.

 

Travelzoo

Condensed Consolidated Statements of Operations

(Unaudited)

(In thousands, except per share amounts)

   
 

Three months ended
March 31

 

2022

 

2021

Revenues

$                 18,453

 

$                 14,284

Cost of revenues

2,832

 

3,018

          Gross profit

15,621

 

11,266

Operating expenses:

     

     Sales and marketing

8,581

 

6,790

     Product development

453

 

683

     General and administrative

4,668

 

4,560

          Total operating expenses

13,702

 

12,033

Operating income (loss)

1,919

 

(767)

Other income (loss), net

1,423

 

(166)

Income (loss) from continuing operations before income taxes

3,342

 

(933)

Income tax expense

968

 

742

Income (loss) from continuing operations

2,374

 

(1,675)

Loss from discontinued operations, net of tax

(11)

 

(15)

Net income (loss)

2,363

 

(1,690)

Net income (loss) attributable to non-controlling interest

4

 

(48)

Net income (loss) attributable to Travelzoo

$                  2,359

 

$                 (1,642)

       

Net income (loss) attributable to Travelzoo—continuing operations

$                  2,370

 

$                  (1,627)

Net loss attributable to Travelzoo—discontinued operations

$                     (11)

 

$                      (15)

       

Income (loss) per share—basic

     

     Continuing operations

$                     0.20

 

$                   (0.14)

     Discontinued operations

$                        —

 

$                         —

Net income (loss) per share —basic

$                     0.20

 

$                   (0.14)

       

Income (loss) per share—diluted

     

     Continuing operations

$                     0.19

 

$                    (0.14)

     Discontinued operations

$                        —

 

$                         —

Net income (loss) per share—diluted

$                     0.19

 

$                    (0.14)

Shares used in per share calculation from continuing operations—
basic

12,056

 

11,391

Shares used in per share calculation from discontinued operations—
basic

12,056

 

11,391

Shares used in per share calculation from continuing operations—
diluted

12,544

 

11,391

Shares used in per share calculation from discontinued operations—
diluted

12,056

 

11,391

 

Travelzoo

Condensed Consolidated Balance Sheets

(Unaudited)

(In thousands)

       
 

March 31,
2022

 

December 31,
2021

Assets

     

     Current assets:

     

          Cash and cash equivalents

$             35,617

 

$            43,815

          Accounts receivable, net

18,163

 

14,871

          Prepaid income taxes

2,547

 

3,325

          Prepaid expenses and other

1,513

 

1,891

          Prepaid expenses—related party

 

1,150

          Assets from discontinued operations

63

 

71

               Total current assets

57,903

 

65,123

          Deposits and other

6,588

 

6,784

          Deferred tax assets

3,887

 

3,949

          Restricted cash

1,121

 

1,142

          Operating lease right-of-use assets

6,679

 

7,700

          Property and equipment, net

572

 

659

          Intangible assets, net

5,189

 

3,426

          Goodwill

10,944

 

10,944

               Total assets

$             92,883

 

$            99,727

Liabilities and Stockholders' Deficit

     

     Current liabilities:

     

          Accounts payable

$               3,453

 

$              3,411

          Merchant payables

60,479

 

68,678

          Accrued expenses and other

9,171

 

10,212

          Deferred revenue

2,317

 

1,733

          Operating lease liabilities

2,813

 

3,180

          Income tax payable

30

 

185

          Liabilities from discontinued operations

488

 

485

               Total current liabilities

78,751

 

87,884

          Long-term operating lease liabilities

8,617

 

9,111

          Other long-term liabilities

2,380

 

2,364

               Total liabilities

89,748

 

99,359

          Non-controlling interest

4,604

 

4,600

          Common stock

126

 

126

          Treasury stock (at cost)

(5,488)

 

(5,488)

          Additional paid-in capital

4,957

 

4,415

          Retained earnings

2,866

 

508

          Accumulated other comprehensive loss

(3,930)

 

(3,793)

               Total stockholders' deficit

(1,469)

 

(4,232)

               Total liabilities and stockholders' deficit

$             92,883

 

$            99,727

 

Travelzoo

Condensed Consolidated Statements of Cash Flows

(Unaudited)

(In thousands)

   
 

Three months ended
March 31

 

2022

 

2021

Cash flows from operating activities:

     

Net income (loss)

$              2,363

 

$            (1,690)

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

     

     Depreciation and amortization

574

 

484

     Stock-based compensation

541

 

882

     Deferred income tax

97

 

541

     Loss on long-lived assets

38

 

     Gain on sale of equity investment in WeGo

(196)

 

     Net foreign currency effects

(13)

 

(152)

     Reversal of reserves on accounts receivable and other reserves

(1,408)

 

(454)

     Changes in operating assets and liabilities:

     

          Accounts receivable

(3,163)

 

(2,229)

          Income tax receivable

759

 

(545)

          Prepaid expenses and other

565

 

(2,357)

          Accounts payable

103

 

1,727

          Merchant payables

(7,961)

 

13,212

          Accrued expenses and other

917

 

(641)

          Income tax payable

(157)

 

(126)

          Other liabilities

(244)

 

412

Net cash provided by (used in) operating activities

(6,764)

 

9,064

Cash flows from investing activities:

     

     Purchases of intangible assets

(1,049)

 

     Proceeds from sale of equity investment in WeGo

196

 

     Purchases of property and equipment

(89)

 

(7)

Net cash used in investing activities

(942)

 

(7)

Cash flows from financing activities:

     

     Repurchase of common stock

 

(1,583)

Net cash used in financing activities

 

(1,583)

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

(524)

 

270

Net increase (decrease) in cash, cash equivalents and restricted cash

(8,230)

 

7,744

Cash, cash equivalents and restricted cash at beginning of period

44,989

 

64,385

Cash, cash equivalents and restricted cash at end of period

$            36,759

 

$            72,129

 

Travelzoo 

Segment Information from Continuing Operations 

(Unaudited) 

(In thousands) 

                   

Three months ended
March 31, 2022

Travelzoo North

America

 

Travelzoo Europe

 

Jack's Flight Club

 

Elimination

 

Consolidated

Revenue from unaffiliated
customers

$          11,503

 

$           6,127

 

$              823

 

$               —

 

$           18,453

Intersegment revenue

193

 

(193)

 

 

 

Total net revenues

11,696

 

5,934

 

823

 

 

18,453

Operating income

$            1,718

 

$              178

 

$                23

 

$               —

 

$             1,919

                   

Three months ended
March 31, 2021

Travelzoo North

America

 

Travelzoo Europe

 

Jack's Flight Club

 

Elimination

 

Consolidated

Revenue from unaffiliated
customers

$            9,828

 

$           3,569

 

$              887

 

$               —

 

$           14,284

Intersegment revenue

(9)

 

9

 

 

 

Total net revenues

9,819

 

3,578

 

887

 

 

14,284

Operating income (loss)

$                 39

 

$            (696)

 

$            (110)

 

$               —

 

$               (767)

 

Travelzoo

Reconciliation of GAAP to Non-GAAP Information

(Unaudited)

(In thousands, except per share amounts)

   
 

Three months ended
March 31

 

2022

 

2021

GAAP operating expense

$             13,702

 

$             12,033

Non-GAAP adjustments:

     

     Impairment of intangible and goodwill (A)

 

     Amortization of intangibles (B)

226

 

284

     Stock option expenses (C)

541

 

882

     Severance-related expenses (D)

13

 

223

Non-GAAP operating expense

12,922

 

10,644

       

GAAP operating income (loss)

1,919

 

(767)

Non-GAAP adjustments (A through D)

780

 

1,389

Non-GAAP operating income

2,699

 

622

 

Investor Relations:
Almira Pusch
ir@travelzoo.com 

 

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SOURCE Travelzoo