• 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 Fourth Quarter 2020 Results

Press Releases

Travelzoo Reports Fourth Quarter 2020 Results

NEW YORK, March 17, 2021 (GLOBE NEWSWIRE) -- Travelzoo® (NASDAQ: TZOO):

  • Consolidated revenue of $12.5 million, down 51% from $25.3 million year-over-year
  • Net income of $702,000
  • Non-GAAP consolidated operating profit of $547,000
  • Earnings per share (EPS) of $0.02 attributable to Travelzoo from continuing operations
  • Cash flow from operations of $9.2 million

Travelzoo, a global Internet media company that publishes exclusive offers and experiences for members, today announced financial results for the fourth quarter ended December 31, 2020. Consolidated revenue was $12.5 million, down 51% from $25.3 million year-over-year. Reported revenue excludes revenue from discontinued operations in Asia Pacific. 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 $173,000 for Q4 2020. At the consolidated level, including minority interests, the reported net income from continuing operations was $702,000. EPS from continuing operations was $0.02, down from $0.15 in the prior-year period.

Non-GAAP operating profit was $547,000. The calculation of non-GAAP operating profit excludes amortization of intangibles ($0.3 million), stock option expenses ($1.0 million), and severance-related expenses ($0.2 million). See section “Non-GAAP Financial Measures” below.

"We see continued improvement in our business. We are seeing irresistibly priced deals from travel companies, and Travelzoo, as the most trusted media brand publishing and recommending deals, is bringing the very best deals to its members," said Holger Bartel, Global CEO.

"In March 2021, we saw the strongest activity from Travelzoo members in the U.S. since March 2020, as measured by user sessions on the Travelzoo site and app."

Cash Position
As of December 31, 2020, consolidated cash, cash equivalents and restricted cash were $64.2 million.

Reserve
Reported revenues include a reserve of $3.9 million related to commissions to be earned from vouchers sold. The reserve was booked contra revenue and reduced reported Q4 2020 revenue by $1.6 million.

Travelzoo North America
North America business segment revenue decreased 45% year-over-year to $8.9 million. Operating profit for Q4 2020 was $1.3 million, or 15% of revenue, compared to an operating profit of $2.0 million, or 12% of revenue in the prior-year period.

Travelzoo Europe
Europe business segment revenue decreased 71% year-over-year to $2.7 million. Operating loss for Q4 2020 was $2.4 million, compared to an operating profit of $925,000, or 10% of revenue 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. In Q4 2020, the Jack's Flight Club business segment generated $971,000 in revenue from subscriptions with operating profit of $582,000. After consolidation with Travelzoo, Jack’s Flight Club's net loss was $62,000, with $37,000 attributable to Travelzoo as a result of recording $333,000 of amortization of intangible assets related to the acquisition and haircut of revenue (derived from deferred revenue sold prior to acquisition) of $49,000 due to purchase accounting in accordance with U.S. GAAP.

Licensing
In June 2020, Travelzoo sold its subsidiary in Japan, Travelzoo Japan K.K., to Mr. Hajime Suzuki. In connection with the sale, Travelzoo and Travelzoo Japan K.K. entered into a royalty-bearing licensing agreement for the exclusive use of Travelzoo members in Japan. In August 2020, Travelzoo sold its Singapore subsidiary to Mr. Julian Rembrandt and entered into a royalty-bearing licensing agreement for, among other things, the exclusive use of Travelzoo's members in Australia, New Zealand, and Singapore. Under the licensing agreements, Travelzoo's existing members in Australia, Japan, New Zealand, and Singapore will continue to be owned by Travelzoo as the licensor. Licensing revenue from Japan was $9,000 in Q4 2020. However, licensing revenue is booked with a lag of one quarter.

Members and Subscribers
As of December 31, 2020, we had 30.2 million members worldwide. In Europe, the unduplicated number of Travelzoo members was 8.7 million as of December 31, 2020, down 4% from December 31, 2019. In North America, the unduplicated number of Travelzoo members was 16.3 million as of December 31, 2020, down 8% from December 31, 2019. On March 15, 2021, Travelzoo added more than 2 million new members in the U.S. in connection with a direct competitor from Europe exiting the U.S. market. Jack’s Flight Club had 1.7 million subscribers as of December 31, 2020, up 6% from December 31, 2019.

Discontinued Operations
As announced in a press release on March 10, 2020, Travelzoo decided to exit its Asia Pacific business which in 2019 reduced EPS by $0.60. The Asia Pacific business was classified as discontinued operations at 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 benefit was $368,000 in Q4 2020, compared to an income tax expense of $1.1 million 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, 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 see a trend of recovery of our revenue. We have been able to reduce our operating expenses significantly. As a result of recovery of revenue and substantially lower operating expenses, we currently expect to achieve for Q1 a result close to break-even or a profit.

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,
  • and access the webcast.

About Travelzoo
Travelzoo® provides our 30 million members insider deals and one-of-a-kind experiences personally reviewed by one of our deal experts around the globe. We have our finger on the pulse of outstanding travel, entertainment, and lifestyle experiences. For over 20 years we have worked 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 and Top 20 are registered trademarks of Travelzoo.

 
Travelzoo
Condensed Consolidated Statements of Operations
       
(Unaudited) Three months ended   Twelve months ended
(In thousands, except per share amounts) December 31,   December 31,
  2020   2019   2020   2019
Revenues $ 12,483     $ 25,326     $ 53,601     $ 104,925  
Cost of revenues 2,795     3,046     10,563     11,435  
Gross profit 9,688     22,280     43,038     93,490  
Operating expenses:              
Sales and marketing 6,305     12,737     30,616     51,342  
Product development 495     1,853     3,081     6,709  
General and administrative 3,785     4,764     20,494     18,398  
Impairment of intangible asset and goodwill         2,920      
Total operating expenses 10,585     19,354     57,111     76,449  
Operating income (loss) (897 )   2,926     (14,073 )   17,041  
Other income (loss), net 677     (90 )   455     (42 )
Income (loss) from continuing operations before income taxes (220 )   2,836     (13,618 )   16,999  
Income tax expense (benefit) (368 )   1,116     (2,438 )   4,712  
Income (loss) from continuing operations 148     1,720     (11,180 )   12,287  
Income (loss) from discontinued operations, net of tax 554     (2,319 )   (3,390 )   (8,132 )
Net income (loss) 702     (599 )   (14,570 )   4,155  
Net income (loss) attributable to non-controlling interest (25 )       (1,147 )    
Net income (loss) attributable to Travelzoo $ 727     $ (599 )   $ (13,423 )   $ 4,155  
               
Net income (loss) attributable to Travelzoo—
continuing operations
$ 173     $ 1,720     $ (10,033 )   $ 12,287  
Net income (loss) attributable to Travelzoo—
discontinued operations
$ 554     $ (2,319 )   $ (3,390 )   $ (8,132 )
               
Income (loss) per share—basic              
Continuing operations $ 0.02     $ 0.15     $ (0.88 )   $ 1.04  
Discontinued operations $ 0.05     $ (0.20 )   $ (0.30 )   $ (0.69 )
Net income (loss) per share —basic $ 0.06     $ (0.05 )   $ (1.18 )   $ 0.35  
               
Income (loss) per share—diluted              
Continuing operations $ 0.01     $ 0.15     $ (0.88 )   $ 1.02  
Discontinued operations $ 0.04     $ (0.20 )   $ (0.30 )   $ (0.69 )
Net income (loss) per share—diluted $ 0.06     $ (0.05 )   $ (1.18 )   $ 0.35  
Shares used in per share calculation from continuing operations—basic 11,315     11,559     11,344     11,809  
Shares used in per share calculation from discontinued operations—basic 11,315     11,559     11,344     11,809  
Shares used in per share calculation from continuing operations—diluted 12,605     11,691     11,344     12,035  
Shares used in per share calculation from discontinued operations—diluted 12,605     11,559     11,344     11,809  
                       

 

 
Travelzoo
Condensed Consolidated Balance Sheets
       
(Unaudited)
(In thousands)
December 31,
2020
  December 31,
2019
Assets      
Current assets:      
Cash and cash equivalents $ 63,061     $ 18,743  
Accounts receivable, net 4,519     11,209  
Prepaid income taxes 931     989  
Deposits 137     105  
Prepaid expenses and other 1,166     2,288  
Assets from discontinued operations 230     3,961  
Total current assets 70,044     37,295  
Deposits and other 745     572  
Deferred tax assets 5,067     2,051  
Restricted cash 1,178     1,135  
Investment in WeGo     2,484  
Operating lease right-of-use assets 8,541     8,140  
Property and equipment, net 1,347     2,861  
Intangible assets, net 4,534      
Goodwill 10,944      
Total assets $ 102,400     $ 54,538  
Liabilities and Stockholders’ Equity      
Current liabilities:      
Accounts payable $ 6,996     $ 6,382  
Merchant payables 57,104     12,967  
Accrued expenses and other 8,649     6,281  
Deferred revenue 2,688     786  
Operating lease liabilities 3,587     4,847  
PPP notes payable (current portion) 2,849      
Income tax payable 326     914  
Liabilities from discontinued operations 671     3,135  
Total current liabilities 82,870     35,312  
PPP notes payable 814      
Deferred tax liabilities 357      
Long-term operating lease liabilities 10,774     7,920  
Other long-term liabilities 1,085     443  
Total liabilities 95,900     43,675  
Non-controlling interest 4,608      
Common stock 114     115  
Additional paid-in capital 6,240      
Retained earnings (accumulated deficit) (406 )   14,200  
Accumulated other comprehensive loss (4,056 )   (3,452 )
Total stockholders’ equity 1,892     10,863  
Total liabilities and stockholders’ equity $ 102,400     $ 54,538  
               

 

 
Travelzoo
Condensed Consolidated Statements of Cash Flows
       
(Unaudited) Three months ended   Twelve months ended
(In thousands) December 31,   December 31,
  2020   2019   2020   2019
Cash flows from operating activities:                              
Net income (loss) $ 702     $ (599 )   $ (14,570 )   $ 4,155  
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:              
Depreciation and amortization 508     319     2,314     1,318  
Stock-based compensation 958     117     6,201     993  
Deferred income tax (813 )   (173 )   (2,560 )   258  
Impairment of intangible assets and goodwill         2,920      
Gain on notes payable settlement         (1,500 )    
Net gain on disposal of long-lived assets (822 )       (385 )    
Loss on equity investment in WeGo     210     474     821  
Gain on sale of equity investment in WeGo (468 )       (468 )    
Net foreign currency effects (143 )   21     (685 )   80  
Provision of loss on accounts receivable and other 1,452     193     5,375     325  
Changes in operating assets and liabilities, net of acquisitions:              
Accounts receivable (50 )   (601 )   6,196     (728 )
Income tax receivable (610 )   (59 )   75     (600 )
Prepaid expenses and other (443 )   (623 )   1,183     (626 )
Accounts payable (5,234 )   410     (748 )   1,104  
Merchant payables 15,381     6,622     44,136     1,957  
Accrued expenses and other (931 )   200     (2,312 )   (242 )
Income tax payable (61 )   409     (540 )   373  
Other liabilities (193 )   2,864     1,711     2,048  
Net cash provided by operating activities 9,233     9,310     46,817     11,236  
Cash flows from investing activities:              
Acquisition of business, net of cash acquired         (679 )   (673 )
Other investment         (430 )    
Proceeds from sale of investment in WeGo 2,607         2,607      
Purchases of property and equipment (1 )   (124 )   (253 )   (474 )
Proceeds from sale of fixed assets 822         822      
Net cash provided by (used in) investing activities 2,606     (124 )   1,245     (1,147 )
Cash flows from financing activities:              
Repurchase of common stock     (2,048 )   (1,205 )   (10,816 )
Payment of promissory notes (1,700 )       (9,500 )    
Proceeds from notes payable         3,663      
Proceeds from exercise of stock options, net of taxes for net share settlement 262         262     1,710  
Net cash used in financing activities (1,438 )   (2,048 )   (6,780 )   (9,106 )
Effect of exchange rate on cash, cash equivalents and restricted cash 1,178     659     1,571     266  
Net increase in cash, cash equivalents and restricted cash 12,401     7,797     43,675     1,249  
Cash, cash equivalents and restricted cash at beginning of period 51,984     12,913     20,710     19,461  
Cash, cash equivalents and restricted cash at end of period 64,385     20,710     64,385     20,710  
                       

 

Travelzoo
Segment Information from Continuing Operations
(Unaudited)
(In thousands)

Three months ended
December 31, 2020
Travelzoo North
America
  Travelzoo Europe   Jack's Flight Club   Elimination   Consolidated
Revenue from unaffiliated customers $ 8,858     $ 2,703     $ 922     $     $ 12,483  
Intersegment revenue 12     (12 )            
Total net revenues 8,870     2,691     922         12,483  
Operating income (loss) $ 1,318     $ (2,414 )   $ 199     $     $ (897 )
                   
Three months ended
December 31, 2019
Travelzoo North
America
  Travelzoo Europe   Jack's Flight Club   Elimination   Consolidated
Revenue from unaffiliated customers $ 15,381     $ 9,937     $     $ 8     $ 25,326  
Intersegment revenue 796     (788 )       (8 )    
Total net revenues 16,177     9,149             25,326  
Operating income $ 1,993     $ 925     $     $ 8     $ 2,926  

 

Twelve months ended
December 31, 2020
Travelzoo North
America
  Travelzoo Europe   Jack's Flight Club   Elimination   Consolidated
Revenue from unaffiliated customers $ 34,663     $ 15,409     $ 3,537     $ (8 )   $ 53,601  
Intersegment revenue 249     (257 )       8      
Total net revenues 34,912     15,152     3,537         53,601  
Operating loss $ (5,056 )   $ (6,195 )   $ (2,814 )   $ (8 )   $ (14,073 )
                   
Twelve months ended
December 31, 2019
Travelzoo North
America
  Travelzoo Europe   Jack's Flight Club   Elimination   Consolidated
Revenue from unaffiliated customers $ 65,455     $ 39,556     $     $ (86 )   $ 104,925  
Intersegment revenue 2,572     (2,658 )       86      
Total net revenues 68,027     36,898             104,925  
Operating income $ 12,666     $ 4,461     $     $ (86 )   $ 17,041  
                                       

 

 
Travelzoo
Reconciliation of GAAP to Non-GAAP Information
(Unaudited)
(In thousands, except per share amounts)
       
  Three months ended   Twelve months ended
  December 31,   December 31,
  2020   2019   2020   2019
GAAP operating expense $ 10,585     $ 19,354     $ 57,111     $ 76,449  
Non-GAAP adjustments:              
Impairment of intangible and goodwill (A)         2,920      
Amortization of intangibles (B) 333         1,277      
Stock option expenses (C) 958     117     6,201     993  
Severance-related expenses (D) 153     63     1,292     148  
Non-GAAP operating expense 9,141     19,174     45,421     75,308  
               
GAAP operating income (loss) (897 )   2,926     (14,073 )   17,041  
Non-GAAP adjustments (A through D) 1,444     180     11,690     1,141  
Non-GAAP operating income (loss) 547     3,106     (2,383 )   18,182  
               

Investor Relations:
Almira Pusch
ir@travelzoo.com

 

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Source: Travelzoo