• 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 Third Quarter 2021 Results

Press Releases

Travelzoo Reports Third Quarter 2021 Results

NEW YORK, Oct. 29, 2021 (GLOBE NEWSWIRE) -- Travelzoo® (NASDAQ: TZOO):

  • Consolidated revenue of $15.7 million, up 14% year-over-year
  • Non-GAAP consolidated operating profit of $1.1 million
  • Earnings per share (EPS) of $0.22 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 third quarter ended September 30, 2021.
Consolidated revenue was $15.7 million, up 14% from $13.8 million year-over-year and down 18%
from the prior quarter. 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 $2.8 million for Q3 2021. At the consolidated level, including minority interests, the reported net income from continuing operations was $2.9 million. EPS from continuing operations was $0.22, compared to a loss per share of ($0.10) in the prior-year period. GAAP operating loss was $261,000.

Non-GAAP operating profit was $1.1 million. The calculation of non-GAAP operating profit excludes amortization of intangibles ($0.3 million), stock option expenses ($1.0 million), and severance-related expenses ($0.1 million). See section “Non-GAAP Financial Measures” below.

“We saw robust growth in our revenue and operating profit from Travelzoo in Europe,” said Holger Bartel, Global CEO. “Unfortunately, revenue from Travelzoo in North America was negatively impacted by press coverage about the COVID-19 Delta variant and Do Not Travel advisories for nearly 100 countries. We believe this to be a short-term effect. We see strong pent-up demand from Travelzoo members to get away as soon as possible.”

Cash Position
As of September 30, 2021, consolidated cash, cash equivalents, and restricted cash were $66.4 million. Net cash used in operations was $12.7 million. Cash was used primarily in connection with the switch to a more efficient merchant payment processing solution. There were no significant capital expenditures.

Reserve
Reported revenues include a reserve of $3.1 million related to commissions to be earned from refundable vouchers sold. The reserve is booked as contra revenue.

Travelzoo North America
North America business segment revenue increased 6% year-over-year to $9.7 million. Operating loss for Q3 2021 was $918,000, compared to an operating loss of $696,000 in the prior-year period.

Travelzoo Europe
Europe business segment revenue increased 43% year-over-year to $5.2 million. Operating profit for Q3 2021 was $600,000, or 11% of revenue, compared to an operating loss of $757,000 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 19% year-over-year to $796,000. Operating income for Q3 2021 was $57,000, compared to an operating income of $250,000 in the prior-year period. After consolidation with Travelzoo, Jack’s Flight Club's net income was $20,000 with $12,000 attributable to Travelzoo as a result of recording $274,000 of amortization of intangible assets related to the acquisition.

Licensing
In June of 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 $2,000 in licensing revenue from the licensee in Australia, New Zealand and Singapore in Q3 2021. Licensing revenue is expected to increase as the licensees develop their business and effects of the pandemic subside.

Members and Subscribers
As of September 30, 2021, we had 30.7 million members worldwide. In North America, the unduplicated number of Travelzoo members was 17.2 million as of September 30, 2021, up 5% from September 30, 2020. In Europe, the unduplicated number of Travelzoo members was 8.4 million as of September 30, 2021, down 5% from September 30, 2020. Jack’s Flight Club had 1.7 million subscribers as of September 30, 2021, consistent with 1.7 million subscribers as of September 30, 2020.

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 $233,000 in Q3 2021, compared to an income tax benefit of $244,000 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 to achieve profitability in Q4 2021. We continue to see a trend of recovery of our revenue. However, there could be unexpected fluctuations in the short-term. We have been able to reduce our operating expenses, and we believe we can continue the trend of lower fixed costs in the foreseeable future.

Conference Call
Travelzoo will host a conference call to discuss third 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 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.

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   Nine months ended
  September 30,   September 30,
  2021   2020   2021   2020
Revenues $ 15,688        $ 13,787        $ 49,051        $ 41,118     
Cost of revenues 2,992        2,924        8,532        7,768     
Gross profit 12,696        10,863        40,519        33,350     
Operating expenses:              
Sales and marketing 7,709        6,929        21,839        24,311     
Product development 684        592        2,052        2,586     
General and administrative 4,564        4,545        14,180        16,709     
Impairment of intangible asset and goodwill —        —        —        2,920     
Total operating expenses 12,957        12,066        38,071        46,526     
Operating income (loss) (261 )     (1,203 )     2,448        (13,176 )  
Other income (loss), net 3,344        (37 )     3,862        (222 )  
Income (loss) from continuing operations before
income taxes
3,083        (1,240 )     6,310        (13,398 )  
Income tax expense (benefit) 233        (244 )     2,111        (2,070 )  
Income (loss) from continuing operations 2,850        (996 )     4,199        (11,328 )  
Income (loss) from discontinued operations,
net of tax
(19 )     (230 )     (5 )     (3,944 )  
Net income (loss) 2,831        (1,226 )     4,194        (15,272 )  
Net income (loss) attributable to non-controlling
interest
      125        (1 )     (1,122 )  
Net income (loss) attributable to Travelzoo $ 2,823        $ (1,351 )     $ 4,195        $ (14,150 )  
               
Net income (loss) attributable to Travelzoo—
continuing operations
$ 2,842        $ (1,121 )     $ 4,200        $ (10,206 )  
Net income (loss) attributable to Travelzoo—
discontinued operations
$ (19 )     $ (230 )     $ (5 )     $ (3,944 )  
               
Income (Loss) per share—basic              
Continuing operations $ 0.24        $ (0.10 )     $ 0.36        $ (0.90 )  
Discontinued operations $ —        $ (0.02 )     $ —        $ (0.35 )  
Net income (loss) per share —basic $ 0.24        $ (0.12 )     $ 0.36        $ (1.25 )  
               
Income (Loss) per share—diluted              
Continuing operations $ 0.22        $ (0.10 )     $ 0.32        $ (0.90 )  
Discontinued operations $ —        $ (0.02 )     $ —        $ (0.35 )  
Net income (loss) per share—diluted $ 0.22        $ (0.12 )     $ 0.32        $ (1.25 )  
Shares used in per share calculation from continuing
operations—basic
11,648        11,310        11,510        11,353     
Shares used in per share calculation from
discontinued operations—basic
11,648        11,310        11,510        11,353     
Shares used in per share calculation from continuing
operations—diluted
12,904        11,310        13,132        11,353     
Shares used in per share calculation from
discontinued operations—diluted
11,648        11,310        11,510        11,353     




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

  September 30,
2021
  December 31,
2020
Assets      
Current assets:      
Cash and cash equivalents $ 65,204        $ 63,061     
Accounts receivable, net 9,084        4,519     
Prepaid income taxes 2,882        931     
Deposits 104        137     
Prepaid expenses and other 3,080        1,166     
Assets from discontinued operations 63        230     
Total current assets 80,417        70,044     
Deposits and other 8,219        745     
Deferred tax assets 3,637        5,067     
Restricted cash 1,154        1,178     
Operating lease right-of-use assets 8,005        8,541     
Property and equipment, net 794        1,347     
Intangible assets, net 3,700        4,534     
Goodwill 10,944        10,944     
Total assets $ 116,870        $ 102,400     
Liabilities and Stockholders’ Equity      
Current liabilities:      
Accounts payable $ 11,875        $ 6,996     
Merchant payables 73,183        57,104     
Accrued expenses and other 7,546        8,649     
Deferred revenue 1,805        2,688     
Operating lease liabilities 3,482        3,587     
PPP notes payable (current portion) —        2,849     
Income tax payable 61        326     
Liabilities from discontinued operations 469        671     
Total current liabilities 98,421        82,870     
PPP notes payables —        814     
Deferred tax liabilities —        357     
Long-term operating lease liabilities 9,721        10,774     
Other long-term liabilities 2,249        1,085     
Total liabilities 110,391        95,900     
Non-controlling interest 4,608        4,609     
Common stock 118        114     
Treasury stock (at cost) (1,583 )     —     
Additional paid-in capital 3,432        6,239     
Retained earnings (accumulated deficit) 3,792        (403 )  
Accumulated other comprehensive loss (3,888 )     (4,059 )  
Total stockholders’ equity 1,871        1,891     
Total liabilities and stockholders’ equity $ 116,870        $ 102,400     




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

  Three months ended   Nine months ended
  September 30,   September 30,
  2021   2020   2021   2020
Cash flows from operating activities:              
Net income (loss) $ 2,831        $ (1,226 )     $ 4,194        $ (15,272 )  
Adjustments to reconcile net income (loss) to net cash provided by
(used in) operating activities:
             
Depreciation and amortization 448        588        1,408        1,806     
Stock-based compensation 971        1,189        2,788        5,243     
Deferred income tax (68 )     14        1,073        (1,747 )  
Impairment of intangible assets and goodwill —        —        —        2,920     
Gain on notes payable settlement —        —        —        (1,500 )  
Loss on long-lived assets —        —        —        437     
Loss on equity investment in WeGo —        138        —        474     
Gain on PPP notes payable forgiveness (3,159 )     —        (3,588 )     —     
Net foreign currency effects (45 )     (86 )     (300 )     (542 )  
Provision (reversal) of loss on accounts receivable and
other reserves
(854 )     1,496        (1,725 )     3,923     
Changes in operating assets and liabilities, net of acquisitions:              
Accounts receivable 933        63        (3,848 )     6,246     
Prepaid income taxes (1,294 )     (304 )     (2,007 )     685     
Prepaid expenses and other (6,698 )     206        (9,473 )     1,626     
Accounts payable 3,610        10,560        5,025        12,709     
Merchant payables (8,699 )     12,372        16,486        20,532     
Accrued expenses and other (132 )     (1 )     (452 )     (1,381 )  
Income tax payable (35 )     (412 )     (263 )     (479 )  
Other liabilities (476 )     (436 )     (34 )     1,904     
Net cash provided by (used in) operating activities (12,667 )     24,161        9,283        37,584     
Cash flows from investing activities:              
Acquisition of business, net of cash acquired —        —        —        (679 )  
Other investment —        —        —        (430 )  
Purchases of property and equipment 60        (49 )     (24 )     (252 )  
Net cash provided by (used in) investing activities 60        (49 )     (24 )     (1,361 )  
Cash flows from financing activities:              
Repurchase of common stock —        —        (1,583 )     (1,205 )  
Payment of promissory notes —        —        (110 )     (7,800 )  
Proceeds from notes payable —        —        —        3,663     
Exercise of stock options and taxes paid for net share
settlement
(2,357 )     —        (5,424 )     —     
Net cash used in financing activities (2,357 )     —        (7,117 )     (5,342 )  
Effect of exchange rate on cash, cash equivalents and
restricted cash
(823 )     904        (126 )     393     
Net increase (decrease) in cash, cash equivalents and
restricted cash
(15,787 )     25,016        2,016        31,274     
Cash, cash equivalents and restricted cash at beginning of period 82,188        26,968        64,385        20,710     
Cash, cash equivalents and restricted cash at end of period $ 66,401        $ 51,984        $ 66,401        $ 51,984     




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

Three months ended September 30, 2021 Travelzoo North
America
  Travelzoo Europe   Jack's Flight Club   Elimination   Consolidated
Revenue from unaffiliated
customers
$ 9,527        $ 5,365        $ 796      $ —      $ 15,688     
Intersegment revenue 136        (136 )     —      —      —     
Total net revenues 9,663        5,229        796      —      15,688     
Operating income (loss) $ (918 )     $ 600

 
      $ 57      $ —      $ (261  )  
                   
Three months ended September 30, 2020 Travelzoo North
America
  Travelzoo Europe   Jack's Flight Club   Elimination   Consolidated
Revenue from unaffiliated
customers
$ 9,002        $ 3,798        $ 987      $ —      $ 13,787     
Intersegment revenue 141        (141 )     —      —      —     
Total net revenues 9,143        3,657        987      —      13,787     
Operating income (loss) $ (696 )     $ (757 )     $ 250      $ —      $ (1,203 )  

 

Nine months ended September 30, 2021 Travelzoo North
America
  Travelzoo Europe   Jack's Flight Club   Elimination   Consolidated
Revenue from unaffiliated
customers
$ 33,005       $ 13,503        $ 2,543        $ —        $ 49,051     
Intersegment revenue 462        (462 )     —        —        —     
Total net revenues 33,467        13,041        2,543        —        49,051     
Operating income (loss) $ 2,654        $ (323 )     $ 117        $ —        $ 2,448     
                   
Nine months ended September 30, 2020 Travelzoo North
America
  Travelzoo Europe   Jack's Flight Club   Elimination   Consolidated
Revenue from unaffiliated
customers
$ 25,805        $ 12,706        $ 2,615        $ (8 )     $ 41,118     
Intersegment revenue 237        (245 )     —              —     
Total net revenues 26,042        12,461        2,615        —        41,118     
Operating income (loss) $ (6,374 )     $ (3,781 )     $ (3,013 )     $ (8 )     $ (13,176 )  




Travelzoo
Reconciliation of GAAP to Non-GAAP Information
(Unaudited)
(In thousands, except per share amounts)

  Three months ended   Nine months ended
  September 30,   September 30,
  2021   2020   2021   2020
GAAP operating expense $ 12,957        $ 12,066        $ 38,071      $ 46,526     
Non-GAAP adjustments:              
Impairment of intangible and goodwill (A) —        —        —      2,920     
Amortization of intangibles (B) 274        333        833      944     
Stock option expenses (C) 971        1,189        2,788      5,243     
Severance-related expenses (D) 95        855        493      1,139     
Non-GAAP operating expense 11,617        9,689        33,957      36,280     
               
GAAP operating income (loss) (261 )     (1,203 )     2,448      (13,176 )  
Non-GAAP adjustments (A through D) 1,340        2,377        4,114      10,246     
Non-GAAP operating income (loss) 1,079        1,174        6,562      (2,930 )  



Investor Relations:
Almira Pusch
ir@travelzoo.com


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Source: Travelzoo