tzoo-20220426
0001133311FALSETravelzoo00011333112020-10-212020-10-21


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
____________________________________________________
FORM 8-K
____________________________________________________
CURRENT REPORT
Pursuant To Section 13 or 15(d) of the
Securities Exchange Act of 1934

Date of Report (Date of earliest event reported):  April 26, 2022
____________________________________________________

https://cdn.kscope.io/3d8f3d8ea13434149542f108fa56a61c-tzoo-20220426_g1.jpg
(Exact name of registrant as specified in its charter)
____________________________________________________
Delaware000-5017136-4415727
(State or Other
Jurisdiction of
Incorporation)
(Commission
File Number)
(I.R.S. Employer
Identification No.)
 
590 Madison Avenue, 35th Floor
New York, New York
10022
(Address of principal executive offices)
(Zip Code)
 
Registrant’s telephone number, including area code (212) 484-4900
(Former Name or Former Address, if Changed Since Last Report)
____________________________________________________

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions ( see General Instruction A.2. below):

      Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
      Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
      Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
      Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock, $0.01 par valueTZOOThe NASDAQ Stock Market




Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter)
                                         Emerging growth company        

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act  




Item 2.02.         Results of Operations and Financial Condition.
 
On April 26, 2022, Travelzoo (the "Company") reported its first quarter 2022 financial results. A copy of the Company’s press release containing this information is being furnished as Exhibit 99.1 to this report on Form 8-K and is incorporated herein by reference.
 
The information furnished pursuant to Item 2.02, including Exhibit 99.1, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) or otherwise subject to the liabilities under that Section and shall not be deemed to be incorporated by reference into any filing of the Company under the Securities Act of 1933, as amended, or the Exchange Act.
 

Item 9.01.        Financial Statements and Exhibits.
(d)           Exhibits.  See Exhibit Index




SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
TRAVELZOO
Date:April 27, 2022By:/s/ Lisa Su
Lisa Su
Chief Accounting Officer




EXHIBIT INDEX
ExhibitDescription
Press Release, dated April 26, 2022.


Document

Exhibit 99.1
https://cdn.kscope.io/3d8f3d8ea13434149542f108fa56a61c-travellogo11062017a13a.jpg
Travelzoo
590 Madison Avenue
35th Floor
New York, NY 10022

Investor Relations:
Almira Pusch
ir@travelzoo.com


FOR IMMEDIATE RELEASE

Travelzoo Reports First Quarter 2022 Results

NEW YORK, April 26, 2022 — 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.
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“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.


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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.
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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.


4/10


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.

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Travelzoo
Condensed Consolidated Statements of Operations
(Unaudited)
(In thousands, except per share amounts)
 Three months ended
 March 31,
 20222021
Revenues$18,453 $14,284 
Cost of revenues2,832 3,018 
Gross profit15,621 11,266 
Operating expenses:
Sales and marketing8,581 6,790 
Product development 453 683 
General and administrative4,668 4,560 
Total operating expenses13,702 12,033 
Operating income (loss)1,919 (767)
Other income (loss), net1,423 (166)
Income (loss) from continuing operations before income taxes3,342 (933)
Income tax expense 968 742 
Income (loss) from continuing operations2,374 (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(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—basic12,056 11,391 
Shares used in per share calculation from discontinued operations—basic12,056 11,391 
Shares used in per share calculation from continuing operations—diluted12,544 11,391 
Shares used in per share calculation from discontinued operations—diluted12,056 11,391 
6/10


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, net18,163 14,871 
Prepaid income taxes2,547 3,325 
Prepaid expenses and other1,513 1,891 
Prepaid expenses—related party— 1,150 
Assets from discontinued operations63 71 
Total current assets57,903 65,123 
Deposits and other6,588 6,784 
Deferred tax assets3,887 3,949 
Restricted cash1,121 1,142 
Operating lease right-of-use assets6,679 7,700 
Property and equipment, net572 659 
Intangible assets, net5,189 3,426 
Goodwill10,944 10,944 
Total assets$92,883 $99,727 
Liabilities and Stockholders’ Deficit
Current liabilities:
Accounts payable$3,453 $3,411 
Merchant payables60,479 68,678 
Accrued expenses and other 9,171 10,212 
Deferred revenue2,317 1,733 
Operating lease liabilities2,813 3,180 
Income tax payable 30 185 
Liabilities from discontinued operations488 485 
Total current liabilities78,751 87,884 
Long-term operating lease liabilities8,617 9,111 
Other long-term liabilities2,380 2,364 
Total liabilities89,748 99,359 
Non-controlling interest4,604 4,600 
Common stock126 126 
Treasury stock (at cost)(5,488)(5,488)
Additional paid-in capital4,957 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 
7/10


Travelzoo
Condensed Consolidated Statements of Cash Flows
(Unaudited)
(In thousands)
 Three months ended
 March 31,
 20222021
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 amortization574 484 
Stock-based compensation542 882 
Deferred income tax97 541 
Loss on long-lived assets38 — 
Gain on sale of equity investment in WeGo(196)— 
Net foreign currency effects(13)(152)
Provision for (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 receivable759 (545)
Prepaid expenses and other 565 (2,357)
Accounts payable103 1,727 
Merchant payables(7,961)13,212 
Accrued expenses and other917 (641)
Income tax payable(157)(126)
Other liabilities176 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 WeGo196 — 
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 period44,989 64,385 
Cash, cash equivalents and restricted cash at end of period$36,759 $72,129 
8/10


Travelzoo
Segment Information from Continuing Operations
(Unaudited)
(In thousands)
Three months ended March 31, 2022Travelzoo North
America
Travelzoo EuropeJack's Flight ClubEliminationConsolidated
Revenue from unaffiliated customers$11,503 $6,127 $823 $— $18,453 
Intersegment revenue193 (193)— — — 
Total net revenues11,696 5,934 823 — 18,453 
Operating income $1,718 $178 $23 $— $1,919 
Three months ended March 31, 2021Travelzoo North
America
Travelzoo EuropeJack's Flight ClubEliminationConsolidated
Revenue from unaffiliated customers$9,828 $3,569 $887 $— $14,284 
Intersegment revenue(9)— — — 
Total net revenues9,819 3,578 887 — 14,284 
Operating income (loss)$39 $(696)$(110)$— $(767)








9/10


Travelzoo
Reconciliation of GAAP to Non-GAAP Information
(Unaudited)
(In thousands, except per share amounts)
 Three months ended
 March 31,
 20222021
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 expense12,922 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 





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