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Travelzoo Reports Third Quarter 2018 Results

TZOO

NEW YORK, Oct. 24, 2018 (GLOBE NEWSWIRE) -- Travelzoo® (NASDAQ: TZOO):

  • Revenue of $25.3 million, up 3% year-over-year in constant currencies
  • Operating profit of $714,000
  • Earnings per share (EPS) of $0.01

Travelzoo, a global publisher of exclusive offers and experiences for members, today announced financial results for the third quarter ended September 30, 2018, with revenue of $25.3 million and operating profit of $714,000. In nominal terms, revenue increased by 2% year-over-year. In constant currencies, revenue increased by 3% year-over-year. Net income was $118,000, with EPS from continuing operations of $0.01, up from $(0.05) in the prior-year period.

"Our attractive core business in North America and Europe generated an operating profit of $2.3 million, with an operating margin of 10%, of which $1.6 million was re-invested in our Asia Pacific business which grew at a rate of 12%. Our goal is to achieve profitability in Asia Pacific by 2020," said Holger Bartel, Global CEO of Travelzoo.

Asia Pacific
Asia Pacific business segment revenue increased 12% year-over-year to $2.0 million. In constant currencies, revenue increased 15% year-over-year. Operating loss for the third quarter was $1.6 million, compared to an operating loss of $1.7 million in the prior-year period.

Europe
Europe business segment revenue increased 5% year-over-year to $8.4 million. In constant currencies, revenue increased 6% year-over-year. Operating profit for the third quarter was $940,000, or 11% of revenue, compared to an operating profit of $309,000, or 4% of revenue in the prior-year period.

North America
North America business segment revenue for the third quarter was $14.9 million, consistent with the prior-year period. Operating profit for the third quarter was $1.4 million, or 9% of revenue, consistent with the prior-year period.

Members
As of September 30, 2018, Travelzoo had a worldwide unduplicated number of members of 29.8 million. In Asia Pacific, unduplicated number of members was 3.6 million as of September 30, 2018, consistent with September 30, 2017. In Europe, unduplicated number of members was 8.8 million as of September 30, 2018, up 3% from September 30, 2017. In North America, unduplicated number of members was 17.5 million as of September 30, 2018, consistent with September 30, 2017.

Income Taxes
Income tax expense was $499,000, compared to a $680,000 income tax expense in the prior-year period.

Asset Management
During the third quarter of 2018, Travelzoo used $744,000 of cash for operating activities. Accounts receivable increased by $861,000 over the prior-year period to $12.3 million. Accounts payable decreased by $2.2 million over the prior-year period to $13.8 million. Cash used in investing activities was $9,000, down from $180,000 primarily due to the $150,000 proceeds from sale of fixed assets. As of September 30, 2018, cash and cash equivalents were $15.8 million.

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;
  • 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 the very best 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   Nine months ended
  September 30,   September 30,
  2018   2017   2018   2017
Revenues $ 25,301     $ 24,687     $ 84,260     $ 79,527  
Cost of revenues 2,987     3,018     9,388     9,447  
Gross profit 22,314     21,669     74,872     70,080  
Operating expenses:              
Sales and marketing 13,375     13,973     44,545     43,542  
Product development 2,297     2,315     7,194     7,016  
General and administrative 5,928     5,363     17,684     16,056  
Total operating expenses 21,600     21,651     69,423     66,614  
Operating income from continuing operations 714     18     5,449     3,466  
Other income (loss), net (91 )   86     100     111  
Income from continuing operations before income taxes 623     104     5,549     3,577  
Income tax expense 505     680     2,452     2,660  
Income (loss) from continuing operations $ 118     $ (576 )   $ 3,097     $ 917  
Income from discontinued operations including gain on sale of Fly.com domain name, net of income taxes             1,938  
Net income (loss) $ 118     $ (576 )   $ 3,097     $ 2,855  
               
Income (loss) per share—basic:              
Continuing operations $ 0.01     $ (0.05 )   $ 0.25     $ 0.07  
Discontinued operations               0.15  
Net income (loss) per share—basic $ 0.01     $ (0.05 )   $ 0.25     $ 0.22  
               
Income (loss) per share—diluted:              
Continuing operations $ 0.01     $ (0.05 )   $ 0.25     $ 0.07  
Discontinued operations               0.15  
Net income (loss) per share—diluted $ 0.01     $ (0.05 )   $ 0.25     $ 0.22  
               
Weighted average shares:              
Basic 12,314     12,628     12,412     13,023  
Diluted 12,663     12,628     12,630     13,040  
                       


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

  September 30,
 2018
  December 31,
 2017
Assets      
Current assets:      
Cash and cash equivalents $ 15,779     $ 22,553  
Accounts receivable, net 12,295     11,769  
Income taxes receivable 868     517  
Deposits 131     259  
Prepaid expenses and other 1,744     2,141  
Total current assets 30,817     37,239  
Deposits and other 622     548  
Deferred tax assets 1,423     1,516  
Restricted cash 1,453     1,448  
Investment 2,866      
Property and equipment, net 4,121     4,921  
Total assets $ 41,302     $ 45,672  
Liabilities and Stockholders’ Equity      
Current liabilities:      
Accounts payable $ 13,795     $ 19,105  
Accrued expenses and other 8,106     8,702  
Deferred revenue 888     825  
Income tax payable 843     961  
Total current liabilities 23,632     29,593  
Long-term tax liabilities 396     373  
Long-term deferred rent and other 2,275     2,628  
Total liabilities 26,303     32,594  
Common stock 122     125  
Additional paid-in capital      
Accumulated other comprehensive loss (3,977 )   (3,597 )
Retained earnings 18,854     16,550  
Total stockholders’ equity 14,999     13,078  
Total liabilities and stockholders’ equity $ 41,302     $ 45,672  
 


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

 

  Three months ended   Nine months ended
  September 30,   September 30,
  2018   2017   2018   2017
Cash flows from operating activities:              
Net income (loss) $ 118     $ (576 )   $ 3,097     $ 2,855  
Adjustments to reconcile net income to net cash provided by (used in) operating activities:              
Depreciation and amortization 400     504     1,227     1,605  
Discontinued operations gain on sale of Fly.com domain name             (2,890 )
Deferred income tax 53     97     (96 )   28  
Stock-based compensation 241     206     763     686  
Losses (gains) from sale and impairment of long-lived assets 20         20      
Other 205     (7 )   162     (34 )
Net foreign currency effects 59     (69 )   (77 )   (293 )
Changes in operating assets and liabilities:              
Accounts receivable (189 )   1,301     (1,086 )   3,388  
Income tax receivable (73 )   (903 )   (350 )   (868 )
Prepaid expenses and other 2     (199 )   420     (417 )
Accounts payable (400 )   1,359     (3,600 )   (4,695 )
Accrued expenses and other (973 )   (1,450 )   (248 )   (1,009 )
Income tax payable (234 )   (70 )   (65 )   109  
Other non-current liabilities 27     (71 )   (131 )   (349 )
Net cash provided by (used in) operating activities (744 )   122     36     (1,884 )
Cash flows from investing activities:              
Proceeds from sale of Fly.com domain name             2,890  
Proceeds from sale of property and equipment 150         150      
Investment in WeekenGO         (3,083 )    
Purchases of property and equipment (159 )   (180 )   (666 )   (486 )
Net cash provided by (used in) investing activities (9 )   (180 )   (3,599 )   2,404  
Cash flows from financing activities:              
Repurchase of common stock, net (2,873 )   (2,732 )   (2,873 )   (9,556 )
Net cash used in financing activities (2,873 )   (2,732 )   (2,873 )   (9,556 )
Effect of exchange rate on cash, cash equivalents and restricted cash (9 )   306     (333 )   1,060  
Net decrease in cash, cash equivalents and restricted cash (3,635 )   (2,484 )   (6,769 )   (7,976 )
Cash, cash equivalents and restricted cash at beginning of period 20,867     22,744     24,001     28,236  
Cash, cash equivalents and restricted cash at end of period $ 17,232     $ 20,260     $ 17,232     $ 20,260  
Supplemental disclosure of cash flow information:              
Cash paid for income taxes, net $ 767     $ 1,628     $ 2,963     $ 4,858  
                               


Travelzoo
Segment Information
(Unaudited)
(In thousands)

Three months ended September 30, 2018 Asia Pacific   Europe   North
America
  Consolidated
Revenue from unaffiliated customers $ 1,977     $ 8,396     $ 14,928     $ 25,301  
Intersegment revenue 10     (18 )   8      
Total net revenues 1,987     8,378     14,936     25,301  
Operating income (loss) $ (1,600 )   $ 940     $ 1,374     $ 714  
               
Three months ended September 30, 2017 Asia Pacific   Europe   North
America
  Consolidated
Revenue from unaffiliated customers $ 1,767     $ 8,008     $ 14,912     $ 24,687  
Intersegment revenue 6     (62 )   56      
Total net revenues 1,773     7,946     14,968     24,687  
Operating income (loss) $ (1,679 )   $ 309     $ 1,388     $ 18  


Nine months ended September 30, 2018 Asia Pacific   Europe   North
America
  Consolidated
Revenue from unaffiliated customers $ 6,092     $ 27,255     $ 50,913     $ 84,260  
Intersegment revenue (19 )   (97 )   116      
Total net revenues 6,073     27,158     51,029     84,260  
Operating income (loss) $ (4,812 )   $ 3,347     $ 6,914     $ 5,449  
               
Nine months ended September 30, 2017 Asia Pacific   Europe   North
America
  Consolidated
Revenue from unaffiliated customers $ 5,574     $ 25,231     $ 48,722     $ 79,527  
Intersegment revenue (38 )   (317 )   355      
Total net revenues 5,536     24,914     49,077     79,527  
Operating income (loss) $ (4,385 )   $ 1,526     $ 6,325     $ 3,466  


Investor Relations:
Lijun Qi
ir@travelzoo.com

 

 

Travelzoo-Logo 11_30_2017 (1).jpg



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