Travelzoo Reports First Quarter 2012 Revenues Up 6%

2012-04-19
  • PDF
  • Print
  • Bookmark
  • Go Back
  • Text Size:
  • Travelzoo Travelzoo Inc., a global Internet media company, today announced financial results for the first quarter ended March 31, 2012, with revenue of $39.3 million, an increase of 6% year-over-year. Non-GAAP operating income was $9.6 million. Non-GAAP net income was $6.7 million, with non-GAAP earnings per share (non-GAAP EPS) of $0.42, up from non-GAAP EPS of $0.37 in the prior-year period. Non-GAAP operating income, non-GAAP net income and non-GAAP earnings per share exclude a $3.0 million charge related to our unexchanged merger shares.

    Travelzoo Inc. (NASDAQ: TZOO):

    “We believe that our strategic focus on profitable growth and quality-leadership is the right approach in the long run”

    First Quarter 2012 Financial Highlights:

    • Revenue of $39.3 million, up 6% year-over-year
    • Non-GAAP net income of $6.7 million, up 12% year-over-year
    • Non-GAAP earnings per share of $0.42, compared to $0.37 in the prior-year period
    • GAAP net income of $3.7 million; GAAP earnings per share of $0.23
    • Cash flow from operations of $9.8 million

    Travelzoo Inc., a global Internet media company, today announced financial results for the first quarter ended March 31, 2012, with revenue of $39.3 million, an increase of 6% year-over-year. Non-GAAP operating income was $9.6 million. Non-GAAP net income was $6.7 million, with non-GAAP earnings per share (non-GAAP EPS) of $0.42, up from non-GAAP EPS of $0.37 in the prior-year period. Non-GAAP operating income, non-GAAP net income and non-GAAP earnings per share exclude a $3.0 million charge related to our unexchanged merger shares.

    “We believe that our strategic focus on profitable growth and quality-leadership is the right approach in the long run,” said Chris Loughlin, chief executive officer of Travelzoo. “Despite a competitive environment fueled by venture capital and unsustainable, loss making business practices, we have built a healthy, vibrant franchise with a strong following of 25 million subscribers and a clear vision for future growth. We see opportunity on the horizon to take advantage of the shake out.”

    North America

    North America business segment revenue grew 4% year-over-year to $28.6 million. Non-GAAP operating income for the first quarter was $7.1 million, or 25% of revenue, down from $9.3 million, or 33% of revenue, in the prior-year period.

    Europe

    Europe business segment revenue grew 14% year-over-year to $10.8 million. In local currency terms, revenue for the first quarter grew 16% year-over-year. Operating income for the first quarter was $2.4 million, compared to an operating profit of $741,000 in the prior-year period.

    Subscribers

    Travelzoo had a total unduplicated number of newsletter subscribers in North America and Europe of 21.8 million as of March 31, 2012, up 9% from March 31, 2011. In North America, total unduplicated number of subscribers was 15.8 million as of March 31, 2012, up 7% from March 31, 2011. In Europe, total unduplicated number of subscribers was 6.0 million as of March 31, 2012, up 17% from March 31, 2011.

    Income Taxes

    Income tax expense was $2.9 million, compared to $4.0 million in the prior-year period. The Non-GAAP effective income tax rate was 30%, down from 40% in the prior-year period.

    Asset Management

    During the first quarter 2012, Travelzoo generated $9.8 million of cash from operating activities. Accounts receivable decreased by $1.8 million over the prior-year period to $14.7 million. Accounts payable increased by $8.8 million over the prior-year period to $22.4 million. Capital expenditures were $678,000, down from $699,000 in the prior-year period. Travelzoo exited the first quarter with $48.6 million in cash and cash equivalents.

    About Travelzoo

    Travelzoo Inc. is a global Internet media company. With more than 25 million subscribers in North America, Europe, and Asia Pacific and 25 offices worldwide, Travelzoo® publishes deals from more than 2,000 travel and entertainment companies. Travelzoo’s deal experts review offers to find the best deals and confirm their true value. In Asia Pacific, Travelzoo is independently owned and operated by Travelzoo (Asia) Ltd. and Travelzoo Japan K.K. under a license agreement with Travelzoo Inc.

       
    Travelzoo Inc.
    Condensed Consolidated Statements of Operations
    (Unaudited)
    (In thousands, except per share amounts)
     
     
    Three months ended
    March 31,
    2011 2012
     
    Revenues $ 36,960 $ 39,333
    Cost of revenues   2,442     4,054

    Gross profit

      34,518     35,279
     
    Operating expenses:
    Sales and marketing 16,131 16,265
    General and administrative 8,394 9,444
    Unexchanged merger shares   20,000     3,000
    Total operating expenses   44,525     28,709
     
    Operating income (10,007 ) 6,570
     
    Other income and expense:
    Interest income and other income 32 64
    Loss on foreign currency   31     35
    Income before income taxes (9,944 ) 6,669
     
    Income taxes 4,011 2,922
       
    Net income   ($13,955 ) $ 3,747
     
    Net income per share:    
    Basic $ (0.85 ) $ 0.23
    Diluted $ (0.85 ) $ 0.23
     
    Weighted Average Shares:
    Basic 16,451 15,962
    Diluted 16,451 16,019
     
       
    Travelzoo Inc.
    Condensed Consolidated Balance Sheets
    (Unaudited)
    (In thousands)
     
    December 31, March 31,
    2011 2012
     
    Assets
    Current assets:
    Cash and cash equivalents $ 38,744 $ 48,559
    Accounts receivable, net 13,340 14,655
    Income taxes receivable 3,625 2,780
    Deposits 278 402
    Prepaid expenses and other current assets 2,123 2,444
    Deferred tax assets   1,754     1,755  

    Total current assets

    59,864 70,595
    Deposits, less current portion 776 807
    Deferred tax assets, less current portion 344 344
    Restricted cash 3,103 3,097
    Property and equipment, net 3,557 3,674
    Intangible assets, net   704     616  
    Total assets $ 68,348   $ 79,133  
     
    Liabilities and Stockholders' Equity
    Current liabilities:
    Accounts payable $ 21,731 $ 22,420
    Accrued expenses 6,311 9,010
    Accrued expenses for unexchanged shares - 3,000
    Deferred revenue 2,168 2,316
    Deferred rent 114 99
    Income tax payable   279     -  
    Total current liabilities 30,603 36,845
    Long-term tax liabilities 2,225 2,276
    Deferred rent, less current portion   761     712  
    Total liabilities   33,589     39,833  
    Common stock 164 164
    Treasury stock (15,123 ) -
    Additional paid-in capital 7,656 7,943
    Accumulated other comprehensive loss (1,422 ) (915 )
    Retained earnings   43,484     32,108  
    Total stockholders' equity   34,759     39,300  
    Total liabilities and stockholders' equity $ 68,348   $ 79,133  
     
       
    Travelzoo Inc.
    Condensed Consolidated Statements of Cash Flows
    (Unaudited)
    (In thousands)
     
    Three months ended
    March 31,
    2011 2012
    Cash flows from operating activities:
    Net income $ (13,955 ) $ 3,748
    Adjustments to reconcile net income to net cash provided by operating activities:
    Depreciation and amortization 643 627
    Deferred income taxes 86 -
    Stock-based compensation 187 287
    Provision for losses on accounts receivable 18 108
    Tax benefit from exercise of stock options (268 ) -
    Net foreign currency effects (31 ) (35 )
    Changes in operating assets and liabilities:
    Accounts receivable (2,918 ) (1,271 )
    Deposits (561 ) (132 )
    Income tax receivable 264 845
    Prepaid expenses and other current assets 193 (295 )
    Accounts payable 3,436 460
    Accrued expenses 3,433 2,619
    Accrued expense for unexchanged merger shares 20,000 3,000
    Deferred revenue 19 134
    Deferred rent 13 (75 )
    Income tax payable 89 (284 )
    Other non-current liabilities   14     51  
    Net cash provided by operating activities   10,662     9,787  
     
    Cash flows from investing activities:
    Purchases of property and equipment (699 ) (678 )
    Purchases of restricted cash   -     -  
    Net cash used in investing activities   (699 )   (678 )
     
    Cash flows from financing activities:
    Proceeds from exercise of stock options 40 -
    Repurchase of common stock - -
    Tax benefit of stock option exercises 268 -
    Proceeds from sale of Asia Pacific business segment   -     -  
    Net cash provided by (used in) financing activities   308     -  
     
    Effect of exchange rate on cash and cash equivalents 243 706
     
    Net increase (decrease) in cash and cash equivalents 10,514 9,815
    Cash and cash equivalents at beginning of period   41,184     38,744  
    Cash and cash equivalents at end of period $ 51,698   $ 48,559  
     
    Supplemental disclosure of cash flow information:
    Cash paid or (refunds received) for income taxes, net (3,558 ) 2,309
     
           
    Travelzoo Inc.
    Segment Information
    (Unaudited)
    (In thousands)
     
    North

     

    Elimination and

     

    Three months ended March 31, 2012 America

    Europe

    Other (a)

    Consolidated

     
    Revenue from unaffiliated customers $ 28,556 $ 10,777 $ - $ 39,333
    Intersegment revenue   79   10   (89 )   -  
    Total net revenues   28,635   10,787   (89 )   39,333  
    Operating income $ 7,142 $ 2,428 $ (3,000 ) $ 6,570  
     
     
    North

     

    Elimination and

     

    Three months ended March 31, 2011 America

    Europe

    Other (a)

    Consolidated

     
    Revenue from unaffiliated customers $ 27,517 $ 9,443 $ - $ 36,960
    Intersegment revenue   101   5   (106 )   -  
    Total net revenues   27,618   9,448   (106 )   36,960  
    Operating income $ 9,252 $ 741 $ (20,000 ) $ (10,007 )
     
     
    (a) Includes a charge related to unexchanged merger shares of $20.0 million and $3.0 million for the three months ended March 31, 2011 and 2012, respectively.
     
       
    Travelzoo Inc.
    Reconciliation of GAAP to Non-GAAP Measures
    (Unaudited)
    (In thousands, except per share amounts)
     
     
    Three months ended
    March 31,
    2011 2012
     
     
    GAAP operating expense $ 44,525 $ 28,709

    Unexchanged merger shares (a)

      20,000     3,000  
    Non-GAAP operating expense $ 24,525 $ 25,709
     
    GAAP North America operating income (loss) $ (10,748 ) $ 4,142
    Unexchanged merger shares (a)   20,000     3,000  
    Non-GAAP North America operating income $ 9,252 $ 7,142
     
    GAAP operating income $ (10,007 ) $ 6,570
    Unexchanged merger shares (a)   20,000     3,000  
    Non-GAAP operating income $ 9,993 $ 9,570
     
    GAAP operating margin -27.1 % 16.7 %
    Unexchanged merger shares (a)   54.1 %   7.6 %
    Non-GAAP operating margin 27.0 % 24.3 %
     
    GAAP effective tax rate -40.3 % 43.8 %
    Unexchanged merger shares (a)   80.2 %   -13.6 %
    Non-GAAP effective tax rate 39.9 % 30.2 %
     
    GAAP net income (loss) $ (13,955 ) $ 3,747
    Unexchanged merger shares (a)   20,000     3,000  
    Non-GAAP net income $ 6,045 $ 6,747
     
    Earnings (loss) per share $ (0.85 ) $ 0.23
    Unexchanged merger shares (a) (b)   1.22     0.19  
    Non-GAAP earnings per share (b) $ 0.37 $ 0.42
     

    (a) Includes a charge related to unexchanged merger shares of $20.0 million and $3.0 million for the three months ended March 31, 2011 and 2012, respectively.

    (b) Shares used to calculate March 31, 2011 non-GAAP earnings per share were 16,551, which were different than the shares used in GAAP loss per share calculation due to the anti-dilutive effect on the GAAP loss per share.



    Logos, product and company names mentioned are the property of their respective owners.

  • PDF
  • Print
  • Bookmark
  • Go Back
  • Text Size:

  • comments powered by Disqus
    Ads by Nevistas

    Newsletters
    Travel
    News
     
    Airline
    Industry News
     
    Hospitality
    Newsletter
     
    Hospitality
    Trends
     
    Your Email Address
     
    Advertise Here