Travelzoo Third Quarter 2012 Revenues Decrease 8%

2012-10-29
  • Send
  • PDF
  • Print
  • Bookmark
  • Text Size:
  •  Repost This Article
  • Travelzoo Operating income was $4.2 million, down 55% year-over-year. Net income was $3.4 million, with earnings per share of $0.22, down from $0.36 in the prior-year period.

    Travelzoo Inc., (NASDAQ: TZOO) a global Internet media company, announced financial results for the third quarter ended September 30, 2012, with revenue of $35.4 million, a decrease of 8% year-over-year. Operating income was $4.2 million, down 55% year-over-year. Net income was $3.4 million, with earnings per share of $0.22, down from $0.36 in the prior-year period.

    “While we are confident about Travelzoo's long-term opportunity, we are disappointed with our Q3 results”

    "While we are confident about Travelzoo's long-term opportunity, we are disappointed with our Q3 results," said Chris Loughlin, chief executive officer. "Declines in SuperSearch and Local Deals were not made up by the positive momentum we saw in Getaways. Continued investments into sales team expansion and subscriber growth, as well as enhancements to our hotel and mobile products are affecting profitability in the near-term, but we believe these are the right steps to position Travelzoo for sustainable and profitable future growth."

    North America

    North America business segment revenue decreased 10% year-over-year to $25.1 million. Operating profit for the third quarter was $3.1 million, or 12% of revenue, down from an operating profit of $7.8 million, or 28% of revenue, in the prior-year period. The decrease in operating profit was a result of a revenue decrease and increased expenses related to sales force expansion and subscriber marketing.

    Europe

    Europe business segment revenue decreased 4% year-over-year to $10.3 million. In local currency terms, revenue for the third quarter decreased 2% year-over-year. Operating profit was $1.1 million, or 10% of revenue, down from an operating profit of $1.4 million, or 13% of revenue in the prior-year period. The decrease in operating profit was a result of a decrease in revenue and increased expenses related to sales force ramp up and subscriber marketing.

    Subscribers

    Travelzoo had a total unduplicated number of subscribers in North America and Europe of 22.4 million as of September 30, 2012, up 5% from September 30, 2011. In North America, total unduplicated number of subscribers was 16.1 million as of September 30, 2012, up 3% from September 30, 2011. In Europe, total unduplicated number of subscribers was 6.3 million as of September 30, 2012, up 10% from September 30, 2011.

    Income Taxes

    Income tax expense was $896,000, compared to $3.3 million in the prior-year period. The effective income tax rate was 21%, compared to 36% in the prior-year period.

    Asset Management

    During the third quarter 2012, Travelzoo generated $6.9 million of cash from operating activities. Accounts receivable increased by $1.4 million over the prior-year period to $15.4 million. Accounts payable increased by $6.1 million over the prior-year period to $23.3 million. Capital expenditures were $774,000, down from $847,000 in the prior-year period. Travelzoo exited the third quarter with $57.6 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 Nine months ended
    September 30, September 30,
    2012 2011 2012 2011
     
    Revenues $ 35,447 $ 38,661 $ 114,140 $ 113,186
    Cost of revenues   3,989   4,221   11,672   9,603
    Gross profit   31,458   34,440   102,468   103,583
     
    Operating expenses:
    Sales and marketing 17,427 16,737 49,753 51,569
    General and administrative 9,836 8,478 28,583 25,167
    Unexchanged promotional merger shares   -   -   3,000   20,000
    Total operating expenses   27,263   25,215   81,336   96,736
     
    Income from operations 4,195 9,225 21,132 6,847
     
    Other income   135   -   218     105
    Income before income taxes 4,330 9,225 21,350 6,952
     
    Income taxes 896 3,298 6,908 10,061
           
    Net income (loss) $ 3,434 $ 5,927 $ 14,442 $ (3,109)
     
    Net income (loss) per share:        
    Basic $ 0.22 $ 0.36 $ 0.91 $ (0.19)
    Diluted $ 0.22 $ 0.36 $ 0.90 $ (0.19)
     
    Weighted Average Shares:
    Basic 15,884 16,396 15,935 16,434
    Diluted 15,922 16,504 16,041 16,434
     
         
    Travelzoo Inc.

    Condensed Consolidated Balance Sheets

    (Unaudited)

    (In thousands)

     
     
    September 30, December 31,
      2012     2011  
     
    Assets
    Current assets:
    Cash and cash equivalents $ 57,634 $ 38,744
    Accounts receivable, net 15,440 13,340
    Income taxes receivable 10,052 3,625
    Deposits 381 278
    Prepaid expenses and other current assets 2,757 2,123
    Deferred tax assets   1,356     1,754  
    Total current assets 87,620 59,864
    Deposits, less current portion 1,068 776
    Deferred tax assets, less current portion 357 344
    Restricted cash 3,122 3,103
    Property and equipment, net 4,007 3,557
    Intangible assets, net   440     704  
    Total assets $ 96,614   $ 68,348  
     
    Liabilities and Stockholders' Equity
    Current liabilities:
    Accounts payable $ 23,314 $ 21,731
    Accrued expenses 12,619 6,311
    Deferred revenue 2,506 2,168
    Deferred rent 287 114
    Income tax payable   -     279  
    Total current liabilities 38,726 30,603
    Long-term tax liabilities 9,874 2,225
    Deferred rent, less current portion   831     761  
    Total liabilities   49,431     33,589  
    Common stock 163 164
    Treasury stock - (15,123 )
    Additional paid-in capital 8,556 7,656
    Accumulated other comprehensive loss (728 ) (1,422 )
    Retained earnings   39,192     43,484  
    Total stockholders' equity   47,183     34,759  
    Total liabilities and stockholders' equity $ 96,614   $ 68,348  
     
               
    Travelzoo Inc.

    Condensed Consolidated Statements of Cash Flows

    (Unaudited)

    (In thousands)

     
    Three months ended Nine months ended
    September 30, September 30,
      2012     2011     2012     2011  
    Cash flows from operating activities:
    Net income (loss) $ 3,434 $ 5,927 $ 14,442 $ (3,109 )
    Adjustments to reconcile net income to net cash provided by operating activities:
    Depreciation and amortization 630 746 1,856 2,054
    Deferred income taxes (3 ) 49 (3 ) 209
    Stock-based compensation 307 187 900 562
    Provision for losses on accounts receivable (84 ) (67 ) 116 (25 )
    Tax benefit from exercise of stock options - - - (268 )
    Net foreign currency effects (46 ) 52 (6 ) 24
    Changes in operating assets and liabilities:
    Accounts receivable 53 1,734 (2,069 ) (722 )
    Deposits (17 ) 92 (382 ) (568 )
    Income tax receivable 689 358 1,819 (2,031 )
    Prepaid expenses and other current assets (161 ) (654 ) (241 ) (771 )
    Accounts payable 680 1,840 1,189 7,454
    Accrued expenses 897 (2,192 ) 6,198 4,992
    Deferred revenue 383 170 323 268
    Deferred rent 55 83 21 179
    Income tax payable (1 ) 165 (284 ) (353 )
    Other non-current liabilities   34     645     (190 )   659  
    Net cash provided by operating activities   6,850     9,135     23,689     8,554  
     
    Cash flows from investing activities:
    Purchases of property and equipment   (774 )   (847 )   (2,046 )   (1,902 )
    Net cash used in investing activities   (774 )   (847 )   (2,046 )   (1,902 )
     
    Cash flows from financing activities:
    Cash used in purchase of common stock (3,611 ) (15,124 ) (3,611 ) (15,124 )
    Proceeds from exercise of stock options - - - 40
    Tax benefit of stock option exercises   -     -     -     268  
    Net cash used in financing activities   (3,611 )   (15,124 )   (3,611 )   (14,816 )
     
    Effect of exchange rate on cash and cash equivalents 1,008 (817 ) 858 (587 )
     
    Net increase (decrease) in cash and cash equivalents 3,473 (7,653 ) 18,890 (8,751 )
    Cash and cash equivalents at beginning of period   54,161     40,086     38,744     41,184  
    Cash and cash equivalents at end of period $ 57,634   $ 32,433   $ 57,634   $ 32,433  
     
    Supplemental disclosure of cash flow information:
    Cash paid for income taxes, net 177 2,096 5,568 11,572
     
                 
    Travelzoo Inc.

    Segment Information

    (Unaudited)

    (In thousands)

     
     
    Three months ended September 30, 2012

       North   

       America   

       Europe   

    Elimination   Consolidated
     
    Revenue from unaffiliated customers $ 25,147 $ 10,300 $ - $ 35,447
    Intersegment revenue   211   10   (221 )   -
    Total net revenues   25,358   10,310   (221 )   35,447
    Operating income $ 3,121 $ 1,074 $ -   $ 4,195
     
     
    Three months ended September 30, 2011

      North  

      America   

       Europe   

    Elimination   Consolidated
     
    Revenue from unaffiliated customers $ 27,944 $ 10,717 $ - $ 38,661
    Intersegment revenue   130   30   (160 )   -
    Total net revenues   28,074   10,747   (160 )   38,661
    Operating income $ 7,811 $ 1,414 $ -   $ 9,225
     
     
    Nine months ended September 30, 2012

       North   

       America   

       Europe   

    Elimination

    and Other (a)

      Consolidated
     
    Revenue from unaffiliated customers $ 82,415 $ 31,725 $ - $ 114,140
    Intersegment revenue   496   41   (537 )   -
    Total net revenues   82,911   31,766   (537 )   114,140
    Operating income $ 18,094 $ 6,038 $ (3,000 ) $ 21,132
     
     
    Nine months ended September 30, 2011

         North     

         America     

         Europe     

    Elimination

    and Other (a)

      Consolidated
     
    Revenue from unaffiliated customers $ 83,048 $ 30,138 $ - $ 113,186
    Intersegment revenue   342   92   (434 )   -
    Total net revenues   83,390   30,230   (434 )   113,186
    Operating income $ 23,605 $ 3,242 $ (20,000 ) $ 6,847
     



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

  • Send
  • 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