Travelzoo Results

Travelzoo Reports First Quarter 2018 Results

Travelzoo

Travelzoo (NASDAQ:TZOO):

  • Revenue of $30.9 million, up 9% year-over-year
  • Operating profit of $3.7 million
  • Earnings per share (EPS) of $0.20
  • Cash flow from operations of $179,000

Travelzoo, a global publisher of exclusive offers and experiences for members, today announced financial results for the first quarter ended March 31, 2018, with revenue of $30.9 million and operating profit of $3.7 million. In nominal terms, revenue increased by 9% year-over-year. In constant currencies, revenue increased by 4% year-over-year. Net income was $2.5 million, with EPS from continuing operations of $0.20, up from $0.07 in the prior-year period.

"Revenue growth accelerated in all three regions, leading to much stronger earnings," said Dr. Holger Bartel, Travelzoo's Global CEO. "With the travel and tourism industry worldwide showing steady growth, we like to leverage Travelzoo's global reach and trusted brand to further improve earnings in future periods."

Asia Pacific

Asia Pacific business segment revenue increased 12% year-over-year to $2.0 million. In constant currencies, revenue increased 4% year-over-year. Operating loss for the first quarter was $1.7 million, compared to an operating loss of $1.5 million in the prior-year period.

Europe

Europe business segment revenue increased 13% year-over-year to $10.3 million. In constant currencies, revenue was flat year-over-year. Operating profit for the first quarter was $2.0 million, or 19% of revenue, compared to an operating profit of $949,000, or 10% of revenue in the prior-year period.

North America

North America business segment revenue increased 6% year-over-year to $18.6 million. Operating profit for the first quarter was $3.4 million, or 18% of revenue, compared to an operating profit of $2.7 million, or 15% of revenue in the prior-year period.

Members

As of March 31, 2018, Travelzoo had a worldwide unduplicated number of members of 29.7 million. In Asia Pacific, unduplicated number of members was 3.6 million as of March 31, 2018, consistent with March 31, 2017. In Europe, unduplicated number of members was 8.7 million as of March 31, 2018, up 5% from March 31, 2017. In North America, unduplicated number of members was 17.5 million as of March 31, 2018, up 1% from March 31, 2017.

Income Taxes

Income tax expense was $1.3 million, compared to a $1.2 million income tax expense in the prior-year period.

Asset Management

During the first quarter of 2018, Travelzoo generated $179,000 of cash from operating activities. Accounts receivable decreased by $1.3 million over the prior-year period to $12.9 million. Accounts payable decreased by $1.8 million over the prior-year period to $14.8 million. Capital expenditures were $65,000, down from $120,000 in the prior-year period. As of March 31, 2018, cash and cash equivalents were $22.4 million.

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.

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

March 31,

2018   2017
Net revenues

$ 30,884

$   28,429
Cost of net revenues

3,385  

3,207
Gross profit

27,499  

25,222
Operating expenses:

Sales and marketing

15,542

15,356
Product development

2,511

2,357
General and administrative

5,789     5,447
Total operating expenses

23,842     23,160
Income from continuing operations

3,657

2,062
Other income, net

161  

7
Income from continuing operations before income taxes

3,818

2,069
Income tax expense

1,316     1,209
Income from continuing operations

$ 2,502

$

860

Income from discontinued operations including gain on sale

of Fly.com domain name, net of income taxes

    1,884
Net income

$ 2,502  

$   2,744

 
Income per share—basic:

Continuing operations

$ 0.20

$

0.07
Discontinued operations

    0.14
Net income per share—basic

$ 0.20     $   0.21

 
Income per share—diluted:

Continuing operations

$ 0.20

$

0.07
Discontinued operations

    0.14
Net income per share—diluted

$ 0.20     $   0.21

 
Weighted average shares:

Basic

12,462

13,288
Diluted

12,462

13,288

 
 

Travelzoo

Condensed Consolidated Balance Sheets

(Unaudited)

(In thousands)

 

  March 31,

2018

  December 31,

2017

Assets

Current assets:

Cash and cash equivalents

$         22,394

$ 22,553

Accounts receivable, net

12,898

11,769

Income taxes receivable

89

517

Deposits

174

259

Prepaid expenses and other

2,189  

2,141  
Total current assets

37,744

37,239

Deposits and other

637

548

Deferred tax assets

1,437

1,516

Restricted cash

2,177

1,448

Property and equipment, net

4,641  

4,921  
Total assets

$         46,636  

$ 45,672  
Liabilities and Stockholders’ Equity

Current liabilities:

Accounts payable

$

14,817

$ 19,105

Accrued expenses and other

9,688

8,702

Deferred revenue

931

825

Income tax payable

1,202  

961  
Total current liabilities

26,638

29,593

Long-term tax liabilities

380

373

Long-term deferred rent and other

2,734  

2,628  
Total liabilities

29,752  

32,594  
Common stock

125

125

Additional paid-in capital

173

Accumulated other comprehensive loss

(3,780 )

(3,597 )
Retained earnings

20,366  

16,550  
Total stockholders’ equity

16,884  

13,078  
Total liabilities and stockholders’ equity

$         46,636  

$ 45,672  

 
 

Travelzoo

Condensed Consolidated Statements of Cash Flows

(Unaudited)

(In thousands)

 

  Three months ended

March 31,

2018   2017
Cash flows from operating activities:

Net income

$ 2,502

$ 2,744

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation and amortization

384

579

Discontinued operations gain on sale of Fly.com domain name

(2,890 )
Deferred income taxes

(110 )

(36 )
Stock-based compensation

173

240

Provision for losses on accounts receivable

(83 )

7

Net foreign currency effects

(171 )

(89 )
Changes in operating assets and liabilities:

Accounts receivable

(997 )

287

Income tax receivable

428

544

Prepaid expenses and other

(10 )

(86 )
Accounts payable

(3,185 )

(3,263 )
Accrued expenses and other

1,024

990

Income tax payable

217

1,466

Other non-current liabilities

7  

62  
Net cash provided by operating activities

179  

555  
Cash flows from investing activities:

Proceeds from sale of Fly.com domain name

2,890

Purchases of property and equipment

(65 )

(120 )
Net cash provided by (used in) investing activities

(65 )

2,770  
Cash flows from financing activities:

Repurchase of common stock, net

 

(1,762 )
Net cash used in financing activities

 

(1,762 )
Effect of exchange rate on cash and cash equivalents

456  

171  
Net increase in cash and cash equivalents

570

1,734

Cash, cash equivalents and restricted cash at beginning of period

24,001  

28,236  
Cash, cash equivalents and restricted cash at end of period

$ 24,571  

$ 29,970  
Supplemental disclosure of cash flow information:

Cash paid for income taxes, net

$ 779

$ 310

 
 

Travelzoo

Segment Information

(Unaudited)

(In thousands)

 
Three months ended March 31, 2018   Asia Pacific   Europe   North

America

  Consolidated
Revenue from unaffiliated customers

$   2,042

$         10,332

$           18,510

$ 30,884
Intersegment revenue

(20 )

(52 )

72  

Total net revenues

2,022  

10,280  

18,582  

30,884
Operating income (loss)

$   (1,740 )

$         1,966  

$           3,431  

$ 3,657
Three months ended March 31, 2017

Asia Pacific

Europe

North

America

Consolidated
Revenue from unaffiliated customers

$

1,844

$

9,218

$

17,367

$ 28,429
Intersegment revenue

(31 )

(147 )

178  

Total net revenues

1,813  

9,071  

17,545  

28,429
Operating income (loss)

$   (1,541 )

$         949  

$           2,654  

$ 2,062

 



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