NEW YORK, July 25, 2018 (GLOBE NEWSWIRE) -- Travelzoo® (NASDAQ:TZOO):

  • Revenue of $28.1 million, up 6% year-over-year
  • Operating profit of $1.1 million
  • Cash flow from operations of $601,000
  • Earnings per share (EPS) of $0.04

Travelzoo, a global publisher of exclusive offers and experiences for members, today announced financial results for the second quarter ended June 30, 2018, with revenue of $28.1 million and operating profit of $1.1 million. In nominal terms, revenue increased by 6% year-over-year. In constant currencies, revenue increased by 4% year-over-year. Net income was $477,000, with EPS from continuing operations of $0.04, down from $0.05 in the prior-year period.

"Given the topline growth in all regions, we decided in Q2 to invest more in marketing which we believe will lead to long-term business growth," said Dr. Holger Bartel. "With the travel and tourism industry worldwide showing steady growth, we like to leverage Travelzoo's global reach and trusted brand to improve earnings in future periods."

Asia Pacific
Asia Pacific business segment revenue increased 6% year-over-year to $2.1 million. In constant currencies, revenue increased 2% year-over-year. Operating loss for the second quarter was $1.5 million, compared to an operating loss of $1.2 million in the prior-year period. The increase in operating loss was primarily driven by higher investment in marketing.

Europe
Europe business segment revenue increased 8% year-over-year to $8.5 million. In constant currencies, revenue increased 1% year-over-year. Operating profit for the second quarter was $441,000, or 5% of revenue, compared to an operating profit of $268,000, or 3% of revenue in the prior-year period.

North America
North America business segment revenue increased 6% year-over-year to $17.5 million. Operating profit for the second quarter was $2.1 million, or 12% of revenue, compared to an operating profit of $2.3 million, or 14% of revenue in the prior-year period.

Members
As of June 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 June 30, 2018, consistent with June 30, 2017. In Europe, unduplicated number of members was 8.7 million as of June 30, 2018, up 4% from June 30, 2017. In North America, unduplicated number of members was 17.6 million as of June 30, 2018, up 1% from June 30, 2017.

Income Taxes
Income tax expense was $631,000, compared to a $771,000 income tax expense in the prior-year period. The effective income tax rate from continuing operations was 57%, compared to 55% for the prior-year period.

Asset Management
During the second quarter of 2018, Travelzoo generated $601,000 of cash from operating activities. Accounts receivable decreased by $67,000 over the prior-year period to $12.5 million. Accounts payable increased by $57,000 over the prior-year period to $14.3 million. Cash used in investing activities was $3.5 million, up from $186,000 in the prior-year period. Most of this cash was used for an equity investment in WeekenGO which we believe will lead to business growth. As of June 30, 2018, cash and cash equivalents were $19.4 million.

Conference Call
Travelzoo will host a conference call to discuss second 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 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 Six months ended
 June 30, June 30,
 2018 2017 2018 2017
Revenues$28,075  $26,411  $58,959  $54,840 
Cost of revenues3,016  3,222  6,401  6,429 
Gross profit25,059  23,189  52,558  48,411 
Operating expenses:       
Sales and marketing15,628  14,213  31,170  29,569 
Product development2,386  2,344  4,897  4,701 
General and administrative5,967  5,246  11,756  10,693 
Total operating expenses23,981  21,803  47,823  44,963 
Operating income from continuing operations1,078  1,386  4,735  3,448 
Other income, net30  18  191  25 
Income from continuing operations before income taxes1,108  1,404  4,926  3,473 
Income tax expense631  771  1,947  1,980 
Income from continuing operations$477  $633  $2,979  $1,493 
Income from discontinued operations including gain on
sale of Fly.com domain name, net of income taxes
  54    1,938 
Net income$477  $687  $2,979  $3,431 
        
Income per share—basic:       
Continuing operations$0.04  $0.05  $0.24  $0.11 
Discontinued operations      0.15 
Net income per share—basic$0.04  $0.05  $0.24  $0.26 
        
Income per share—diluted:       
Continuing operations$0.04  $0.05  $0.24  $0.11 
Discontinued operations      0.15 
Net income per share—diluted$0.04  $0.05  $0.24  $0.26 
        
Weighted average shares:       
Basic12,462  13,030  12,462  13,224 
Diluted12,780  13,058  12,622  13,229 
            

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

 
 June 30,   
 2018   
 December 31,
 2017
Assets                           
Current assets:   
Cash and cash equivalents$19,409  $22,553 
Accounts receivable, net12,509  11,769 
Income taxes receivable794  517 
Deposits88  259 
Prepaid expenses and other1,731  2,141 
Total current assets34,531  37,239 
Deposits and other692  548 
Deferred tax assets1,476  1,516 
Restricted cash1,458  1,448 
Investment2,961   
Property and equipment, net4,528  4,921 
Total assets$45,646  $45,672 
Liabilities and Stockholders’ Equity   
Current liabilities:   
Accounts payable$14,251  $19,105 
Accrued expenses and other9,141  8,702 
Deferred revenue966  825 
Income tax payable1,086  961 
Total current liabilities25,444  29,593 
Long-term tax liabilities387  373 
Long-term deferred rent and other2,440  2,628 
Total liabilities28,271  32,594 
Common stock125  125 
Additional paid-in capital522   
Accumulated other comprehensive loss(4,115) (3,597)
Retained earnings20,843  16,550 
Total stockholders’ equity17,375  13,078 
Total liabilities and stockholders’ equity$45,646  $45,672 
 

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

    
 Three months ended Six months ended
 June 30, June 30,
 2018 2017 2018 2017
Cash flows from operating activities:       
Net income$477  $687  $2,979  $3,431 
Adjustments to reconcile net income to net cash provided by operating activities:       
Depreciation and amortization443  522  827  1,101 
Discontinued operations gain on sale of Fly.com domain name      (2,890)
Deferred income tax(39) (33) (149) (69)
Stock-based compensation349  240  522  480 
Other40  (34) (43) (27)
Net foreign currency effects35  (135) (136) (224)
Changes in operating assets and liabilities:       
Accounts receivable100  1,800  (897) 2,087 
Income tax receivable(705) (509) (277) 35 
Prepaid expenses and other428  (132) 418  (218)
Accounts payable(15) (2,791) (3,200) (6,054)
Accrued expenses and other(299) (549) 725  441 
Income tax payable(48) (1,287) 169  179 
Other non-current liabilities(165) (340) (158) (278)
Net cash provided by (used in) operating activities601  (2,561) 780  (2,006)
Cash flows from investing activities:       
Proceeds from sale of Fly.com domain name      2,890 
Investment in WeekenGO(3,083)   (3,083)  
Purchases of property and equipment(442) (186) (507) (306)
Net cash provided by (used in) investing activities(3,525) (186) (3,590) 2,584 
Cash flows from financing activities:       
Repurchase of common stock, net  (5,062)   (6,824)
Net cash used in financing activities  (5,062)   (6,824)
Effect of exchange rate on cash, cash equivalents and restricted cash(780) 583  (324) 754 
Net increase in cash, cash equivalents and restricted cash(3,704) (7,226) (3,134) (5,492)
Cash, cash equivalents and restricted cash at beginning of period24,571  29,970  24,001  28,236 
Cash, cash equivalents and restricted cash at end of period$20,867  $22,744  $20,867  $22,744 
Supplemental disclosure of cash flow information:       
Cash paid for income taxes, net$1,417  $2,920  $2,196  $3,230 
                

Travelzoo
Segment Information
(Unaudited)
(In thousands)

 
Three months ended June 30, 2018Asia Pacific Europe North
America

 Consolidated
 
Revenue from unaffiliated customers$       2,073  $       8,527  $     17,475   $   28,075  
Intersegment revenue(9) (27) 36   —  
Total net revenues2,064  8,500  17,511   28,075  
Operating income (loss)$(1,472) $441  $2,109   $1,078  
Three months ended June 30, 2017Asia Pacific Europe North
America

 Consolidated
 
Revenue from unaffiliated customers$1,963  $8,005  $     16,443   $26,411  
Intersegment revenue                                               (13) (108) 121   —  
Total net revenues1,950  7,897  16,564   26,411  
Operating income (loss)$(1,165) $268  $2,283   $1,386  
                
                


Six months ended June 30, 2018       Asia Pacific Europe North
America
 Consolidated
 
Revenue from unaffiliated customers$       4,115  $     18,859  $       35,985  $  58,959  
Intersegment revenue(29) (79) 108  —  
Total net revenues4,086  18,780  36,093  58,959  
Operating income (loss)$(3,212) $2,407  $5,540  $4,735  
Six months ended June 30, 2017                           Asia Pacific Europe North
America
 Consolidated
 
Revenue from unaffiliated customers$3,807  $17,223  $33,810  $54,840  
Intersegment revenue(44) (255) 299  —  
Total net revenues3,763  16,968  34,109  54,840  
Operating income (loss)$(2,706) $1,217  $4,937  $3,448  
                

Travelzoo
590 Madison Avenue
37th Floor
New York, NY 10022

Investor Relations:
Lijun Qi
ir@travelzoo.com