EX-99.1 2 ex-9916x30x20178xk.htm EXHIBIT 99.1 Exhibit


99.1
 
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Travelzoo
590 Madison Avenue
37th Floor
New York, NY 10022

Investor Relations:
Lijun Qi
ir@travelzoo.com 


FOR IMMEDIATE RELEASE

Travelzoo Reports Second Quarter 2017 Results

NEW YORK, July 27, 2017—Travelzoo® (NASDAQ: TZOO):

•
Revenue of $26.4 million, down 8% year-over-year in constant currencies
•
Operating profit of $1.4 million
•
Earnings per share (EPS) from continuing operations of $0.05
•
Cash flow used in operations of $2.6 million

Travelzoo, a travel deal site with exclusive offers for members, today announced financial results for the second quarter ended June 30, 2017, with revenue of $26.4 million and operating profit of $1.4 million. In nominal terms, revenue decreased by 11% year-over-year. In constant currencies, revenue decreased by 8% year-over-year. Net income was $687,000, with EPS of $0.05, which includes income from discontinued operations of $54,000.

"We never compromise the quality of the offers which we provide to our members—even if it resulted in less deals being promoted during the second quarter of 2017 and a corresponding decrease in revenue of certain products", said Dr. Holger Bartel, Global CEO of Travelzoo. "Our top priority is to provide Travelzoo members outstanding, exclusive travel and entertainment experiences. We remain ambitious to grow Travelzoo's global brand and business."


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Asia Pacific
Asia Pacific business segment revenue decreased 20% year-over-year to $2.0 million. In constant currencies, revenue decreased 16% year-over-year. Operating loss for the second quarter was $1.2 million, compared to an operating loss of $1.2 million in the prior-year period.

Europe
Europe business segment revenue decreased 16% year-over-year to $7.9 million. In constant currencies, revenue decreased 9% year-over-year. Operating profit for the second quarter was $268,000, or 3% of revenue, compared to operating income of $1.7 million, or 18% of revenue in the prior-year period.

North America
North America business segment revenue decreased 7% year-over-year to $16.6 million. Operating profit for the second quarter was $2.3 million, or 14% of revenue, compared to operating income of $3.0 million, or 17% of revenue in the prior-year period.

Members
As of June 30, 2017, Travelzoo had a worldwide unduplicated number of members of 29.3 million. In Asia Pacific, unduplicated number of members was 3.6 million as of June 30, 2017, consistent with June 30, 2016. In Europe, unduplicated number of members was 8.4 million as of June 30, 2017, up 3% from June 30, 2016. In North America, unduplicated number of members was 17.4 million as of June 30, 2017, consistent with June 30, 2016.

Income Taxes
Income tax expense was $771,000, compared to a $1.5 million income tax expense in the prior-year period.

Asset Management
During the second quarter of 2017, Travelzoo used $2.6 million of cash for operating activities. Accounts receivable decreased by $5.8 million over the prior-year period to $12.6 million. Accounts payable decreased by $6.6 million over the prior-year period to $14.2 million. Capital expenditures were $186,000, down from $503,000 in the prior-year period. As of June 30, 2017, cash and cash equivalents were $21.3 million.

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Conference Call
Travelzoo will host a conference call to discuss second quarter results at 11:00 a.m. ET today. Please visit http://www.travelzoo.com/earnings 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 pulse on 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 allow us 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. All other names are trademarks and/or registered trademarks of their respective owners.






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Travelzoo
Condensed Consolidated Statements of Operations
(Unaudited)
(In thousands, except per share amounts)
 
 
Three months ended
 
Six months ended
 
June 30,
 
June 30,
 
2017
 
2016
 
2017
 
2016
Revenues
$
26,411

 
$
29,798

 
$
54,840

 
$
60,626

Cost of revenues
3,222

 
3,471

 
6,429

 
7,322

Gross profit
23,189

 
26,327

 
48,411

 
53,304

Operating expenses:
 
 
 
 
 
 
 
Sales and marketing
14,213

 
15,455

 
29,569

 
30,985

Product development
2,344

 
2,001

 
4,701

 
4,789

General and administrative
5,246

 
5,434

 
10,693

 
11,247

Total operating expenses
21,803

 
22,890

 
44,963

 
47,021

Income from continuing operations
1,386

 
3,437

 
3,448

 
6,283

Other income (expense), net
18

 
(91
)
 
25

 
42

Income from continuing operations before income taxes
1,404

 
3,346

 
3,473

 
6,325

Income tax expense
771

 
1,548

 
1,980

 
2,702

Income from continuing operations
$
633

 
$
1,798

 
$
1,493

 
$
3,623

Income from discontinued operations, net of income taxes
54

 
222

 
1,938

 
446

Net income
$
687

 
$
2,020

 
$
3,431

 
$
4,069

 
 
 
 
 
 
 
 
Income per share—basic:
 
 
 
 
 
 
 
Continuing operations
$
0.05

 
$
0.13

 
$
0.12

 
$
0.26

Discontinued operations
0.00

 
0.01

 
0.14

 
0.03

Net income per share—basic
$
0.05

 
$
0.14

 
$
0.26

 
$
0.29

 
 
 
 
 
 
 
 
Income per share—diluted:
 
 
 
 
 
 
 
Continuing operations
$
0.05

 
$
0.13

 
$
0.12

 
$
0.26

Discontinued operations
0.00

 
0.01

 
0.14

 
0.03

Net income per share—diluted
$
0.05


$
0.14

 
$
0.26

 
$
0.29

 
 
 
 
 
 
 
 
Weighted average shares:
 
 
 
 
 
 
 
Basic
13,030

 
14,066

 
13,224

 
14,246

Diluted
13,058

 
14,066

 
13,229

 
14,246



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Travelzoo
Condensed Consolidated Balance Sheets
(Unaudited)
(In thousands)
 
 
June 30,
2017
 
December 31,
2016
Assets
 
 
 
Current assets:
 
 
 
Cash and cash equivalents
$
21,331

 
$
26,838

Accounts receivable, net
12,576

 
14,415

Income taxes receivable
639

 
542

Deposits
709

 
105

Prepaid expenses and other
1,481

 
1,773

Deferred tax assets
—

 
793

Total current assets
36,736

 
44,466

Deposits and other
413

 
702

Deferred tax assets
1,860

 
1,052

Restricted cash
1,413

 
1,152

Property and equipment, net
5,418

 
6,158

Total assets
$
45,840

 
$
53,530

Liabilities and Stockholders’ Equity
 
 
 
Current liabilities:
 
 
 
Accounts payable
$
14,194

 
$
19,714

Accrued expenses and other
9,334

 
8,699

Deferred revenue
954

 
719

Income tax payable
1,056

 
691

Total current liabilities
25,538

 
29,823

Long-term tax liabilities
2,602

 
2,879

Long-term deferred rent and other
2,674

 
2,764

Total liabilities
30,814

 
35,466

Common stock
128

 
135

Additional paid-in capital
—

 
—

Accumulated other comprehensive loss
(3,687
)
 
(3,787
)
Retained earnings
18,585

 
21,716

Total stockholders’ equity
15,026

 
18,064

Total liabilities and stockholders’ equity
$
45,840

 
$
53,530



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Travelzoo
Condensed Consolidated Statements of Cash Flows
(Unaudited)
(In thousands) 
 
Three months ended
 
Six months ended
 
June 30,
 
June 30,
 
2017
 
2016
 
2017
 
2016
Cash flows from operating activities:
 
 
 
 
 
 
 
Net income
$
687

 
$
2,020

 
$
3,431

 
$
4,069

Adjustments to reconcile net income to net cash provided by (used in) operating activities:
 
 
 
 
 
 
 
Depreciation and amortization
522

 
608

 
1,101

 
1,250

Discontinued operations gain on sale of Fly.com domain name
—

 
—

 
(2,890
)
 
—

Deferred income taxes
(33
)
 
233

 
(69
)
 
(211
)
Stock-based compensation
240

 
230

 
480

 
442

Provision for losses on accounts receivable
(34
)
 
36

 
(27
)
 
44

Net foreign currency effects
(135
)
 
(23
)
 
(224
)
 
236

Changes in operating assets and liabilities:
 
 
 
 
 
 
 
Accounts receivable
1,800

 
(1,241
)
 
2,087

 
(2,265
)
Income tax receivable
(509
)
 
(397
)
 
35

 
525

Prepaid expenses and other
(132
)
 
122

 
(218
)
 
220

Accounts payable
(2,791
)
 
(740
)
 
(6,054
)
 
(2,210
)
Accrued expenses and other
(549
)
 
937

 
441

 
484

Income tax payable
(1,287
)
 
665

 
179

 
1,268

Other non-current liabilities
(340
)
 
46

 
(278
)
 
53

Net cash provided by (used in) operating activities
(2,561
)
 
2,496

 
(2,006
)
 
3,905

Cash flows from investing activities:
 
 
 
 
 
 
 
Proceeds from sale of Fly.com domain name
—

 
—

 
2,890

 
—

Purchases of property and equipment
(186
)
 
(503
)
 
(306
)
 
(648
)
Net cash provided by (used in) investing activities
(186
)
 
(503
)
 
2,584

 
(648
)
Cash flows from financing activities:
 
 
 
 
 
 
 
Acquisition of the Asia Pacific business
—

 
—

 
—

 
58

Payment of loan to related party
—

 
—

 
—

 
(5,658
)
Repurchase of common stock, net
(5,062
)
 
(3,048
)
 
(6,824
)
 
(4,956
)
Net cash used in financing activities
(5,062
)
 
(3,048
)
 
(6,824
)
 
(10,556
)
Effect of exchange rate on cash and cash equivalents
546

 
(192
)
 
739

 
(269
)
Net decrease in cash and cash equivalents
(7,263
)
 
(1,247
)
 
(5,507
)
 
(7,568
)
Cash and cash equivalents at beginning of period
28,594

 
28,807

 
26,838

 
35,128

Cash and cash equivalents at end of period
$
21,331

 
$
27,560

 
$
21,331

 
$
27,560

Supplemental disclosure of cash flow information:
 
 
 
 
 
 
 
Cash paid for income taxes, net
$
2,920

 
$
1,022

 
$
3,230

 
$
1,072

Cash paid for interest on related party loan
$
—

 
$
—

 
$
—

 
$
110


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Travelzoo
Segment Information
(Unaudited)
(In thousands)
 
Three months ended June 30, 2017
Asia Pacific
 
Europe
 
North
America
 
Consolidated
Revenue from unaffiliated customers
$
1,963

 
$
8,005

 
$
16,443

 
$
26,411

Intersegment revenue
(13
)
 
(108
)
 
121

 
—

Total net revenues
1,950

 
7,897

 
16,564

 
26,411

Operating profit (loss)
$
(1,165
)
 
$
268

 
$
2,283

 
$
1,386

Three months ended June 30, 2016
Asia Pacific
 
Europe
 
North
America
 
Consolidated
Revenue from unaffiliated customers
$
2,401

 
$
9,638

 
$
17,759

 
$
29,798

Intersegment revenue
37

 
(181
)
 
144

 
—

Total net revenues
2,438

 
9,457

 
17,903

 
29,798

Operating profit (loss)
$
(1,233
)
 
$
1,704

 
$
2,966

 
$
3,437


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 revenues
3,763

 
16,968

 
34,109

 
54,840

Operating profit (loss)
$
(2,706
)
 
$
1,217

 
$
4,937

 
$
3,448

Six months ended June 30, 2016
Asia Pacific
 
Europe
 
North
America
 
Consolidated
Revenue from unaffiliated customers
$
4,651

 
$
20,279

 
$
35,696

 
$
60,626

Intersegment revenue
42

 
(264
)
 
222

 
—

Total net revenues
4,693

 
20,015

 
35,918

 
60,626

Operating profit (loss)
$
(2,282
)
 
$
3,611

 
$
4,954

 
$
6,283




                                                                    

###


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