EX-99.1 2 ex-99112x31x20228xk.htm EX-99.1 Document

Exhibit 99.1
travellogo11062017a13.jpg
Travelzoo
590 Madison Avenue
35th Floor
New York, NY 10022

Investor Relations:
ir@travelzoo.com


FOR IMMEDIATE RELEASE

Travelzoo Reports Fourth Quarter 2022 Results

NEW YORK, March 22, 2023 — Travelzoo® (NASDAQ: TZOO):

•Revenue of $18.6 million, up 36% year-over-year
•In constant currencies, revenue was $19.4 million, up 42% year-over-year
•Non-GAAP consolidated operating profit of $4.8 million
•Earnings per share (EPS) of $0.20

Travelzoo, a global Internet media company that provides exclusive offers and experiences for members, today announced financial results for the fourth quarter ended December 31, 2022. Consolidated revenue was $18.6 million, up 36% from $13.7 million year-over-year. In constant currencies, revenue was $19.4 million. Travelzoo's reported revenue consists of advertising revenues and commissions, derived from and generated in connection with purchases made by Travelzoo members.

The reported net income attributable to Travelzoo from continuing operations was $2.5 million for Q4 2022. At the consolidated level, including minority interests, the reported net income from continuing operations was $2.5 million. EPS from continuing operations was $0.20 compared to EPS of ($0.27) in the prior-year period.


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Non-GAAP operating profit was $4.8 million. The calculation of non-GAAP operating profit excludes impairment of intangible assets ($200,000), amortization of intangibles ($453,000), stock option expenses ($348,000) and severance-related expenses ($200,000). GAAP operating profit was $3.6 million. See section “Non-GAAP Financial Measures” below.

“Revenue growth accelerated in both North America and in Europe, leading to much stronger earnings," said Holger Bartel, Travelzoo's Global CEO. "As the recovery from the pandemic continues, we will leverage Travelzoo's global reach and trusted brand to further improve earnings in future periods.

“With more than 30 million members, 7 million mobile app users, and 4 million social media followers, Travelzoo is loved by travel enthusiasts who are affluent, active, and open to new experiences..”

Cash Position
As of December 31, 2022, consolidated cash, cash equivalents and restricted cash were $19.4 million. Net cash used in operations was $2.3 million for the three months ended December 31, 2022. Cash was used primarily in connection with a decrease of merchant payables by $6.3 million.

Reserve
Reported revenues include a reserve of $1.3 million related to commissions to be earned from vouchers sold. The reserve is booked as contra revenue.

Travelzoo North America
North America business segment revenue increased 53% year-over-year to $13.1 million. Operating profit for Q4 2022 was $3.7 million, or 29% of revenue, compared to an operating loss of $2.1 million in the prior-year period.

Travelzoo Europe
Europe business segment revenue increased 9% year-over-year to $4.7 million. At constant currencies, Europe business segment revenue increased 23% year-over-year. Operating profit for Q4 2022 was $42,000, compared to an operating loss of $1.7 million in the prior-year period.


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Jack’s Flight Club
On January 13, 2020, Travelzoo acquired 60% of Jack’s Flight Club, a membership subscription service. Jack’s Flight Club revenue increased 6% year-over-year to $855,000. During Q4 2022, premium subscribers increased 27%. Revenue from increases in subscribers is reported with a lag because we recognize revenue from subscriptions monthly pro rata over the subscription period (quarterly, semi-annually, annually). Non-GAAP operating profit for Q4 2022 was $220,000, compared to a non-GAAP operating profit of $292,000 in the prior-year period. After consolidation with Travelzoo, Jack’s Flight Club's net loss was $102,000, with $61,000 attributable to Travelzoo as a result of recording $200,000 of intangible assets impairment and $216,000 of amortization of intangible assets related to the acquisition.

Licensing
In June 2020, Travelzoo entered into a royalty-bearing licensing agreement with a local licensee in Japan for the exclusive use of Travelzoo’s brand, business model, and members in Japan. In August of 2020, Travelzoo entered into a royalty-bearing licensing agreement with a local licensee in Australia for the exclusive use of Travelzoo’s brand, business models, and members in Australia, New Zealand, and Singapore. Under these arrangements, Travelzoo’s existing members in Australia, Japan, New Zealand, and Singapore will continue to be owned by Travelzoo as the licensor. Licensing revenue is booked with a lag of one quarter. Travelzoo recorded $7,000 in licensing revenue from the licensee in Australia, New Zealand, and Singapore in Q4 2022. Licensing revenue is expected to increase going forward.

Members and Subscribers
As of December 31, 2022, we had 30.4 million members worldwide. In North America, the unduplicated number of Travelzoo members was 16.3 million as of December 31, 2022, down 4% from December 31, 2021. In Europe, the unduplicated number of Travelzoo members was 9.0 million as of December 31, 2022, up 8% from December 31, 2021. Jack’s Flight Club had 1.9 million subscribers as of December 31, 2022, up 8% from December 31, 2021.


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Discontinued Operations
As announced in a press release on March 10, 2020, Travelzoo decided to exit its Asia Pacific business and operate it as a licensing business going forward. Consequently, the Asia Pacific business has been classified as discontinued operations since March 31, 2020. Prior periods have been reclassified to conform with the current presentation. Certain reclassifications have been made for current and prior periods between the continued operations and the discontinued operations in accordance with U.S. GAAP.
Income Taxes
Income tax expense was $1.1 million in Q4 2022, compared to an income tax benefit of $333,000 in the prior-year period.

Non-GAAP Financial Measures
Management calculates non-GAAP operating income when evaluating the financial performance of the business. Travelzoo’s calculation of non-GAAP operating income, also called “non-GAAP operating profit” in this press release and today’s earnings conference call, excludes the following items: impairment of intangibles, amortization of intangibles, stock option expenses, and severance-related expenses. This press release includes a table which reconciles GAAP operating income to the calculation of non-GAAP operating income. Non-GAAP operating income is not required by, or presented in accordance with, generally accepted accounting principles in the United States of America ("GAAP"). This information should be considered as supplemental in nature and should not be considered in isolation or as a substitute for the financial information prepared in accordance with GAAP. In addition, these non-GAAP financial measures may not be the same as similarly titled measures reported by other companies.

Looking Ahead
For Q1 2023, we currently expect higher revenue and profitability. During the pandemic, we have been able to lower our fixed costs. We believe we can keep our fixed costs relatively low in the foreseeable future.

Conference Call
Travelzoo will host a conference call to discuss fourth quarter 2022 results today at 11:30 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.
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About Travelzoo
Travelzoo® provides its 30 million members with exclusive offers and one-of-a-kind experiences personally reviewed by our deal experts around the globe. We have our finger on the pulse of outstanding travel, entertainment, and lifestyle experiences. We work in partnership with more than 5,000 top travel suppliers—our long-standing relationships give Travelzoo members access to irresistible 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, Top 20, and Jack's Flight Club are registered trademarks of Travelzoo.

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Travelzoo
Condensed Consolidated Statements of Operations
(Unaudited)
(In thousands, except per share amounts)
 Three months endedTwelve months ended
 December 31,December 31,
 2022202120222021
Revenues$18,608 $13,661 $70,599 $62,712 
Cost of revenues2,684 2,856 10,003 11,388 
Gross profit15,924 10,805 60,596 51,324 
Operating expenses:
Sales and marketing7,499 8,455 33,072 30,294 
Product development 673 538 2,064 2,590 
General and administrative4,168 5,573 17,903 19,753 
Total operating expenses12,340 14,566 53,039 52,637 
Operating income (loss)3,584 (3,761)7,557 (1,313)
Other income (loss), net(53)144 2,401 4,006 
Income (loss) from continuing operations before income taxes3,531 (3,617)9,958 2,693 
Income tax expense (benefit)1,057 (333)3,270 1,778 
Income (loss) from continuing operations2,474 (3,284)6,688 915 
Loss from discontinued operations, net of tax(63)(8)(59)(13)
Net income (loss)2,411 (3,292)6,629 902 
Net loss attributable to non-controlling interest(41)(8)(5)(9)
Net income (loss) attributable to Travelzoo$2,452 $(3,284)$6,634 $911 
Net income (loss) attributable to Travelzoo—continuing operations$2,515 $(3,276)$6,693 $924 
Net loss attributable to Travelzoo—discontinued operations$(63)$(8)$(59)$(13)
Income (loss) per share—basic
Continuing operations$0.20 $(0.27)$0.54 $0.08 
Discontinued operations$— $— $— $— 
Net income (loss) per share—basic$0.20 $(0.27)$0.54 $0.08 
Income (loss) per share—diluted
Continuing operations$0.20 $(0.27)$0.53 $0.07 
Discontinued operations$— $— $— $— 
Net income (loss) per share—diluted$0.20 $(0.27)$0.53 $0.07 
Shares used in per share calculation from continuing operations—basic12,425 12,050 12,372 11,646 
Shares used in per share calculation from discontinued operations—basic12,425 12,050 12,372 11,646 
Shares used in per share calculation from continuing operations—diluted12,487 12,050 12,561 12,991 
Shares used in per share calculation from discontinued operations—diluted12,425 12,050 12,372 11,646 
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Travelzoo
Condensed Consolidated Balance Sheets
(Unaudited)
(In thousands)
December 31,
2022		December 31,
2021
Assets
Current assets:
Cash and cash equivalents$18,693 $43,815 
Accounts receivable, net13,820 14,871 
Prepaid income taxes1,778 3,325 
Prepaid expenses and other1,289 1,891 
Prepaid expenses—related party— 1,150 
Assets from discontinued operations11 71 
Total current assets35,591 65,123 
Deposits and other5,094 6,784 
Deferred tax assets3,222 3,949 
Restricted cash675 1,142 
Operating lease right-of-use assets7,440 7,700 
Property and equipment, net657 659 
Intangible assets, net3,651 3,426 
Goodwill10,944 10,944 
Total assets$67,274 $99,727 
Liabilities and Stockholders’ Equity (Deficit)
Current liabilities:
Accounts payable$4,271 $3,411 
Merchant payables32,574 68,678 
Accrued expenses and other 5,049 10,212 
Deferred revenue2,216 1,733 
Operating lease liabilities2,972 3,180 
Income tax payable — 185 
Liabilities from discontinued operations452 485 
Total current liabilities47,534 87,884 
Long-term operating lease liabilities8,326 9,111 
Other long-term liabilities2,563 2,364 
Total liabilities58,423 99,359 
Non-controlling interest4,595 4,600 
Common stock165 126 
Treasury stock (at cost)(7,130)(5,488)
Additional paid-in capital23,274 4,415 
Tax indemnification(9,537)— 
Note receivable from shareholder(4,753)— 
Retained earnings 7,142 508 
Accumulated other comprehensive loss(4,905)(3,793)
Total stockholders’ equity (deficit)4,256 (4,232)
Total liabilities and stockholders’ equity (deficit)$67,274 $99,727 
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Travelzoo
Condensed Consolidated Statements of Cash Flows
(Unaudited)
(In thousands)
 Three months endedTwelve months ended
 December 31,December 31,
 2022202120222021
Cash flows from operating activities:
Net income (loss)$2,411 $(3,292)$6,629 $902 
Adjustments to reconcile net income (loss) to net cash used in operating activities:
Depreciation and amortization537 412 2,189 1,820 
Stock-based compensation349 960 1,805 3,748 
Deferred income tax73 (260)774 813 
Loss on long-lived assets9 — 47 — 
Impairment of intangible assets200 — 200 — 
Gain on sale of equity investment in WeGo— — (196)— 
Gain on PPP notes payable forgiveness— — — (3,588)
Net foreign currency effects198 (73)232 (373)
Provision for (reversal of) reserves on accounts receivable and other reserves(965)2,150 (4,367)425 
Changes in operating assets and liabilities:
Accounts receivable(1,223)(5,887)1,317 (9,735)
Prepaid income taxes 1,098 (451)1,452 (2,458)
Prepaid expenses and other 1,586 1,381 1,627 (8,092)
Accounts payable500 (8,335)902 (3,311)
Merchant payables(6,334)(4,307)(35,228)12,179 
Accrued expenses and other(649)773 (496)321 
Income tax payable24 125 (162)(138)
Other liabilities(86)(562)154 (596)
Net cash used in operating activities(2,272)(17,366)(23,121)(8,083)
Cash flows from investing activities:
Purchases of intangible assets— — (1,049)— 
Proceeds from sale of equity investment in WeGo— — 196 — 
Purchases of property and equipment(226)(5)(462)(29)
Proceeds from repayment of note receivable— 133 — 133 
Net cash provided by (used in) investing activities(226)128 (1,315)104 
Cash flows from financing activities:
Repurchase of common stock(472)(3,905)(1,642)(5,488)
Payment of promissory notes— — — (110)
Proceeds from short swing settlement— — 46 — 
Proceeds from issuance of common stock1,006 — 1,006 — 
Exercise of stock options and taxes paid for net share settlement of equity awards(13)(136)1,872 (5,560)
Net cash provided by (used in) financing activities521 (4,041)1,282 (11,158)
Effect of exchange rate on cash, cash equivalents and restricted cash810 (133)(2,457)(259)
Net decrease in cash, cash equivalents and restricted cash(1,167)(21,412)(25,611)(19,396)
Cash, cash equivalents and restricted cash at beginning of period20,545 66,401 44,989 64,385 
Cash, cash equivalents and restricted cash at end of period$19,378 $44,989 $19,378 $44,989 
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Travelzoo
Segment Information from Continuing Operations
(Unaudited)
(In thousands)
Three months ended December 31, 2022Travelzoo North
America		Travelzoo EuropeJack's Flight ClubEliminationConsolidated
Revenue from unaffiliated customers$12,928 $4,825 $855 $— $18,608 
Intersegment revenue162 (162)— — — 
Total net revenues13,090 4,663 855 — 18,608 
Operating income (loss)$3,738 $42 $(196)$— $3,584 
Three months ended December 31, 2021Travelzoo North
America		Travelzoo EuropeJack's Flight ClubEliminationConsolidated
Revenue from unaffiliated customers$8,678 $4,180 $803 $— $13,661 
Intersegment revenue(99)99 — — — 
Total net revenues8,579 4,279 803 — 13,661 
Operating income (loss)$(2,104)$(1,674)$17 $— $(3,761)

Twelve months ended December 31, 2022Travelzoo North
America		Travelzoo EuropeJack's Flight ClubEliminationConsolidated
Revenue from unaffiliated customers$47,054 $20,068 $3,477 $— $70,599 
Intersegment revenue613 (613)— — — 
Total net revenues47,667 19,455 3,477 — 70,599 
Operating income (loss)$9,360 $(1,803)$— $— $7,557 
Twelve months ended December 31, 2021Travelzoo North
America		Travelzoo EuropeJack's Flight ClubEliminationConsolidated
Revenue from unaffiliated customers$41,683 $17,683 $3,346 $— $62,712 
Intersegment revenue363 (363)— — — 
Total net revenues42,046 17,320 3,346 — 62,712 
Operating income (loss)$550 $(1,997)$134 $— $(1,313)







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Travelzoo
Reconciliation of GAAP to Non-GAAP Information
(Unaudited)
(In thousands)
 Three months endedTwelve months ended
 December 31,December 31,
 2022202120222021
GAAP operating expense$12,340 $14,566 $53,039 $52,637 
Non-GAAP adjustments:
Impairment of intangibles (A)200 — 200 — 
Amortization of intangibles (B)453 275 1,771 1,108 
Stock option expenses (C)349 960 1,805 3,748 
Severance-related expenses (D)200 87 336 580 
Non-GAAP operating expense11,138 13,244 48,927 47,201 
GAAP operating income (loss)3,584 (3,761)7,557 (1,313)
Non-GAAP adjustments (A through D)1,202 1,322 4,112 5,436 
Non-GAAP operating income (loss)4,786 (2,439)11,669 4,123 





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