EX-96.1 2 ex-99112x31x20218xk.htm EX-96.1

Exhibit 99.1

						Travelzoo 590 Madison Avenue 35th Floor New York, NY 10022 Investor Relations: Almira Pusch ir@travelzoo.com

FOR IMMEDIATE RELEASE

Travelzoo Reports Fourth Quarter 2021 Results

NEW YORK, March 3, 2022 — Travelzoo® (NASDAQ: TZOO):

•Consolidated revenue of $14.1 million, up 13% year-over-year

•Non-GAAP consolidated operating loss of $2.1 million

•Earnings per share (EPS) of ($0.25) attributable to Travelzoo from continuing operations

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, 2021. Consolidated revenue was $14.1 million, up 13% from $12.5 million year-over-year and down 10% from the prior quarter. Reported revenue excludes revenue from discontinued operations in Asia Pacific. 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 loss attributable to Travelzoo from continuing operations was $3.0 million for Q4 2021. At the consolidated level, including minority interests, the reported net loss from continuing operations was $3.0 million. EPS from continuing operations was ($0.25), compared to $0.02 in the prior-year period. GAAP operating loss was $3.4 million.

Non-GAAP operating loss was $2.1 million. The calculation of non-GAAP operating profit (loss) excludes amortization of intangibles ($0.3 million), stock option expenses ($1.0 million), and severance-related expenses ($0.1 million). See section “Non-GAAP Financial Measures” below.

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“The surge of the Omicron variant and related increased safety measures during Q4 2021 affected our reported revenue and operating income,” said Holger Bartel, Global CEO. "We believe this to be a short-term effect. We expect the Company’s financial performance to significantly improve in 2022.”

Cash Position

As of December 31, 2021, consolidated cash, cash equivalents and restricted cash were $45.0 million. Net cash used in operations was $17.4 million. Cash was used primarily in connection with the payment of accounts payable and merchant payables as well an increase in accounts receivables of $8.8 million related to switching to a more efficient payment processor. The switch also increased deposits by $5.5 million during a transition period. There were no significant capital expenditures.

Reserve

Reported revenues are net of a reserve of $4.7 million related to commissions earned from refundable vouchers sold. The reserve is booked as contra revenue, which lowered revenue and operating income by $1.6 million for the quarter.

Travelzoo North America

North America business segment revenue decreased 3% year-over-year to $8.6 million. Operating loss for Q4 2021 was $2.2 million, compared to an operating profit of $1.3 million in the prior-year period.

Travelzoo Europe

Europe business segment revenue increased 77% year-over-year to $4.8 million. Operating loss for Q4 2021 was $1.2 million, compared to an operating loss of $2.4 million in the prior-year period.

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 decreased 13% year-over-year to $803,000. Non-GAAP operating income for Q4 2021 was $292,000, compared to Non-GAAP operating income of $532,000 in the prior-year period. After consolidation with Travelzoo, which includes $275,000 in amortization of intangible assets related to the accounting of the acquisition, Jack’s Flight Club's reported net loss was $19,000, with $11,000 attributable to Travelzoo.

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Licensing

In June of 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 $1,000 in licensing revenue from the licensee in Australia, New Zealand, and Singapore in Q4 2021. Licensing revenue is expected to increase going forward.

Members and Subscribers

As of December 31, 2021, we had 30.3 million members worldwide. In North America, the unduplicated number of Travelzoo members was 16.9 million as of December 31, 2021, up 4% from December 31, 2020. In Europe, the unduplicated number of Travelzoo members was 8.4 million as of December 31, 2021, down 4% from December 31, 2020. Jack’s Flight Club had 1.8 million subscribers as of December 31, 2021, up 6% from December 31, 2020.

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 benefit was $248,000 in Q4 2021, compared to an income tax benefit of $368,000 in the prior-year period.

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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 (loss)” in this press release and today’s earnings conference call, excludes the following items: impairment of intangibles and goodwill, 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

We currently expect substantially higher revenue and a return to profitability in Q1 2022. We continue to see a trend of recovery of our revenue. However, there could be unexpected fluctuations in the short term. 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—while revenue is expected to grow.

Conference Call

Travelzoo will host a conference call to discuss third 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; and access the webcast.

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About Travelzoo

Travelzoo® provides its 30 million members 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 ended												Twelve months ended
			December 31,												December 31,
			2021						2020						2021						2020
Revenues			$	14,139					$	12,483					$	63,190					$	53,601
Cost of revenues			2,993						2,795						11,525						10,563
Gross profit			11,146						9,688						51,665						43,038
Operating expenses:
Sales and marketing			8,455						6,305						30,294						30,616
Product development			538						495						2,590						3,081
General and administrative			5,573						3,785						19,753						20,494
Impairment of intangible asset and goodwill			—						—						—						2,920
Total operating expenses			14,566						10,585						52,637						57,111
Operating loss			(3,420)						(897)						(972)						(14,073)
Other income, net			144						677						4,006						455
Income (loss) from continuing operations before income taxes			(3,276)						(220)						3,034						(13,618)
Income tax expense (benefit)			(248)						(368)						1,863						(2,438)
Income (loss) from continuing operations			(3,028)						148						1,171						(11,180)
Income (loss) from discontinued operations, net of tax			(8)						554						(13)						(3,390)
Net income (loss)			(3,036)						702						1,158						(14,570)
Net loss attributable to non-controlling interest			(8)						(25)						(9)						(1,147)
Net income (loss) attributable to Travelzoo			$	(3,028)					$	727					$	1,167					$	(13,423)
Net income (loss) attributable to Travelzoo—continuing operations			$	(3,020)					$	173					$	1,180					$	(10,033)
Net income (loss) attributable to Travelzoo—discontinued operations			$	(8)					$	554					$	(13)					$	(3,390)
Income (Loss) per share—basic
Continuing operations			$	(0.25)					$	0.01					$	0.10					$	(0.88)
Discontinued operations			$	—					$	0.05					$	—					$	(0.30)
Net income (loss) per share —basic			$	(0.25)					$	0.06					$	0.10					$	(1.18)
Income (Loss) per share—diluted
Continuing operations			$	(0.25)					$	0.01					$	0.09					$	(0.88)
Discontinued operations			$	—					$	0.05					$	—					$	(0.30)
Net income (loss) per share—diluted			$	(0.25)					$	0.06					$	0.09					$	(1.18)
Shares used in per share calculation from continuing operations—basic			12,050						11,315						11,646						11,344
Shares used in per share calculation from discontinued operations—basic			12,050						11,315						11,646						11,344
Shares used in per share calculation from continuing operations—diluted			12,050						12,605						12,991						11,344
Shares used in per share calculation from discontinued operations—diluted			12,050						12,605						11,646						11,344

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Travelzoo

Condensed Consolidated Balance Sheets

(Unaudited)

(In thousands)

			December 31, 2021						December 31, 2020
Assets
Current assets:
Cash and cash equivalents			$	43,815					$	63,061
Accounts receivable, net			15,305						4,519
Prepaid income taxes			3,239						931
Deposits			190						137
Prepaid expenses and other			2,851						1,166
Assets from discontinued operations			71						230
Total current assets			65,471						70,044
Deposits and other			6,784						745
Deferred tax assets			3,949						5,067
Restricted cash			1,142						1,178
Operating lease right-of-use assets			7,700						8,541
Property and equipment, net			659						1,347
Intangible assets, net			3,426						4,534
Goodwill			10,944						10,944
Total assets			$	100,075					$	102,400
Liabilities and Stockholders’ Equity (Deficit)
Current liabilities:
Accounts payable			$	3,981					$	6,996
Merchant payables			68,678						57,104
Accrued expenses and other			9,734						8,649
Deferred revenue			1,733						2,688
Operating lease liabilities			3,180						3,587
PPP notes payable (current portion)			—						2,849
Income tax payable			185						326
Liabilities from discontinued operations			485						671
Total current liabilities			87,976						82,870
PPP notes payables			—						814
Deferred tax liabilities			—						357
Long-term operating lease liabilities			9,111						10,774
Other long-term liabilities			2,364						1,085
Total liabilities			99,451						95,900
Non-controlling interest			4,600						4,609
Common stock			126						114
Treasury stock (at cost)			(5,488)						—
Additional paid-in capital			4,415						6,239
Retained earnings (accumulated deficit)			764						(403)
Accumulated other comprehensive loss			(3,793)						(4,059)
Total stockholders’ equity (deficit)			(3,976)						1,891
Total liabilities and stockholders’ equity (deficit)			$	100,075					$	102,400

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Travelzoo

Condensed Consolidated Statements of Cash Flows

(Unaudited)

(In thousands)

			Three months ended												Twelve months ended
			December 31,												December 31,
			2021						2020						2021						2020
Cash flows from operating activities:
Net income (loss)			$	(3,036)					$	702					$	1,158					$	(14,570)
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Depreciation and amortization			412						508						1,820						2,314
Stock-based compensation			960						960						3,748						6,203
Deferred income tax			(259)						(1,666)						813						(3,413)
Impairment of intangible assets and goodwill			—						—						—						2,920
Gain on notes payable settlement			—						—						—						(1,500)
Gain on long-lived assets			—						(822)						—						(385)
Loss on equity investment in WeGo			—						—						—						474
Gain on sale of equity investment in WeGo			—						(468)						—						(468)
Gain on PPP notes payable forgiveness			—						—						(3,588)						—
Net foreign currency effects			(73)						(143)						(373)						(685)
Provision for (reversal of)loss on accounts receivable and other reserves			1,667						1,452						(58)						5,375
Changes in operating assets and liabilities, net of acquisitions:
Accounts receivable			(6,321)						(50)						(10,169)						6,196
Prepaid income taxes			(366)						(610)						(2,373)						75
Prepaid expenses and other			1,381						(443)						(8,092)						1,183
Accounts payable			(7,765)						(13,457)						(2,740)						(748)
Merchant payables			(4,307)						23,604						12,179						44,136
Accrued expenses and other			785						(731)						333						(2,112)
Income tax payable			125						(61)						(138)						(540)
Other liabilities			(563)						660						(597)						2,564
Net cash provided by (used in) operating activities			(17,360)						9,435						(8,077)						47,019
Cash flows from investing activities:
Acquisition of business, net of cash acquired			—						—						—						(679)
Other investment			—						—						—						(430)
Proceeds from investment			133						—						133						—
Proceeds from sale of equity investment in WeGo			—						2,607						—						2,607
Purchases of property and equipment			(5)						(1)						(29)						(253)
Proceeds from sale of long-lived assets			—						822						—						822
Net cash provided by investing activities			128						3,428						104						2,067
Cash flows from financing activities:
Repurchase of common stock			(3,905)						—						(5,488)						(1,205)
Payment of promissory notes			—						(1,700)						(110)						(9,500)
Proceeds from notes payable			—						—						—						3,663
Exercise of stock options and taxes paid for net share settlement			(148)						60						(5,572)						60
Net cash used in financing activities			(4,053)						(1,640)						(11,170)						(6,982)
Effect of exchange rate on cash, cash equivalents and restricted cash			(127)						1,178						(253)						1,571
Net increase (decrease) in cash, cash equivalents and restricted cash			(21,412)						12,401						(19,396)						43,675
Cash, cash equivalents and restricted cash at beginning of period			66,401						51,984						64,385						20,710
Cash, cash equivalents and restricted cash at end of period			$	44,989					$	64,385					$	44,989					$	64,385

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Travelzoo

Segment Information from Continuing Operations

(Unaudited)

(In thousands)

Three months ended December 31, 2021			Travelzoo North America						Travelzoo Europe						Jack's Flight Club						Elimination						Consolidated
Revenue from unaffiliated customers			$	8,678					$	4,658					$	803					$	—					$	14,139
Intersegment revenue			(99)						99						—						—						—
Total net revenues			8,579						4,757						803						—						14,139
Operating income (loss)			$	(2,240)					$	(1,197)					$	17					$	—					$	(3,420)
Three months ended December 31, 2020			Travelzoo North America						Travelzoo Europe						Jack's Flight Club						Elimination						Consolidated
Revenue from unaffiliated customers			$	8,858					$	2,703					$	922					$	—					$	12,483
Intersegment revenue			12						(12)						—						—						—
Total net revenues			8,870						2,691						922						—						12,483
Operating income (loss)			$	1,318					$	(2,414)					$	199					$	—					$	(897)

Twelve months ended December 31, 2021			Travelzoo North America						Travelzoo Europe						Jack's Flight Club						Elimination						Consolidated
Revenue from unaffiliated customers			$	41,683					$	18,161					$	3,346					$	—					$	63,190
Intersegment revenue			363						(363)						—						—						—
Total net revenues			42,046						17,798						3,346						—						63,190
Operating income (loss)			$	414					$	(1,520)					$	134					$	—					$	(972)
Twelve months ended December 31, 2020			Travelzoo North America						Travelzoo Europe						Jack's Flight Club						Elimination						Consolidated
Revenue from unaffiliated customers			$	34,663					$	15,409					$	3,537					$	(8)					$	53,601
Intersegment revenue			249						(257)						—						8						—
Total net revenues			34,912						15,152						3,537						—						53,601
Operating loss			$	(5,056)					$	(6,195)					$	(2,814)					$	(8)					$	(14,073)

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Travelzoo

Reconciliation of GAAP to Non-GAAP Information

(Unaudited)

(In thousands, except per share amounts)

			Three months ended												Twelve months ended
			December 31,												December 31,
			2021						2020						2021						2020
GAAP operating expense			$	14,566					$	10,585					$	52,637					$	57,111
Non-GAAP adjustments:
Impairment of intangible and goodwill (A)			—						—						—						2,920
Amortization of intangibles (B)			275						333						1,108						1,277
Stock option expenses (C)			960						958						3,747						6,201
Severance-related expenses (D)			87						153						580						1,292
Non-GAAP operating expense			13,244						9,141						47,202						45,421
GAAP operating loss			(3,420)						(897)						(972)						(14,073)
Non-GAAP adjustments (A through D)			1,322						1,444						5,435						11,690
Non-GAAP operating income (loss)			(2,098)						547						4,463						(2,383)

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