Travelzoo Reports First Quarter 2019 Results

Date : 04/25/2019 @ 1:00PM
Source : GlobeNewswire Inc.
Stock : Travelzoo (TZOO)
Quote : 14.53  0.0 (0.00%) @ 12:00PM

Travelzoo Reports First Quarter 2019 Results

Travelzoo (NASDAQ:TZOO)
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3 Months : From Apr 2019 to Jul 2019

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Travelzoo® (NASDAQ: TZOO):

  • Revenue of $30.8 million, up 3% year-over-year in constant currencies
  • Operating profit of $5.0 million, up 36% year-over-year
  • Cash flow from operations of $3.4 million
  • Earnings per share (EPS) of $0.26

Travelzoo, a global publisher of exclusive offers and experiences for members, today announced financial results for the first quarter ended March 31, 2019, with revenue of $30.8 million and operating profit of $5.0 million. In nominal terms, revenue decreased $59,000 year-over-year. In constant currencies, revenue increased by 3% year-over-year. Net income was $3.1 million, with EPS of $0.26, up from $0.20 in the prior-year period.

"Our attractive core business in North America and Europe generated an operating profit of $6.6 million, with a strong operating margin of 23%, of which $1.6 million was re-invested in our Asia Pacific business. We are committed to driving up shareholder value by implementing a successful strategy to achieve profitable growth in Asia Pacific faster," said Holger Bartel, Global CEO of Travelzoo.

Asia PacificAsia Pacific business segment revenue decreased 18% year-over-year to $1.7 million. In constant currencies, revenue decreased 13% year-over-year. The operating loss in Asia Pacific for the first quarter was $1.6 million, compared to an operating loss of $1.7 million in the prior-year period.

EuropeEurope business segment revenue increased 3% year-over-year to $10.6 million. In constant currencies, revenue increased 10% year-over-year. Operating profit for the first quarter was $2.1 million, or 20% of revenue, compared to an operating profit of $2.0 million, or 19% of revenue in the prior-year period.

North AmericaNorth America business segment revenue for the fourth quarter was $18.6 million, unchanged from the prior-year period. In constant currencies, revenue increased 1% year-over-year. Operating profit for the first quarter was $4.5 million, or 24% of revenue, compared to an operating profit of $3.4 million, or 18% of revenue in the prior-year period.

MembersAs of March 31, 2019, Travelzoo had a worldwide unduplicated number of members of 29.9 million. In Asia Pacific, unduplicated number of members was 3.6 million as of March 31, 2019, consistent with December 31, 2018. In Europe, unduplicated number of members was 8.9 million as of March 31, 2019, up 2% from December 31, 2018. In North America, unduplicated number of members was 17.5 million as of March 31, 2019, consistent with December 31, 2018.

Income TaxesIncome tax expense was $1.8 million, compared to a $1.3 million income tax expense in the prior-year period.

Asset ManagementDuring the first quarter of 2019, Travelzoo generated $3.4 million of cash from operating activities. Accounts receivable increased by $2.7 million over the prior-year period to $15.6 million. Accounts payable increased by $1.4 million over the prior-year period to $16.2 million. Capital expenditures were $131,000, up from $65,000 in the prior-year period. As of March 31, 2019, cash and cash equivalents were $19.9 million.

Conference CallTravelzoo will host a conference call to discuss first 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 TravelzooTravelzoo® 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 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 and Top 20 are registered trademarks of Travelzoo.

TravelzooCondensed Consolidated Statements of Operations(Unaudited)(In thousands, except per share amounts)

 Three months ended
 March 31,
 2019 2018
Revenues$30,825  $30,884 
Cost of revenues2,946  3,385 
Gross profit27,879  27,499 
Operating expenses:   
Sales and marketing15,606  15,542 
Product development1,703  2,511 
General and administrative5,599  5,789 
Total operating expenses22,908  23,842 
Income from operations4,971  3,657 
Other income (loss), net(99) 161 
Income before income taxes4,872  3,818 
Income tax expense1,752  1,316 
Net income$3,120  $2,502 
    
Basic income per share$0.26  $0.20 
Diluted income per share$0.26  $0.20 
    
Weighted average shares:   
Basic11,914  12,462 
Diluted12,224  12,462 

TravelzooCondensed Consolidated Balance Sheets(Unaudited)(In thousands)

 March 31,  2019 December 31,  2018
Assets   
Current assets:   
Cash and cash equivalents$19,946  $18,017 
Accounts receivable, net15,579  12,646 
Income taxes receivable  389 
Deposits88  167 
Prepaid expenses and other1,607  1,947 
Total current assets37,220  33,166 
Deposits and other689  685 
Deferred tax assets1,284  1,645 
Restricted cash1,325  1,444 
Investment in WeekenGO2,483  2,694 
Operating lease right-of-use assets14,264   
Property and equipment, net3,604  3,790 
Total assets$60,869  $43,424 
Liabilities and Stockholders’ Equity   
Current liabilities:   
Accounts payable$16,180  $17,129 
Accrued expenses and other9,067  7,853 
Deferred revenue1,199  1,339 
Operating lease liabilities5,508   
Income tax payable1,519  489 
Total current liabilities33,473  26,810 
Long-term tax liabilities425  418 
Long-term operating lease liabilities11,251   
Other long-term liabilities83  2,137 
Total liabilities45,232  29,365 
Common stock119  120 
Additional paid-in capital   
Accumulated other comprehensive loss(4,303) (4,214)
Retained earnings19,821  18,153 
Total stockholders’ equity15,637  14,059 
Total liabilities and stockholders’ equity$60,869  $43,424 

TravelzooCondensed Consolidated Statements of Cash Flows(Unaudited)(In thousands)

 Three months ended
 March 31,
 2019 2018
Cash flows from operating activities:   
Net income$3,120  $2,502 
Adjustments to reconcile net income to net cash provided by operating activities:   
Depreciation and amortization330  384 
Deferred income tax341  (110)
Stock-based compensation163  173 
Loss on equity investment in WeekenGO159   
Other77  (83)
Net foreign currency effects(21) (171)
Changes in operating assets and liabilities:   
Accounts receivable(2,980) (997)
Income tax receivable388  428 
Prepaid expenses and other425  (10)
Accounts payable(1,100) (3,185)
Accrued expenses and other1,587  1,024 
Income tax payable988  217 
Other liabilities(71) 7 
Net cash provided by operating activities3,406  179 
Cash flows from investing activities:   
Purchases of property and equipment(131) (65)
Net cash used in investing activities(131) (65)
Cash flows from financing activities:   
Repurchase of common stock, net(1,591)  
Taxes paid for net share settlement of equity awards(26)  
Net cash used in financing activities(1,617)  
Effect of exchange rate on cash, cash equivalents and restricted cash152  456 
Net increase in cash, cash equivalents and restricted cash1,810  570 
Cash, cash equivalents and restricted cash at beginning of period19,461  24,001 
Cash, cash equivalents and restricted cash at end of period$21,271  $24,571 
Supplemental disclosure of cash flow information:   
Cash paid for income taxes, net$(60) $779 

TravelzooSegment Information(Unaudited)(In thousands)

Three months ended March 31, 2019Asia Pacific Europe North America Consolidated
Revenue from unaffiliated customers$1,635  $11,054  $18,136  $30,825 
Intersegment revenue30  (481) 451   
Total net revenues1,665  10,573  18,587  30,825 
Operating income (loss)$(1,635) $2,137  $4,469  $4,971 
        
Three months ended March 31, 2018Asia Pacific Europe North America Consolidated
Revenue from unaffiliated customers$2,042  $10,332  $18,510  $30,884 
Intersegment revenue(20) (52) 72   
Total net revenues2,022  10,280  18,582  30,884 
Operating income (loss)$(1,740) $1,966  $3,431  $3,657 

Investor Relations:Lijun Qiir@travelzoo.com

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