Travelzoo® (NASDAQ: TZOO):
- Consolidated revenue of $13.8 million, down 42% from $23.8
million year-over-year
- Net loss of $1.2 million
- Non-GAAP consolidated operating profit of $1.2 million
- Earnings per share (EPS) of ($0.10) attributable to Travelzoo
from continuing operations
Travelzoo, a global Internet media company that publishes
exclusive offers and experiences for members, today announced
financial results for the third quarter ended September 30, 2020.
Consolidated revenue was $13.8 million, down 42% from $23.8 million
year-over-year. Revenue increased by 97% from $7.0 million in Q2
2020. 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 $1.1 million for Q3 2020. At the consolidated level,
including minority interests, the reported net loss from continuing
operations was $1.2 million. EPS from continuing operations was
($0.10), down from $0.21 in the prior-year period.
Non-GAAP operating profit was $1.2 million. The calculation of
non-GAAP operating profit excludes amortization of intangibles
($0.3 million), stock option expenses ($1.2 million), and
severance-related expenses ($0.9 million). See section “Non-GAAP
Financial Measures” below.“A strong improvement in our business is
evident compared to Q2. We are seeing irresistibly priced deals
coming to the market, and Travelzoo, as the most trusted media
brand publishing and recommending travel deals, is telling its
members about the very best deals," said Holger Bartel, Global
CEO.
Cash PositionAs of September 30, 2020,
consolidated cash, cash equivalents and restricted cash were $51.7
million. In April 2020 and May 2020, Travelzoo received
low-interest government loans under the Paycheck Protection Program
(PPP) of $3.1 million and $535,000, respectively. No further
applications for loans have been made since then and the company
does not anticipate requiring any further loans.
Travelzoo North AmericaNorth America business
segment revenue decreased 40% year-over-year to $9.1 million. North
America business segment revenue increased by 118% from $4.2
million in Q2 2020. Operating loss for Q3 was $696,000, or (8%) of
revenue, compared to an operating profit of $2.6 million, or 17% of
revenue in the prior-year period.
Travelzoo EuropeEurope business segment revenue
decreased 57% year-over-year to $3.7 million. In constant
currencies, revenue decreased 62% year-over-year. Europe business
segment revenue increased by 97% from $1.9 million in Q2 2020.
Operating loss for Q3 was $757,000, or (21%) of revenue, compared
to an operating profit of $815,000, or 10% of revenue in the
prior-year period.
Jack’s Flight Club On January 13, 2020,
Travelzoo acquired 60% of Jack’s Flight Club, a subscription
service. In Q3 2020, the Jack's Flight Club business segment
generated $1.1 million in revenue from subscriptions with operating
profit of $731,000. After consolidation with Travelzoo, Jack’s
Flight Club's net income was $312,000, with $187,000 attributable
to Travelzoo as a result of recording $333,000 of amortization of
intangible assets related to the acquisition and a haircut of
revenue (derived from deferred revenue sold prior to acquisition)
of $148,000 due to purchase accounting in accordance with U.S.
GAAP.
Members and Subscribers As of September 30,
2020, we had 30.5 million members worldwide. In Europe, the
unduplicated number of Travelzoo members was 8.9 million as of
September 30, 2020, down 3% from September 30, 2019. In North
America, the unduplicated number of Travelzoo members was 16.5
million as of September 30, 2020, down 7% from September 30, 2019.
Jack’s Flight Club had 1.7 million subscribers as of September 30,
2020, up 9% from September 30, 2019. In June 2020, Travelzoo sold
its subsidiary in Japan, Travelzoo Japan K.K., to Mr. Hajime
Suzuki. In connection with the sale, Travelzoo and Travelzoo Japan
K.K. entered into a royalty-bearing licensing agreement for the
exclusive use of Travelzoo members in Japan. In August 2020,
Travelzoo sold its Singapore subsidiary to Mr. Julian Rembrandt and
entered into a royalty-bearing licensing agreement for, among other
things, the exclusive use of Travelzoo's members in Australia, New
Zealand and Singapore. Under the licensing agreements, Travelzoo’s
existing members in Australia, Japan, New Zealand, and Singapore
will continue to be owned by Travelzoo as the licensor.
Discontinued OperationsAs announced in a press
release on March 10, 2020, Travelzoo decided to exit its Asia
Pacific business which in 2019 reduced EPS by $0.60. The Asia
Pacific business was classified as discontinued operations at 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 TaxesIncome tax benefit was $244,000 in
Q3 2020, compared to an income tax expense of $860,000 in the
prior-year period.
Non-GAAP Financial MeasuresManagement
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 and goodwill,
amortization of intangibles, stock option expenses,
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 see a trend of
recovery of our revenue. We have been able to reduce our operating
expenses significantly. As a result of recovery of revenue and
substantially lower operating expenses, we currently expect to
achieve for Q4 a result close to break-even or a profit.
Conference CallTravelzoo 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.
About TravelzooTravelzoo®
provides our 30 million members insider deals and one-of-a-kind
experiences personally reviewed by one of our deal experts around
the globe. We have our finger on the pulse of outstanding travel,
entertainment, and lifestyle experiences. For over 20 years we have
worked 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 and Top 20 are registered trademarks of Travelzoo.
TravelzooCondensed
Consolidated Statements of
Operations(Unaudited)
| (In thousands,
except per share amounts) |
Three months ended |
|
Nine months ended |
| |
September 30, |
|
September 30, |
| |
2020 |
|
2019 |
|
2020 |
|
2019 |
|
Revenues |
$ |
13,787 |
|
|
|
$ |
23,833 |
|
|
|
$ |
41,118 |
|
|
|
$ |
79,599 |
|
|
| Cost of revenues |
2,924 |
|
|
|
2,852 |
|
|
|
7,768 |
|
|
|
8,389 |
|
|
|
Gross profit |
10,863 |
|
|
|
20,981 |
|
|
|
33,350 |
|
|
|
71,210 |
|
|
| Operating expenses: |
|
|
|
|
|
|
|
|
Sales and marketing |
6,929 |
|
|
|
11,967 |
|
|
|
24,311 |
|
|
|
38,605 |
|
|
|
Product development |
592 |
|
|
|
1,434 |
|
|
|
2,586 |
|
|
|
4,856 |
|
|
|
General and administrative |
4,545 |
|
|
|
4,188 |
|
|
|
16,709 |
|
|
|
13,634 |
|
|
|
Impairment of intangible asset and goodwill |
— |
|
|
|
— |
|
|
|
2,920 |
|
|
|
— |
|
|
|
Total operating expenses |
12,066 |
|
|
|
17,589 |
|
|
|
46,526 |
|
|
|
57,095 |
|
|
| Operating income (loss) |
(1,203 |
) |
|
|
3,392 |
|
|
|
(13,176 |
) |
|
|
14,115 |
|
|
| Other income (loss), net |
(37 |
) |
|
|
32 |
|
|
|
(222 |
) |
|
|
48 |
|
|
| Income (loss) from continuing
operations before income taxes |
(1,240 |
) |
|
|
3,424 |
|
|
|
(13,398 |
) |
|
|
14,163 |
|
|
| Income tax expense (benefit) |
(244 |
) |
|
|
860 |
|
|
|
(2,070 |
) |
|
|
3,596 |
|
|
| Income (loss) from continuing
operations |
(996 |
) |
|
|
2,564 |
|
|
|
(11,328 |
) |
|
|
10,567 |
|
|
| Loss from discontinued
operations, net of tax |
(230 |
) |
|
|
(2,258 |
) |
|
|
(3,944 |
) |
|
|
(5,813 |
) |
|
| Net income (loss) |
(1,226 |
) |
|
|
306 |
|
|
|
(15,272 |
) |
|
|
4,754 |
|
|
| Net income (loss) attributable to
non-controlling interest |
125 |
|
|
|
— |
|
|
|
(1,122 |
) |
|
|
— |
|
|
| Net income (loss) attributable to
Travelzoo |
$ |
(1,351 |
) |
|
|
$ |
306 |
|
|
|
$ |
(14,150 |
) |
|
|
$ |
4,754 |
|
|
| |
|
|
|
|
|
|
|
| Net income (loss) attributable to
Travelzoo—continuing operations |
$ |
(1,121 |
) |
|
|
$ |
2,564 |
|
|
|
$ |
(10,206 |
) |
|
|
$ |
10,567 |
|
|
| Net income (loss) attributable to
Travelzoo—discontinued operations |
$ |
(230 |
) |
|
|
$ |
(2,258 |
) |
|
|
$ |
(3,944 |
) |
|
|
$ |
(5,813 |
) |
|
| |
|
|
|
|
|
|
|
| Income (loss) per
share—basic |
|
|
|
|
|
|
|
|
Continuing operations |
$ |
(0.10 |
) |
|
|
$ |
0.22 |
|
|
|
$ |
(0.90 |
) |
|
|
$ |
0.89 |
|
|
|
Discontinued operations |
$ |
(0.02 |
) |
|
|
$ |
(0.19 |
) |
|
|
$ |
(0.35 |
) |
|
|
$ |
(0.49 |
) |
|
| Net income (loss) per share
—basic |
$ |
(0.12 |
) |
|
|
$ |
0.03 |
|
|
|
$ |
(1.25 |
) |
|
|
$ |
0.40 |
|
|
| |
|
|
|
|
|
|
|
| Income (loss) per
share—diluted |
|
|
|
|
|
|
|
|
Continuing operations |
$ |
(0.10 |
) |
|
|
$ |
0.21 |
|
|
|
$ |
(0.90 |
) |
|
|
$ |
0.87 |
|
|
|
Discontinued operations |
$ |
(0.02 |
) |
|
|
$ |
(0.19 |
) |
|
|
$ |
(0.35 |
) |
|
|
$ |
(0.49 |
) |
|
| Net income (loss) per
share—diluted |
$ |
(0.12 |
) |
|
|
$ |
0.03 |
|
|
|
$ |
(1.25 |
) |
|
|
$ |
0.39 |
|
|
| Shares used in per share
calculation from continuing operations—basic |
11,310 |
|
|
|
11,767 |
|
|
|
11,353 |
|
|
|
11,894 |
|
|
| Shares used in per share
calculation from discontinued operations—basic |
11,310 |
|
|
|
11,767 |
|
|
|
11,353 |
|
|
|
11,894 |
|
|
| Shares used in per share
calculation from continuing operations—diluted |
11,310 |
|
|
|
11,956 |
|
|
|
11,353 |
|
|
|
12,152 |
|
|
| Shares used in per share
calculation from discontinued operations—diluted |
11,310 |
|
|
|
11,767 |
|
|
|
11,353 |
|
|
|
11,894 |
|
|
TravelzooCondensed
Consolidated Balance
Sheets(Unaudited)
| (In thousands) |
September 30, 2020 |
|
December 31, 2019 |
| Assets |
|
|
|
|
Current assets: |
|
|
|
|
Cash and cash equivalents |
$ |
50,528 |
|
|
|
$ |
18,743 |
|
|
|
Accounts receivable, net |
4,195 |
|
|
|
11,209 |
|
|
|
Prepaid income taxes |
304 |
|
|
|
989 |
|
|
|
Deposits |
98 |
|
|
|
105 |
|
|
|
Prepaid expenses and other |
990 |
|
|
|
2,288 |
|
|
|
Assets from discontinued operations |
454 |
|
|
|
3,961 |
|
|
|
Total current assets |
56,569 |
|
|
|
37,295 |
|
|
|
Deposits and other |
806 |
|
|
|
572 |
|
|
|
Deferred tax assets |
4,415 |
|
|
|
2,051 |
|
|
|
Restricted cash |
1,155 |
|
|
|
1,135 |
|
|
|
Investment in WeGo |
2,101 |
|
|
|
2,484 |
|
|
|
Operating lease right-of-use assets |
9,076 |
|
|
|
8,140 |
|
|
|
Property and equipment, net |
1,499 |
|
|
|
2,861 |
|
|
|
Intangible assets, net |
4,867 |
|
|
|
— |
|
|
|
Goodwill |
10,944 |
|
|
|
— |
|
|
|
Total assets |
$ |
91,432 |
|
|
|
$ |
54,538 |
|
|
| Liabilities and
Stockholders’ Equity |
|
|
|
|
Current liabilities: |
|
|
|
|
Accounts payable |
$ |
53,018 |
|
|
|
$ |
19,349 |
|
|
|
Accrued expenses and other |
6,953 |
|
|
|
6,281 |
|
|
|
Deferred revenue |
2,777 |
|
|
|
786 |
|
|
|
Operating lease liabilities |
3,988 |
|
|
|
4,847 |
|
|
|
Promissory notes payable |
1,700 |
|
|
|
— |
|
|
|
Income tax payable |
373 |
|
|
|
914 |
|
|
|
Liabilities from discontinued operations |
1,509 |
|
|
|
3,135 |
|
|
|
Total current liabilities |
70,318 |
|
|
|
35,312 |
|
|
|
PPP notes payable |
3,663 |
|
|
|
— |
|
|
|
Deferred tax liabilities |
851 |
|
|
|
— |
|
|
|
Long-term operating lease liabilities |
11,425 |
|
|
|
7,920 |
|
|
|
Other long-term liabilities |
473 |
|
|
|
443 |
|
|
|
Total liabilities |
86,730 |
|
|
|
43,675 |
|
|
|
Non-controlling interest |
4,633 |
|
|
|
— |
|
|
|
Common stock |
113 |
|
|
|
115 |
|
|
|
Additional paid-in capital |
5,220 |
|
|
|
— |
|
|
|
Retained earnings (accumulated deficit) |
(1,130 |
) |
|
|
14,200 |
|
|
|
Accumulated other comprehensive loss |
(4,134 |
) |
|
|
(3,452 |
) |
|
|
Total stockholders’ equity |
69 |
|
|
|
10,863 |
|
|
|
Total liabilities and stockholders’ equity |
$ |
91,432 |
|
|
|
$ |
54,538 |
|
|
|
|
|
|
|
|
|
|
|
|
|
TravelzooSegment
Information from Continuing
Operations(Unaudited)
(In thousands)
| Three months ended
September 30, 2020 |
TravelzooNorth America |
|
TravelzooEurope |
|
Jack'sFlight Club |
|
Elimination |
|
Consolidated |
|
Revenue from unaffiliated customers |
$ |
9,002 |
|
|
|
$ |
3,798 |
|
|
|
$ |
987 |
|
|
$ |
— |
|
|
|
$ |
13,787 |
|
|
| Intersegment revenue |
141 |
|
|
|
(141 |
) |
|
|
— |
|
|
— |
|
|
|
— |
|
|
| Total net revenues |
9,143 |
|
|
|
3,657 |
|
|
|
987 |
|
|
— |
|
|
|
13,787 |
|
|
| Operating income (loss) |
$ |
(696 |
) |
|
|
$ |
(757 |
) |
|
|
$ |
250 |
|
|
$ |
— |
|
|
|
$ |
(1,203 |
) |
|
| |
|
|
|
|
|
|
|
|
|
| Three months ended
September 30, 2019 |
TravelzooNorth America |
|
TravelzooEurope |
|
Jack'sFlight Club |
|
Elimination |
|
Consolidated |
| Revenue from unaffiliated
customers |
$ |
14,444 |
|
|
|
$ |
9,432 |
|
|
|
$ |
— |
|
|
$ |
(43 |
) |
|
|
$ |
23,833 |
|
|
| Intersegment revenue |
895 |
|
|
|
(938 |
) |
|
|
— |
|
|
43 |
|
|
|
— |
|
|
| Total net revenues |
15,339 |
|
|
|
8,494 |
|
|
|
— |
|
|
|
|
23,833 |
|
|
| Operating income (loss) |
$ |
2,620 |
|
|
|
$ |
815 |
|
|
|
$ |
— |
|
|
$ |
(43 |
) |
|
|
$ |
3,392 |
|
|
| Nine months ended
September 30, 2020 |
TravelzooNorth America |
|
TravelzooEurope |
|
Jack'sFlight Club |
|
Elimination |
|
Consolidated |
|
Revenue from unaffiliated customers |
$ |
25,805 |
|
|
|
$ |
12,706 |
|
|
|
$ |
2,615 |
|
|
|
$ |
(8 |
) |
|
|
$ |
41,118 |
|
|
| Intersegment revenue |
237 |
|
|
|
(245 |
) |
|
|
— |
|
|
|
8 |
|
|
|
— |
|
|
| Total net revenues |
26,042 |
|
|
|
12,461 |
|
|
|
2,615 |
|
|
|
— |
|
|
|
41,118 |
|
|
| Operating loss |
$ |
(6,374 |
) |
|
|
$ |
(3,781 |
) |
|
|
$ |
(3,013 |
) |
|
|
$ |
(8 |
) |
|
|
$ |
(13,176 |
) |
|
| |
|
|
|
|
|
|
|
|
|
| Nine months ended
September 30, 2019 |
TravelzooNorth America |
|
TravelzooEurope |
|
Jack'sFlight Club |
|
Elimination |
|
Consolidated |
| Revenue from unaffiliated
customers |
$ |
50,074 |
|
|
|
$ |
29,619 |
|
|
|
$ |
— |
|
|
|
$ |
(94 |
) |
|
|
$ |
79,599 |
|
|
| Intersegment revenue |
1,776 |
|
|
|
(1,870 |
) |
|
|
— |
|
|
|
94 |
|
|
|
— |
|
|
| Total net revenues |
51,850 |
|
|
|
27,749 |
|
|
|
— |
|
|
|
0 |
|
79,599 |
|
|
| Operating income (loss) |
$ |
10,673 |
|
|
|
$ |
3,536 |
|
|
|
$ |
— |
|
|
|
$ |
(94 |
) |
|
|
$ |
14,115 |
|
|
TravelzooReconciliation
of GAAP to Non-GAAP
Information(Unaudited)
| (In thousands, except
per share amounts) |
Three months ended |
|
Nine months ended |
| |
September 30, |
|
September 30, |
| |
2020 |
|
2019 |
|
2020 |
|
2019 |
|
GAAP operating expense |
$ |
12,066 |
|
|
|
$ |
17,589 |
|
|
$ |
46,526 |
|
|
|
$ |
57,095 |
|
| Non-GAAP adjustments: |
|
|
|
|
|
|
|
|
Impairment of intangible and goodwill (A) |
— |
|
|
|
— |
|
|
2,920 |
|
|
|
— |
|
|
Amortization of intangibles (B) |
333 |
|
|
|
— |
|
|
944 |
|
|
|
— |
|
|
Stock option expenses (C) |
1,189 |
|
|
|
394 |
|
|
5,243 |
|
|
|
876 |
|
|
Severance-related expenses (D) |
855 |
|
|
|
35 |
|
|
1,139 |
|
|
|
85 |
|
| Non-GAAP operating expense |
9,689 |
|
|
|
17,160 |
|
|
36,280 |
|
|
|
56,134 |
|
|
|
|
|
|
|
|
|
|
| GAAP operating income (loss) |
(1,203 |
) |
|
|
3,392 |
|
|
(13,176 |
) |
|
|
14,115 |
|
| Non-GAAP adjustments (A through
D) |
2,377 |
|
|
|
429 |
|
|
10,246 |
|
|
|
961 |
|
| Non-GAAP operating income
(loss) |
1,174 |
|
|
|
3,821 |
|
|
(2,930 |
) |
|
|
15,076 |
|
| |
|
|
|
|
|
|
|
Investor Relations:Almira Puschir@travelzoo.com
Travelzoo (NASDAQ:TZOO)
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From Mar 2024 to Apr 2024
Travelzoo (NASDAQ:TZOO)
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From Apr 2023 to Apr 2024
