Travelzoo® (NASDAQ: TZOO):
- Consolidated revenue of $14.3
million, down 30% year-over-year and up 14%
quarter-over-quarter
- Non-GAAP consolidated operating
profit of $0.6 million
- Earnings per share (EPS) of ($0.14)
attributable to Travelzoo from continuing operations
- Cash flow from operations of $11.9
million
Travelzoo, a global Internet media company that publishes
exclusive offers and experiences for members, today announced
financial results for the first quarter ended March 31, 2021.
Consolidated revenue was $14.3 million, down 30% from $20.3 million
year-over-year and up 14% from $12.5 million in 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 $1.6 million for Q1 2021. At the consolidated level,
including minority interests, the reported net loss from continuing
operations was $1.7 million. EPS from continuing operations was
($0.14), compared to ($0.32) in the prior-year period.
Non-GAAP operating profit was $0.6 million. The calculation of
non-GAAP operating profit excludes amortization of intangibles
($0.3 million), stock option expenses ($0.9 million), and
severance-related expenses ($0.2 million). See section “Non-GAAP
Financial Measures” below.
“We see continued improvement in our business. Travelzoo is
loved by travel enthusiasts who look for quality offers. Travelzoo
members are affluent, active, and open for new experiences. 75% say
Travelzoo influences their travel destinations because they trust
Travelzoo. We believe that trust is becoming an important
competitive advantage for Travelzoo,” said Holger Bartel, Global
CEO.
Cash PositionAs of March 31, 2021, consolidated
cash, cash equivalents and restricted cash were $72.0 million. Cash
flow from operations was $11.9 million. There were no significant
capital expenditures.
ReserveReported revenues include a reserve of
$4.0 million related to commissions to be earned from vouchers
sold. The reserve is booked as contra revenue. For Q1 2021, an
adjustment to the reserve reduced reported revenue by $56,000.
Travelzoo North AmericaNorth America business
segment revenue decreased 23% year-over-year to $9.8 million.
Operating profit for Q1 2021 was $39,000, or 0.4% of revenue,
compared to an operating loss of $976,000 in the prior-year
period.
Travelzoo EuropeEurope business segment revenue
decreased 48% year-over-year to $3.6 million. Operating loss for Q1
2021 was $696,000, compared to an operating loss of $1.3 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 increased 30%
year-over-year to $887,000. Operating loss for Q1 2021 was
$110,000, compared to an operating loss of $3.0 million in the
prior-year period. After consolidation with Travelzoo, Jack’s
Flight Club's net loss was $121,000, with $73,000 attributable to
Travelzoo as a result of recording $284,000 of amortization of
intangible assets related to the acquisition.
Licensing 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. Licensing
revenue is booked with a lag of one quarter. Licensing revenue from
Japan of $9,000 generated in Q4 2020 was recognized in Q1 2021.
Members and SubscribersAs of March 31, 2021, we
had 31.8 million members worldwide. In North America, the
unduplicated number of Travelzoo members was 18.1 million as of
March 31, 2021, up 7% from March 31, 2020. In Europe, the
unduplicated number of Travelzoo members was 8.6 million as of
March 31, 2021, down 6% from March 31, 2020. On March 15, 2021,
Travelzoo added more than 2 million new members in the U.S. in
connection with a direct competitor from Europe exiting the U.S.
market. Jack’s Flight Club had 1.6 million subscribers as of March
31, 2021, down from 1.7 million subscribers as of March 31,
2020.
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 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 TaxesIncome tax expense was $742,000 in
Q1 2021, compared to an income tax benefit of $517,000 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, 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 for Q2 2021
to report significantly higher revenue and profitability. We see a
trend of recovery of our revenue. We have been able to reduce our
operating expenses, and we believe we can contain many of the lower
costs in the foreseeable future.
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; and access the webcast.
About Travelzoo
Travelzoo® 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, Top 20, and Jack's Flight Club are registered
trademarks of Travelzoo.
| |
|
TravelzooCondensed Consolidated Statements
of Operations(Unaudited)(In
thousands, except per share amounts) |
| |
|
| |
Three months ended |
| |
March 31, |
| |
2021 |
|
2020 |
|
Revenues |
$ |
14,284 |
|
|
$ |
20,327 |
|
| Cost of revenues |
3,018 |
|
|
2,703 |
|
|
Gross profit |
11,266 |
|
|
17,624 |
|
| Operating expenses: |
|
|
|
|
Sales and marketing |
6,790 |
|
|
13,094 |
|
|
Product development |
683 |
|
|
1,428 |
|
|
General and administrative |
4,560 |
|
|
5,522 |
|
|
Impairment of intangible asset and goodwill |
— |
|
|
2,920 |
|
|
Total operating expenses |
12,033 |
|
|
22,964 |
|
| Operating loss |
(767 |
) |
|
(5,340 |
) |
| Other income (loss), net |
(166 |
) |
|
(6 |
) |
| Loss from continuing operations
before income taxes |
(933 |
) |
|
(5,346 |
) |
| Income tax expense (benefit) |
742 |
|
|
(517 |
) |
| Loss from continuing
operations |
(1,675 |
) |
|
(4,829 |
) |
| Loss from discontinued
operations, net of tax |
(15 |
) |
|
(2,919 |
) |
| Net loss |
(1,690 |
) |
|
(7,748 |
) |
| Net loss attributable to
non-controlling interest |
(48 |
) |
|
(1,139 |
) |
| Net loss attributable to
Travelzoo |
$ |
(1,642 |
) |
|
$ |
(6,609 |
) |
| |
|
|
|
| Net loss attributable to
Travelzoo—continuing operations |
$ |
(1,627 |
) |
|
$ |
(3,690 |
) |
| Net loss attributable to
Travelzoo—discontinued operations |
$ |
(15 |
) |
|
$ |
(2,919 |
) |
| |
|
|
|
| Loss per share—basic |
|
|
|
|
Continuing operations |
$ |
(0.14 |
) |
|
$ |
(0.32 |
) |
|
Discontinued operations |
$ |
— |
|
|
$ |
(0.26 |
) |
| Net loss per share —basic |
$ |
(0.14 |
) |
|
$ |
(0.58 |
) |
| |
|
|
|
| Loss per share—diluted |
|
|
|
|
Continuing operations |
$ |
(0.14 |
) |
|
$ |
(0.32 |
) |
|
Discontinued operations |
$ |
— |
|
|
$ |
(0.26 |
) |
| Net loss per share—diluted |
$ |
(0.14 |
) |
|
$ |
(0.58 |
) |
| Shares used in per share
calculation from continuing operations—basic |
11,391 |
|
|
11,439 |
|
| Shares used in per share
calculation from discontinued operations—basic |
11,391 |
|
|
11,439 |
|
| Shares used in per share
calculation from continuing operations—diluted |
11,391 |
|
|
11,439 |
|
| Shares used in per share
calculation from discontinued operations—diluted |
11,391 |
|
|
11,439 |
|
| |
|
|
|
|
|
| |
|
TravelzooCondensed Consolidated Balance
Sheets(Unaudited)(In
thousands) |
| |
|
|
|
| |
March 31,2021 |
|
March 31,2020 |
| Assets |
|
|
|
|
Current assets: |
|
|
|
|
Cash and cash equivalents |
$ |
70,862 |
|
|
$ |
63,061 |
|
|
Accounts receivable, net |
7,293 |
|
|
4,519 |
|
|
Prepaid income taxes |
1,443 |
|
|
931 |
|
|
Deposits |
101 |
|
|
137 |
|
|
Prepaid expenses and other |
3,275 |
|
|
1,166 |
|
|
Assets from discontinued operations |
123 |
|
|
230 |
|
|
Total current assets |
83,097 |
|
|
70,044 |
|
|
Deposits and other |
1,351 |
|
|
745 |
|
|
Deferred tax assets |
4,400 |
|
|
5,067 |
|
|
Restricted cash |
1,157 |
|
|
1,178 |
|
|
Operating lease right-of-use assets |
8,474 |
|
|
8,541 |
|
|
Property and equipment, net |
1,152 |
|
|
1,347 |
|
|
Intangible assets, net |
4,250 |
|
|
4,534 |
|
|
Goodwill |
10,944 |
|
|
10,944 |
|
|
Total assets |
$ |
114,825 |
|
|
$ |
102,400 |
|
| Liabilities and
Stockholders’ Equity |
|
|
|
|
Current liabilities: |
|
|
|
|
Accounts payable |
$ |
8,750 |
|
|
$ |
6,996 |
|
|
Merchant payables |
70,094 |
|
|
57,104 |
|
|
Accrued expenses and other |
10,827 |
|
|
8,649 |
|
|
Deferred revenue |
2,417 |
|
|
2,688 |
|
|
Operating lease liabilities |
3,796 |
|
|
3,587 |
|
|
PPP notes payable (current portion) |
3,460 |
|
|
2,849 |
|
|
Income tax payable |
201 |
|
|
326 |
|
|
Liabilities from discontinued operations |
580 |
|
|
671 |
|
|
Total current liabilities |
100,124 |
|
|
82,870 |
|
|
PPP notes payable |
204 |
|
|
814 |
|
|
Deferred tax liabilities |
235 |
|
|
357 |
|
|
Long-term operating lease liabilities |
10,558 |
|
|
10,774 |
|
|
Other long-term liabilities |
2,027 |
|
|
1,085 |
|
|
Total liabilities |
113,148 |
|
|
95,900 |
|
|
Non-controlling interest |
4,560 |
|
|
4,609 |
|
|
Common stock |
115 |
|
|
114 |
|
|
Treasury stock (at cost) |
(1,583 |
) |
|
— |
|
|
Additional paid-in capital |
4,279 |
|
|
6,239 |
|
|
Retained earnings (accumulated deficit) |
(2,045 |
) |
|
(403 |
) |
|
Accumulated other comprehensive loss |
(3,649 |
) |
|
(4,059 |
) |
|
Total stockholders’ equity |
(2,883 |
) |
|
1,891 |
|
|
Total liabilities and stockholders’ equity |
$ |
114,825 |
|
|
$ |
102,400 |
|
|
|
|
|
|
|
|
|
|
| |
|
TravelzooCondensed Consolidated Statements
of Cash Flows(Unaudited)(In
thousands) |
| |
|
| |
Three months ended |
| |
March 31, |
| |
2021 |
|
2020 |
| Cash flows from operating
activities: |
|
|
|
|
Net income (loss) |
$ |
(1,690 |
) |
|
$ |
(7,748 |
) |
| Adjustments to reconcile net
income (loss) to net cash provided by (used in) operating
activities: |
|
|
|
|
Depreciation and amortization |
484 |
|
|
551 |
|
|
Stock-based compensation |
882 |
|
|
23 |
|
|
Deferred income tax |
541 |
|
|
(609 |
) |
|
Impairment of intangible assets and goodwill |
— |
|
|
2,920 |
|
|
Loss on long-lived assets |
— |
|
|
437 |
|
|
Loss on equity investment in WeGo |
— |
|
|
195 |
|
|
Net foreign currency effects |
(152 |
) |
|
(681 |
) |
|
Provision of loss on accounts receivable and other |
(454 |
) |
|
1,441 |
|
|
Changes in operating assets and liabilities, net of
acquisitions: |
|
|
|
|
Accounts receivable |
(2,229 |
) |
|
2,509 |
|
|
Income tax receivable |
(545 |
) |
|
989 |
|
|
Prepaid expenses and other |
(2,357 |
) |
|
862 |
|
|
Accounts payable |
1,727 |
|
|
547 |
|
|
Merchant payables |
13,212 |
|
|
(6,940 |
) |
|
Accrued expenses and other |
2,199 |
|
|
704 |
|
|
Income tax payable |
(126 |
) |
|
(333 |
) |
|
Other liabilities |
412 |
|
|
2,077 |
|
| Net cash provided by operating
activities |
11,904 |
|
|
(3,056 |
) |
| Cash flows from investing
activities: |
|
|
|
|
Acquisition of business, net of cash acquired |
— |
|
|
(679 |
) |
|
Purchases of property and equipment |
(7 |
) |
|
(131 |
) |
| Net cash provided by (used in)
investing activities |
(7 |
) |
|
(810 |
) |
| Cash flows from financing
activities: |
|
|
|
|
Repurchase of common stock |
(1,583 |
) |
|
(1,205 |
) |
|
Payment of promissory notes |
— |
|
|
(1,000 |
) |
|
Proceeds from exercise of stock options, net of taxes for net share
settlement |
(2,840 |
) |
|
— |
|
| Net cash used in financing
activities |
(4,423 |
) |
|
(2,205 |
) |
| Effect of exchange rate on cash,
cash equivalents and restricted cash |
270 |
|
|
(272 |
) |
| Net increase in cash, cash
equivalents and restricted cash |
7,744 |
|
|
(6,343 |
) |
| Cash, cash equivalents and
restricted cash at beginning of period |
64,385 |
|
|
20,710 |
|
| Cash, cash equivalents and
restricted cash at end of period |
$ |
72,129 |
|
|
$ |
14,367 |
|
| |
|
|
|
|
|
|
|
| |
|
TravelzooSegment Information from
Continuing
Operations(Unaudited)(In
thousands) |
| |
|
|
|
|
|
|
|
|
|
| Three months
endedMarch 31, 2021 |
TravelzooNorthAmerica |
|
TravelzooEurope |
|
Jack's FlightClub |
|
Elimination |
|
Consolidated |
|
Revenue from unaffiliated customers |
$ |
9,828 |
|
|
$ |
3,569 |
|
|
$ |
887 |
|
|
$ |
— |
|
|
$ |
14,284 |
|
| Intersegment revenue |
(9 |
) |
|
9 |
|
|
— |
|
|
— |
|
|
— |
|
| Total net revenues |
9,819 |
|
|
3,578 |
|
|
887 |
|
|
— |
|
|
14,284 |
|
| Operating income (loss) |
$ |
39 |
|
|
$ |
(696 |
) |
|
$ |
(110 |
) |
|
$ |
— |
|
|
$ |
(767 |
) |
| |
|
|
|
|
|
|
|
|
|
| Three months
endedMarch 31, 2020 |
TravelzooNorthAmerica |
|
TravelzooEurope |
|
Jack's FlightClub |
|
Elimination |
|
Consolidated |
| Revenue from unaffiliated
customers |
$ |
12,549 |
|
|
$ |
7,103 |
|
|
$ |
683 |
|
|
$ |
(8 |
) |
|
$ |
20,327 |
|
| Intersegment revenue |
148 |
|
|
(156 |
) |
|
— |
|
|
8 |
|
|
— |
|
| Total net revenues |
12,697 |
|
|
6,947 |
|
|
683 |
|
|
— |
|
|
20,327 |
|
| Operating loss |
$ |
(976 |
) |
|
$ |
(1,341 |
) |
|
$ |
(3,015 |
) |
|
$ |
(8 |
) |
|
$ |
(5,340 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
TravelzooReconciliation of GAAP to
Non-GAAP
Information(Unaudited)(In
thousands, except per share amounts) |
| |
|
| |
Three months endedMarch 31 |
| |
2021 |
|
2020 |
|
GAAP operating expense |
$ |
12,033 |
|
|
$ |
22,964 |
|
| Non-GAAP adjustments: |
|
|
|
|
Impairment of intangible and goodwill (A) |
— |
|
|
2,920 |
|
|
Amortization of intangibles (B) |
284 |
|
|
215 |
|
|
Stock option expenses (C) |
882 |
|
|
23 |
|
|
Severance-related expenses (D) |
223 |
|
|
217 |
|
| Non-GAAP operating expense |
10,644 |
|
|
19,589 |
|
| |
|
|
|
| GAAP operating income (loss) |
(767 |
) |
|
(5,340 |
) |
| Non-GAAP adjustments (A through
D) |
1,389 |
|
|
3,375 |
|
| Non-GAAP operating income
(loss) |
622 |
|
|
(1,965 |
) |
| |
|
|
|
Investor Relations:Almira Puschir@travelzoo.com
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