Travelzoo Reports Third Quarter 2018 Results
NEW YORK, Oct. 24, 2018 (GLOBE NEWSWIRE) -- Travelzoo® (NASDAQ: TZOO):
- Revenue of $25.3 million, up 3% year-over-year in constant currencies
- Operating profit of $714,000
- Earnings per share (EPS) of $0.01
Travelzoo, a global publisher of exclusive offers and experiences for members, today announced financial results for the third quarter ended September 30, 2018, with revenue of $25.3 million and operating profit of $714,000. In nominal terms, revenue increased by 2% year-over-year. In constant currencies, revenue increased by 3% year-over-year. Net income was $118,000, with EPS from continuing operations of $0.01, up from $(0.05) in the prior-year period.
"Our attractive core business in North America and Europe generated an operating profit of $2.3 million, with an operating margin of 10%, of which $1.6 million was re-invested in our Asia Pacific business which grew at a rate of 12%. Our goal is to achieve profitability in Asia Pacific by 2020," said Holger Bartel, Global CEO of Travelzoo.
Asia PacificAsia Pacific business segment revenue increased 12% year-over-year to $2.0 million. In constant currencies, revenue increased 15% year-over-year. Operating loss for the third quarter was $1.6 million, compared to an operating loss of $1.7 million in the prior-year period.
EuropeEurope business segment revenue increased 5% year-over-year to $8.4 million. In constant currencies, revenue increased 6% year-over-year. Operating profit for the third quarter was $940,000, or 11% of revenue, compared to an operating profit of $309,000, or 4% of revenue in the prior-year period.
North AmericaNorth America business segment revenue for the third quarter was $14.9 million, consistent with the prior-year period. Operating profit for the third quarter was $1.4 million, or 9% of revenue, consistent with the prior-year period.
MembersAs of September 30, 2018, Travelzoo had a worldwide unduplicated number of members of 29.8 million. In Asia Pacific, unduplicated number of members was 3.6 million as of September 30, 2018, consistent with September 30, 2017. In Europe, unduplicated number of members was 8.8 million as of September 30, 2018, up 3% from September 30, 2017. In North America, unduplicated number of members was 17.5 million as of September 30, 2018, consistent with September 30, 2017.
Income TaxesIncome tax expense was $499,000, compared to a $680,000 income tax expense in the prior-year period.
Asset ManagementDuring the third quarter of 2018, Travelzoo used $744,000 of cash for operating activities. Accounts receivable increased by $861,000 over the prior-year period to $12.3 million. Accounts payable decreased by $2.2 million over the prior-year period to $13.8 million. Cash used in investing activities was $9,000, down from $180,000 primarily due to the $150,000 proceeds from sale of fixed assets. As of September 30, 2018, cash and cash equivalents were $15.8 million.
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;
- 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 the very best 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, | ||||||||||||||
| 2018 | 2017 | 2018 | 2017 | ||||||||||||
| Revenues | $ | 25,301 | $ | 24,687 | $ | 84,260 | $ | 79,527 | |||||||
| Cost of revenues | 2,987 | 3,018 | 9,388 | 9,447 | |||||||||||
| Gross profit | 22,314 | 21,669 | 74,872 | 70,080 | |||||||||||
| Operating expenses: | |||||||||||||||
| Sales and marketing | 13,375 | 13,973 | 44,545 | 43,542 | |||||||||||
| Product development | 2,297 | 2,315 | 7,194 | 7,016 | |||||||||||
| General and administrative | 5,928 | 5,363 | 17,684 | 16,056 | |||||||||||
| Total operating expenses | 21,600 | 21,651 | 69,423 | 66,614 | |||||||||||
| Operating income from continuing operations | 714 | 18 | 5,449 | 3,466 | |||||||||||
| Other income (loss), net | (91 | ) | 86 | 100 | 111 | ||||||||||
| Income from continuing operations before income taxes | 623 | 104 | 5,549 | 3,577 | |||||||||||
| Income tax expense | 505 | 680 | 2,452 | 2,660 | |||||||||||
| Income (loss) from continuing operations | $ | 118 | $ | (576 | ) | $ | 3,097 | $ | 917 | ||||||
| Income from discontinued operations including gain on sale of Fly.com domain name, net of income taxes | — | — | — | 1,938 | |||||||||||
| Net income (loss) | $ | 118 | $ | (576 | ) | $ | 3,097 | $ | 2,855 | ||||||
| Income (loss) per share—basic: | |||||||||||||||
| Continuing operations | $ | 0.01 | $ | (0.05 | ) | $ | 0.25 | $ | 0.07 | ||||||
| Discontinued operations | — | — | — | 0.15 | |||||||||||
| Net income (loss) per share—basic | $ | 0.01 | $ | (0.05 | ) | $ | 0.25 | $ | 0.22 | ||||||
| Income (loss) per share—diluted: | |||||||||||||||
| Continuing operations | $ | 0.01 | $ | (0.05 | ) | $ | 0.25 | $ | 0.07 | ||||||
| Discontinued operations | — | — | — | 0.15 | |||||||||||
| Net income (loss) per share—diluted | $ | 0.01 | $ | (0.05 | ) | $ | 0.25 | $ | 0.22 | ||||||
| Weighted average shares: | |||||||||||||||
| Basic | 12,314 | 12,628 | 12,412 | 13,023 | |||||||||||
| Diluted | 12,663 | 12,628 | 12,630 | 13,040 | |||||||||||
TravelzooCondensed Consolidated Balance Sheets(Unaudited)(In thousands)
| September 30, 2018 | December 31, 2017 | ||||||
| Assets | |||||||
| Current assets: | |||||||
| Cash and cash equivalents | $ | 15,779 | $ | 22,553 | |||
| Accounts receivable, net | 12,295 | 11,769 | |||||
| Income taxes receivable | 868 | 517 | |||||
| Deposits | 131 | 259 | |||||
| Prepaid expenses and other | 1,744 | 2,141 | |||||
| Total current assets | 30,817 | 37,239 | |||||
| Deposits and other | 622 | 548 | |||||
| Deferred tax assets | 1,423 | 1,516 | |||||
| Restricted cash | 1,453 | 1,448 | |||||
| Investment | 2,866 | — | |||||
| Property and equipment, net | 4,121 | 4,921 | |||||
| Total assets | $ | 41,302 | $ | 45,672 | |||
| Liabilities and Stockholders’ Equity | |||||||
| Current liabilities: | |||||||
| Accounts payable | $ | 13,795 | $ | 19,105 | |||
| Accrued expenses and other | 8,106 | 8,702 | |||||
| Deferred revenue | 888 | 825 | |||||
| Income tax payable | 843 | 961 | |||||
| Total current liabilities | 23,632 | 29,593 | |||||
| Long-term tax liabilities | 396 | 373 | |||||
| Long-term deferred rent and other | 2,275 | 2,628 | |||||
| Total liabilities | 26,303 | 32,594 | |||||
| Common stock | 122 | 125 | |||||
| Additional paid-in capital | — | — | |||||
| Accumulated other comprehensive loss | (3,977 | ) | (3,597 | ) | |||
| Retained earnings | 18,854 | 16,550 | |||||
| Total stockholders’ equity | 14,999 | 13,078 | |||||
| Total liabilities and stockholders’ equity | $ | 41,302 | $ | 45,672 | |||
TravelzooCondensed Consolidated Statements of Cash Flows(Unaudited)(In thousands)
| Three months ended | Nine months ended | ||||||||||||||
| September 30, | September 30, | ||||||||||||||
| 2018 | 2017 | 2018 | 2017 | ||||||||||||
| Cash flows from operating activities: | |||||||||||||||
| Net income (loss) | $ | 118 | $ | (576 | ) | $ | 3,097 | $ | 2,855 | ||||||
| Adjustments to reconcile net income to net cash provided by (used in) operating activities: | |||||||||||||||
| Depreciation and amortization | 400 | 504 | 1,227 | 1,605 | |||||||||||
| Discontinued operations gain on sale of Fly.com domain name | — | — | — | (2,890 | ) | ||||||||||
| Deferred income tax | 53 | 97 | (96 | ) | 28 | ||||||||||
| Stock-based compensation | 241 | 206 | 763 | 686 | |||||||||||
| Losses (gains) from sale and impairment of long-lived assets | 20 | — | 20 | — | |||||||||||
| Other | 205 | (7 | ) | 162 | (34 | ) | |||||||||
| Net foreign currency effects | 59 | (69 | ) | (77 | ) | (293 | ) | ||||||||
| Changes in operating assets and liabilities: | |||||||||||||||
| Accounts receivable | (189 | ) | 1,301 | (1,086 | ) | 3,388 | |||||||||
| Income tax receivable | (73 | ) | (903 | ) | (350 | ) | (868 | ) | |||||||
| Prepaid expenses and other | 2 | (199 | ) | 420 | (417 | ) | |||||||||
| Accounts payable | (400 | ) | 1,359 | (3,600 | ) | (4,695 | ) | ||||||||
| Accrued expenses and other | (973 | ) | (1,450 | ) | (248 | ) | (1,009 | ) | |||||||
| Income tax payable | (234 | ) | (70 | ) | (65 | ) | 109 | ||||||||
| Other non-current liabilities | 27 | (71 | ) | (131 | ) | (349 | ) | ||||||||
| Net cash provided by (used in) operating activities | (744 | ) | 122 | 36 | (1,884 | ) | |||||||||
| Cash flows from investing activities: | |||||||||||||||
| Proceeds from sale of Fly.com domain name | — | — | — | 2,890 | |||||||||||
| Proceeds from sale of property and equipment | 150 | — | 150 | ||||||||||||
| Investment in WeekenGO | — | — | (3,083 | ) | — | ||||||||||
| Purchases of property and equipment | (159 | ) | (180 | ) | (666 | ) | (486 | ) | |||||||
| Net cash provided by (used in) investing activities | (9 | ) | (180 | ) | (3,599 | ) | 2,404 | ||||||||
| Cash flows from financing activities: | |||||||||||||||
| Repurchase of common stock, net | (2,873 | ) | (2,732 | ) | (2,873 | ) | (9,556 | ) | |||||||
| Net cash used in financing activities | (2,873 | ) | (2,732 | ) | (2,873 | ) | (9,556 | ) | |||||||
| Effect of exchange rate on cash, cash equivalents and restricted cash | (9 | ) | 306 | (333 | ) | 1,060 | |||||||||
| Net decrease in cash, cash equivalents and restricted cash | (3,635 | ) | (2,484 | ) | (6,769 | ) | (7,976 | ) | |||||||
| Cash, cash equivalents and restricted cash at beginning of period | 20,867 | 22,744 | 24,001 | 28,236 | |||||||||||
| Cash, cash equivalents and restricted cash at end of period | $ | 17,232 | $ | 20,260 | $ | 17,232 | $ | 20,260 | |||||||
| Supplemental disclosure of cash flow information: | |||||||||||||||
| Cash paid for income taxes, net | $ | 767 | $ | 1,628 | $ | 2,963 | $ | 4,858 | |||||||
TravelzooSegment Information(Unaudited)(In thousands)
| Three months ended September 30, 2018 | Asia Pacific | Europe | North America | Consolidated | |||||||||||
| Revenue from unaffiliated customers | $ | 1,977 | $ | 8,396 | $ | 14,928 | $ | 25,301 | |||||||
| Intersegment revenue | 10 | (18 | ) | 8 | — | ||||||||||
| Total net revenues | 1,987 | 8,378 | 14,936 | 25,301 | |||||||||||
| Operating income (loss) | $ | (1,600 | ) | $ | 940 | $ | 1,374 | $ | 714 | ||||||
| Three months ended September 30, 2017 | Asia Pacific | Europe | North America | Consolidated | |||||||||||
| Revenue from unaffiliated customers | $ | 1,767 | $ | 8,008 | $ | 14,912 | $ | 24,687 | |||||||
| Intersegment revenue | 6 | (62 | ) | 56 | — | ||||||||||
| Total net revenues | 1,773 | 7,946 | 14,968 | 24,687 | |||||||||||
| Operating income (loss) | $ | (1,679 | ) | $ | 309 | $ | 1,388 | $ | 18 | ||||||
| Nine months ended September 30, 2018 | Asia Pacific | Europe | North America | Consolidated | |||||||||||
| Revenue from unaffiliated customers | $ | 6,092 | $ | 27,255 | $ | 50,913 | $ | 84,260 | |||||||
| Intersegment revenue | (19 | ) | (97 | ) | 116 | — | |||||||||
| Total net revenues | 6,073 | 27,158 | 51,029 | 84,260 | |||||||||||
| Operating income (loss) | $ | (4,812 | ) | $ | 3,347 | $ | 6,914 | $ | 5,449 | ||||||
| Nine months ended September 30, 2017 | Asia Pacific | Europe | North America | Consolidated | |||||||||||
| Revenue from unaffiliated customers | $ | 5,574 | $ | 25,231 | $ | 48,722 | $ | 79,527 | |||||||
| Intersegment revenue | (38 | ) | (317 | ) | 355 | — | |||||||||
| Total net revenues | 5,536 | 24,914 | 49,077 | 79,527 | |||||||||||
| Operating income (loss) | $ | (4,385 | ) | $ | 1,526 | $ | 6,325 | $ | 3,466 | ||||||
Investor Relations:Lijun Qi[email protected]
