EX-99.1 2 exh99-1.htm PRESS RELEASE

 

Exhibit 99.1

 

Travelzoo Inc.
590 Madison Avenue

21st Floor
New York, NY 10022


Media Contact:

Kelly Ford

+1 (212) 521-4216
kford@travelzoo-inc.com

 

 

 

FOR IMMEDIATE RELEASE

 

Travelzoo Reports Third Quarter 2005 Financial Results

 

NEW YORK, October 18, 2005 -- Travelzoo Inc. (NASDAQ: TZOO), the Internet’s largest publisher of travel offers available directly from hundreds of companies, today reported financial results for the third quarter ended September 30, 2005. Diluted earnings per share (EPS) were $0.13, which includes a loss of $363,000 from Travelzoo’s new U.K. business.

 

Third Quarter 2005 Financial Highlights:

 

 

•

Revenues of $13.4 million, up 41% year-over-year

 

•

Income from operations of $4.2 million, up 27% year-over-year

 

•

Operating margin of 31.5%

 

•

Net income of $2.3 million

 

“Travelzoo continued to see growth in the third quarter as a result of our large audience of 8.9 million subscribers in the U.S., and our new U.K. business,” said Ralph Bartel, chairman and chief executive officer, Travelzoo. “In Q3, we decided to invest a record $5.7 million in marketing the Travelzoo brand. It’s our strong brand combined with a robust business model that we believe will enable us to take advantage of future growth opportunities.”

 

Travelzoo reported revenues of $13.4 million for the third quarter ended September 30, 2005, an increase of 41% over revenues of $9.5 million for the prior-year period, and a quarterly sequential increase of 9% over revenues of $12.3 million for the second quarter ended June 30, 2005. All revenues were generated from the sale of online advertising to travel companies.

 

Income from operations for the third quarter ended September 30, 2005 was approximately $4.2 million or 31.5% of revenues, compared to approximately $3.3 million, or 35.0% of revenues, for the prior-year period.

 

Travelzoo reported a net income of approximately $2.3 million for the third quarter of 2005, up from approximately $2.0 million for the prior-year period.

 

Cash flow from operations in the third of quarter 2005 was $1.0 million.

 

 

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Reported net income for the third quarter of 2005 includes a loss of $363,000 from Travelzoo’s new U.K. business. The loss was treated as having no recognizable tax benefit. Travelzoo UK began operations in May 2005.

 

Travelzoo’s new U.K. business generated revenues of $368,000 in the third quarter 2005, up from $9,000 in the second quarter 2005.

 

Travelzoo will host a conference call to discuss third quarter results at 11:00 a.m. Eastern Time today. A live Web cast can be accessed through the company’s investor relations Web site at www.travelzoo.com/ir.

 

About Travelzoo

Travelzoo Inc. (NASDAQ: TZOO) is the Internet’s largest publisher of travel offers available directly from hundreds of companies. Travelzoo’s media properties include the Travelzoo® Web site (www.travelzoo.com), the Top 20® e-mail newsletter, the Newsflash™ e-mail alert service and SuperSearch™, a travel search engine. With 9.1 million subscribers worldwide, Travelzoo lists offers from more than 500 advertisers. Travelzoo independently reviews all travel deals listed in its publications to ensure that offers are legitimate and easy-to-book.

 

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 Inc. All other company and product names mentioned are trademarks of their respective owners.

 

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Travelzoo Inc.
Condensed Consolidated Statements of Operations
(Unaudited)
(In thousands, except per share amounts)

 

 

Three months ended
September 30,

 

Nine months ended
September 30,

 

 

2005

 

2004

 

2005

 

2004

 

 

 

 

 

 

 

 

 

Revenues

 

$13,384 

 

$ 9,507

 

$36,871 

 

$23,171

Cost of revenues

 

225 

 

183

 

629 

 

529

 

 

 

 

 

 

 

 

 

Gross profit

 

13,159 

 

9,324

 

36,242 

 

22,642

Operating expenses:

 

 

 

 

 

 

 

 

Sales and marketing

 

7,101 

 

4,339

 

18,283 

 

11,463

General and administrative

 

1,838 

 

1,657

 

6,573 

 

3,873

 

 

 

 

 

 

 

 

 

Total operating expenses

 

8,939 

 

5,996

 

24,856 

 

15,336

 

 

 

 

 

 

 

 

 

Income from operations

 

4,220 

 

3,328

 

11,386 

 

7,306

Other income and expense:

 

 

 

 

 

 

 

 

Interest income

 

279 

 

9

 

656 

 

21

Gain/loss on foreign currency

 

(4)

 

-

 

(8)

 

-

Income before income taxes

 

4,494 

 

3,337

 

12,034 

 

7,327

Income taxes

 

2,174 

 

1,371

 

5,703 

 

3,018

Net income

 

$ 2,320 

 

$ 1,966

 

$ 6,331 

 

$ 4,309

 

 

 

 

 

 

 

 

 

Basic net income per share

 

$ 0.14 

 

$ 0.13

 

$ 0.39 

 

$ 0.25

Diluted net income per share

 

0.13 

 

0.11

 

0.35 

 

0.23

 

 

 

 

 

 

 

 

 

Shares used in computing

basic net income per share

 

 

16,250 

 

 

15,488

 

 

16,249 

 

 

17,111

Shares used in computing

diluted net income per share

 


17,695 

 


17,293

 


17,897 

 


18,562

 

 

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Travelzoo Inc.

Condensed Consolidated Balance Sheets

(Unaudited)

(In thousands)

 

 

September 30,

 

December 31,

 

2005

 

2004

ASSETS

 

 

 

Cash and cash equivalents

$ 22,735 

 

$ 26,435

Short term investments

19,918 

 

10,032

Accounts receivable, net

8,330 

 

5,327

Deposits

123 

 

163

Other current assets

376 

 

674

Deferred income taxes

371 

 

391

Total current assets

51,853 

 

43,022

 

 

 

 

Deposits, less current portion

91 

 

-

Deferred income taxes, less current portion

43 

 

43

Property and equipment, net

148 

 

108

Intangible assets, net

34 

 

84

Total Assets

$ 52,169 

 

$ 43,257

 

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

Accounts payable

701 

 

440

Accrued expenses

3,649 

 

2,464

Deferred revenue

312 

 

91

Income tax payable

637 

 

-

Total Liabilities

5,299 

 

2,995

Common stock

163 

 

162

Additional paid-in capital

30,606 

 

30,300

Accumulated other comprehensive income

(30)

 

-

Retained earnings

16,131 

 

9,800

Total Stockholders’ Equity

46,870 

 

40,262

Total Liabilities and

 

 

 

Stockholders’ Equity

$ 52,169 

 

$ 43,257

 

 

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Travelzoo Inc.

Condensed Consolidated Statements of Cash Flows

(Unaudited)

(In thousands)

 

 

 

Three months ended September 30,

 

Nine months ended

September 30,

 

 

2005

 

2005

CASH FLOWS FROM OPERATING ACTIVITIES:

 

 

 

 

Net income

 

$ 2,320 

 

$ 6,331 

Adjustments to reconcile net income to net

cash provided by operating activities:

 

 

 

 

Depreciation and amortization

 

42 

 

126 

Deferred income taxes

 

-  

 

20 

Provision for losses on accounts receivable

 

(8)

 

39 

Tax benefit of stock option exercises

 

-  

 

396 

Accrued income on short-term investments

 

(145)

 

(268)

Changes in operating assets and liabilities:

 

 

 

 

Accounts receivable

 

(1,214)

 

(3,050)

Deposits

 

(7)

 

(52)

Prepaid expenses and other current assets

 

247 

 

296 

Accounts payable

 

(722)

 

266 

Accrued expenses

 

493 

 

1,188 

Deferred revenue

 

25 

 

221 

Income tax payable

 

(1)

 

637 

Net cash provided by operating activities

 

1,030 

 

6,150 

 

 

 

 

 

CASH FLOWS FROM INVESTING ACTIVITIES:

 

 

 

 

Purchases of property and equipment

 

(22)

 

(117)

Purchase of short-term investments

 

(9,918)

 

(29,691)

Sale of short-term investments

 

9,985 

 

20,073 

Net cash used in investing activities

 

45 

 

(9,735)

 

 

 

 

 

CASH FLOWS FROM FINANCING ACTIVITIES:

 

 

 

 

Proceeds from issuance of common stock, net of

related costs

 

 

-  

 

(124)

Proceeds from stock option exercises

 

-  

 

35 

Effective of exchange rate on cash

 

(26)

 

(26)

Recovery of profit from purchase and sale of

stock by employees

 

 

-  

 

 

-  

Net cash provided by financing activities

 

(26)

 

(115)

Net increase in cash and cash equivalents

 

1,050 

 

(3,700)

Cash and cash equivalents at beginning of period

 

21,685 

 

26,435 

 

 

 

 

 

Cash and cash equivalents at end of period

 

22,735 

 

22,735 

Supplemental disclosure of cash flow information:

 

 

 

 

Cash paid for income taxes net of refunds received

 

2,175 

 

4,476 

 

 

 

 

 

 

 

 

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