EX-99 2 ex99-1.htm EXHIBIT 99.1 - PRESS RELEASE DATED FEBRUARY 3, 2010 ex99-1.htm - Generated by SEC Publisher for SEC Filing

 

 

travelzoo

Travelzoo

590 Madison Avenue

37th Floor

New York, NY 10022

 

Media Contact:Mandy Gresh

(212) 484-4925
mgresh@travelzoo.com

 

 

 

FOR IMMEDIATE RELEASE

 

 

Travelzoo Reports Fourth Quarter 2009 Results

 

 

NEW YORK, February 3, 2010 -- Travelzoo Inc. (NASDAQ: TZOO):

 

·         Revenue of $23.8 million, up 21% year-over-year

·         Operating profit from continuing operations of $3.5 million, up 47% year-over-year

·         Net income per share from continuing operations of $0.09, compared to $0.11 in the prior-year period

·         Earnings per share of $0.53, compared to loss per share of ($0.01) in the prior-year period

·         Income tax rate of 57%

 

Travelzoo Inc., a global Internet media company, today announced financial results for the fourth quarter ended December 31, 2009, with revenue of $23.8 million, an increase of 21% year-over-year.  Operating profit from continuing operations was $3.5 million, up 47% year-over-year.  Net income from continuing operations was $1.5 million, with diluted net income per share from continuing operations of $0.09, compared to diluted net income per share from continuing operations of $0.11 in the prior-year period.  Revenue, operating profit and income from continuing operations for all periods exclude the results of Travelzoo’s Asia Pacific business segment which are reported as discontinued operations.  The sale of Travelzoo’s Asia Pacific business segment was completed during the fourth quarter.  Including gains from the sale, tax benefits from the sale, and operating losses during the fourth quarter incurred prior to the sale, diluted earnings per share (EPS) was $0.53, compared to diluted loss per share of ($0.01) in the prior-year period.

 

 

“We ended the year with another quarter of strong revenue growth of 21% and operating profit growth of 47% year-over-year.  Our continuing operations, North America and Europe combined, achieved record revenues,” said Holger Bartel, CEO of Travelzoo.  “Even though we continue to invest aggressively in growing Europe and our Fly.com business, our operating margin improved to 15%, up from 12% a year ago.”

 

North America

North America business segment revenue grew 12% year-over-year to $19.3 million.  Operating profit was $5.3 million, or 28% of revenue, up from an operating profit of $3.7 million, or 21% of revenue, in the prior-year period.

 

Europe

            Europe business segment revenue grew 91% year-over-year to $4.6 million.  In local currency terms, revenue grew 84% year-over-year.  Operating loss was $1.8 million, compared to an operating loss of $1.3 million in the prior-year period.  Travelzoo began operations in the U.K. in May 2005, in Germany in September 2006, and in France in March 2007.  In May 2008, Travelzoo began publishing its weekly Top 20® list in Spain, after having operated a sales office in Barcelona since November 2006.

 

Subscribers

            Travelzoo had a total unduplicated number of newsletter subscribers in North America and Europe of 16.8 million as of December 31, 2009, up 25% from December 31, 2008, and up 3% from September 30, 2009.  In North America, total unduplicated number of subscribers was 13.2 million as of December 31, 2009, up 17% from December 31, 2008 and up 2% from September 30, 2009. In Europe, total unduplicated number of subscribers was 3.6 million as of December 31, 2009, up 62% from December 31, 2008 and up 10% from September 30, 2009.

 

Income Taxes

            Income tax expense was $2.0 million, compared to $1.1 million in the prior-year period for continuing operations.  The effective income tax rate was 57%, up from 39% in the prior-year period.  Operating losses from our Europe business segment were treated as having no recognizable tax benefit.

 

 

Asset Management

            During the fourth quarter, Travelzoo generated $2.4 million of cash from operating activities.  Accounts receivable decreased by $493,000 quarter-over-quarter and decreased by $118,000 over the prior-year period to $11.3 million.  Accounts payable decreased by $506,000 quarter-over-quarter and increased by $468,000 over the prior-year period to $6.9 million.  Capital expenditures were $384,000, down from $405,000 in the prior quarter and down from $916,000 in the prior-year period.  Travelzoo exited the fourth quarter with $19.8 million in cash and cash equivalents, up from $15.7 million on September 30, 2009.

 

Conference Call

            Travelzoo will host a conference call to discuss fourth quarter results at 11:00 a.m. ET today.  Please visit http://www.travelzoo.com/earnings to

 

·         download the management presentation (PDF format) to be discussed in the conference call;

·         access the Web cast.

 

About Travelzoo

Travelzoo is a global Internet media company.  With more than 18 million subscribers in North America, Europe, and Asia Pacific and 20 offices worldwide, Travelzoo® publishes deals from more than 2,000 travel and entertainment companies.  Travelzoo’s deal experts review offers to find the best deals and confirm their true value.  In Asia Pacific, Travelzoo is independently owned and operated by Travelzoo (Asia) Ltd. and Travelzoo Japan K.K. under a license agreement with Travelzoo Inc.

 

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.

 

 

Travelzoo Inc.

Condensed Consolidated Statements of Operations

(Unaudited)

(In thousands, except per share amounts)

 

 

 

 

Three months ended

Twelve months ended

 

December 31,

December 31,

 

   2009

   2008

   2009

   2008

 

 --------

 --------

 --------

 --------

Revenues

 $ 23,779

 $ 19,610

 $ 93,973

 $ 80,817

Cost of revenues

    1,488

      909

    5,628

    2,842

 

 --------

 --------

 --------

 --------

     Gross profit

   22,291

   18,701

   88,345

   77,975

Operating expenses:

 

 

 

 

Sales and marketing

   12,258

   10,601

   49,707

   43,297

General and administrative

    6,509

    5,704

   24,930

   21,366

 

 --------

 --------

 --------

 --------

     Total operating expenses

   18,767

   16,305

   74,637

   64,663

 

 --------

 --------

 --------

 --------

     Operating income from

      continuing operations

   

    3,524

   

    2,396

   

   13,708

  

   13,312

Other income and expense:

 

 

 

 

Interest income and other income

       21

       19

       61

      284

Gain (loss) on foreign currency

      (94)

      424

      (78)

      494

 

 --------

 --------

 --------

 --------

Income from continuing operations

 before income taxes

   

    3,451

   

    2,839

  

   13,691

  

   14,090

Income taxes

    1,981

    1,115

    7,273

    8,177

 

 --------

 --------

 --------

 --------

Income from continuing operations

    1,470

    1,724

    6,418

    5,913

 

 

 

 

 

Loss from discontinued operations

     (467)

   (1,853)

   (5,611)

  (10,029)

Gain on sale of Asia Pacific business

 segment, including tax benefit

     

    7,763

   

        -

 

    7,811

     

        -

 

 --------

 --------

 --------

 --------

Gain (loss) from discontinued

 Operations

 

    7,296

 

   (1,853)

 

    2,200

 

  (10,029)

 

 --------

 --------

 --------

 --------

Net income (loss)

 $  8,766

 $   (129)

 $  8,618

 $ (4,116)

 

 ========

 ========

 ========

 ========

 

 

 

 

 

Basic net income (loss) per

 share from:

 

 

 

 

 Continuing operations

 $   0.09

 $   0.12

 $   0.39

 $   0.41

 Discontinued operations

 $   0.44

 $  (0.13)

 $   0.13

 $  (0.70)

 Net income (loss)

 $   0.53

 $  (0.01)

 $   0.53

 $  (0.29)

Diluted net income (loss) per

 share from:

 

 

 

 

 Continuing operations

 $   0.09

 $   0.11

 $   0.39

 $   0.37

 Discontinued operations

 $   0.44

 $  (0.12)

 $   0.13

 $  (0.62)

 Net income (loss)

 $   0.53

 $  (0.01)

 $   0.52

 $  (0.25)

Shares used in computing basic

 net income (loss) per share

 

   16,444

 

   14,285

 

   16,408

 

   14,273

Shares used in computing diluted

 net income (loss) per share


   16,453


   16,098


   16,416


   16,190

 

Travelzoo Inc.

Condensed Consolidated Balance Sheets

(Unaudited)

(In thousands)

 

 

December 31,

 

December 31,

 

2009

 

2008

 

   --------

 

   --------

ASSETS

 

 

 

Cash and cash equivalents

   $ 19,776

 

   $ 14,179

Accounts receivable, net

     11,279

 

     11,397

Other receivables

      1,238

 

         -

Deposits

        139

 

        185

Prepaid expenses and other current assets

      7,070

 

      2,356

Deferred tax assets

        966

 

      1,089

Assets held for sale

         -

 

        831

 

   --------

 

   --------

     Total current assets

     40,468

 

     30,037

 

   --------

 

   --------

Deposits, less current portion

        381

 

        292

Deferred tax assets, less current portion

         52

 

          -

Restricted cash

        875

 

        875

Property and equipment, net

      4,089

 

      4,100

Intangible assets, net

      1,411

 

         18

 

   --------

 

   --------

          Total assets

   $ 47,276

 

   $ 35,322

 

   ========

 

   ========

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

Accounts payable

      6,902

 

      6,434

Accrued expenses

      4,278

 

      3,913

Deferred revenue

        828

 

        666

Deferred rent

        134

 

        101

Liabilities related to assets held for sale

         -

 

      1,281

 

   --------

 

   --------

     Total current liabilities

     12,142

 

     12,395

 

   --------

 

   --------

Deferred tax liabilities

        533

 

        465

Long-term tax liabilities

      2,139

 

        900

Deferred rent, less current portion

        615

 

        799

 

 

 

 

Common stock

        164

 

        143

Additional paid-in capital

      2,415

 

        185

Accumulated other comprehensive loss

     (1,173)

 

     (1,388)

Retained earnings

     30,441

 

     21,823

 

   --------

 

   --------

     Total stockholders' equity

     31,847

 

     20,763

 

   --------

 

   --------

          Total liabilities and

 

 

 

           stockholders' equity

   $ 47,276

 

   $ 35,322

 

   ========

 

   ========

Travelzoo Inc.

Condensed Consolidated Statements of Cash Flows

(Unaudited)

(In thousands)

 

 

Three months ended

Twelve months ended

 

December 31,

December 31,

 

2009

2008

2009

2008

 

---------

--------

---------

--------

CASH FLOWS FROM OPERATING ACTIVITIES:

 

 

 

 

 Net income (loss)

$  8,766

$  (129)

$  8,618

$(4,116)

 Adjustments to reconcile net income

  (loss) to net cash provided by (used in)

  operating activities:

 

 

 

 

  Depreciation and amortization

     535

    258

   1,992

    667

  Deferred income taxes

     139

    769

     139

    769

  Stock-based compensation

      94

      -

      94

      -

  Provision for losses on accounts

   receivable

 

     (44)

    

     73

 

     258

 

    316

  Tax benefit from exercise of stock

   options 

 

       -


     -


       -

 

   (110)

  Gain on sale of Asia Pacific business

   segment

 

  (3,323)

    

      -

 

  (3,323)

   

      -

  Net foreign currency effects

      94

   (432)

      78

   (500)

  Changes in operating assets and

   liabilities:

 

 

 

 

   Accounts receivable

     569

 (1,869)

    (197)

 (2,443)

   Deposits

      60

     24

     (15)

     25

   Other receivables

     (92)

      -         

     (92)

      -

   Prepaid expenses and other current

    assets

 

  (5,040)

 

   (140)

 

  (4,617)

 

   (650)

   Accounts payable

    (723)

    425

     877

  1,054

   Accrued expenses

     179

    514

      77

    877

   Deferred revenue

       6

     64

     160

    314

   Deferred rent

     (37)

    (18)

    (163)

    828

   Other non-current liabilities

   1,222

     20

   1,239

   (356)

 

---------

--------

---------

--------

    Net cash provided by (used in)

     operating activities

  

   2,405

 

   (441)

  

   5,125

 

 (3,325)

 

---------

--------

---------

--------

CASH FLOWS FROM INVESTING ACTIVITIES:

 

 

 

 

 Purchases of property and equipment

    (384)

   (916)

  (1,992)

 (3,867)

 Purchase of restricted cash

 Purchase of intangible asset

       -

       -

      -

      -

       -

  (1,760)

   (875)

      -

 Proceeds from sale of Asia Pacific

  business segment, net of cash provided

  

   2,061

 

      -

 

   2,061

   

      -

 

---------

--------

---------

--------

    Net cash provided by (used in)

     investing activities

 

   1,677

  

   (916)

 

  (1,691)

 

 (4,742)

 

---------

--------

---------

--------

CASH FLOWS FROM FINANCING ACTIVITIES:

 

 

 

 

 Proceeds from exercise of stock options

       -

      -

   2,158

     75

 Tax benefit from exercise of stock options

       -

      -

       -

    110

 

---------

--------

---------

--------

    Net cash provided by financing

     activities

     

       -

 

      -

      

   2,158

     

    185

 

---------

--------

---------

--------

Effect of exchange rate on cash and cash

 equivalents

   

       -

    

   (300)

   

       5

    

   (580)

 

---------

--------

---------

--------

Net increase (decrease) in cash and cash

 equivalents

   

   4,082

 

 (1,657)

  

   5,597

 

 (8,462)

Cash and cash equivalents at beginning of

 period

 

  15,694

 

 15,836

 

  14,179

 

 22,641

 

---------

--------

---------

--------

Cash and cash equivalents at end of period

  19,776

 14,179

  19,776

 14,179

 

=========

========

=========

========

Supplemental disclosure of cash flow

 information:

 

 

 

 

  Cash paid for income taxes net of refunds

   received

 

$  1,029

 

$   850

 

$  5,760

 

$ 8,193

 

---------

--------

---------

--------

 

Travelzoo Inc.

Segment Information

(Unaudited)

(In thousands)

 

 

 

 

 

 

Three months ended

 December 31, 2009

North

America

 

  Europe

 

Elimination

 

Consolidated

 

 --------

 --------

-----------

------------

Revenue from

 unaffiliated customers

 

 $ 19,233

 

 $ 4,546

 

 $       - 

 

   $ 23,779

Intersegment revenue

       51

      43

       (94)

          -

 

 --------

 --------

-----------

 -----------

Total net revenues

   19,284

   4,589

       (94)

     23,779

 

 --------

 --------

-----------

 -----------

Operating income (loss)

 $  5,329

 $(1,802)  

 $      (3)

   $  3,524

 

 --------

 --------

-----------

 -----------

 

 

 

 

 

Three months ended

 December 31, 2008

North

America

  

   Europe

  Elimination

 

Consolidated

 

 --------

 ---------

-----------

------------

Revenue from

 unaffiliated customers

 

 $ 17,220

 

 $  2,390

 

 $       - 

 

 $   19,610

Intersegment revenue

       16

       12

       (28)

          -

 

 --------

 ---------

-----------

 -----------

Total net revenues

   17,236

    2,402

       (28)

     19,610

 

 --------

 ---------

-----------

 -----------

Operating income (loss)

 $  3,702

 $ (1,307)  

 $       1

 $    2,396

 

 --------

 ---------

-----------

 -----------

 

 

 

 

 

Twelve months ended

 December 31, 2009

North

America

 

   Europe

 

Elimination

 

Consolidated

 

 

 --------

 ---------

-----------

------------

 

Revenue from

 unaffiliated customers

 

 $ 77,707

 

 $ 16,266

 

 $       - 

 

 $   93,973

 

Intersegment revenue

      260

       73

      (333)

          -

 

 

 --------

 ---------

-----------

 -----------

 

Total net revenues

   77,967

   16,339

      (333)

     93,973

 

 

 --------

 ---------

-----------

 -----------

 

Operating income (loss)

 $ 19,227

 $ (5,463)  

 $     (56)

 $   13,708

 

 

 --------

 ---------

-----------

 -----------

 

 

 

 

 

 

 

Twelve months ended

 December 31, 2008

North

America

 

   Europe

 

Elimination

 

Consolidated

 

 

 --------

 ---------

-----------

------------

 

Revenue from

 unaffiliated customers

 

 $ 71,245

 

 $  9,572

 

 $       - 

 

 $   80,817

 

Intersegment revenue

       94

       51

      (145)

          -

 

 

 --------

 ---------

-----------

 -----------

 

Total net revenues

   71,339

    9,623

      (145)

     80,817

 

 

 --------

 ---------

-----------

 -----------

 

Operating income (loss)

 $ 21,118

 $ (7,809) 

 $       3

 $   13,312

 

 

 --------

 ---------

-----------

 -----------