Delaware | 000-50171 | 36-4415727 | |
(State or Other Jurisdiction of Incorporation) | (Commission File Number) | (I.R.S. Employer Identification No.) | |
590 Madison Avenue, 37th Floor New York, New York | 10022 | ||
(Address of principal executive offices) | (Zip Code) | ||
Registrant’s telephone number, including area code (212) 484-4900 | |||
(Former Name or Former Address, if Changed Since Last Report) |
TRAVELZOO INC. | |||
Date: | October 17, 2013 | By: | /s/ Glen Ceremony |
Glen Ceremony Chief Financial Officer |
Exhibit | Description |
99.1 | Press Release, dated October 17, 2013. |
Travelzoo Inc. 590 Madison Avenue 37th Floor New York, NY 10022 Media Contact: Christie McConnell Travelzoo, North America +1 (212) 484-4912 cmcconnell@travelzoo.com |
• | Revenue of $37.3 million, up 5% year-over-year |
• | Non-GAAP net income of $3.0 million |
• | Non-GAAP earnings per share of $0.19, compared to $0.21 in the prior-year period |
• | GAAP net loss of $19.0 million; GAAP loss per share of $1.24 |
• | Cash flow from operations of $2.2 million |
• | download the management presentation (PDF format) to be discussed in the conference call; |
• | access the webcast. |
Three months ended | Nine months ended | ||||||||||||||
September 30, | September 30, | ||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||
Revenues | $ | 37,256 | $ | 35,447 | $ | 120,759 | $ | 114,140 | |||||||
Cost of revenues | 4,322 | 3,989 | 12,733 | 11,672 | |||||||||||
Gross profit | 32,934 | 31,458 | 108,026 | 102,468 | |||||||||||
Operating expenses: | |||||||||||||||
Sales and marketing | 18,449 | 17,427 | 57,563 | 49,753 | |||||||||||
General and administrative | 10,510 | 9,836 | 30,659 | 28,583 | |||||||||||
Unexchanged promotional merger shares | 22,000 | — | 22,000 | 3,000 | |||||||||||
Total operating expenses | 50,959 | 27,263 | 110,222 | 81,336 | |||||||||||
Income (loss) from operations | (18,025 | ) | 4,195 | (2,196 | ) | 21,132 | |||||||||
Other income | 224 | 135 | 369 | 218 | |||||||||||
Income (loss) before income taxes | (17,801 | ) | 4,330 | (1,827 | ) | 21,350 | |||||||||
Income taxes | 1,235 | 896 | 6,414 | 6,908 | |||||||||||
Net income (loss) | $ | (19,036 | ) | $ | 3,434 | $ | (8,241 | ) | $ | 14,442 | |||||
Net income (loss) per share: | |||||||||||||||
Basic | $ | (1.24 | ) | $ | 0.22 | $ | (0.54 | ) | $ | 0.91 | |||||
Diluted | $ | (1.24 | ) | $ | 0.21 | $ | (0.54 | ) | $ | 0.90 | |||||
Weighted Average Shares: | |||||||||||||||
Basic | 15,362 | 15,884 | 15,362 | 15,935 | |||||||||||
Diluted | 15,362 | 15,992 | 15,362 | 16,041 |
September 30, 2013 | December 31, 2012 | ||||||
Assets | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 77,900 | $ | 61,169 | |||
Accounts receivable, net | 14,818 | 13,626 | |||||
Income taxes receivable | 4,504 | 6,682 | |||||
Deposits | 501 | 389 | |||||
Prepaid expenses and other current assets | 3,483 | 2,260 | |||||
Deferred tax assets | 2,007 | 2,194 | |||||
Total current assets | 103,213 | 86,320 | |||||
Deposits, less current portion | 979 | 1,107 | |||||
Deferred tax assets, less current portion | 1,229 | 1,710 | |||||
Restricted cash | 1,618 | 3,396 | |||||
Property and equipment, net | 6,376 | 4,314 | |||||
Intangible assets, net | 540 | 986 | |||||
Total assets | $ | 113,955 | $ | 97,833 | |||
Liabilities and Stockholders’ Equity | |||||||
Current liabilities: | |||||||
Accounts payable | $ | 27,676 | $ | 28,695 | |||
Accrued unexchanged promotional merger shares | 25,000 | 3,000 | |||||
Accrued expenses | 10,043 | 8,993 | |||||
Deferred revenue | 1,740 | 2,698 | |||||
Deferred rent | 306 | 280 | |||||
Income tax payable | 1,353 | — | |||||
Total current liabilities | 66,118 | 43,666 | |||||
Long-term tax liabilities | 10,388 | 10,030 | |||||
Deferred rent, less current portion | 1,423 | 798 | |||||
Total liabilities | 77,929 | 54,494 | |||||
Common stock | 163 | 163 | |||||
Treasury stock | (7,898 | ) | (7,898 | ) | |||
Additional paid-in capital | 9,851 | 8,863 | |||||
Accumulated other comprehensive loss | (797 | ) | (737 | ) | |||
Retained earnings | 34,707 | 42,948 | |||||
Total stockholders’ equity | 36,026 | 43,339 | |||||
Total liabilities and stockholders’ equity | $ | 113,955 | $ | 97,833 |
Three months ended | Nine months ended | ||||||||||||||
September 30, | September 30, | ||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||
Cash flows from operating activities: | |||||||||||||||
Net income (loss) | $ | (19,036 | ) | $ | 3,434 | $ | (8,241 | ) | $ | 14,442 | |||||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||||||
Depreciation and amortization | 709 | 630 | 2,185 | 1,856 | |||||||||||
Deferred income taxes | 241 | (3 | ) | 641 | (3 | ) | |||||||||
Stock-based compensation | 375 | 307 | 989 | 900 | |||||||||||
Provision for losses on accounts receivable | (94 | ) | (84 | ) | (44 | ) | 116 | ||||||||
Net foreign currency effects | (74 | ) | (46 | ) | 38 | (6 | ) | ||||||||
Changes in operating assets and liabilities: | |||||||||||||||
Accounts receivable | 1,021 | 53 | (1,106 | ) | (2,069 | ) | |||||||||
Deposits | (3 | ) | (17 | ) | 17 | (382 | ) | ||||||||
Income tax receivable | (1,424 | ) | 689 | 2,169 | 1,819 | ||||||||||
Prepaid expenses and other current assets | 59 | (161 | ) | (975 | ) | (241 | ) | ||||||||
Accounts payable | (1,886 | ) | 680 | (1,041 | ) | 1,189 | |||||||||
Accrued unexchanged promotional shares | 22,000 | — | 22,000 | 3,000 | |||||||||||
Accrued expenses | (182 | ) | 897 | 1,039 | 3,198 | ||||||||||
Deferred revenue | (109 | ) | 383 | (956 | ) | 323 | |||||||||
Deferred rent | 188 | 55 | 299 | 21 | |||||||||||
Income tax payable | 254 | (1 | ) | 1,292 | (284 | ) | |||||||||
Other non-current liabilities | 149 | 34 | 359 | (190 | ) | ||||||||||
Net cash provided by operating activities | 2,188 | 6,850 | 18,665 | 23,689 | |||||||||||
Cash flows from investing activities: | |||||||||||||||
Purchases of restricted cash | 2,048 | — | 1,786 | — | |||||||||||
Purchases of property and equipment | (1,487 | ) | (774 | ) | (3,596 | ) | (2,046 | ) | |||||||
Net cash provided by (used in) investing activities | 561 | (774 | ) | (1,810 | ) | (2,046 | ) | ||||||||
Cash flows from financing activities: | |||||||||||||||
Cash used in purchase of common stock | — | (3,611 | ) | — | (3,611 | ) | |||||||||
Net cash used in financing activities | — | (3,611 | ) | — | (3,611 | ) | |||||||||
Effect of exchange rate on cash and cash equivalents | 1,770 | 1,008 | (124 | ) | 858 | ||||||||||
Net increase in cash and cash equivalents | 4,519 | 3,473 | 16,731 | 18,890 | |||||||||||
Cash and cash equivalents at beginning of period | 73,381 | 54,161 | 61,169 | 38,744 | |||||||||||
Cash and cash equivalents at end of period | $ | 77,900 | $ | 57,634 | $ | 77,900 | $ | 57,634 | |||||||
Supplemental disclosure of cash flow information: | |||||||||||||||
Cash paid for income taxes, net | $ | 1,897 | $ | 177 | $ | 1,917 | $ | 5,568 |
Three months ended September 30, 2013 | North America | Europe | Elimination and Other (a) | Consolidated | |||||||||||
Revenue from unaffiliated customers | $ | 26,209 | $ | 11,047 | $ | — | $ | 37,256 | |||||||
Intersegment revenue | 361 | 110 | (471 | ) | — | ||||||||||
Total net revenues | 26,570 | 11,157 | (471 | ) | 37,256 | ||||||||||
Operating income | $ | 2,506 | $ | 1,469 | $ | (22,000 | ) | $ | (18,025 | ) | |||||
Three months ended September 30, 2012 | North America | Europe | Elimination | Consolidated | |||||||||||
Revenue from unaffiliated customers | $ | 25,147 | $ | 10,300 | $ | — | $ | 35,447 | |||||||
Intersegment revenue | 211 | 10 | (221 | ) | — | ||||||||||
Total net revenues | 25,358 | 10,310 | (221 | ) | 35,447 | ||||||||||
Operating income | $ | 3,121 | $ | 1,074 | $ | — | $ | 4,195 | |||||||
Nine months ended September 30, 2013 | North America | Europe | Elimination and Other (b) | Consolidated | |||||||||||
Revenue from unaffiliated customers | $ | 86,368 | $ | 34,391 | $ | — | $ | 120,759 | |||||||
Intersegment revenue | 757 | 440 | (1,197 | ) | — | ||||||||||
Total net revenues | 87,125 | 34,831 | (1,197 | ) | 120,759 | ||||||||||
Operating income | $ | 13,888 | $ | 5,916 | $ | (22,000 | ) | $ | (2,196 | ) | |||||
Nine months ended September 30, 2012 | North America | Europe | Elimination and Other (b) | Consolidated | |||||||||||
Revenue from unaffiliated customers | $ | 82,415 | $ | 31,725 | $ | — | $ | 114,140 | |||||||
Intersegment revenue | 496 | 41 | (537 | ) | — | ||||||||||
Total net revenues | 82,911 | 31,766 | (537 | ) | 114,140 | ||||||||||
Operating income | $ | 18,094 | $ | 6,038 | $ | (3,000 | ) | $ | 21,132 |
(a) | Includes a charge of $22.0 million for the three months ended September 30, 2013 related to settlement agreements in connection with a dispute over unclaimed property audits. |
(b) | Includes a charge of $22.0 million and $3.0 million for the nine months ended September 30, 2013 and 2012, respectively, related to settlement agreements in connection with a dispute over unclaimed property audits. |
Travelzoo Inc. | |||||||||||||||
Reconciliation of GAAP to Non-GAAP Measures | |||||||||||||||
(Unaudited) | |||||||||||||||
(In thousands, except per share amounts) | |||||||||||||||
Three months ended | Nine months ended | ||||||||||||||
September 30, | September 30, | ||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||
GAAP operating expense | $ | 50,959 | $ | 27,263 | $ | 110,222 | $ | 81,336 | |||||||
Unexchanged merger shares (a) (b) | 22,000 | — | 22,000 | 3,000 | |||||||||||
Non-GAAP operating expense | $ | 28,959 | $ | 27,263 | $ | 88,222 | $ | 78,336 | |||||||
GAAP operating income (loss) | $ | (18,025 | ) | $ | 4,195 | $ | (2,196 | ) | $ | 21,132 | |||||
Unexchanged merger shares (a) (b) | 22,000 | — | 22,000 | 3,000 | |||||||||||
Non-GAAP operating income | $ | 3,975 | $ | 4,195 | $ | 19,804 | $ | 24,132 | |||||||
GAAP operating margin | (48.4) | % | 11.8 | % | (1.8) | % | 18.5 | % | |||||||
Unexchanged merger shares (a) (b) | 59.1 | % | — | % | 18.2 | % | 2.6 | % | |||||||
Non-GAAP operating margin | 10.7 | % | 11.8 | % | 16.4 | % | 21.1 | % | |||||||
GAAP effective tax rate | (6.9) | % | 20.7 | % | (351.1) | % | 32.4 | % | |||||||
Unexchanged merger shares (a) (b) | 36.4 | % | — | % | 382.9 | % | (4.0) | % | |||||||
Non-GAAP effective tax rate | 29.4 | % | 20.7 | % | 31.8 | % | 28.4 | % | |||||||
GAAP net income (loss) | $ | (19,036 | ) | $ | 3,434 | $ | (8,241 | ) | $ | 14,442 | |||||
Unexchanged merger shares (a) (b) | 22,000 | — | 22,000 | 3,000 | |||||||||||
Non-GAAP net income | $ | 2,964 | $ | 3,434 | $ | 13,759 | $ | 17,442 | |||||||
Earnings (loss) per share | $ | (1.24 | ) | $ | 0.21 | $ | (0.54 | ) | $ | 0.90 | |||||
Unexchanged merger shares (a) (b) | 1.43 | — | 1.42 | 0.19 | |||||||||||
Non-GAAP earnings per share (c) | $ | 0.19 | $ | 0.21 | $ | 0.88 | $ | 1.09 | |||||||
(a) | Includes a charge of $22.0 million for the three months ended September 30, 2013 related to settlement agreements in connection with a dispute over unclaimed property audits. |
(b) | Includes a charge $22.0 million and $3.0 million for the nine months ended September 30, 2013 and 2012, respectively, related to settlement agreements in connection with a dispute over unclaimed property audits. |
(c) | Shares used to calculate non-GAAP earnings per share for the three months ended September 30, 2013 were 15,482,802, which were different than the shares used in GAAP loss per share calculation due to the anti-dilutive effect on the GAAP loss per share. Shares used to calculate non-GAAP earnings per share for the nine months ended September 30, 2013 were 15,550,982, which were different than the shares used in GAAP loss per share calculation due to the anti-dilutive effect on the GAAP loss per share. |