EX-99.1 2 ex-9913x31x20168k.htm EXHIBIT 99.1 3.31.16 Exhibit


Exhibit 99.1
 
Travelzoo
590 Madison Avenue
37th Floor
New York, NY 10022

Investor Relations:
Glen Ceremony
Chief Financial Officer
ir@travelzoo.com 


FOR IMMEDIATE RELEASE

Travelzoo Reports First Quarter 2016 Results

NEW YORK, April 28, 2016 — Travelzoo Inc. (NASDAQ: TZOO):

•
Revenue of $34.8 million, down 9% in constant currencies
•
Operating profit of $3.1 million
•
Earnings per share of $0.14, compared to $0.05 in the prior-year period
•
Cash flow from operations of $1.4 million

Travelzoo, a global media commerce company, today announced financial results for the first quarter ended March 31, 2016, with revenue of $34.8 million and operating income of $3.1 million. In nominal terms, revenue decreased by 11% year-over-year. In constant currencies, revenue decreased by 9% year-over-year. Net income was $2.0 million, up 181% year-over-year. Diluted earnings per share (EPS) were $0.14, up from $0.05 in the prior-year period.

"In the first quarter of 2016, more than 1 million new members joined Travelzoo. Our objective remains to leverage Travelzoo's global scale and trusted brand for further improvements in earnings in future periods," said Holger Bartel, Chairman and Global CEO.






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Asia Pacific
Asia Pacific business segment revenue decreased 15% year-over-year to $2.3 million. In constant currencies, revenue decreased 10% year-over-year. Operating loss for the first quarter was $1.0 million, compared to an operating loss of $833,000 in the prior-year period.

Europe
Europe business segment revenue decreased 6% year-over-year to $10.9 million. In constant currencies, revenue decreased 2% year-over-year. Operating income for the first quarter was $2.1 million, or 19% of revenue, up from $1.7 million, or 15% of revenue in the prior-year period.

North America
North America business segment revenue decreased 13% year-over-year to $21.7 million. Operating income for the first quarter was $2.1 million, or 10% of revenue, compared to an operating income of $2.1 million in the prior-year period.

Members
As of March 31, 2016, Travelzoo had a worldwide unduplicated number of members of 28.7 million. In Asia Pacific, unduplicated number of members was 3.5 million as of March 31, 2016, up 2% from March 31, 2015. In Europe, unduplicated number of members was 8.1 million as of March 31, 2016, up 8% from March 31, 2015. In North America, unduplicated number of members was 17.3 million as of March 31, 2016, up 1% from March 31, 2015.

Income Taxes
Income tax expense was $1.2 million, compared to a $1.8 million income tax expense in the prior-year period. The effective income tax rate was 38%, down from 71% in the prior-year period, primarily due to certain state tax reserves recorded in the prior-year period.

Asset Management
During the first quarter of 2016, Travelzoo generated $1.4 million of cash from operating activities. Accounts receivable decreased by $178,000 over the prior-year period to $17.4 million. Accounts payable decreased by $6.2 million over the prior-year period to $22.1 million. Capital expenditures were $145,000, down from $189,000 in the prior-year period. As of March 31, 2016, cash and cash equivalents were $28.8 million.


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Other Information
Travelzoo Inc.'s financial results have been adjusted to include the financial results of Asia Pacific for the current and prior periods. In addition, certain prior period statement of operations amounts have been reclassified to conform to current period presentation primarily due to the allocation of facilities costs and separate disclosure of product development costs.

Conference Call
Travelzoo will host a conference call to discuss first 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 webcast.

About Travelzoo
Travelzoo is a global media commerce company. With more than 28 million members in Asia Pacific, Europe, and North America and 25 offices worldwide, Travelzoo® publishes offers from more than 2,000 travel, entertainment and local companies. Travelzoo’s deal experts review offers to find the best deals and confirm their true value.

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. All other names are trademarks and/or registered 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
 
 March 31,
 
2016
 
2015
Revenues
$
34,804

 
$
39,145

Cost of revenues
4,009

 
4,546

Gross profit
30,795

 
34,599

Operating expenses:
 
 
 
Sales and marketing
18,959

 
22,077

Product development
2,875

 
3,089

General and administrative
5,813

 
6,451

Total operating expenses
27,647

 
31,617

Income from operations
3,148

 
2,982

Other income (loss)
133

 
(446
)
Income before income taxes
3,281

 
2,536

Income taxes
1,232

 
1,806

Net income
$
2,049

 
$
730

Net income per share:
 
 
 
Basic
$
0.14

 
$
0.05

Diluted
$
0.14

 
$
0.05

Weighted average shares:
 
 
 
Basic
14,431

 
14,730

Diluted
14,431

 
14,730



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Travelzoo Inc.
Condensed Consolidated Balance Sheets
(Unaudited)
(In thousands)
 
 
March 31,
2016
 
December 31,
2015
Assets
 
 
 
Current assets:
 
 
 
Cash and cash equivalents
$
28,807

 
$
35,128

Accounts receivable, net
17,414

 
16,398

Income taxes receivable
436

 
1,356

Deposits
729

 
782

Prepaid expenses and other
2,204

 
2,167

Deferred tax assets
1,543

 
1,230

Total current assets
51,133

 
57,061

Deposits
484

 
501

Deferred tax assets
1,900

 
1,769

Restricted cash
1,182

 
1,328

Property and equipment, net
7,374

 
7,905

Other assets
—

 
15

Total assets
$
62,073

 
$
68,579

Liabilities and Stockholders’ Equity
 
 
 
Current liabilities:
 
 
 
Accounts payable
$
22,118

 
$
23,655

Accrued expenses and other
9,915

 
10,140

Deferred revenue
1,117

 
1,085

Income tax payable
1,075

 
477

Note payable to related party
—

 
5,658

Total current liabilities
34,225

 
41,015

Long-term tax liabilities
3,007

 
3,000

Long-term deferred rent and other
2,965

 
3,177

Total liabilities
40,197

 
47,192

Common stock
148

 
150

Additional paid-in capital
6,009

 
7,759

Accumulated other comprehensive loss
(3,716
)
 
(3,908
)
Retained earnings
19,435

 
17,386

Total stockholders’ equity
21,876

 
21,387

Total liabilities and stockholders’ equity
$
62,073

 
$
68,579



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Travelzoo Inc.
Condensed Consolidated Statements of Cash Flows
(Unaudited)
(In thousands) 
 
Three months ended
 
 March 31,
 
2016
 
2015
Cash flows from operating activities:
 
 
 
Net income
$
2,049

 
$
730

Adjustments to reconcile net income to net cash provided by operating activities:
 
 
 
Depreciation and amortization
642

 
823

Deferred income taxes
(443
)
 
(222
)
Stock-based compensation
212

 
148

Provision for losses on accounts receivable
8

 
27

Net foreign currency effects
259

 
(111
)
Changes in operating assets and liabilities:
 
 
 
Accounts receivable
(1,025
)
 
(1,880
)
Deposits
63

 
(18
)
Income tax receivable
921

 
851

Prepaid expenses and other
39

 
495

Accounts payable
(1,470
)
 
496

Accrued expenses and other
(451
)
 
564

Income tax payable
603

 
144

Reserve for unexchanged promotional shares
—

 
(1,393
)
Other non-current liabilities
7

 
672

Net cash provided by operating activities
1,414

 
1,326

Cash flows from investing activities:
 
 
 
Release (purchase) of restricted cash
(5
)
 
57

Purchases of property and equipment
(145
)
 
(189
)
Net cash used in investing activities
(150
)
 
(132
)
Cash flows from financing activities:
 
 
 
Payment for Asia Pacific business
58

 
—

Proceeds from (payment of) related party loan
(5,658
)
 
750

Increase in bank overdraft
—

 
44

Repurchase of common stock, net
(1,908
)
 
—

Net cash provided by (used in) financing activities
(7,508
)
 
794

Effect of exchange rate on cash and cash equivalents
(77
)
 
(2,822
)
Net decrease in cash and cash equivalents
(6,321
)
 
(834
)
Cash and cash equivalents at beginning of period
35,128

 
55,416

Cash and cash equivalents at end of period
$
28,807

 
$
54,582

Supplemental disclosure of cash flow information:
 
 
 
Cash paid for income taxes, net
$
50

 
$
361

Cash paid for interest on related party loan
$
88

 
$
—


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Travelzoo Inc.
Segment Information
(Unaudited)
(In thousands)
 
Three months ended March 31, 2016
Asia Pacific
 
Europe
 
North
America
 
Consolidated
Revenue from unaffiliated customers
$
2,259

 
$
10,966

 
$
21,579

 
$
34,804

Intersegment revenue
1

 
(74
)
 
73

 
—

Total net revenues
2,260

 
10,892

 
21,652

 
34,804

Operating income (loss)
$
(1,044
)
 
$
2,094

 
$
2,098

 
$
3,148

Three months ended March 31, 2015
Asia Pacific
 
Europe
 
North
America
 
Consolidated
Revenue from unaffiliated customers
2,653

 
11,779

 
24,713

 
39,145

Intersegment revenue
(5
)
 
(217
)
 
222

 
—

Total net revenues
2,648

 
11,562

 
24,935

 
39,145

Operating income (loss)
$
(833
)
 
$
1,729

 
$
2,086

 
$
2,982

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  ###
 
 
 
 
 
 
 





                                                                    

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