EX-99.1 2 ex-99106x30x20248xk.htm EX-99.1 Document

Exhibit 99.1
travellogo11062017a13.jpg
Travelzoo
590 Madison Avenue
35th Floor
New York, NY 10022

Investor Relations:
ir@travelzoo.com

FOR IMMEDIATE RELEASE

Travelzoo Reports Second Quarter 2024 Results

NEW YORK, July 25, 2024 — Travelzoo® (NASDAQ: TZOO):

•Revenue of $21.1 million, consistent year-over-year
•Consolidated operating profit of $4.0 million
•Non-GAAP consolidated operating profit of $4.8 million
•Cash flow from operations of $3.1 million
•Earnings per share (EPS) of $0.23

Travelzoo, the club for travel enthusiasts, today announced financial results for the second quarter ended June 30, 2024. Consolidated revenue was $21.1 million, consistent year-over-year. In constant currencies, revenue was $21.2 million, up from $21.1 million year-over-year. Travelzoo's reported revenue consists of advertising revenues and commissions, derived from and generated in connection with purchases made by Travelzoo members, and membership fees.

Net income attributable to Travelzoo was $2.9 million for Q2 2024, or $0.23 per share, compared with $0.17 in the prior-year period. Net income attributable to Travelzoo from continuing operations was $2.9 million for Q2 2024, or $0.23 per share, compared with $0.17 in the prior-year period.

Non-GAAP operating profit was $4.8 million. Non-GAAP operating profit excludes amortization of intangibles ($88,000), stock option expenses ($0.7 million) and severance-related expenses ($30,000). Please refer to “Non-GAAP Financial Measures” and the tabular reconciliation below.

“We will continue to leverage Travelzoo's global reach, trusted brand, and strong relationships with top travel suppliers to negotiate more exclusive offers for members,” said Holger Bartel, Travelzoo's Global
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CEO. “With more than 30 million members, 8 million mobile app users, and 4 million social media followers, Travelzoo is loved by travel enthusiasts who are affluent, active, and open to new experiences."

Cash Position
As of June 30, 2024, consolidated cash, cash equivalents and restricted cash were $13.2 million. Net cash provided by operations was $3.1 million.

Travelzoo North America
North America business segment revenue remained consistent year-over-year at $14.1 million. Operating profit for Q2 2024 was $3.7 million, or 26% of revenue, compared to operating profit of $3.8 million in the prior-year period.

Travelzoo Europe
Europe business segment revenue increased 1% year-over-year to $6.0 million. In constant currencies, Europe business segment revenue increased 1% year-over-year. Operating profit for Q2 2024 was $512,000, or 9% of revenue, compared to operating loss of $239,000 in the prior-year period.

Jack’s Flight Club
Jack’s Flight Club is a membership subscription service in which Travelzoo has a 60% ownership interest. Revenue from unaffiliated customers increased 9% year-over-year to $1.1 million. The number of premium subscribers increased 19% year-over-year. Jack’s Flight Club’s revenue from subscriptions is recognized ratably over the subscription period (quarterly, semi-annually, annually). Non-GAAP operating profit for Q2 2024 was $25,000. Non-GAAP operating profit excludes amortization of intangibles ($59,000) related to the acquisition of Travelzoo’s ownership interest in Jack’s Flight Club in 2020.

New Initiatives
New Initiatives business segment revenue, which includes Licensing and Travelzoo META, was $23,000. Operating loss for Q2 2024 was $184,000.

In June 2020, Travelzoo entered into a royalty-bearing licensing agreement with a local licensee in Japan for the exclusive use of Travelzoo’s brand, business model, and members in Japan. In August of 2020, Travelzoo entered into a royalty-bearing licensing agreement with a local licensee in Australia for the exclusive use of Travelzoo’s brand, business models, and members in Australia, New Zealand, and Singapore. Under these arrangements, Travelzoo’s existing members in Australia, Japan, New
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Zealand, and Singapore will continue to be owned by Travelzoo as the licensor. Travelzoo recorded $7,000 in licensing revenue from the licensee in Japan in Q2 2024. Travelzoo recorded $11,000 in licensing revenue from the licensee in Australia, New Zealand, and Singapore in Q2 2024. Licensing revenue is expected to increase going forward.

Members and Subscribers
As of June 30, 2024, we had 30.8 million members worldwide, consistent with June 30, 2023. In North America, Travelzoo had 16.1 million unduplicated members as of June 30, 2024, down from 16.2 million as of June 30, 2023. In Europe, Travelzoo had 9.2 million unduplicated members as of June 30, 2024, consistent with June 30, 2023. Jack’s Flight Club had 2.2 million subscribers, including premium subscribers, as of June 30, 2024, consistent with June 30, 2023.

Discontinued Operations
In March 2020, Travelzoo decided to exit its Asia Pacific business and operate it as a licensing business going forward. Consequently, the Asia Pacific business has been classified as discontinued operations.

Income Taxes
A provision of $1.3 million for income taxes was recorded for Q2 2024, compared to an income tax expense of $1.1 million in the prior-year period. Travelzoo intends to utilize available net operating losses (NOLs) to largely offset its actual tax liability for Q2 2024.

Share Repurchase Program
During Q2 2024, the Company repurchased 800,000 of its outstanding common stock.

Looking Ahead
For Q3 2024, we expect growth in revenue year-over-year, albeit at a smaller pace than in 2023. However, there could be unexpected fluctuations. We also expect for Q3 2024 higher profitability year-over-year. For 2025, we expect substantial growth in revenue as a result of additional revenue from membership fees.

In December 2023, we announced the introduction of a membership fee for Travelzoo beginning January 1, 2024. We recognize membership fee revenue ratably over the subscription period. Legacy Travelzoo members as of December 31, 2023, which represent more than 95% of members, are exempt from the fee during 2024. Therefore, we do not anticipate membership fee revenue from these members before 2025.
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Non-GAAP Financial Measures
Management calculates non-GAAP operating income when evaluating the financial performance of the business. Travelzoo’s calculation of non-GAAP operating income, also called “non-GAAP operating profit” in this press release and today’s earnings conference call, excludes the following items: amortization of intangibles, stock option expenses and severance-related expenses. This press release includes a table which reconciles GAAP operating income to the calculation of non-GAAP operating income. Non-GAAP operating income is not required by, or presented in accordance with, generally accepted accounting principles in the United States of America ("GAAP"). This information should be considered as supplemental in nature and should not be considered in isolation or as a substitute for the financial information prepared in accordance with GAAP. In addition, these non-GAAP financial measures may not be the same as similarly titled measures reported by other companies.

Conference Call
Travelzoo will host a conference call to discuss second quarter 2024 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 Travelzoo
We, Travelzoo®, are the club for travel enthusiasts. Our 30 million members receive exclusive offers and one-of-a-kind experiences personally reviewed by our deal experts around the globe. We have our finger on the pulse of outstanding travel, entertainment, and lifestyle experiences. We work in partnership with more than 5,000 top travel suppliers—our long-standing relationships give Travelzoo members access to irresistible 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.


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Travelzoo
Condensed Consolidated Statements of Operations
(Unaudited)
(In thousands, except per share amounts)
 Three months endedSix months ended
 June 30,June 30,
 2024202320242023
Revenues$21,141 $21,128 $43,126 $42,729 
Cost of revenues2,520 2,880 5,160 5,571 
Gross profit18,621 18,248 37,966 37,158 
Operating expenses:
Sales and marketing9,386 10,142 17,984 19,438 
Product development 603 518 1,169 1,008 
General and administrative4,621 4,315 9,211 8,728 
Total operating expenses14,610 14,975 28,364 29,174 
Operating income 4,011 3,273 9,602 7,984 
Other income, net176 479 315 829 
Income from continuing operations before income taxes4,187 3,752 9,917 8,813 
Income tax expense 1,267 1,091 2,772 2,469 
Income from continuing operations2,920 2,661 7,145 6,344 
Income from discontinued operations, net of tax— 2 — — 
Net income 2,920 2,663 7,145 6,344 
Net income (loss) attributable to non-controlling interest(7)37 (18)45 
Net income attributable to Travelzoo$2,927 $2,626 $7,163 $6,299 
Net income attributable to Travelzoo—continuing operations$2,927 $2,624 $7,163 $6,299 
Net income attributable to Travelzoo—discontinued operations$— $2 $— $— 
Income per share—basic
Continuing operations$0.23 $0.17 $0.54 $0.41 
Discontinued operations$— $— $— $— 
Net income per share—basic$0.23 $0.17 $0.54 $0.41 
Income per share—diluted
Continuing operations$0.23 $0.17 $0.54 $0.40 
Discontinued operations$— $— $— $— 
Net income per share—diluted$0.23 $0.17 $0.54 $0.40 
Shares used in per share calculation from continuing operations—basic12,895 15,275 13,191 15,485 
Shares used in per share calculation from discontinued operations—basic12,895 15,275 13,191 15,485 
Shares used in per share calculation from continuing operations—diluted12,976 15,337 13,300 15,557 
Shares used in per share calculation from discontinued operations—diluted12,976 15,337 13,300 15,557 
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Travelzoo
Condensed Consolidated Balance Sheets
(Unaudited)
(In thousands)
June 30,
2024		December 31,
2023
Assets
Current assets:
Cash and cash equivalents$12,567 $15,713 
Accounts receivable, net13,220 12,965 
Prepaid income taxes998 629 
Prepaid expenses and other1,726 1,461 
Total current assets28,511 30,768 
Deposits and other223 1,115 
Deferred tax assets3,102 3,196 
Restricted cash675 675 
Operating lease right-of-use assets5,873 6,015 
Property and equipment, net499 578 
Intangible assets, net1,686 2,091 
Goodwill10,944 10,944 
Total assets$51,513 $55,382 
Liabilities and Equity
Current liabilities:
Accounts payable$5,212 $4,546 
Merchant payables16,708 20,622 
Accrued expenses and other 4,217 3,658 
Deferred revenue3,207 2,044 
Income tax payable1,070 766 
Operating lease liabilities2,389 2,530 
Liabilities from discontinued operations24 24 
Total current liabilities32,827 34,190 
Long-term tax liabilities6,323 4,681 
Long-term operating lease liabilities6,342 6,717 
Other long-term liabilities376 911 
Total liabilities45,868 46,499 
Common stock124 136 
Tax indemnification(9,537)(9,537)
Note receivable from shareholder(1,753)(1,753)
Additional paid-in capital— 439 
Retained earnings 17,083 19,508 
Accumulated other comprehensive loss(4,951)(4,607)
Total Travelzoo stockholders’ equity966 4,186 
Non-controlling interest4,679 4,697 
Total stockholder's equity5,645 8,883 
Total liabilities and equity$51,513 $55,382 
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Travelzoo
Condensed Consolidated Statements of Cash Flows
(Unaudited)
(In thousands)
 Three months endedSix months ended
 June 30,June 30,
 2024202320242023
Cash flows from operating activities:
Net income $2,920 $2,663 $7,145 $6,344 
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization175 467 558 945 
Stock-based compensation688 432 783 828 
Deferred income tax(12)30 (27)(38)
Loss on long-lived assets— 10 — 10 
Net foreign currency effects(14)(36)(11)(33)
Provision of loss (net recoveries) on accounts receivable and refund reserves26 (117)(7)(829)
Changes in operating assets and liabilities:
Accounts receivable(150)3,516 (385)3,888 
Prepaid income taxes(390)610 (327)1,017 
Prepaid expenses, deposits and other (49)2,325 533 2,485 
Accounts payable(295)(1,072)713 (2,393)
Merchant payables(1,101)(4,013)(3,779)(8,604)
Accrued expenses and other478 (534)1,450 377 
Income tax payable224 234 278 234 
Other liabilities556 600 753 1,419 
Net cash provided by operating activities3,056 5,115 7,677 5,650 
Cash flows from investing activities:
Proceeds from repayment of note receivable— 74 — 113 
Purchases of property and equipment(48)(46)(83)(157)
Net cash provided by (used in) investing activities(48)28 (83)(44)
Cash flows from financing activities:
Repurchase of common stock(6,557)(4,684)(10,429)(4,870)
Exercise of stock options and taxes paid for net share settlement of equity awards— (299)— (299)
Net cash used in financing activities(6,557)(4,983)(10,429)(5,169)
Effect of exchange rate on cash, cash equivalents and restricted cash(73)211 (311)382 
Net increase (decrease) in cash, cash equivalents and restricted cash(3,622)371 (3,146)819 
Cash, cash equivalents and restricted cash at beginning of period16,865 19,826 16,389 19,378 
Cash, cash equivalents and restricted cash at end of period$13,243 $20,197 $13,243 $20,197 
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Travelzoo
Segment Information from Continuing Operations
(Unaudited)
(In thousands)
Three months ended June 30, 2024Travelzoo North
America		Travelzoo EuropeJack's Flight ClubNew InitiativesConsolidated
Revenues from unaffiliated customers$14,015 $6,004 $1,099 $23 $21,141 
Intersegment revenues 119 (53)(66)— — 
Total net revenues14,134 5,951 1,033 23 21,141 
Operating profit (loss)$3,717 $512 $(34)$(184)$4,011 
Three months ended June 30, 2023Travelzoo North
America		Travelzoo EuropeJack's Flight ClubNew InitiativesConsolidated
Revenues from unaffiliated customers$13,642 $6,462 $1,011 $13 $21,128 
Intersegment revenues491 (575)84 — — 
Total net revenues14,133 5,887 1,095 13 21,128 
Operating profit (loss)$3,753 $(239)$97 $(338)$3,273 

Six months ended June 30, 2024Travelzoo North
America		Travelzoo EuropeJack's Flight ClubNew InitiativesConsolidated
Revenues from unaffiliated customers$28,288 $12,584 $2,199 $55 $43,126 
Intersegment revenues74 29 (103)— — 
Total net revenues28,362 12,613 2,096 55 43,126 
Operating profit (loss)$8,155 $1,894 $(133)$(314)$9,602 
Six months ended June 30, 2023Travelzoo North
America		Travelzoo EuropeJack's Flight ClubNew InitiativesConsolidated
Revenues from unaffiliated customers$28,209 $12,540 $1,959 $21 $42,729 
Intersegment revenues682 (766)84 — — 
Total net revenues28,891 11,774 2,043 21 42,729 
Operating profit (loss)$8,269 $218 $52 $(555)$7,984 




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Travelzoo
Reconciliation of GAAP to Non-GAAP Information
(Unaudited)
(In thousands, except per share amounts)

 Three months endedSix months ended
 June 30,June 30,
 2024202320242023
GAAP operating expense$14,610 $14,975 $28,364 $29,174 
Non-GAAP adjustments:
Amortization of intangibles (A)88 389 405 787 
Stock option expenses (B)688 431 783 827 
Severance-related expenses (C)30 56 30 95 
Non-GAAP operating expense13,804 14,099 27,146 27,465 
GAAP operating profit4,011 3,273 9,602 7,984 
Non-GAAP adjustments (A through C)806 876 1,218 1,709 
Non-GAAP operating profit4,817 4,149 10,820 9,693 





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