TRAVELZOO - FORM 8-K - EX-99.1 - EXHIBIT - July 18, 2013

Attached files

file filename
8-K - 8-K - TRAVELZOOtzoo-2013x630x8k.htm


Exhibit 99.1

 
 
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

FOR IMMEDIATE RELEASE

Travelzoo Reports Second Quarter 2013 Results

NEW YORK, July 18, 2013 — Travelzoo Inc. (NASDAQ: TZOO):

•
Revenue of $41.3 million, up 5% year-over-year
•
Net income of $5.2 million, down 28% year-over-year
•
Earnings per share of $0.34, compared to $0.45 in the prior-year period
•
Cash flow from operations of $10.0 million

Travelzoo Inc., a global Internet media company, today announced financial results for the second quarter ended June 30, 2013, with revenue of $41.3 million, an increase of 5% year-over-year. Operating profit was $7.8 million. Net income was $5.2 million, with earnings per share of $0.34, down from $0.45 in the prior-year period.

"Continued growth in our Travel businesses in North America and Europe drove a solid quarter," said Chris Loughlin, chief executive officer, "Audience engagement reached record levels and we made good progress in social media and mobile. Our earnings were still impacted by our investments into a hotel booking platform, aimed at simplifying our user experience on web and mobile.  We plan to introduce the platform later this year."


North America
North America business segment revenue increased 5% year-over-year to $30.2 million. Operating profit for the second quarter was $5.9 million, or 20% of revenue, down from $7.8 million, or 27% of revenue, in the prior-year period. The decrease in operating profit was a result of increased expenses related to sales force expansion, hotel booking platform development and traffic acquisition.

Europe
Europe business segment revenue increased 4% year-over-year to $11.1 million. In local currency terms, revenue for the second quarter increased 7% year-over-year. Operating profit was $1.9 million, or 17% of revenue, down from an operating profit of $2.5 million, or 24% of revenue in the prior-year period.

Subscribers
Travelzoo had a total unduplicated number of subscribers in North America and Europe of 23.0 million as of June 30, 2013, up 4% from June 30, 2012. In North America, total unduplicated number of subscribers was 16.4 million as of June 30, 2013, up 3% from June 30, 2012. In Europe, total unduplicated number of subscribers was 6.6 million as of June 30, 2013, up 8% from June 30, 2012.

Income Taxes
Income tax expense was $2.7 million, compared to $3.1 million in the prior-year period. The effective income tax rate was 34%, up from 30% in the prior-year period.

Asset Management
During the second quarter 2013, Travelzoo generated $10.0 million of cash from operating activities. Accounts receivable increased by $227,000 over the prior-year period to $15.5 million. Accounts payable increased by $6.8 million over the prior-year period to $29.0 million. Capital expenditures were $1.2 million, up from $595,000 in the prior-year period. Travelzoo exited the second quarter with $73.4 million in cash and cash equivalents.







Conference Call
Travelzoo will host a conference call to discuss second 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 Inc. is a global Internet media company. With more than 26 million subscribers in North America, Europe, and Asia Pacific and 25 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
 
Six months ended
 
June 30,
 
June 30,
 
2013
 
2012
 
2013
 
2012
Revenues
$
41,327

 
$
39,360

 
$
83,504

 
$
78,693

Cost of revenues
4,425

 
3,630

 
8,411

 
7,683

Gross profit
36,902

 
35,730

 
75,093

 
71,010

Operating expenses:
 
 
 
 
 
 
 
Sales and marketing
19,457

 
16,061

 
39,115

 
32,326

General and administrative
9,651

 
9,303

 
20,149

 
18,747

Unexchanged promotional merger shares
—

 
—

 
—

 
3,000

Total operating expenses
29,108

 
25,364

 
59,264

 
54,073

Income from operations
7,794

 
10,366

 
15,829

 
16,937

Other income (expense)
112

 
(16
)
 
144

 
83

Income before income taxes
7,906

 
10,350

 
15,973

 
17,020

Income taxes
2,706

 
3,090

 
5,178

 
6,012

Net income
$
5,200

 
$
7,260

 
$
10,795

 
$
11,008

Net income per share:
 
 
 
 
 
 
 
Basic
$
0.34

 
$
0.45

 
$
0.70

 
$
0.69

Diluted
$
0.34

 
$
0.45

 
$
0.70

 
$
0.69

Weighted Average Shares:
 
 
 
 
 
 
 
Basic
15,362

 
15,962

 
15,362

 
15,962

Diluted
15,457

 
16,006

 
15,427

 
16,012






Travelzoo Inc.
Condensed Consolidated Balance Sheets
(Unaudited)
(In thousands)
 
 
June 30,
2013
 
December 31,
2012

Assets
 
 
 
Current assets:
 
 
 
Cash and cash equivalents
$
73,381

 
$
61,169

Accounts receivable, net
15,463

 
13,626

Income taxes receivable
3,191

 
6,682

Deposits
473

 
389

Prepaid expenses and other current assets
3,400

 
2,260

Deferred tax assets
2,214

 
2,194

Total current assets
98,122

 
86,320

Deposits, less current portion
943

 
1,107

Deferred tax assets, less current portion
1,271

 
1,710

Restricted cash
3,517

 
3,396

Property and equipment, net
5,811

 
4,314

Intangible assets, net
655

 
986

Total assets
$
110,319

 
$
97,833

Liabilities and Stockholders’ Equity
 
 
 
Current liabilities:
 
 
 
Accounts payable
$
28,962

 
$
28,695

Accrued expenses
13,200

 
11,993

Deferred revenue
1,828

 
2,698

Deferred rent
262

 
280

Income tax payable
1,022

 
—

Total current liabilities
45,274

 
43,666

Long-term tax liabilities
10,239

 
10,030

Deferred rent, less current portion
1,437

 
798

Total liabilities
56,950

 
54,494

Common stock
163

 
163

Treasury stock
(7,898
)
 
(7,898
)
Additional paid-in capital
9,476

 
8,863

Accumulated other comprehensive loss
(2,115
)
 
(737
)
Retained earnings
53,743

 
42,948

Total stockholders’ equity
53,369

 
43,339

Total liabilities and stockholders’ equity
$
110,319

 
$
97,833






Travelzoo Inc.
Condensed Consolidated Statements of Cash Flows
(Unaudited)
(In thousands)
 
 
Three months ended
 
Six months ended
 
June 30,
 
June 30,
 
2013
 
2012
 
2013
 
2012
Cash flows from operating activities:
 
 
 
 
 
 
 
Net income
$
5,200

 
$
7,260

 
$
10,795

 
$
11,008

Adjustments to reconcile net income to net cash provided by operating activities:
 
 
 
 
 
 
 
Depreciation and amortization
760

 
599

 
1,476

 
1,225

Deferred income taxes
207

 
—

 
400

 
—

Stock-based compensation
307

 
307

 
613

 
593

Provision for losses on accounts receivable
(45
)
 
91

 
50

 
199

Net foreign currency effects
19

 
75

 
112

 
40

Changes in operating assets and liabilities:
 
 
 
 
 
 
 
Accounts receivable
(91
)
 
(851
)
 
(2,127
)
 
(2,122
)
Deposits
175

 
(232
)
 
20

 
(364
)
Income tax receivable
2,029

 
285

 
3,593

 
1,130

Prepaid expenses and other current assets
(1,382
)
 
215

 
(1,032
)
 
(79
)
Accounts payable
1,965

 
48

 
845

 
508

Accrued expenses
371

 
(317
)
 
1,221

 
5,302

Deferred revenue
(329
)
 
(194
)
 
(847
)
 
(60
)
Deferred rent
221

 
41

 
111

 
(34
)
Income tax payable
467

 
1

 
1,038

 
(283
)
Other non-current liabilities
107

 
(276
)
 
210

 
(224
)
Net cash provided by operating activities
9,981

 
7,052

 
16,478

 
16,839

Cash flows from investing activities:
 
 
 
 
 
 
 
Purchases of restricted cash
(263
)
 
—

 
(263
)
 
—

Purchases of property and equipment
(1,209
)
 
(595
)
 
(2,109
)
 
(1,272
)
Net cash used in investing activities
(1,472
)
 
(595
)
 
(2,372
)
 
(1,272
)
Cash flows from financing activities:
 
 
 
 
 
 
 
Net cash provided by (used in) financing activities
—

 
—

 
—

 
—

Effect of exchange rate on cash and cash equivalents
(235
)
 
(855
)
 
(1,894
)
 
(150
)
Net increase in cash and cash equivalents
8,274

 
5,602

 
12,212

 
15,417

Cash and cash equivalents at beginning of period
65,107

 
48,559

 
61,169

 
38,744

Cash and cash equivalents at end of period
$
73,381

 
$
54,161

 
$
73,381

 
$
54,161

Supplemental disclosure of cash flow information:
 
 
 
 
 
 
 
Cash paid for income taxes, net
$
10

 
$
3,082

 
$
20

 
$
5,391






Travelzoo Inc.
Segment Information
(Unaudited)
(In thousands)
 
Three months ended June 30, 2013
North
America
 
Europe
 
Elimination
 
Consolidated
Revenue from unaffiliated customers
$
30,249

 
$
11,078

 
$
—

 
$
41,327

Intersegment revenue
331

 
222

 
(553
)
 
—

Total net revenues
30,580

 
11,300

 
(553
)
 
41,327

Operating income
$
5,899

 
$
1,895

 
$
—

 
$
7,794

Three months ended June 30, 2012
North
America
 
Europe
 
Elimination
 
Consolidated
Revenue from unaffiliated customers
$
28,712

 
$
10,648

 
$
—

 
$
39,360

Intersegment revenue
205

 
21

 
(226
)
 
—

Total net revenues
28,917

 
10,669

 
(226
)
 
39,360

Operating income
$
7,831

 
$
2,535

 
$
—

 
$
10,366

Six months ended June 30, 2013
North
America
 
Europe
 
Elimination
 
Consolidated
Revenue from unaffiliated customers
$
60,160

 
$
23,344

 
$
—

 
$
83,504

Intersegment revenue
575

 
330

 
(905
)
 
—

Total net revenues
60,735

 
23,674

 
(905
)
 
83,504

Operating income
$
11,383

 
$
4,447

 
$
—

 
$
15,830

Six months ended June 30, 2012
North
America
 
Europe
 
Elimination and Other (a)
 
Consolidated
Revenue from unaffiliated customers
$
57,268

 
$
21,425

 
$
—

 
$
78,693

Intersegment revenue
470

 
31

 
(501
)
 
—

Total net revenues
57,738

 
21,456

 
(501
)
 
78,693

Operating income
$
14,972

 
$
4,965

 
$
(3,000
)
 
$
16,937




 
(a)
Includes a charge related to unexchanged promotional merger shares for the six months ended June 30, 2012.



Stock widget

Investing forum

TRAVELZOO Reports