TRAVELZOO - FORM 8-K - EX-99.1 - EXHIBIT 99.1 - April 25, 2018

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Exhibit 99.1
 
travellogo11062017.jpg
Travelzoo
590 Madison Avenue
37th Floor
New York, NY 10022

Investor Relations:
Lijun Qi
ir@travelzoo.com 


FOR IMMEDIATE RELEASE

Travelzoo Reports First Quarter 2018 Results

NEW YORK, April 25, 2018 — Travelzoo® (NASDAQ: TZOO):

•
Revenue of $30.9 million, up 9% year-over-year
•
Operating profit of $3.7 million
•
Earnings per share (EPS) of $0.20
•
Cash flow from operations of $179,000

Travelzoo, a global publisher of exclusive offers and experiences for members, today announced financial results for the first quarter ended March 31, 2018, with revenue of $30.9 million and operating profit of $3.7 million. In nominal terms, revenue increased by 9% year-over-year. In constant currencies, revenue increased by 4% year-over-year. Net income was $2.5 million, with EPS from continuing operations of $0.20, up from $0.07 in the prior-year period.

"Revenue growth accelerated in all three regions, leading to much stronger earnings," said Dr. Holger Bartel, Travelzoo's Global CEO. "With the travel and tourism industry worldwide showing steady growth, we like to leverage Travelzoo's global reach and trusted brand to further improve earnings in future periods."





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Asia Pacific
Asia Pacific business segment revenue increased 12% year-over-year to $2.0 million. In constant currencies, revenue increased 4% year-over-year. Operating loss for the first quarter was $1.7 million, compared to an operating loss of $1.5 million in the prior-year period.

Europe
Europe business segment revenue increased 13% year-over-year to $10.3 million. In constant currencies, revenue was flat year-over-year. Operating profit for the first quarter was $2.0 million, or 19% of revenue, compared to an operating profit of $949,000, or 10% of revenue in the prior-year period.

North America
North America business segment revenue increased 6% year-over-year to $18.6 million. Operating profit for the first quarter was $3.4 million, or 18% of revenue, compared to an operating profit of $2.7 million, or 15% of revenue in the prior-year period.

Members
As of March 31, 2018, Travelzoo had a worldwide unduplicated number of members of 29.7 million. In Asia Pacific, unduplicated number of members was 3.6 million as of March 31, 2018, consistent with March 31, 2017. In Europe, unduplicated number of members was 8.7 million as of March 31, 2018, up 5% from March 31, 2017. In North America, unduplicated number of members was 17.5 million as of March 31, 2018, up 1% from March 31, 2017.

Income Taxes
Income tax expense was $1.3 million, compared to a $1.2 million income tax expense in the prior-year period.

Asset Management
During the first quarter of 2018, Travelzoo generated $179,000 of cash from operating activities. Accounts receivable decreased by $1.3 million over the prior-year period to $12.9 million. Accounts payable decreased by $1.8 million over the prior-year period to $14.8 million. Capital expenditures were $65,000, down from $120,000 in the prior-year period. As of March 31, 2018, cash and cash equivalents were $22.4 million.

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Conference Call
Travelzoo will host a conference call to discuss first quarter results today at 11:00 a.m. ET. 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® provides our 28 million members insider deals and one-of-a-kind experiences personally reviewed by one of our deal experts around the globe. With more than 25 offices worldwide, we have our finger on the pulse of outstanding travel, entertainment, and lifestyle experiences. For over 15 years we have worked in partnership with more than 2,000 top travel suppliers—our long-standing relationships give Travelzoo members access to the very best 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.
Travelzoo and Top 20 are registered trademarks of Travelzoo.





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Travelzoo
Condensed Consolidated Statements of Operations
(Unaudited)
(In thousands, except per share amounts)
 
 
Three months ended
 
 March 31,
 
2018
 
2017
Net revenues
$
30,884

 
$
28,429

Cost of net revenues
3,385

 
3,207

Gross profit
27,499

 
25,222

Operating expenses:
 
 
 
Sales and marketing
15,542

 
15,356

Product development
2,511

 
2,357

General and administrative
5,789

 
5,447

Total operating expenses
23,842

 
23,160

Income from continuing operations
3,657

 
2,062

Other income, net
161

 
7

Income from continuing operations before income taxes
3,818

 
2,069

Income tax expense
1,316

 
1,209

Income from continuing operations
$
2,502

 
$
860

Income from discontinued operations including gain on sale of Fly.com domain name, net of income taxes
—

 
1,884

Net income
$
2,502

 
$
2,744

 
 
 
 
Income per share—basic:
 
 
 
Continuing operations
$
0.20

 
$
0.07

Discontinued operations
—

 
0.14

Net income per share—basic
$
0.20


$
0.21

 
 
 
 
Income per share—diluted:
 
 
 
Continuing operations
$
0.20

 
$
0.07

Discontinued operations
—

 
0.14

Net income per share—diluted
$
0.20


$
0.21

 
 
 
 
Weighted average shares:
 
 
 
Basic
12,462

 
13,288

Diluted
12,462

 
13,288



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Travelzoo
Condensed Consolidated Balance Sheets
(Unaudited)
(In thousands)
 
 
March 31,
2018
 
December 31,
2017
Assets
 
 
 
Current assets:
 
 
 
Cash and cash equivalents
$
22,394

 
$
22,553

Accounts receivable, net
12,898

 
11,769

Income taxes receivable
89

 
517

Deposits
174

 
259

Prepaid expenses and other
2,189

 
2,141

Total current assets
37,744

 
37,239

Deposits and other
637

 
548

Deferred tax assets
1,437

 
1,516

Restricted cash
2,177

 
1,448

Property and equipment, net
4,641

 
4,921

Total assets
$
46,636

 
$
45,672

Liabilities and Stockholders’ Equity
 
 
 
Current liabilities:
 
 
 
Accounts payable
$
14,817

 
$
19,105

Accrued expenses and other
9,688

 
8,702

Deferred revenue
931

 
825

Income tax payable
1,202

 
961

Total current liabilities
26,638

 
29,593

Long-term tax liabilities
380

 
373

Long-term deferred rent and other
2,734

 
2,628

Total liabilities
29,752

 
32,594

Common stock
125

 
125

Additional paid-in capital
173

 
—

Accumulated other comprehensive loss
(3,780
)
 
(3,597
)
Retained earnings
20,366

 
16,550

Total stockholders’ equity
16,884

 
13,078

Total liabilities and stockholders’ equity
$
46,636

 
$
45,672



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Travelzoo
Condensed Consolidated Statements of Cash Flows
(Unaudited)
(In thousands) 
 
Three months ended
 
 March 31,
 
2018
 
2017
Cash flows from operating activities:
 
 
 
Net income
$
2,502

 
$
2,744

Adjustments to reconcile net income to net cash provided by operating activities:
 
 
 
Depreciation and amortization
384

 
579

Discontinued operations gain on sale of Fly.com domain name
—

 
(2,890
)
Deferred income taxes
(110
)
 
(36
)
Stock-based compensation
173

 
240

Provision for losses on accounts receivable
(83
)
 
7

Net foreign currency effects
(171
)
 
(89
)
Changes in operating assets and liabilities:
 
 
 
Accounts receivable
(997
)
 
287

Income tax receivable
428

 
544

Prepaid expenses and other
(10
)
 
(86
)
Accounts payable
(3,185
)
 
(3,263
)
Accrued expenses and other
1,024

 
990

Income tax payable
217

 
1,466

Other non-current liabilities
7

 
62

Net cash provided by operating activities
179

 
555

Cash flows from investing activities:
 
 
 
Proceeds from sale of Fly.com domain name
—

 
2,890

Purchases of property and equipment
(65
)
 
(120
)
Net cash provided by (used in) investing activities
(65
)
 
2,770

Cash flows from financing activities:
 
 
 
Repurchase of common stock, net
—

 
(1,762
)
Net cash used in financing activities
—

 
(1,762
)
Effect of exchange rate on cash and cash equivalents
456

 
171

Net increase in cash and cash equivalents
570

 
1,734

Cash, cash equivalents and restricted cash at beginning of period
24,001

 
28,236

Cash, cash equivalents and restricted cash at end of period
$
24,571

 
$
29,970

Supplemental disclosure of cash flow information:
 
 
 
Cash paid for income taxes, net
$
779

 
$
310


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Travelzoo
Segment Information
(Unaudited)
(In thousands)
 
Three months ended March 31, 2018
Asia Pacific
 
Europe
 
North
America
 
Consolidated
Revenue from unaffiliated customers
$
2,042

 
$
10,332

 
$
18,510

 
$
30,884

Intersegment revenue
(20
)
 
(52
)
 
72

 
—

Total net revenues
2,022

 
10,280

 
18,582

 
30,884

Operating income (loss)
$
(1,740
)
 
$
1,966

 
$
3,431

 
$
3,657

Three months ended March 31, 2017
Asia Pacific
 
Europe
 
North
America
 
Consolidated
Revenue from unaffiliated customers
$
1,844

 
$
9,218

 
$
17,367

 
$
28,429

Intersegment revenue
(31
)
 
(147
)
 
178

 
—

Total net revenues
1,813

 
9,071

 
17,545

 
28,429

Operating income (loss)
$
(1,541
)
 
$
949

 
$
2,654

 
$
2,062

 
 
 
 
 
 
 
 





                                                                    

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