NEW YORK--(BUSINESS WIRE)--Travelzoo Inc. (NASDAQ:TZOO):
- Revenue of $34.0 million, down 6% year-over-year in constant currencies
- Operating profit of $3.8 million
- Earnings per share of $0.14, compared to $0.06 in the prior-year period
- Cash flow from operations of $2.5 million
Travelzoo, a global media commerce company, today announced financial results for the second quarter ended June 30, 2016, with revenue of $34.0 million and operating income of $3.8 million. In nominal terms, revenue decreased by 7% year-over-year. In constant currencies, revenue decreased by 6% year-over-year. Net income was $2.0 million, up 140% year-over-year. Diluted earnings per share (EPS) were $0.14, up from $0.06 in the prior-year period.
“Our strategy of publishing high-quality deals, combined with efficient execution, has led to increased operating profits in Europe and North America,” said Holger Bartel, Chairman and Global CEO. “We intend to leverage Travelzoo’s global reach and trusted brand to grow revenue and increase profitability in future periods.”
Asia Pacific
Asia Pacific business segment revenue decreased 10% year-over-year to $2.4 million. In constant currencies, revenue decreased 10% year-over-year. Operating loss for the second quarter was $1.2 million, compared to an operating loss of $268,000 in the prior-year period.
Europe
Europe business segment revenue decreased 5% year-over-year to $9.7 million. In constant currencies, revenue decreased 2% year-over-year. Operating income for the second quarter was $1.8 million, or 18% of revenue, up from $47,000, or 0.5% of revenue in the prior-year period.
North America
North America business segment revenue decreased 8% year-over-year to $21.9 million. Operating income for the second quarter was $3.2 million, or 15% of revenue, up from $2.5 million or 11% of revenue in the prior-year period.
Members
As of June 30, 2016, Travelzoo had a worldwide unduplicated number of members of 28.9 million. In Asia Pacific, unduplicated number of members was 3.6 million as of June 30, 2016, up 5% from June 30, 2015. In Europe, unduplicated number of members was 8.1 million as of June 30, 2016, up 8% from June 30, 2015. In North America, unduplicated number of members was 17.4 million as of June 30, 2016, up 1% from June 30, 2015.
Income Taxes
Income tax expense was $1.7 million, compared to a $1.3 million income tax expense in the prior-year period. The effective income tax rate was 45%, down from 60% in the prior-year period, driven primarily by the geographic mix of taxable income.
Asset Management
During the second quarter of 2016, Travelzoo generated $2.6 million of cash from operating activities. Accounts receivable decreased by $407,000 over the prior-year period to $18.4 million. Accounts payable decreased by $7.6 million over the prior-year period to $20.8 million. Capital expenditures were $503,000, down from $564,000 in the prior-year period. As of June 30, 2016, cash and cash equivalents were $27.6 million.
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. Management presents year-over-year revenue percentage rates of change in constant currencies, calculated using prior-year period foreign currency rates on current-year period non-US revenue, as it believes this is a useful metric that facilitates comparison to historical performance.
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 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. |
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Three months ended |
Six months ended | |||||||||||||||||
| June 30, | June 30, | |||||||||||||||||
| 2016 | 2015 |
2016 |
2015 |
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| Revenues | $ | 34,046 | $ | 36,792 | $ | 68,850 | $ | 75,937 | ||||||||||
| Cost of revenues | 3,612 | 5,208 | 7,621 | 9,754 | ||||||||||||||
| Gross profit | 30,434 | 31,584 | 61,229 | 66,183 | ||||||||||||||
| Operating expenses: | ||||||||||||||||||
| Sales and marketing | 19,135 | 20,715 | 38,094 | 42,792 | ||||||||||||||
| Product development | 2,089 | 3,206 | 4,964 | 6,295 | ||||||||||||||
| General and administrative | 5,434 | 5,335 | 11,247 | 11,786 | ||||||||||||||
| Total operating expenses | 26,658 | 29,256 | 54,305 | 60,873 | ||||||||||||||
| Income from operations | 3,776 | 2,328 | 6,924 | 5,310 | ||||||||||||||
| Other income (loss) | (91 | ) | (218 | ) | 42 | (664 | ) | |||||||||||
| Income before income taxes | 3,685 | 2,110 | 6,966 | 4,646 | ||||||||||||||
| Income taxes | 1,665 | 1,268 | 2,897 | 3,074 | ||||||||||||||
| Net income | $ | 2,020 | $ | 842 | $ | 4,069 | $ | 1,572 | ||||||||||
| Net income per share: | ||||||||||||||||||
| Basic | $ | 0.14 | $ | 0.06 | $ | 0.29 | $ | 0.11 | ||||||||||
| Diluted | $ | 0.14 | $ | 0.06 | $ | 0.29 | $ | 0.11 | ||||||||||
| Weighted average shares: | ||||||||||||||||||
| Basic | 14,066 | 14,730 | 14,246 | 14,730 | ||||||||||||||
| Diluted | 14,066 | 14,730 | 14,246 | 14,730 | ||||||||||||||
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Travelzoo Inc. |
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June 30, 2016 |
December 31, 2015 |
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| Assets | ||||||||||||||||||||
| Current assets: | ||||||||||||||||||||
| Cash and cash equivalents | $ | 27,560 | $ | 35,128 | ||||||||||||||||
| Accounts receivable, net | 18,400 | 16,398 | ||||||||||||||||||
| Income taxes receivable | 833 | 1,356 | ||||||||||||||||||
| Deposits | 488 | 782 | ||||||||||||||||||
| Prepaid expenses and other | 1,828 | 2,167 | ||||||||||||||||||
| Deferred tax assets | 1,129 | 1,230 | ||||||||||||||||||
| Total current assets | 50,238 | 57,061 | ||||||||||||||||||
| Deposits | 719 | 501 | ||||||||||||||||||
| Deferred tax assets | 570 | 1,769 | ||||||||||||||||||
| Restricted cash | 1,398 | 1,328 | ||||||||||||||||||
| Property and equipment, net | 7,228 | 7,905 | ||||||||||||||||||
| Other assets | — | 15 | ||||||||||||||||||
| Total assets | $ | 60,153 | $ | 68,579 | ||||||||||||||||
| Liabilities and Stockholders’ Equity | ||||||||||||||||||||
| Current liabilities: | ||||||||||||||||||||
| Accounts payable | $ | 20,843 | $ | 23,655 | ||||||||||||||||
| Accrued expenses and other | 10,982 | 10,140 | ||||||||||||||||||
| Deferred revenue | 1,040 | 1,085 | ||||||||||||||||||
| Income tax payable | 1,639 | 477 | ||||||||||||||||||
| Note payable to related party | — | 5,658 | ||||||||||||||||||
| Total current liabilities | 34,504 | 41,015 | ||||||||||||||||||
| Long-term tax liabilities | 3,053 | 3,000 | ||||||||||||||||||
| Long-term deferred rent and other | 2,906 | 3,177 | ||||||||||||||||||
| Total liabilities | 40,463 | 47,192 | ||||||||||||||||||
| Common stock | 144 | 150 | ||||||||||||||||||
| Additional paid-in capital | 1,716 | 7,759 | ||||||||||||||||||
| Accumulated other comprehensive loss | (3,625 | ) | (3,908 | ) | ||||||||||||||||
| Retained earnings | 21,455 | 17,386 | ||||||||||||||||||
| Total stockholders’ equity | 19,690 | 21,387 | ||||||||||||||||||
| Total liabilities and stockholders’ equity | $ | 60,153 | $ | 68,579 | ||||||||||||||||
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Travelzoo Inc. |
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Three months ended |
Six months ended | |||||||||||||||
| June 30, | June 30, | |||||||||||||||
| 2016 | 2015 |
2016 |
2015 |
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| Cash flows from operating activities: | ||||||||||||||||
| Net income | $ | 2,020 | $ | 842 | $ | 4,069 | $ | 1,572 | ||||||||
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Adjustments to reconcile net income to net cash provided |
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| Depreciation and amortization | 608 | 687 | 1,250 | 1,510 | ||||||||||||
| Deferred income taxes | 233 | (20 | ) | (211 | ) | (242 | ) | |||||||||
| Stock-based compensation | 230 | 148 | 442 | 296 | ||||||||||||
| Provision for losses on accounts receivable | 36 | 25 | 44 | 52 | ||||||||||||
| Net foreign currency effects | (23 | ) | (54 | ) | 236 | (165 | ) | |||||||||
| Changes in operating assets and liabilities: | ||||||||||||||||
| Accounts receivable | (1,241 | ) | (996 | ) | (2,265 | ) | (2,876 | ) | ||||||||
| Deposits | (25 | ) | 91 | 38 | 73 | |||||||||||
| Income tax receivable | (397 | ) | 830 | 525 | 1,681 | |||||||||||
| Prepaid expenses and other | 147 | 140 | 182 | 635 | ||||||||||||
| Accounts payable | (740 | ) | (1,732 | ) | (2,210 | ) | (1,236 | ) | ||||||||
| Accrued expenses and other | 937 | (421 | ) | 484 | 143 | |||||||||||
| Income tax payable | 665 | (121 | ) | 1,268 | 23 | |||||||||||
| Reserve for unexchanged promotional shares | — | — | — | (1,393 | ) | |||||||||||
| Other non-current liabilities | 46 | 123 | 53 | 795 | ||||||||||||
| Net cash provided by (used in) operating activities | 2,496 | (458 | ) | 3,905 | 868 | |||||||||||
| Cash flows from investing activities: | ||||||||||||||||
| Release of restricted cash | — | — | — | 57 | ||||||||||||
| Purchases of property and equipment | (503 | ) | (564 | ) | (648 | ) | (753 | ) | ||||||||
| Net cash used in investing activities | (503 | ) | (564 | ) | (648 | ) | (696 | ) | ||||||||
| Cash flows from financing activities: | ||||||||||||||||
| Payment for Asia Pacific business | — | — | 58 | — | ||||||||||||
| Payment of loan to related party | — | (5,658 | ) | — | ||||||||||||
| Proceeds from related party loan | — | 1,500 | — | 2,250 | ||||||||||||
| Decrease in bank overdraft | — | (281 | ) | — | (237 | ) | ||||||||||
| Repurchase of common stock, net | (3,048 | ) | — | (4,956 | ) | |||||||||||
| Net cash provided by (used in) financing activities | (3,048 | ) | 1,219 | (10,556 | ) | 2,013 | ||||||||||
| Effect of exchange rate on cash and cash equivalents | (192 | ) | 1,698 | (269 | ) | (1,125 | ) | |||||||||
| Net increase (decrease) in cash and cash equivalents | (1,247 | ) | 1,895 | (7,568 | ) | 1,060 | ||||||||||
| Cash and cash equivalents at beginning of period | 28,807 | 54,582 | 35,128 | 55,417 | ||||||||||||
| Cash and cash equivalents at end of period | $ | 27,560 | $ | 56,477 | $ | 27,560 | $ | 56,477 | ||||||||
| Supplemental disclosure of cash flow information: | ||||||||||||||||
| Cash paid for income taxes, net | $ | 1,022 | $ | 372 | $ | 1,072 | $ | 733 | ||||||||
| Cash paid for interest on related party loan | $ | — | $ | — | $ | 110 | $ | — | ||||||||
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Travelzoo Inc. |
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| Three months ended June 30, 2016 |
Asia Pacific |
Europe |
North |
Consolidated | ||||||||||||||||||||||
| Revenue from unaffiliated customers | $ | 2,412 | $ | 9,946 | $ | 21,688 | $ | 34,046 | ||||||||||||||||||
| Intersegment revenue | 35 | (247 | ) | 212 | — | |||||||||||||||||||||
| Total net revenues | 2,447 | 9,699 | 21,900 | 34,046 | ||||||||||||||||||||||
| Operating income (loss) | $ | (1,224 | ) | $ | 1,791 | $ | 3,209 | $ | 3,776 | |||||||||||||||||
| Three months ended June 30, 2015 |
Asia Pacific |
Europe |
North |
Consolidated | ||||||||||||||||||||||
| Revenue from unaffiliated customers | 2,728 | 10,337 | 23,727 | 36,792 | ||||||||||||||||||||||
| Intersegment revenue | (15 | ) | (78 | ) | 93 | — | ||||||||||||||||||||
| Total net revenues | 2,713 | 10,259 | 23,820 | 36,792 | ||||||||||||||||||||||
| Operating income (loss) | $ | (268 | ) | $ | 47 | $ | 2,549 | $ | 2,328 | |||||||||||||||||
| Six months ended June 30, 2016 |
Asia Pacific |
Europe |
North |
Consolidated | ||||||||||||||||||||||
| Revenue from unaffiliated customers | $ | 4,671 | $ | 20,912 | $ | 43,267 | $ | 68,850 | ||||||||||||||||||
| Intersegment revenue | 36 | (321 | ) | 285 | — | |||||||||||||||||||||
| Total net revenues | 4,707 | 20,591 | 43,552 | 68,850 | ||||||||||||||||||||||
| Operating income (loss) | $ | (2,268 | ) | $ | 3,885 | $ | 5,307 | $ | 6,924 | |||||||||||||||||
| Six months ended June 30, 2015 |
Asia Pacific |
Europe |
North |
Consolidated | ||||||||||||||||||||||
| Revenue from unaffiliated customers | $ | 5,381 | $ | 22,116 | $ | 48,440 | $ | 75,937 | ||||||||||||||||||
| Intersegment revenue | (20 | ) | (295 | ) | 315 | — | ||||||||||||||||||||
| Total net revenues | 5,361 | 21,821 | 48,755 | 75,937 | ||||||||||||||||||||||
| Operating income (loss) | $ | (1,101 | ) | $ | 1,776 | $ | 4,635 | $ | 5,310 | |||||||||||||||||