EX-99.1 2 ex-99112x31x20188xk.htm EXHIBIT 99.1 Exhibit


Exhibit 99.1
 
travellogo11062017a03.jpg
Travelzoo
590 Madison Avenue
37th Floor
New York, NY 10022

Investor Relations:
Lijun Qi
ir@travelzoo.com 


FOR IMMEDIATE RELEASE

Travelzoo Reports Fourth Quarter 2018 Results

NEW YORK, February 6, 2019 — Travelzoo® (NASDAQ: TZOO):

•
Revenue of $27.1 million, up 2% year-over-year in constant currencies
•
Operating profit of $2.8 million, up 158% year-over-year
•
Cash flow from operations of $5.3 million
•
Earnings per share (EPS) of $0.13

Travelzoo, a global publisher of exclusive offers and experiences for members, today announced financial results for the fourth quarter ended December 31, 2018, with revenue of $27.1 million and operating profit of $2.8 million. In nominal terms, revenue increased $65,000 year-over-year. In constant currencies, revenue increased by 2% year-over-year. Net income was $1.6 million, with EPS from continuing operations of $0.13, up from $0.05 in the prior-year period.

"Our attractive core business in North America and Europe generated an operating profit of $4.3 million, with an operating margin of 17%, of which $1.5 million was re-invested in our Asia Pacific business. As previously announced, project 'Asia Pacific 2020' is underway with the goal of creating shareholder value from the investment," said Holger Bartel, Global CEO of Travelzoo.






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Asia Pacific
Asia Pacific business segment revenue decreased 10% year-over-year to $1.8 million. In constant currencies, revenue decreased 7% year-over-year. Revenue trends were mixed. While revenue increased 4% in Japan, 5% in Hong Kong and 217% in Southeast Asia, revenue in mainland China decreased 29%. The operating loss in Asia Pacific for the fourth quarter was $1.5 million, compared to an operating loss of $1.6 million in the prior-year period.

Europe
Europe business segment revenue increased 3% year-over-year to $9.0 million. In constant currencies, revenue increased 6% year-over-year. Operating profit for the fourth quarter was $1.6 million, or 18% of revenue, compared to an operating profit of $764,000, or 9% of revenue in the prior-year period.

North America
North America business segment revenue for the fourth quarter was $16.3 million, consistent with the
prior-year period. Operating profit for the fourth quarter was $2.7 million, or 16% of revenue, compared to an operating profit of $1.9 million, or 12% of revenue in the prior-year period.

Members
As of December 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 December 31, 2018, consistent with December 31, 2017. In Europe, unduplicated number of members was 8.8 million as of December 31, 2018, up 3% from December 31, 2017. In North America, unduplicated number of members was 17.5 million as of December 31, 2018, up 1% from December 31, 2017.

Income Taxes
Income tax expense was $1.2 million, compared to a $466,000 income tax expense in the prior-year period.

Asset Management
During the fourth quarter of 2018, Travelzoo generated $5.3 million of cash from operating activities. Accounts receivable increased by $877,000 over the prior-year period to $12.6 million. Accounts payable decreased by $2.0 million over the prior-year period to $17.1 million. Capital expenditures were $86,000, down from $252,000 in the prior-year period. As of December 31, 2018, cash and cash equivalents were $18.0 million.

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Conference Call
Travelzoo will host a conference call to discuss fourth quarter 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
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
 
Twelve months ended
 
December 31,
 
December 31,
 
2018
 
2017
 
2018
 
2017
Revenues
$
27,062

 
$
26,997

 
$
111,322

 
$
106,524

Cost of revenues
2,880

 
3,462

 
12,268

 
12,909

Gross profit
24,182

 
23,535

 
99,054

 
93,615

Operating expenses:
 
 
 
 
 
 
 
Sales and marketing
13,974

 
13,746

 
58,519

 
57,288

Product development
1,799

 
2,208

 
8,993

 
9,224

General and administrative
5,620

 
6,502

 
23,304

 
22,558

Total operating expenses
21,393

 
22,456

 
90,816

 
89,070

Operating income from continuing operations
2,789

 
1,079

 
8,238

 
4,545

Other income (loss), net
(52
)
 
62

 
48

 
173

Income from continuing operations before income taxes
2,737

 
1,141

 
8,286

 
4,718

Income tax expense
1,173

 
466

 
3,625

 
3,126

Income from continuing operations
$
1,564

 
$
675

 
$
4,661

 
$
1,592

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

 
—

 
—

 
1,938

Net income
$
1,564

 
$
675

 
$
4,661

 
$
3,530

 
 
 
 
 
 
 
 
Income per share—basic:
 
 
 
 
 
 
 
Continuing operations
$
0.13

 
$
0.05

 
$
0.38

 
$
0.12

Discontinued operations
—

 
—

 
—

 
0.15

Net income per share—basic
$
0.13


$
0.05

 
$
0.38

 
$
0.27

 
 
 
 
 
 
 
 
Income per share—diluted:
 
 
 
 
 
 
 
Continuing operations
$
0.13

 
$
0.05

 
$
0.37

 
$
0.12

Discontinued operations
—

 
—

 
—

 
0.15

Net income per share—diluted
$
0.13


$
0.05

 
$
0.37

 
$
0.27

 
 
 
 
 
 
 
 
Weighted average shares:
 
 
 
 
 
 
 
Basic
12,059

 
12,462

 
12,323

 
12,882

Diluted
12,151

 
12,462

 
12,510

 
12,894



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Travelzoo
Condensed Consolidated Balance Sheets
(Unaudited)
(In thousands)
 
 
December 31,
2018
 
December 31,
2017
Assets
 
 
 
Current assets:
 
 
 
Cash and cash equivalents
$
18,017

 
$
22,553

Accounts receivable, net
12,646

 
11,769

Income taxes receivable
389

 
517

Deposits
167

 
259

Prepaid expenses and other
1,947

 
2,141

Total current assets
33,166

 
37,239

Deposits and other
685

 
548

Deferred tax assets
1,645

 
1,516

Restricted cash
1,444

 
1,448

Investment in WeekenGO
2,694

 
—

Property and equipment, net
3,790

 
4,921

Total assets
$
43,424

 
$
45,672

Liabilities and Stockholders’ Equity
 
 
 
Current liabilities:
 
 
 
Accounts payable
$
17,129

 
$
19,105

Accrued expenses and other
7,853

 
8,702

Deferred revenue
1,339

 
825

Income tax payable
489

 
961

Total current liabilities
26,810

 
29,593

Long-term tax liabilities
418

 
373

Long-term deferred rent and other
2,137

 
2,628

Total liabilities
29,365

 
32,594

Common stock
120

 
125

Additional paid-in capital
—

 
—

Accumulated other comprehensive loss
(4,214
)
 
(3,597
)
Retained earnings
18,153

 
16,550

Total stockholders’ equity
14,059

 
13,078

Total liabilities and stockholders’ equity
$
43,424

 
$
45,672



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Travelzoo
Condensed Consolidated Statements of Cash Flows
(Unaudited)
(In thousands) 
 
Three months ended
 
Twelve months ended
 
December 31,
 
December 31,
 
2018
 
2017
 
2018
 
2017
Cash flows from operating activities:
 
 
 
 
 
 
 
Net income
$
1,564

 
$
675

 
$
4,661

 
$
3,530

Adjustments to reconcile net income to net cash provided by operating activities:
 
 
 
 
 
 
 
Depreciation and amortization
438

 
470

 
1,828

 
2,075

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

 
—

 
—

 
(2,890
)
Deferred income tax
(240
)
 
281

 
(336
)
 
309

Stock-based compensation
152

 
321

 
915

 
1,006

Losses (gains) from sale and impairment of long-lived assets
—

 
—

 
(143
)
 
—

Other
80

 
152

 
242

 
118

Net foreign currency effects
119

 
(61
)
 
42

 
(354
)
Changes in operating assets and liabilities:
 
 
 
 
 
 
 
Accounts receivable
(433
)
 
(323
)
 
(1,519
)
 
3,065

Income tax receivable
479

 
896

 
129

 
28

Prepaid expenses and other
(316
)
 
(70
)
 
104

 
(487
)
Accounts payable
3,575

 
3,105

 
(25
)
 
(1,588
)
Accrued expenses and other
248

 
534

 
—

 
(475
)
Income tax payable
(327
)
 
152

 
(392
)
 
261

Other non-current liabilities
(58
)
 
(2,173
)
 
(189
)
 
(2,522
)
Net cash provided by operating activities
5,281

 
3,959

 
5,317

 
2,076

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

 
—

 
—

 
2,890

Proceeds from sale of property and equipment
—

 
—

 
150

 
—

Investment in WeekenGO
—

 
—

 
(3,083
)
 
—

Purchases of property and equipment
(86
)
 
(252
)
 
(752
)
 
(738
)
Net cash provided by (used in) investing activities
(86
)
 
(252
)
 
(3,685
)
 
2,152

Cash flows from financing activities:
 
 
 
 
 
 
 
Repurchase of common stock, net
(2,419
)
 
(155
)
 
(5,292
)
 
(9,712
)
Net cash used in financing activities
(2,419
)
 
(155
)
 
(5,292
)
 
(9,712
)
Effect of exchange rate on cash, cash equivalents and restricted cash
(547
)
 
189

 
(880
)
 
1,249

Net increase (decrease) in cash, cash equivalents and restricted cash
2,229

 
3,741

 
(4,540
)
 
(4,235
)
Cash, cash equivalents and restricted cash at beginning of period
17,232

 
20,260

 
24,001

 
28,236

Cash, cash equivalents and restricted cash at end of period
$
19,461

 
$
24,001

 
$
19,461

 
$
24,001

Supplemental disclosure of cash flow information:
 
 
 
 
 
 
 
Cash paid for income taxes, net
$
1,098

 
$
1,343

 
$
4,061

 
$
6,201


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Travelzoo
Segment Information
(Unaudited)
(In thousands)
 
Three months ended December 31, 2018
Asia Pacific
 
Europe
 
North
America
 
Consolidated
Revenue from unaffiliated customers
$
1,777

 
$
9,213

 
$
16,072

 
$
27,062

Intersegment revenue
9

 
(222
)
 
213

 
—

Total net revenues
1,786

 
8,991

 
16,285

 
27,062

Operating income (loss)
$
(1,510
)
 
$
1,626

 
$
2,673

 
$
2,789

 
 
 
 
 
 
 
 
Three months ended December 31, 2017
Asia Pacific
 
Europe
 
North
America
 
Consolidated
Revenue from unaffiliated customers
$
1,979

 
$
8,803

 
$
16,215

 
$
26,997

Intersegment revenue
4

 
(36
)
 
32

 
—

Total net revenues
1,983

 
8,767

 
16,247

 
26,997

Operating income (loss)
$
(1,582
)
 
$
764

 
$
1,897

 
$
1,079


Twelve months ended December 31, 2018
Asia Pacific
 
Europe
 
North
America
 
Consolidated
Revenue from unaffiliated customers
$
7,869

 
$
36,468

 
$
66,985

 
$
111,322

Intersegment revenue
(10
)
 
(319
)
 
329

 
—

Total net revenues
7,859

 
36,149

 
67,314

 
111,322

Operating income (loss)
$
(6,322
)
 
$
4,973

 
$
9,587

 
$
8,238

 
 
 
 
 
 
 
 
Twelve months ended December 31, 2017
Asia Pacific
 
Europe
 
North
America
 
Consolidated
Revenue from unaffiliated customers
$
7,553

 
$
34,034

 
$
64,937

 
$
106,524

Intersegment revenue
(34
)
 
(353
)
 
387

 
—

Total net revenues
7,519

 
33,681

 
65,324

 
106,524

Operating income (loss)
$
(5,967
)
 
$
2,290

 
$
8,222

 
$
4,545





                                                                    

###


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