Travelzoo® (NASDAQ: TZOO):
- Revenue of $27.0 million, up 1% year-over-year
- Operating profit of $1.1 million
- Earnings per share of $0.05
- Cash flow from operations of $4.0 million
Travelzoo, a global publisher of exclusive offers and experiences for members, today announced financial results for the fourth quarter ended December 31, 2017, with revenue of $27.0 million and operating profit of $1.1 million. In nominal terms, revenue increased by 1% year-over-year. In constant currencies, revenue decreased by 2% year-over-year. Net income was $675,000, with earnings per share (EPS) of $0.05.
Travelzoo's Global CEO, Dr. Holger Bartel, commented: "We will continue leveraging Travelzoo's trusted brand and worldwide relationships with top suppliers to negotiate more exclusive offers for Travelzoo members. High quality of every offer remains our top priority. We only present to our members offers which have passed a rigorous review and test booking."
Asia Pacific
Asia Pacific business segment revenue decreased 19% year-over-year to $2.0 million. Operating loss for the fourth quarter was $1.6 million, compared to an operating loss of $810,000 in the prior-year period. The fourth quarter 2017 operating loss was impacted by the cost of a severance payment to an executive in Asia Pacific.
Europe
Europe business segment revenue increased 4% year-over-year to $8.8 million. In constant currencies, revenue decreased 4% year-over-year. Operating profit for the fourth quarter was $764,000, or 9% of revenue, compared to operating income of $582,000, or 7% of revenue in the prior-year period.
North America
North America business segment revenue increased 2% year-over-year to $16.2 million. In constant currencies, revenue increased 1% year-over-year. Operating profit for the fourth quarter was $1.9 million, or 12% of revenue, compared to operating income of $2.3 million, or 14% of revenue in the prior-year period.
Members
As of December 31, 2017, Travelzoo had a worldwide unduplicated number of members of 29.4 million. In Asia Pacific, unduplicated number of members was 3.6 million as of December 31, 2017, up 1% from December 31, 2016. In Europe, unduplicated number of members was 8.5 million as of December 31, 2017, up 5% from December 31, 2016. In North America, unduplicated number of members was 17.4 million as of December 31, 2017, up 1% from December 31, 2016.
Income Taxes
Income tax expense was $466,000, compared to $542,000 in the prior-year period. The fourth quarter 2017 income tax expense includes a $505,000 one-time net tax benefit as a result of a tax reserve release related to the completion of an IRS tax audit offset by the estimated impact of the new U.S. tax law. Beginning with the first quarter of 2018, Travelzoo's earnings are expected to benefit from the new reduced U.S. federal tax rate because the largest portion of the company's taxable income is in the U.S.
Asset Management
During the fourth quarter of 2017, Travelzoo generated $4.0 million of cash from operating activities. Accounts receivable decreased by $2.6 million over the prior-year period to $11.8 million. Accounts payable decreased by $609,000 over the prior-year period to $19.1 million. Capital expenditures were $252,000, up from $107,000 in the prior-year period. As of December 31, 2017, cash and cash equivalents were $22.6 million.
Conference Call
Travelzoo will host a conference call to discuss fourth 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® 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 allow us 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. All other names are trademarks and/or registered trademarks of their respective owners.
Travelzoo | |||||||||||||||||
Three months ended | Twelve months ended | ||||||||||||||||
| December 31, | December 31, | ||||||||||||||||
| 2017 | 2016 | 2017 | 2016 | ||||||||||||||
| Revenues | $ | 26,997 | $ | 26,813 | $ | 106,524 | $ | 114,263 | |||||||||
| Cost of revenues | 3,462 | 3,262 | 12,909 | 13,855 | |||||||||||||
| Gross profit | 23,535 | 23,551 | 93,615 | 100,408 | |||||||||||||
| Operating expenses: | |||||||||||||||||
| Sales and marketing | 13,746 | 13,369 | 57,288 | 58,429 | |||||||||||||
| Product development | 2,208 | 2,077 | 9,224 | 9,096 | |||||||||||||
| General and administrative | 6,502 | 6,077 | 22,558 | 22,697 | |||||||||||||
| Total operating expenses | 22,456 | 21,523 | 89,070 | 90,222 | |||||||||||||
| Income from continuing operations | 1,079 | 2,028 | 4,545 | 10,186 | |||||||||||||
| Other income (expense), net | 62 | (480 | ) | 173 | (187 | ) | |||||||||||
| Income from continuing operations before income taxes | 1,141 | 1,548 | 4,718 | 9,999 | |||||||||||||
| Income tax expense | 466 | 542 | 3,126 | 3,992 | |||||||||||||
| Income from continuing operations | $ | 675 | $ | 1,006 | $ | 1,592 | $ | 6,007 | |||||||||
| Income (loss) from discontinued operations, net of income taxes | - | (63 | ) | 1,938 | 624 | ||||||||||||
| Net income | $ | 675 | $ | 943 | $ | 3,530 | $ | 6,631 | |||||||||
Income per share-basic: | |||||||||||||||||
| Continuing operations | $ | 0.05 | $ | 0.07 | $ | 0.12 | $ | 0.43 | |||||||||
| Discontinued operations | 0.00 | 0.00 | 0.15 | 0.04 | |||||||||||||
Net income per share-basic | $ | 0.05 | $ | 0.07 | $ | 0.27 | $ | 0.47 | |||||||||
Income per share-diluted: | |||||||||||||||||
| Continuing operations | $ | 0.05 | $ | 0.07 | $ | 0.12 | $ | 0.43 | |||||||||
| Discontinued operations | 0.00 | 0.00 | 0.15 | 0.04 | |||||||||||||
Net income per share-diluted | $ | 0.05 | $ | 0.07 | $ | 0.27 | $ | 0.47 | |||||||||
| Weighted average shares: | |||||||||||||||||
| Basic | 12,462 | 13,665 | 12,882 | 13,997 | |||||||||||||
| Diluted | 12,462 | 13,714 | 12,894 | 13,997 | |||||||||||||
Travelzoo | |||||||||
| December 31, 2017 | December 31, 2016 | ||||||||
| Assets | |||||||||
| Current assets: | |||||||||
| Cash and cash equivalents | $ | 22,553 | $ | 26,838 | |||||
| Accounts receivable, net | 11,769 | 14,415 | |||||||
| Income taxes receivable | 517 | 542 | |||||||
| Deposits | 259 | 105 | |||||||
| Prepaid expenses and other | 2,141 | 1,773 | |||||||
| Deferred tax assets | — | 793 | |||||||
| Total current assets | 37,239 | 44,466 | |||||||
| Deposits and other | 548 | 702 | |||||||
| Deferred tax assets | 1,516 | 1,052 | |||||||
| Restricted cash | 1,448 | 1,152 | |||||||
| Property and equipment, net | 4,921 | 6,158 | |||||||
| Total assets | $ | 45,672 | $ | 53,530 | |||||
| Liabilities and Stockholders’ Equity | |||||||||
| Current liabilities: | |||||||||
| Accounts payable | $ | 19,105 | $ | 19,714 | |||||
| Accrued expenses and other | 8,702 | 8,699 | |||||||
| Deferred revenue | 825 | 719 | |||||||
| Income tax payable | 961 | 691 | |||||||
| Total current liabilities | 29,593 | 29,823 | |||||||
| Long-term tax liabilities | 373 | 2,879 | |||||||
| Long-term deferred rent and other | 2,628 | 2,764 | |||||||
| Total liabilities | 32,594 | 35,466 | |||||||
| Common stock | 125 | 135 | |||||||
| Additional paid-in capital | — | — | |||||||
| Accumulated other comprehensive loss | (3,597 | ) | (3,787 | ) | |||||
| Retained earnings | 16,550 | 21,716 | |||||||
| Total stockholders’ equity | 13,078 | 18,064 | |||||||
| Total liabilities and stockholders’ equity | $ | 45,672 | $ | 53,530 | |||||
Travelzoo | |||||||||||||||||
Three months ended | Twelve months ended | ||||||||||||||||
| December 31, | December 31, | ||||||||||||||||
| 2017 | 2016 | 2017 | 2016 | ||||||||||||||
| Cash flows from operating activities: | |||||||||||||||||
| Net income | $ | 675 | $ | 943 | $ | 3,530 | $ | 6,631 | |||||||||
| Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||||||||
| Depreciation and amortization | 470 | 674 | 2,075 | 2,530 | |||||||||||||
| Discontinued operations gain on sale of Fly.com | — | (2,890 | ) | — | |||||||||||||
| Deferred income taxes | 281 | 25 | 309 | (199 | ) | ||||||||||||
| Stock-based compensation | 321 | 241 | 1,007 | 933 | |||||||||||||
| Provision for losses on accounts receivable | 152 | 83 | 118 | 100 | |||||||||||||
| Net foreign currency effects | (61 | ) | (7 | ) | (354 | ) | (315 | ) | |||||||||
| Changes in operating assets and liabilities: | |||||||||||||||||
| Accounts receivable | (323 | ) | 1,860 | 3,065 | 1,313 | ||||||||||||
| Income tax receivable | 896 | 1,115 | 28 | 816 | |||||||||||||
| Prepaid expenses and other | (70 | ) | 1,344 | (487 | ) | 957 | |||||||||||
| Accounts payable | 3,105 | 1,928 | (1,590 | ) | (2,463 | ) | |||||||||||
| Accrued expenses and other | 534 | 327 | (475 | ) | (1,747 | ) | |||||||||||
| Income tax payable | 152 | (1,485 | ) | 261 | 287 | ||||||||||||
| Other non-current liabilities | (2,173 | ) | (242 | ) | (2,522 | ) | (121 | ) | |||||||||
| Net cash provided by operating activities | 3,959 | 6,806 | 2,075 | 8,722 | |||||||||||||
| Cash flows from investing activities: | |||||||||||||||||
| Proceeds from sale of Fly.com domain name | — | — | 2,890 | — | |||||||||||||
| Purchases of property and equipment | (252 | ) | (107 | ) | (738 | ) | (909 | ) | |||||||||
| Net cash provided by (used in) investing activities | (252 | ) | (107 | ) | 2,152 | (909 | ) | ||||||||||
| Cash flows from financing activities: | |||||||||||||||||
| Acquisition of the Asia Pacific business | — | — | — | 58 | |||||||||||||
| Payment of loan to related party | — | — | — | (5,658 | ) | ||||||||||||
| Repurchase of common stock, net | (155 | ) | (3,936 | ) | (9,711 | ) | (9,662 | ) | |||||||||
| Net cash used in financing activities | (155 | ) | (3,936 | ) | (9,711 | ) | (15,262 | ) | |||||||||
| Effect of exchange rate on cash and cash equivalents | 179 | (764 | ) | 1,199 | (841 | ) | |||||||||||
| Net increase (decrease) in cash and cash equivalents | 3,731 | 1,999 | (4,285 | ) | (8,290 | ) | |||||||||||
| Cash and cash equivalents at beginning of period | 18,822 | 24,839 | 26,838 | 35,128 | |||||||||||||
| Cash and cash equivalents at end of period | $ | 22,553 | $ | 26,838 | $ | 22,553 | $ | 26,838 | |||||||||
| Supplemental disclosure of cash flow information: | |||||||||||||||||
| Cash paid for income taxes, net | $ | 1,343 | $ | 1,111 | $ | 6,201 | $ | 3,309 | |||||||||
| Cash paid for interest on related party loan | $ | — | $ | — | $ | — | $ | 88 | |||||||||
Travelzoo | |||||||||||||||
| Three months ended December 31, 2017 | Asia Pacific | Europe | North | 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 profit (loss) | $ | (1,582 | ) | $ | 764 | $ | 1,897 | $ | 1,079 | ||||||
| Three months ended December 31, 2016 | Asia Pacific | Europe | North | Consolidated | |||||||||||
| Revenue from unaffiliated customers | $ | 2,452 | $ | 8,609 | $ | 15,752 | $ | 26,813 | |||||||
| Intersegment revenue | (5 | ) | (192 | ) | 197 | — | |||||||||
| Total net revenues | 2,447 | 8,417 | 15,949 | 26,813 | |||||||||||
| Operating profit (loss) | $ | (810 | ) | $ | 582 | $ | 2,256 | $ | 2,028 | ||||||
Twelve months ended December 31, 2017 | Asia Pacific | Europe | North | 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 profit (loss) | $ | (5,967 | ) | $ | 2,290 | $ | 8,222 | $ | 4,545 | ||||||
| Twelve months ended December 31, 2016 | Asia Pacific | Europe | North | Consolidated | |||||||||||
| Revenue from unaffiliated customers | $ | 9,625 | $ | 37,502 | $ | 67,136 | $ | 114,263 | |||||||
| Intersegment revenue | 73 | (595 | ) | 522 | — | ||||||||||
| Total net revenues | 9,698 | 36,907 | 67,658 | 114,263 | |||||||||||
| Operating profit (loss) | $ | (3,890 | ) | $ | 5,604 | $ | 8,472 | $ | 10,186 | ||||||
View source version on businesswire.com: http://www.businesswire.com/news/home/20180208005788/en/
Contacts:
Travelzoo
Lijun Qi
ir@travelzoo.com
