Attached files
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| 8-K - FORM 8-K - TRAVELZOO | tzoo8-kearningsrelease4q2010.htm |
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Travelzoo 37th Floor Christie McConnell +1 (212) 484-4912 |
FOR IMMEDIATE RELEASE
Travelzoo Reports Fourth Quarter 2010 Results
NEW YORK, February 3, 2011 -- Travelzoo Inc. (NASDAQ: TZOO):
· Revenue of $28.5 million, up 20% year-over-year
· Operating profit from continuing operations of $6.7 million, up 90% year-over-year
· Cash flow from operations of $8.8 million
· Net income per share from continuing operations of $0.23, up 156% from $0.09 in the prior-year period
· Earnings per share of $0.23, compared to earnings per share of $0.32 in the prior-year period. Prior-year period included a one-time income tax benefit of $4.4 million related to the dissolution of the Asia Pacific business segment
Travelzoo Inc., a global Internet media company, today announced financial results for the fourth quarter ended December 31, 2010, with revenue of $28.5 million, an increase of 20% year-over-year. Operating profit from continuing operations was $6.7 million, up 90% year-over-year. Net income from continuing operations was $3.8 million, with diluted net income per share from continuing operations of $0.23, compared to diluted net income per share from continuing operations of $0.09 in the prior-year period. Revenue, operating profit and income from continuing operations for all periods exclude the results of Travelzoo’s former Asia Pacific business segment, which are reported as discontinued operations.
“We rounded off 2010 with strong revenue growth and the highest quarterly EPS since Q1 2007,” said Chris Loughlin, CEO of Travelzoo. “Operating income increased 90% year-over-year in spite of start up costs related to Local Deals. We now publish Local Deals in 30 cities across the U.S., U.K., and Spain.”
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North America
North America business segment revenue grew 14% year-over-year to $22.0 million. Operating profit was $6.7 million, or 30% of revenue, up from an operating profit of $5.3 million, or 28% of revenue, in the prior-year period.
Europe
Europe business segment revenue grew 43% year-over-year to $6.6 million. In local currency terms, revenue grew 47% year-over-year. Operating profit was $22,000, compared to an operating loss of $1.8 million in the prior-year period. Travelzoo began operations in the U.K. in May 2005, in Germany in September 2006, and in France in March 2007. In May 2008, Travelzoo began publishing its weekly Top 20® list in Spain, after having operated a sales office in Barcelona since November 2006.
Subscribers
Travelzoo had a total unduplicated number of newsletter subscribers in North America and Europe of 18.9 million as of December 31, 2010, up 12% from December 31, 2009, and up 1% from September 30, 2010. In North America, total unduplicated number of subscribers was 14.3 million as of December 31, 2010, up 8% from December 31, 2009 and up 1% from September 30, 2010. In Europe, total unduplicated number of subscribers was 4.6 million as of December 31, 2010, up 28% from December 31, 2009 and up 2% from September 30, 2010.
Income Taxes
Income tax expense was $3.0 million, compared to $2.0 million in the prior-year period for continuing operations. The effective income tax rate was 44%, down from 57% in the prior-year period.
Asset Management
During the fourth quarter, Travelzoo generated $8.8 million of cash from operating activities. Accounts receivable decreased by $862,000 quarter-over-quarter and increased by $2.0 million over the prior-year period to $13.3 million. Accounts payable increased by $2.6 million quarter-over-quarter and increased by $3.1 million over the prior-year period to $9.9 million. Capital expenditures were $138,000 down from $391,000 in the prior quarter and down from $384,000 in the prior-year period. Travelzoo exited the fourth quarter with $41.2 million in cash and cash equivalents.
2/8
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 Web cast.
About Travelzoo
Travelzoo Inc. is a global Internet media company. With more than 22 million subscribers in North America, Europe, and Asia Pacific and 24 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.
3/8
|
Travelzoo Inc. | ||||
|
Condensed Consolidated Statements of Operations | ||||
|
(Unaudited) | ||||
|
(In thousands, except per share amounts) | ||||
|
|
|
|
| |
|
|
Three months ended |
Twelve months ended | ||
|
|
December 31, |
December 31, | ||
|
|
2010 |
2009 |
2010 |
2009 |
|
|
--------- |
--------- |
--------- |
--------- |
|
Revenues |
$ 28,468 |
$ 23,779 |
$ 112,784 |
$ 93,973 |
|
Cost of revenues |
2,241 |
1,488 |
7,253 |
5,628 |
|
|
--------- |
--------- |
--------- |
--------- |
|
Gross profit |
26,227 |
22,291 |
105,531 |
88,345 |
|
Operating expenses: |
|
|
|
|
|
Sales and marketing |
11,783 |
12,258 |
54,454 |
49,707 |
|
General and administrative |
7,732 |
6,509 |
27,565 |
24,930 |
|
|
--------- |
--------- |
--------- |
--------- |
|
Total operating expenses |
19,515 |
18,767 |
82,019 |
74,637 |
|
|
--------- |
--------- |
--------- |
--------- |
|
Operating income from continuing operations |
6,712 |
3,524 |
23,512 |
13,708 |
|
Other income and expense: |
|
|
|
|
|
Interest income and other income |
34 |
21 |
166 |
61 |
|
Loss on foreign currency |
(8) |
(94) |
(197) |
(78) |
|
|
--------- |
--------- |
--------- |
--------- |
|
Income from continuing operations before income taxes |
6,738 |
3,451 |
23,481 |
13,691 |
|
Income taxes |
2,951 |
1,981 |
10,324 |
7,273 |
|
|
--------- |
--------- |
--------- |
--------- |
|
Income from continuing operations |
3,787 |
1,470 |
13,157 |
6,418 |
|
|
|
|
|
|
|
Loss from discontinued operations, net of tax |
- |
(546) |
- |
(5,642) |
|
Income tax benefit related to dissolution of Asia Pacific business segment |
- |
4,409 |
- |
4,409 |
|
|
--------- |
--------- |
--------- |
--------- |
|
Income (loss) from discontinued operations |
- |
3,863 |
- |
(1,233) |
|
|
--------- |
--------- |
--------- |
--------- |
|
Net income |
$ 3,787 |
$ 5,333 |
$ 13,157 |
$ 5,185 |
|
|
========= |
========= |
========= |
========= |
|
|
|
|
|
|
|
Basic net income (loss) per share from: |
|
|
|
|
|
Continuing operations |
$ 0.23 |
$ 0.09 |
$ 0.80 |
$ 0.39 |
|
Discontinued operations |
$ - |
$ 0.23 |
$ - |
$ (0.08) |
|
Net income |
$ 0.23 |
$ 0.32 |
$ 0.80 |
$ 0.32 |
|
Diluted net income (loss) per share from: |
|
|
|
|
|
Continuing operations |
$ 0.23 |
$ 0.09 |
$ 0.80 |
$ 0.39 |
|
Discontinued operations |
$ - |
$ 0.23 |
$ - |
$ (0.08) |
|
Net income |
$ 0.23 |
$ 0.32 |
$ 0.80 |
$ 0.32 |
|
|
|
|
|
|
|
Shares used in computing basic net income (loss) per share |
16,444 |
16,444 |
16,444 |
16,408 |
|
Shares used in computing diluted net income (loss) per share |
16,518 |
16,453 |
16,453 |
16,416 |
4/8
|
Travelzoo Inc. | |||
|
Condensed Consolidated Balance Sheets | |||
|
(Unaudited) | |||
|
(In thousands) | |||
|
| |||
|
|
December 31, |
|
December 31, |
|
|
2010 |
|
2009 |
|
|
---------- |
|
---------- |
|
ASSETS |
|
|
|
|
Cash and cash equivalents |
$ 41,184 |
|
$ 19,776 |
|
Accounts receivable, net |
13,290 |
|
11,279 |
|
Income taxes receivable |
264 |
|
6,061 |
|
Deposits |
129 |
|
139 |
|
Prepaid expenses and other current assets |
1,489 |
|
1,103 |
|
Deferred tax assets |
1,411 |
|
966 |
|
|
---------- |
|
---------- |
|
Total current assets |
57,767 |
|
39,324 |
|
|
---------- |
|
---------- |
|
Deposits, less current portion |
279 |
|
381 |
|
Deferred tax assets, less current portion |
349 |
|
52 |
|
Restricted cash |
3,124 |
|
875 |
|
Property and equipment, net |
3,425 |
|
4,089 |
|
Intangible assets, net |
1,058 |
|
1,411 |
|
|
---------- |
|
---------- |
|
Total assets |
$ 66,002 |
|
$ 46,132 |
|
|
========== |
|
========== |
|
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
|
Accounts payable |
9,931 |
|
6,834 |
|
Accrued expenses |
6,080 |
|
4,278 |
|
Deferred revenue |
1,325 |
|
828 |
|
Deferred rent |
218 |
|
134 |
|
Income tax payable |
650 |
|
- |
|
|
---------- |
|
---------- |
|
Total current liabilities |
18,204 |
|
12,074 |
|
|
---------- |
|
---------- |
|
Deferred tax liabilities |
- |
|
533 |
|
Long-term tax liabilities |
1,449 |
|
2,139 |
|
Deferred rent, less current portion |
460 |
|
615 |
|
|
|
|
|
|
Common stock |
164 |
|
164 |
|
Additional paid-in capital |
6,598 |
|
4,772 |
|
Accumulated other comprehensive loss |
(1,038) |
|
(1,173) |
|
Retained earnings |
40,165 |
|
27,008 |
|
|
---------- |
|
---------- |
|
Total stockholders' equity |
45,889 |
|
30,771 |
|
|
---------- |
|
---------- |
|
Total liabilities and |
|
|
|
|
stockholders' equity |
$ 66,002 |
|
$ 46,132 |
|
|
========== |
|
========== |
5/8
|
Travelzoo Inc. | ||||
|
Condensed Consolidated Statements of Cash Flows | ||||
|
(Unaudited) | ||||
|
(In thousands) | ||||
|
|
|
|
| |
|
|
Three months ended |
Twelve months ended | ||
|
|
December 31, |
December 31, | ||
|
|
2010 |
2009 |
2010 |
2009 |
|
|
--------- |
--------- |
--------- |
--------- |
|
CASH FLOWS FROM OPERATING ACTIVITIES: |
|
|
|
|
|
Net income |
$ 3,787 |
$ 5,333 |
$ 13,157 |
$ 5,185 |
|
Adjustments to reconcile net income to net cash provided by operating activities: |
|
|
|
|
|
Depreciation and amortization |
623 |
535 |
2,389 |
1,992 |
|
Deferred income taxes |
(1,340) |
139 |
(1,276) |
139 |
|
Stock-based compensation |
188 |
94 |
750 |
94 |
|
Provision for losses on accounts receivable |
93 |
(44) |
199 |
258 |
|
Foreign currency translation loss related to dissolution of Asia Pacific business segment |
- |
110 |
- |
110 |
|
Net foreign currency effects |
8 |
94 |
197 |
78 |
|
Changes in operating assets and liabilities: |
|
|
|
|
|
Accounts receivable |
659 |
569 |
(2,323) |
(197) |
|
Deposits |
129 |
60 |
20 |
(15) |
|
Income tax receivable |
1,517 |
(4,352) |
5,797 |
(4,352) |
|
Prepaid expenses and other current assets |
(134) |
(780) |
(413) |
(357) |
|
Accounts payable |
2,638 |
(723) |
3,232 |
877 |
|
Accrued expenses |
413 |
179 |
1,830 |
77 |
|
Deferred revenue |
150 |
6 |
498 |
160 |
|
Deferred rent |
(51) |
(37) |
(72) |
(163) |
|
Income tax payable |
134 |
- |
630 |
- |
|
Other non-current liabilities |
14 |
1,222 |
(690) |
1,239 |
|
|
--------- |
--------- |
--------- |
--------- |
|
Net cash provided by operating activities |
8,828 |
2,405 |
23,925 |
5,125 |
|
|
--------- |
--------- |
--------- |
--------- |
|
CASH FLOWS FROM INVESTING ACTIVITIES: |
|
|
|
|
|
Purchases of property and equipment |
(138) |
(384) |
(1,279) |
(1,992) |
|
Purchases of restricted cash |
(2,248) |
- |
(2,248) |
- |
|
Purchase of intangible asset |
- |
- |
- |
(1,760) |
|
|
--------- |
--------- |
--------- |
--------- |
|
Net cash used in investing activities |
(2,386) |
(384) |
(3,527) |
(3,752) |
|
|
--------- |
--------- |
--------- |
--------- |
|
CASH FLOWS FROM FINANCING ACTIVITIES: |
|
|
|
|
|
Proceeds from exercise of stock options |
- |
- |
- |
2,158 |
|
Proceeds from sale of Asia Pacific business segment |
- |
2,061 |
1,073 |
2,061 |
|
|
--------- |
--------- |
--------- |
--------- |
|
Net cash provided by financing activities |
- |
2,061 |
1,073 |
4,219 |
|
|
--------- |
--------- |
--------- |
--------- |
6/ 8
|
|
--------- |
--------- |
--------- |
--------- |
|
Effect of exchange rate on cash and cash equivalents |
25 |
- |
(63) |
5 |
|
|
--------- |
--------- |
--------- |
--------- |
|
Net increase in cash and cash equivalents |
6,467 |
4,082 |
21,408 |
5,597 |
|
Cash and cash equivalents at beginning of period |
34,717 |
15,694 |
19,776 |
14,179 |
|
|
--------- |
--------- |
--------- |
--------- |
|
Cash and cash equivalents at end of period |
41,184 |
19,776 |
41,184 |
19,776 |
|
|
========= |
========= |
========= |
========= |
|
Supplemental disclosure of cash flow information: |
|
|
|
|
|
Cash paid for income taxes net of refunds received |
$ 2,593 |
$ 1,029 |
$ 5,857 |
$ 5,760 |
|
|
--------- |
--------- |
--------- |
--------- |
7/8
|
Travelzoo Inc. | |||||
|
Segment Information | |||||
|
(Unaudited) | |||||
|
(In thousands) | |||||
|
|
|
|
|
| |
|
Three months ended December 31, 2010 |
North America |
Europe |
Elimination |
Consolidated | |
|
|
-------- |
-------- |
----------- |
------------ | |
|
Revenue from unaffiliated customers |
$ 21,945 |
$ 6,523 |
$ - |
$ 28,468 | |
|
Intersegment revenue |
70 |
28 |
(98) |
- | |
|
|
-------- |
-------- |
----------- |
----------- | |
|
Total net revenues |
22,015 |
6,551 |
(98) |
28,468 | |
|
|
-------- |
-------- |
----------- |
----------- | |
|
Operating income |
$ 6,689 |
$ 22 |
$ 1 |
$ 6,712 | |
|
|
-------- |
-------- |
----------- |
----------- | |
|
|
|
|
|
| |
|
Three months ended December 31, 2009 |
North America |
Europe |
Elimination |
Consolidated | |
|
|
-------- |
--------- |
----------- |
------------ | |
|
Revenue from unaffiliated customers |
$ 19,233 |
$ 4,546 |
$ - |
$ 23,779 | |
|
Intersegment revenue |
51 |
43 |
(94) |
- | |
|
|
-------- |
--------- |
----------- |
----------- | |
|
Total net revenues |
19,284 |
4,589 |
(94) |
23,779 | |
|
|
-------- |
--------- |
----------- |
----------- | |
|
Operating income (loss) |
$ 5,329 |
$ (1,802) |
$ (3) |
$ 3,524 | |
|
|
-------- |
--------- |
----------- |
----------- | |
|
|
|
|
|
| |
|
Twelve months ended December 31, 2010 |
North America |
Europe |
Elimination |
Consolidated | |
|
|
-------- |
-------- |
----------- |
------------ | |
|
Revenue from unaffiliated customers |
$ 87,661 |
$ 25,123 |
$ - |
$ 112,784 | |
|
Intersegment revenue |
197 |
107 |
(304) |
- | |
|
|
-------- |
-------- |
----------- |
----------- | |
|
Total net revenues |
87,858 |
25,230 |
(304) |
112,784 | |
|
|
-------- |
-------- |
----------- |
----------- | |
|
Operating income (loss) |
$ 24,998 |
$ (1,489) |
$ 3 |
$ 23,512 | |
|
|
-------- |
-------- |
----------- |
----------- | |
|
|
|
|
|
| |
|
Twelve months ended December 31, 2009 |
North America |
Europe |
Elimination |
Consolidated | |
|
|
-------- |
-------- |
----------- |
------------ | |
|
Revenue from unaffiliated customers |
$ 77,707 |
$ 16,266 |
$ - |
$ 93,973 | |
|
Intersegment revenue |
260 |
73 |
(333) |
- | |
|
|
|
-------- |
----------- |
---------- |
---------- |
|
Total net revenues |
|
77,967 |
16,339 |
(333) |
93,973 |
|
|
|
-------- |
----------- |
----------- |
------------- |
|
Operating income (loss) |
|
$ 19,227 |
$ (5,463) |
$ (56) |
$ 13,708 |
|
|
|
-------- |
----------- |
----------- |
-------- |
8/8