Welcome!

News Feed Item

Travelzoo Reports Fourth Quarter 2013 Results and Announces Share Repurchase Program

Travelzoo Inc. (NASDAQ:TZOO):

Fourth Quarter 2013 Financial Highlights:

  • Revenue of $37.5 million, up 1% year-over-year
  • Operating income of $4.5 million, up 3% year-over-year
  • Net income of $3.2 million
  • Earnings per share of $0.21, compared to $0.24 in the prior-year period
  • Cash used in operations was $1.8 million

Travelzoo Inc., a global Internet media company, today announced financial results for the fourth quarter ended December 31, 2013, with revenue of $37.5 million, an increase of 1% year-over-year. Operating income was $4.5 million, up 3% year-over-year. Net income was $3.2 million, with earnings per share of $0.21, down from $0.24 in the prior-year period.

Travelzoo also announced that its board of directors has authorized the repurchase of up to 500,000 of the company's outstanding common shares. Purchases may be made, from time to time, in the open market and will be funded from available cash. The number of shares to be purchased and the timing of purchases will be based on the level of Travelzoo's cash balances, general business and market conditions, and other factors, including alternative investment opportunities.

"Our Travel products showed continued strength in Q4, particularly in Europe, which contributed 40% of the company's profits. These gains were offset by revenue declines in SuperSearch and Fly.com," said Chris Loughlin, chief executive officer. "We will continue to invest in audience and products to spur future growth. These include our hotel booking platform, which is now in internal testing, as well as features that make it easier for our users to find deals when and where they need them, particularly on their mobile devices."

For the full year, revenue was $158.2 million, an increase of 5% year-over-year. GAAP operating income was $2.3 million, down 91% year-over-year. Non-GAAP operating income was $24.3 million, down 15% year-over-year. GAAP net loss was $5.0 million, with loss per share of $0.33, compared to earnings per share of $1.14 in the prior-year period. Non-GAAP net income was $17.0 million, with earnings per share of $1.11, down from $1.33 in the prior-year period. For the year ended December 31, 2013 and 2012, non-GAAP operating income, non-GAAP net income and non-GAAP earnings per share exclude a $22.0 million and a $3.0 million charge related to a reserve for Travelzoo Inc.'s settlement agreements in connection with a dispute over unclaimed property audits.

North America

North America business segment revenue decreased 3% year-over-year to $25.6 million. Operating profit for the fourth quarter was $2.7 million, or 10% of revenue, down from $3.4 million, or 13% of revenue, in the prior-year period.

Europe

Europe business segment revenue increased 12% year-over-year to $11.9 million. In local currency terms, revenue increased 11% year-over-year. Operating profit for the fourth quarter was $1.8 million, or 15% of revenue, up from $1.0 million, or 9% of revenue in the prior-year period.

Search Products

In response to declining revenue and profit from its Search products, which include SuperSearch and Fly.com, the Company has initiated a performance review, which may result in merging the products, discontinuing or replacing one or both of them. "Challenges in traffic acquisition from search engines and poor monetization on mobile devices have led to continued declines in Search revenue," said Glen Ceremony, chief financial officer. "As we are reviewing these products and working on their improvement, we will also put a stronger focus on profitability, which could result in a revenue decline of approximately $1.5 million from SuperSearch versus the prior-year period."

Subscribers

Travelzoo had a total unduplicated number of subscribers in North America and Europe of 23.3 million as of December 31, 2013, up 4% from December 31, 2012. In North America, total unduplicated number of subscribers was 16.6 million as of December 31, 2013, up 3% from December 31, 2012. In Europe, total unduplicated number of subscribers was 6.8 million as of December 31, 2013, up 6% from December 31, 2012.

Income Taxes

Income tax expense was $1.3 million, compared to $692,000 in the prior-year period. The effective income tax rate was 29%, up from 16% in the prior-year period.

Asset Management

During the fourth quarter of 2013, Travelzoo used $1.8 million of cash from operating activities. Accounts receivable increased by $360,000 over the prior-year period to $14.0 million. Accounts payable increased by $3.1 million over the prior-year period to $31.8 million. Capital expenditures were $1.9 million, up from $698,000 in the prior-year period. As of December 31, 2013, cash and cash equivalents were $66.2 million.

Non-GAAP Measures

To give an enhanced view of Travelzoo's operating performance, management has calculated non-GAAP operating expense, non-GAAP operating income, non-GAAP operating margin, non-GAAP effective tax rate, non-GAAP net income and non-GAAP earnings per share by excluding the charges related to our unexchanged promotional shares. The company believes these metrics assist investors to assess certain business trends in the same way that these trends are analyzed by management. The discussion of these non-GAAP metrics are not in accordance with GAAP and may differ from non-GAAP methods of accounting and reporting used by other companies. Non-GAAP metrics are merely a supplement to, and not a replacement for, GAAP financial measures. As the only difference between GAAP and non-GAAP measures is the charges related to our unexchanged promotional shares, today’s reporting should not be viewed as Travelzoo’s intention to report non-GAAP measures in future periods. Refer to the “Reconciliation of GAAP to Non-GAAP Measures” section of this press release for a summary of these non-GAAP measures and their reconciliation to the reported GAAP measures.

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 Inc. is a global Internet media company. With more than 26 million subscribers in North America, Europe, and Asia Pacific and 25 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.

 

Travelzoo Inc.

Condensed Consolidated Statements of Operations

(Unaudited)

(In thousands, except per share amounts)

         
Three months ended Twelve months ended
December 31, December 31,
2013   2012 2013   2012
Revenues $ 37,475 $ 37,028 $ 158,234 $ 151,168
Cost of revenues 4,670   4,073   17,402   15,745
Gross profit 32,805   32,955   140,832   135,423
Operating expenses:
Sales and marketing 17,307 18,489 74,870 68,242
General and administrative 11,025 10,109 41,684 38,692
Unexchanged promotional shares     22,000   3,000
Total operating expenses 28,332   28,598   138,554   109,934
Income from operations 4,473 4,357 2,278 25,489
Other income 61   92   429   309
Income before income taxes 4,534 4,449 2,707 25,798
Income taxes 1,304   692   7,718   7,600
Net income (loss) $ 3,230   $ 3,757   $ (5,011 ) $ 18,198
Net income (loss) per share:        
Basic $ 0.22   $ 0.24   $ (0.33 ) $ 1.15
Diluted $ 0.21   $ 0.24   $ (0.33 ) $ 1.14
Weighted Average Shares:
Basic 14,997 15,659 15,269 15,866
Diluted 15,072 15,659 15,269 15,901
 
 

Travelzoo Inc.

Condensed Consolidated Balance Sheets

(Unaudited)

(In thousands)

       

December 31,

2013

December 31,

2012

Assets
Current assets:
Cash and cash equivalents $ 66,223 $ 61,169
Accounts receivable, net 13,986 13,626
Income taxes receivable 2,656 6,682
Deposits 396 389
Prepaid expenses and other current assets 3,202 2,260
Deferred tax assets 1,143 2,194
Restricted cash 200
Funds held for reverse/forward stock split 13,668    
Total current assets 101,474 86,320
Deposits, less current portion 1,168 1,107
Deferred tax assets, less current portion 2,032 1,710
Restricted cash 1,479 3,396
Property and equipment, net 8,245 4,314
Intangible assets, net 404   986  
Total assets $ 114,802   $ 97,833  
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable $ 31,766 $ 28,695
Accrued expenses 10,543 8,993
Deferred revenue 1,578 2,698
Deferred rent 281 280
Reserve for unexchanged promotional shares 12,726 3,000
Payable to shareholders for reverse/forward stock split 13,668    
Total current liabilities 70,562 43,666
Long-term tax liabilities 10,436 10,030
Deferred rent, less current portion 2,469   798  
Total liabilities 83,467   54,494  
Common stock 163 163
Treasury stock (15,662 ) (7,898 )
Additional paid-in capital 10,247 8,863
Accumulated other comprehensive loss (530 ) (737 )
Retained earnings 37,117   42,948  
Total stockholders’ equity 31,335   43,339  
Total liabilities and stockholders’ equity $ 114,802   $ 97,833  
 
 

Travelzoo Inc.

Condensed Consolidated Statements of Cash Flows

(Unaudited)

(In thousands)

     
Three months ended Twelve months ended
December 31, December 31,
2013   2012 2013   2012
Cash flows from operating activities:
Net income (loss) $ 3,230 $ 3,757 $ (5,011 ) $ 18,198
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation and amortization 795 683 2,980 2,539
Deferred income taxes 65 (2,174 ) 706 (2,178 )
Stock-based compensation 395 307 1,384 1,207
Provision for losses on accounts receivable 15 46 (29 ) 162
Net foreign currency effects (5 ) 1 33 (4 )
Changes in operating assets and liabilities:
Accounts receivable 932 1,784 (173 ) (285 )
Deposits (67 ) (24 ) (50 ) (406 )
Income tax receivable 1,873 3,351 4,042 5,171
Prepaid expenses and other current assets 290 328 (685 ) 87
Accounts payable 3,494 5,211 2,453 6,403
Accrued expenses 475 (630 ) 1,515 2,568
Deferred revenue (165 ) 190 (1,121 ) 513
Deferred rent 383 25 682 45
Income tax payable (1,298 ) (1 ) (6 ) (285 )
Reserve for unexchanged promotional shares (12,274 ) 9,726 3,000
Other non-current liabilities 47   156   406   (35 )
Net cash provided by (used in) operating activities (1,815 ) 13,010   16,852   36,700  
Cash flows from investing activities:
Purchases of intangible asset (677 ) (677 )
Release (purchases) of restricted cash (272 ) 1,786 (272 )
Purchases of property and equipment (1,866 ) (698 ) (5,461 ) (2,744 )
Net cash used in investing activities (1,866 ) (1,647 ) (3,675 ) (3,693 )
Cash flows from financing activities:
Repurchase of common stock (7,764 ) (7,898 ) (7,764 ) (11,509 )
Reverse/forward stock split, including transaction costs (688 )   (688 )  
Net cash used in financing activities (8,452 ) (7,898 ) (8,452 ) (11,509 )
Effect of exchange rate on cash and cash equivalents 456   70   329   927  
Net increase (decrease) in cash and cash equivalents (11,677 ) 3,535 5,054 22,425
Cash and cash equivalents at beginning of period 77,900   57,634   61,169   38,744  
Cash and cash equivalents at end of period $ 66,223   $ 61,169   $ 66,223   $ 61,169  
Supplemental disclosure of cash flow information:
Cash paid (received) for income taxes, net $ 562 $ (631 ) $ 2,479 $ 4,937
 
 

Travelzoo Inc.

Segment Information

(Unaudited)

(In thousands)

         
Three months ended December 31, 2013

North

America

Europe

Elimination

and Other

Consolidated
Revenue from unaffiliated customers $ 25,586 $ 11,889 $ $ 37,475
Intersegment revenue 194   11   (205 )
Total net revenues 25,780   11,900   (205 ) 37,475
Operating income $ 2,680   $ 1,793   $   $ 4,473
 
Three months ended December 31, 2012

North

America

Europe

Elimination

and Other

Consolidated
Revenue from unaffiliated customers $ 26,373 $ 10,655 $ $ 37,028
Intersegment revenue 157   102   (259 )
Total net revenues 26,530   10,757   (259 ) 37,028
Operating income $ 3,387   $ 970   $   $ 4,357
 
Twelve months ended December 31, 2013

North

America

Europe

Elimination

and Other (a)

Consolidated
Revenue from unaffiliated customers $ 111,955 $ 46,279 $ $ 158,234
Intersegment revenue 814   452   (1,266 )
Total net revenues 112,769   46,731   (1,266 ) 158,234
Operating income $ 16,568   $ 7,710   $ (22,000 ) $ 2,278
 
Twelve months ended December 31, 2012

North

America

Europe

Elimination

and Other (a)

Consolidated
Revenue from unaffiliated customers $ 108,787 $ 42,381 $ $ 151,168
Intersegment revenue 728   143   (871 )
Total net revenues 109,515   42,524   (871 ) 151,168
Operating income $ 21,481   $ 7,008   $ (3,000 ) $ 25,489
 
(a)   Includes a charge of $22.0 million and $3.0 million for the twelve months ended December 31, 2013 and 2012, respectively, related to settlement agreements in connection with a dispute over unclaimed property audits.
 
 

Travelzoo Inc.

Reconciliation of GAAP to Non-GAAP Measures

(Unaudited)

(In thousands, except per share amounts)

       
Twelve months ended
December 31,
2013 2012
GAAP operating expense $ 138,554 $ 109,934
Unexchanged promotional shares (a) 22,000   3,000  
Non-GAAP operating expense $ 116,554 $ 106,934
 
GAAP operating income $ 2,278 $ 25,489
Unexchanged promotional shares (a) 22,000   3,000  
Non-GAAP operating income $ 24,278 $ 28,489
 
GAAP operating margin 1.4 % 16.9 %
Unexchanged promotional shares (a) 13.9 % 2.0 %
Non-GAAP operating margin 15.3 % 18.9 %
 
GAAP effective tax rate 285.1 % 29.5 %
Unexchanged promotional shares (a) (253.9 )% (3.1

)%

Non-GAAP effective tax rate 31.2 % 26.4 %
 
GAAP net income (loss) $ (5,011 ) $ 18,198
Unexchanged promotional shares (a) 22,000   3,000  
Non-GAAP net income $ 16,989 $ 21,198
 
Earnings (loss) per share $ (0.33 ) $ 1.14
Unexchanged promotional shares (a) 1.44   0.19  
Non-GAAP earnings per share (b) $ 1.11 $ 1.33
 
(a)   Includes a charge of $22.0 million and a charge of $3.0 million for the twelve months ended December 31, 2013 and 2012, respectively, related to settlement agreements in connection with a dispute over unclaimed property audits.
 
(b) Shares used to calculate non-GAAP earnings per share for the twelve months ended December 31, 2013 were 15,355,160, which were different than the shares used in GAAP loss per share calculation due to the anti-dilutive effect on the GAAP loss per share.

More Stories By Business Wire

Copyright © 2009 Business Wire. All rights reserved. Republication or redistribution of Business Wire content is expressly prohibited without the prior written consent of Business Wire. Business Wire shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon.

Latest Stories
The “Digital Era” is forcing us to engage with new methods to build, operate and maintain applications. This transformation also implies an evolution to more and more intelligent applications to better engage with the customers, while creating significant market differentiators. In both cases, the cloud has become a key enabler to embrace this digital revolution. So, moving to the cloud is no longer the question; the new questions are HOW and WHEN. To make this equation even more complex, most ...
As you move to the cloud, your network should be efficient, secure, and easy to manage. An enterprise adopting a hybrid or public cloud needs systems and tools that provide: Agility: ability to deliver applications and services faster, even in complex hybrid environments Easier manageability: enable reliable connectivity with complete oversight as the data center network evolves Greater efficiency: eliminate wasted effort while reducing errors and optimize asset utilization Security: imple...
Mobile device usage has increased exponentially during the past several years, as consumers rely on handhelds for everything from news and weather to banking and purchases. What can we expect in the next few years? The way in which we interact with our devices will fundamentally change, as businesses leverage Artificial Intelligence. We already see this taking shape as businesses leverage AI for cost savings and customer responsiveness. This trend will continue, as AI is used for more sophistica...
In his Opening Keynote at 21st Cloud Expo, John Considine, General Manager of IBM Cloud Infrastructure, led attendees through the exciting evolution of the cloud. He looked at this major disruption from the perspective of technology, business models, and what this means for enterprises of all sizes. John Considine is General Manager of Cloud Infrastructure Services at IBM. In that role he is responsible for leading IBM’s public cloud infrastructure including strategy, development, and offering m...
Digital transformation is about embracing digital technologies into a company's culture to better connect with its customers, automate processes, create better tools, enter new markets, etc. Such a transformation requires continuous orchestration across teams and an environment based on open collaboration and daily experiments. In his session at 21st Cloud Expo, Alex Casalboni, Technical (Cloud) Evangelist at Cloud Academy, explored and discussed the most urgent unsolved challenges to achieve f...
In his session at 21st Cloud Expo, Raju Shreewastava, founder of Big Data Trunk, provided a fun and simple way to introduce Machine Leaning to anyone and everyone. He solved a machine learning problem and demonstrated an easy way to be able to do machine learning without even coding. Raju Shreewastava is the founder of Big Data Trunk (www.BigDataTrunk.com), a Big Data Training and consulting firm with offices in the United States. He previously led the data warehouse/business intelligence and B...
Recently, REAN Cloud built a digital concierge for a North Carolina hospital that had observed that most patient call button questions were repetitive. In addition, the paper-based process used to measure patient health metrics was laborious, not in real-time and sometimes error-prone. In their session at 21st Cloud Expo, Sean Finnerty, Executive Director, Practice Lead, Health Care & Life Science at REAN Cloud, and Dr. S.P.T. Krishnan, Principal Architect at REAN Cloud, discussed how they built...
The past few years have brought a sea change in the way applications are architected, developed, and consumed—increasing both the complexity of testing and the business impact of software failures. How can software testing professionals keep pace with modern application delivery, given the trends that impact both architectures (cloud, microservices, and APIs) and processes (DevOps, agile, and continuous delivery)? This is where continuous testing comes in. D
Blockchain is a shared, secure record of exchange that establishes trust, accountability and transparency across business networks. Supported by the Linux Foundation's open source, open-standards based Hyperledger Project, Blockchain has the potential to improve regulatory compliance, reduce cost as well as advance trade. Are you curious about how Blockchain is built for business? In her session at 21st Cloud Expo, René Bostic, Technical VP of the IBM Cloud Unit in North America, discussed the b...
SYS-CON Events announced today that Synametrics Technologies will exhibit at SYS-CON's 22nd International Cloud Expo®, which will take place on June 5-7, 2018, at the Javits Center in New York, NY. Synametrics Technologies is a privately held company based in Plainsboro, New Jersey that has been providing solutions for the developer community since 1997. Based on the success of its initial product offerings such as WinSQL, Xeams, SynaMan and Syncrify, Synametrics continues to create and hone in...
With tough new regulations coming to Europe on data privacy in May 2018, Calligo will explain why in reality the effect is global and transforms how you consider critical data. EU GDPR fundamentally rewrites the rules for cloud, Big Data and IoT. In his session at 21st Cloud Expo, Adam Ryan, Vice President and General Manager EMEA at Calligo, examined the regulations and provided insight on how it affects technology, challenges the established rules and will usher in new levels of diligence arou...
Nordstrom is transforming the way that they do business and the cloud is the key to enabling speed and hyper personalized customer experiences. In his session at 21st Cloud Expo, Ken Schow, VP of Engineering at Nordstrom, discussed some of the key learnings and common pitfalls of large enterprises moving to the cloud. This includes strategies around choosing a cloud provider(s), architecture, and lessons learned. In addition, he covered some of the best practices for structured team migration an...
The 22nd International Cloud Expo | 1st DXWorld Expo has announced that its Call for Papers is open. Cloud Expo | DXWorld Expo, to be held June 5-7, 2018, at the Javits Center in New York, NY, brings together Cloud Computing, Digital Transformation, Big Data, Internet of Things, DevOps, Machine Learning and WebRTC to one location. With cloud computing driving a higher percentage of enterprise IT budgets every year, it becomes increasingly important to plant your flag in this fast-expanding busin...
No hype cycles or predictions of a gazillion things here. IoT is here. You get it. You know your business and have great ideas for a business transformation strategy. What comes next? Time to make it happen. In his session at @ThingsExpo, Jay Mason, an Associate Partner of Analytics, IoT & Cybersecurity at M&S Consulting, presented a step-by-step plan to develop your technology implementation strategy. He also discussed the evaluation of communication standards and IoT messaging protocols, data...
Companies are harnessing data in ways we once associated with science fiction. Analysts have access to a plethora of visualization and reporting tools, but considering the vast amount of data businesses collect and limitations of CPUs, end users are forced to design their structures and systems with limitations. Until now. As the cloud toolkit to analyze data has evolved, GPUs have stepped in to massively parallel SQL, visualization and machine learning.