Travelzoo Reports Fourth Quarter 2012 Results

Before you go, we thought you'd like these...
Before you go close icon

Travelzoo Reports Fourth Quarter 2012 Results

NEW YORK--(BUSINESS WIRE)-- Travelzoo Inc. (NAS: TZOO) :

  • Revenue of $37.0 million, up 5% year-over-year
  • Net income of $3.8 million, down 42% year-over-year
  • Earnings per share of $0.24, compared to $0.40 in the prior-year period
  • Cash flow from operations of $13.0 million

Travelzoo Inc., a global Internet media company, today announced financial results for the fourth quarter ended December 31, 2012, with revenue of $37.0 million, an increase of 5% year-over-year. Operating income was $4.4 million, down 47% year-over-year. Net income was $3.8 million, with earnings per share of $0.24, down from $0.40 in the prior-year period. For the full year, revenue was $151.2 million, an increase of 2% year-over-year. GAAP operating income was $25.5 million, up 70% year-over-year. Non-GAAP operating income was $28.5 million, down 19% year-over-year. GAAP net income was $18.2 million, with earnings per share of $1.14, up from $0.20 in the prior-year period. Non-GAAP net income was $21.2 million, with earnings per share of $1.33, down from $1.42 in the prior-year period.


"During the fourth quarter of 2012 we continued to execute our strategy of increasing Travelzoo's reach, expanding our sales force and developing our products, particularly in the mobile and hotel categories," said Chris Loughlin, chief executive officer. "We are pleased with our progress: The Travelzoo® brand now reaches 26 million subscribers, Getaway sales accelerated, and in Europe our Travel business grew 23% year-over-year. We continue to see strong adoption of the Travelzoo brand on mobile; 33% of users now access our brand through mobile devices."

North America

North America business segment revenue increased 3% year-over-year to $26.5 million. Operating income for the fourth quarter was $3.4 million, or 13% of revenue, down from an operating income of $6.5 million, or 25% of revenue, in the prior-year period. The decrease in operating income was a result of increased expenses related to sales force expansion and subscriber marketing.

Europe

Europe business segment revenue increased 10% year-over-year to $10.7 million. In local currency terms, revenue for the fourth quarter increased 8% year-over-year. Operating income was $969,000, or 9% of revenue, down from an operating income of $1.7 million, or 17% of revenue in the prior-year period. The decrease in operating income was a result of increased expenses related to sales force expansion and subscriber marketing.

Subscribers

Travelzoo had a total unduplicated number of subscribers in North America and Europe of 22.5 million as of December 31, 2012, up 5% from December 31, 2011. In North America, total unduplicated number of subscribers was 16.1 million as of December 31, 2012, up 3% from December 31, 2011. In Europe, total unduplicated number of subscribers was 6.4 million as of December 31, 2012, up 10% from December 31, 2011.

Income Taxes

Income tax expense was $692,000, compared to $1.9 million in the prior-year period. The effective income tax rate was 16%, compared to 23% in the prior-year period.

Asset Management

During the fourth quarter 2012, Travelzoo generated $13.0 million of cash from operating activities. Accounts receivable increased by $286,000 over the prior-year period to $13.6 million. Accounts payable increased by $7.0 million over the prior-year period to $28.7 million. Capital expenditures were $698,000, up from $558,000 in the prior-year period. Travelzoo exited the fourth quarter with $61.2 million in cash and cash equivalents.

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 endedTwelve months ended
December 31,December 31,
2012201120122011
 
Revenues$ 37,028$ 35,156$ 151,168$ 148,342
Cost of revenues  4,073  3,680  15,745  13,283
Gross profit  32,955  31,476  135,423  135,059
 
Operating expenses:
Sales and marketing18,48913,92168,24265,490
General and administrative10,1099,38038,69234,547
Unexchanged promotional merger shares  -  -  3,000  20,000
Total operating expenses  28,598  23,301  109,934  120,037
 
Income from operations4,3578,17525,48915,022
 
Other income  92  197  309  302
Income before income taxes4,4498,37225,79815,324
 
Income taxes6921,9447,60012,005
    
Net income$ 3,757$ 6,428$ 18,198$ 3,319
 
Net income per share:    
Basic$ 0.24$ 0.40$ 1.15$ 0.20
Diluted$ 0.24$ 0.40$ 1.14$ 0.20
 
Weighted average shares:
Basic15,65915,96215,86616,315
Diluted15,65916,02615,90116,414
 
          
Travelzoo Inc.
Condensed Consolidated Balance Sheets
(Unaudited)
(In thousands)
 
 
December 31,December 31,
20122011
 

Assets

Current assets:
Cash and cash equivalents$61,169$38,744
Accounts receivable, net13,62613,340
Income taxes receivable

6,682

3,625
Deposits389278
Prepaid expenses and other current assets

2,260

2,123
Deferred tax assets 2,194 1,754
Total current assets86,32059,864
Deposits, less current portion1,107776
Deferred tax assets, less current portion1,710344
Restricted cash3,3963,103
Property and equipment, net4,3143,557
Intangible assets, net 986 704
Total assets$97,833$68,348
 
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable$28,695$21,731
Accrued expenses11,9936,311
Deferred revenue2,6982,168
Deferred rent280114
Income tax payable - 279
Total current liabilities43,66630,603
Long-term tax liabilities10,0302,225
Deferred rent, less current portion 798 761
Total liabilities 54,494 33,589
Common stock163164
Treasury stock(7,898)(15,123)
Additional paid-in capital8,8637,656
Accumulated other comprehensive loss(737)(1,422)
Retained earnings 42,948 43,484
Total stockholders' equity 43,339 34,759
Total liabilities and stockholders' equity$97,833$68,348
 
              
Travelzoo Inc.
Condensed Consolidated Statements of Cash Flows
(Unaudited)
(In thousands)
 
Three months endedTwelve months ended
December 31,December 31,
2012201120122011
Cash flows from operating activities:
Net income$3,757$6,428$18,198$3,319

Adjustments to reconcile net income to net cash
provided by operating activities:

Depreciation and amortization6836712,5392,725
Deferred income taxes(2,174)(546)(2,178)(337)
Stock-based compensation3071871,207750
Provision for losses on accounts receivable467616252
Tax benefit from exercise of stock options---(268)
Net foreign currency effects158(4)81
Changes in operating assets and liabilities:
Accounts receivable1,784
Read Full Story

Want more news like this?

Sign up for Finance Report by AOL and get everything from business news to personal finance tips delivered directly to your inbox daily!

Subscribe to our other newsletters

Emails may offer personalized content or ads. Learn more. You may unsubscribe any time.

From Our Partners

Gift Finder Promo
More to Explore
Fri, Dec 02
Set Your Location
City, State, or Zip