Travelzoo Reports First Quarter 2013 Results

Travelzoo Reports First Quarter 2013 Results

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

  • Revenue of $42.2 million, up 7% year-over-year
  • Net income of $5.6 million, up 49% year-over-year
  • Earnings per share of $0.36, compared to $0.23 (GAAP) / $0.42 (non-GAAP) in the prior-year period
  • Cash flow from operations of $6.5 million

Travelzoo Inc., a global Internet media company, today announced financial results for the first quarter ended March 31, 2013, with revenue of $42.2 million, an increase of 7% year-over-year. Operating profit was $8.0 million. Net income was $5.6 million, with earnings per share of $0.36, up from $0.23 in the prior-year period. Non-GAAP earnings per share was $0.36, down from $0.42 in the prior-year period.

"We kicked off 2013 with record revenues, driven by strong performance within our travel segments in both North America and Europe," said Chris Loughlin, chief executive officer. "We accelerated subscriber growth and made significant improvements in audience engagement across email, social media and mobile apps. We continued to develop our new hotel booking platform, which we plan to roll out later this year."

North America

North America business segment revenue increased 5% year-over-year to $30.2 million. Operating profit for the first quarter was $5.5 million, or 18% of revenue, down from $7.1 million, or 25% of revenue, in the prior-year period. The decrease in operating profit was a result of increased expenses related to sales force expansion, hotel booking platform development, traffic acquisition and subscriber marketing.


Europe business segment revenue increased 14% year-over-year to $12.4 million. In local currency terms, revenue for the first quarter increased 14% year-over-year. Operating profit was $2.5 million, or 21% of revenue, up from an operating profit of $2.4 million, or 23% of revenue in the prior-year period.


Travelzoo had a total unduplicated number of subscribers in North America and Europe of 22.9 million as of March 31, 2013, up 5% from March 31, 2012. In North America, total unduplicated number of subscribers was 16.3 million as of March 31, 2013, up 3% from March 31, 2012. In Europe, total unduplicated number of subscribers was 6.5 million as of March 31, 2013, up 9% from March 31, 2012.

Income Taxes

Income tax expense was $2.5 million, compared to $2.9 million in the prior-year period. The non-GAAP effective income tax rate was 31%, up from 30% in the prior-year period.

Asset Management

During the first quarter 2013, Travelzoo generated $6.5 million of cash from operating activities. Accounts receivable increased by $648,000 over the prior-year period to $15.3 million. Accounts payable increased by $4.5 million over the prior-year period to $26.9 million. Capital expenditures were $900,000, up from $678,000 in the prior-year period. Travelzoo exited the first quarter with $65.1 million in cash and cash equivalents.

Non-GAAP Measures

To give an enhanced view of the company's operating performance, management has calculated non-GAAP operating income, non-GAAP net income and non-GAAP earnings per share by excluding the $3 million charge related to our unexchanged promotional merger shares in the prior-year period. 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 non-GAAP operating income, non-GAAP net income, and non-GAAP earnings share are not in accordance with GAAP and may differ from non-GAAP methods of accounting and reporting used by other companies. Non-GAAP numbers 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 charge related to our unexchanged promotional merger shares in the prior- year period, today's reporting should not be viewed as the company's intention to report non-GAAP measures in future periods. Refer to the "Reconciliation of GAAP to Non-GAAP Measures" section of this 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 first quarter results at 11:00 a.m. ET today. Please visit 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


(In thousands, except per share amounts)

Three months ended
March 31,
2013 2012


Cost of revenues3,9854,054
Gross profit38,19235,279
Operating expenses:
Sales and marketing19,65916,265
General and administrative10,4979,444
Unexchanged promotional merger shares


Total operating expenses30,15628,709
Income from operations8,0366,570
Other income3199
Income before income taxes8,0676,669
Income taxes2,4722,922
Net income$5,595$3,747
Net income per share:  
Weighted Average Shares:

Travelzoo Inc.

Condensed Consolidated Balance Sheets


(In thousands)

March 31,


December 31,


Current assets:
Cash and cash equivalents$65,107$61,169
Accounts receivable, net15,30313,626
Income taxes receivable5,1176,682
Prepaid expenses and other current assets2,1872,260
Deferred tax assets2,426 2,194 
Total current assets90,53886,320
Deposits, less current portion1,2081,107
Deferred tax assets, less current portion1,2401,710
Restricted cash3,2523,396
Property and equipment, net5,3164,314
Intangible assets, net796 986 
Total assets$102,350 $97,833 
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable$26,909$28,695
Accrued expenses12,79611,993
Deferred revenue2,1582,698
Deferred rent262280
Income tax payable559  
Total current liabilities42,68443,666
Long-term tax liabilities10,13310,030
Deferred rent, less current portion1,510 798 
Total liabilities54,327 54,494 
Common stock163163
Treasury stock(7,898)(7,898)
Additional paid-in capital9,1698,863
Accumulated other comprehensive loss(1,954)(737)
Retained earnings48,543 42,948 
Total stockholders' equity48,023 43,339 
Total liabilities and stockholders' equity$102,350 $97,833 

Travelzoo Inc.

Condensed Consolidated Statements of Cash Flows


(In thousands)

Three months ended
March 31,
2013 2012
Cash flows from operating activities:
Net income$5,595$3,747
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization716627
Deferred income taxes193
Stock-based compensation307287
Provision for losses on accounts receivable95108
Net foreign currency effects94(35)
Changes in operating assets and liabilities:
Accounts receivable(2,036)(1,271)
Income tax receivable1,564845
Prepaid expenses and other current assets350(295)
Accounts payable(549)460
Accrued expenses8505,619
Deferred revenue(517)134
Deferred rent(110)(75)
Income tax payable(284)
Other non-current liabilities103 52 
Net cash provided by operating activities6,500 9,787 
Cash flows from investing activities:
Purchases of property and equipment(900)(678)
Net cash provided by (used in) investing activities(900)(678)
Cash flows from financing activities:
Net cash used in financing activities 


Effect of exchange rate on cash and cash equivalents(1,662)706
Net increase in cash and cash equivalents3,9389,815
Cash and cash equivalents at beginning of period61,169 38,744 
Cash and cash equivalents at end of period$65,107 $48,559 
Supplemental disclosure of cash flow information:
Cash paid for income taxes, net$328$2,309
Read Full Story
Scroll to continue with content AD
  • DJI27110.8033.980.13%
    S&P 5003005.707.740.26%
  • NIKKEI 22522001.3213.030.06%
    Hang Seng26790.24-334.31-1.23%
  • USD (PER EUR)1.110.00710.64%
    USD (PER CHF)1.01-0.0003-0.03%
    JPY (PER USD)108.110.02900.03%
    GBP (PER USD)1.250.00700.56%
More to Explore

Travelzoo Inc.

Segment Information


(In thousands)

Three months ended March 31, 2013




Revenue from unaffiliated customers$29,911$12,266$


Intersegment revenue262 108 (370) 
Total net revenues30,173 12,374 (370)42,177 
Operating income$5,484 $2,552 $ $8,036 
Three months ended March 31, 2012North




and Other (a)

Revenue from unaffiliated customers$28,556$10,777$$39,333
Intersegment revenue79 10 (89) 
Total net revenues28,635 10,787 (89)39,333 
Operating income$7,142