NEW
YORK, April 27, 2023 /PRNewswire/ -- Travelzoo®
(NASDAQ: TZOO):
- Revenue of $21.6 million, up 17%
year-over-year
- In constant currencies, revenue was $22.1 million, up 19% year-over-year
- Non-GAAP consolidated operating profit of $5.5 million
- Earnings per share (EPS) of $0.23
Travelzoo, a global Internet media company that provides
exclusive offers and experiences for members, today announced
financial results for the first quarter ended March 31, 2023.
Consolidated revenue was $21.6
million, up 17% from $18.5
million year-over-year. In constant currencies, revenue was
$22.1 million. Travelzoo's reported
revenue consists of advertising revenues and commissions, derived
from and generated in connection with purchases made by Travelzoo
members.
The reported net income attributable to Travelzoo from
continuing operations was $3.7
million for Q1 2023. At the consolidated level, including
minority interests, the reported net income from continuing
operations was $3.7 million. EPS from
continuing operations was $0.23,
compared to $0.19 in the prior-year
period.
Non-GAAP operating profit was $5.5
million. The calculation of non-GAAP operating profit
excludes amortization of intangibles ($0.4
million), stock option expenses ($0.4
million) and severance-related expenses ($39,000). See section "Non-GAAP Financial
Measures" below.
"We will continue our strategy of leveraging Travelzoo's global
reach, trusted brand, and strong relationships with top travel
suppliers to negotiate more exclusive offers for Travelzoo
members," said Holger Bartel,
Travelzoo's Global CEO. "With more than 30 million members, 8
million mobile app users, and 4 million social media followers,
Travelzoo is loved by travel enthusiasts who are affluent, active,
and open to new experiences."
Cash Position
As of March 31, 2023, consolidated
cash, cash equivalents and restricted cash were $19.8 million. Net cash provided by operations
was $535,000.
Reserve
Reported revenues include a reserve of
$785,000 related to commissions to be
earned from vouchers sold. The reserve is initially booked as
contra revenue.
Travelzoo North America
North America business segment revenue
increased 26% year-over-year to $14.8
million. Operating profit for Q1 2023 was $4.5 million, or 31% of revenue, compared to an
operating profit of $1.7 million in
the prior-year period.
Travelzoo Europe
Europe business segment revenue remained
consistent year-over-year at $5.9
million. At constant currencies, Europe business segment revenue increased 6%
year-over-year. Operating profit for Q1 2023 was $457,000, or 8% of revenue, compared to an
operating profit of $178,000 in the
prior-year period.
Jack's Flight Club
Jack's Flight Club business
segment revenue increased 15% year-over-year to $948,000. Jack's Flight Club is a membership
subscription service in which Travelzoo has a 60% ownership
interest. The number of premium subscribers increased 27%
year-over-year. Revenue from increases in subscribers is reported
with a lag because we recognize revenue from subscriptions monthly
pro rata over the subscription period (quarterly, semi-annually,
annually). Non-GAAP operating profit for Q1 2023 was
$123,000, compared to a non-GAAP
operating profit of $249,000 in the
prior-year period. After consolidation with Travelzoo, Jack's
Flight Club's net income was $20,000,
with $12,000 attributable to
Travelzoo as a result of recording $168,000 of amortization of intangible assets
related to the acquisition.
New Initiatives
New Initiatives business segment
revenue, which includes Licensing and Travelzoo META, was
$8,000. Operating loss for Q1 2023
was $217,000.
In June 2020, Travelzoo entered
into a royalty-bearing licensing agreement with a local licensee in
Japan for the exclusive use of
Travelzoo's brand, business model, and members in Japan. In August of 2020, Travelzoo entered
into a royalty-bearing licensing agreement with a local licensee in
Australia for the exclusive use of
Travelzoo's brand, business models, and members in Australia, New
Zealand, and Singapore.
Under these arrangements, Travelzoo's existing members in
Australia, Japan, New
Zealand, and Singapore will
continue to be owned by Travelzoo as the licensor. Licensing
revenue is booked with a lag of one quarter. Travelzoo recorded
$8,000 in licensing revenue from the
licensee in Australia,
New Zealand, and Singapore in Q1 2023. Licensing revenue is
expected to increase going forward.
Members and Subscribers
As of March 31, 2023,
we had 30.5 million members worldwide. In North America, the unduplicated number of
Travelzoo members was 16.3 million as of March 31, 2023, down
2% from March 31, 2022. In Europe, the unduplicated number of Travelzoo
members was 9.1 million as of March 31, 2023, consistent with
March 31, 2022. Jack's Flight Club had 2.0 million subscribers
as of March 31, 2023, up 14% from March 31, 2022.
Discontinued Operations
As announced in a press
release on March 10, 2020, Travelzoo
decided to exit its Asia Pacific
business and operate it as a licensing business going forward.
Consequently, the Asia Pacific
business has been classified as discontinued operations since
March 31, 2020. Prior periods have
been reclassified to conform with the current presentation. Certain
reclassifications have been made for current and prior periods
between the continued operations and the discontinued operations in
accordance with U.S. GAAP.
Income Taxes
A provision of $1.4 million for income taxes was recorded for Q1
2023, compared to an income tax expense of $968,000 in the prior-year period. The provision
for Q1 2023 does not reflect the expected utilization of NOLs by
Travelzoo in the U.S.
Non-GAAP Financial Measures
Management calculates
non-GAAP operating income when evaluating the financial performance
of the business. Travelzoo's calculation of non-GAAP operating
income, also called "non-GAAP operating profit" in this press
release and today's earnings conference call, excludes the
following items: amortization of intangibles, stock option
expenses, and severance-related expenses. This press release
includes a table which reconciles GAAP operating income to the
calculation of non-GAAP operating income. Non-GAAP operating income
is not required by, or presented in accordance with, generally
accepted accounting principles in the
United States of America ("GAAP"). This information should
be considered as supplemental in nature and should not be
considered in isolation or as a substitute for the financial
information prepared in accordance with GAAP. In addition, these
non-GAAP financial measures may not be the same as similarly titled
measures reported by other companies.
Looking Ahead
For Q2 2023, we currently expect growth
in revenue and growth in operating profit to continue
year-over-year. During the pandemic, we have been able to lower our
fixed costs. We believe we can keep our fixed costs relatively low
in the foreseeable future.
Conference Call
Travelzoo will host a conference call
to discuss first quarter 2023 results today at 11:00 a.m. ET. Please visit
http://ir.travelzoo.com/events-presentations to
- download the management presentation (PDF format) to be
discussed in the conference call
- access the webcast.
About Travelzoo
Travelzoo® provides its 30 million
members with exclusive offers and one-of-a-kind experiences
personally reviewed by our deal experts around the globe. We have
our finger on the pulse of outstanding travel, entertainment, and
lifestyle experiences. We work in partnership with more than 5,000
top travel suppliers—our long-standing relationships give Travelzoo
members access to irresistible 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 Jack's Flight Club are registered trademarks of
Travelzoo.
Travelzoo
Condensed
Consolidated Statements of Operations
(Unaudited)
(In thousands,
except per share amounts)
|
|
|
|
Three months
ended
|
|
March
31
|
|
2023
|
|
2022
|
Revenues
|
$
21,601
|
|
$
18,453
|
Cost of
revenues
|
2,691
|
|
2,832
|
Gross
profit
|
18,910
|
|
15,621
|
Operating
expenses:
|
|
|
|
Sales and
marketing
|
9,296
|
|
8,581
|
Product
development
|
490
|
|
453
|
General and
administrative
|
4,413
|
|
4,668
|
Total operating
expenses
|
14,199
|
|
13,702
|
Operating
income
|
4,711
|
|
1,919
|
Other income,
net
|
350
|
|
1,423
|
Income from continuing
operations before income taxes
|
5,061
|
|
3,342
|
Income tax
expense
|
1,378
|
|
968
|
Income from continuing
operations
|
3,683
|
|
2,374
|
Loss from discontinued
operations, net of tax
|
(2)
|
|
(11)
|
Net income
|
3,681
|
|
2,363
|
Net income attributable
to non-controlling interest
|
8
|
|
4
|
Net income attributable
to Travelzoo
|
$
3,673
|
|
$
2,359
|
|
|
|
|
Net income attributable
to Travelzoo—continuing operations
|
$
3,675
|
|
$
2,370
|
Net loss attributable
to Travelzoo—discontinued operations
|
$
(2)
|
|
$
(11)
|
|
|
|
|
Income per
share—basic
|
|
|
|
Continuing
operations
|
$
0.23
|
|
$
0.20
|
Discontinued
operations
|
$
—
|
|
$
—
|
Net income per
share—basic
|
$
0.23
|
|
$
0.20
|
|
|
|
|
Income per
share—diluted
|
|
|
|
Continuing
operations
|
$
0.23
|
|
$
0.19
|
Discontinued
operations
|
$
—
|
|
$
—
|
Net income per
share—diluted
|
$
0.23
|
|
$
0.19
|
Shares used in per
share calculation from continuing
operations—basic
|
15,697
|
|
12,056
|
Shares used in per
share calculation from discontinued
operations—basic
|
15,697
|
|
12,056
|
Shares used in per
share calculation from continuing
operations—diluted
|
15,779
|
|
12,544
|
Shares used in per
share calculation from discontinued
operations—diluted
|
15,697
|
|
12,056
|
Travelzoo
Condensed
Consolidated Balance Sheets
(Unaudited)
(In
thousands)
|
|
|
|
|
|
March 31,
2023
|
|
December 31,
2022
|
Assets
|
|
|
|
Current
assets:
|
|
|
|
Cash and cash
equivalents
|
$
19,138
|
|
$
18,693
|
Accounts receivable,
net
|
13,672
|
|
13,820
|
Prepaid income
taxes
|
1,401
|
|
1,778
|
Prepaid expenses and
other
|
1,764
|
|
1,289
|
Assets from
discontinued operations
|
10
|
|
11
|
Total current
assets
|
35,985
|
|
35,591
|
Deposits and
other
|
4,618
|
|
5,094
|
Deferred tax
assets
|
3,248
|
|
3,222
|
Restricted
cash
|
679
|
|
675
|
Operating lease
right-of-use assets
|
6,852
|
|
7,440
|
Property and
equipment, net
|
692
|
|
657
|
Intangible assets,
net
|
3,249
|
|
3,651
|
Goodwill
|
10,944
|
|
10,944
|
Total
assets
|
$
66,267
|
|
$
67,274
|
Liabilities and
Stockholders' Equity
|
|
|
|
Current
liabilities:
|
|
|
|
Accounts
payable
|
$
3,143
|
|
$
4,271
|
Merchant
payables
|
27,976
|
|
32,574
|
Accrued expenses and
other
|
4,611
|
|
5,049
|
Deferred
revenue
|
3,124
|
|
2,216
|
Operating lease
liabilities
|
2,682
|
|
2,972
|
Liabilities from
discontinued operations
|
453
|
|
452
|
Total current
liabilities
|
41,989
|
|
47,534
|
Long-term operating
lease liabilities
|
7,926
|
|
8,326
|
Other long-term
liabilities
|
3,530
|
|
2,563
|
Total
liabilities
|
53,445
|
|
58,423
|
Non-controlling
interest
|
4,603
|
|
4,595
|
Common
stock
|
165
|
|
165
|
Treasury stock (at
cost)
|
(7,316)
|
|
(7,130)
|
Tax
indemnification
|
(9,537)
|
|
(9,537)
|
Note receivable from
shareholder
|
(4,753)
|
|
(4,753)
|
Additional paid-in
capital
|
23,670
|
|
23,274
|
Retained
earnings
|
10,815
|
|
7,142
|
Accumulated other
comprehensive loss
|
(4,825)
|
|
(4,905)
|
Total stockholders'
equity
|
8,219
|
|
4,256
|
Total liabilities and
stockholders' equity
|
$
66,267
|
|
$
67,274
|
Travelzoo
Condensed
Consolidated Statements of Cash Flows
(Unaudited)
(In
thousands)
|
|
|
|
Three months
ended
|
|
March
31
|
|
2023
|
|
2022
|
Cash flows from
operating activities:
|
|
|
|
Net income
|
$
3,681
|
|
$
2,363
|
Adjustments to
reconcile net income to net cash provided by (used
in) operating activities:
|
|
|
|
Depreciation and
amortization
|
478
|
|
574
|
Stock-based
compensation
|
396
|
|
542
|
Deferred income
tax
|
(68)
|
|
97
|
Loss on long-lived
assets
|
—
|
|
38
|
Gain on sale of equity
investment in WeGo
|
—
|
|
(196)
|
Net foreign currency
effects
|
3
|
|
(13)
|
Reversal of reserves
on accounts receivable and other
reserves
|
(569)
|
|
(1,408)
|
Changes in operating
assets and liabilities:
|
|
|
|
Accounts
receivable
|
372
|
|
(3,163)
|
Prepaid income
taxes
|
407
|
|
759
|
Prepaid expenses,
deposits and other
|
17
|
|
565
|
Accounts
payable
|
(1,321)
|
|
103
|
Merchant
payables
|
(4,591)
|
|
(7,961)
|
Accrued expenses and
other
|
911
|
|
917
|
Income tax
payable
|
—
|
|
(157)
|
Other
liabilities
|
819
|
|
176
|
Net cash provided by
(used in) operating activities
|
535
|
|
(6,764)
|
Cash flows from
investing activities:
|
|
|
|
Proceeds from
repayment of note receivable
|
39
|
|
—
|
Purchases of
intangible assets
|
—
|
|
(1,049)
|
Proceeds from sale of
equity investment in WeGo
|
—
|
|
196
|
Purchases of property
and equipment
|
(111)
|
|
(89)
|
Net cash used in
investing activities
|
(72)
|
|
(942)
|
Cash flows from
financing activities:
|
|
|
|
Repurchase of common
stock
|
(186)
|
|
—
|
Net cash used in
financing activities
|
(186)
|
|
—
|
Effect of exchange rate
on cash, cash equivalents and restricted
cash
|
171
|
|
(524)
|
Net increase (decrease)
in cash, cash equivalents and restricted
cash
|
448
|
|
(8,230)
|
Cash, cash equivalents
and restricted cash at beginning of period
|
19,378
|
|
44,989
|
Cash, cash equivalents
and restricted cash at end of period
|
$
19,826
|
|
$
36,759
|
Travelzoo
Segment Information
from Continuing Operations
(Unaudited)
(In
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months
ended March 31,
2023
|
Travelzoo
North
America
|
|
Travelzoo
Europe
|
|
Jack's
Flight
Club
|
|
New
Initiatives
|
|
Elimination
|
|
Consolidated
|
Revenue from
unaffiliated
customers
|
$
14,567
|
|
$
6,078
|
|
$
948
|
|
$
8
|
|
$
—
|
|
$
21,601
|
Intersegment
revenue
|
191
|
|
(191)
|
|
—
|
|
—
|
|
—
|
|
—
|
Total net
revenues
|
14,758
|
|
5,887
|
|
948
|
|
8
|
|
—
|
|
21,601
|
Operating income
(loss)
|
$
4,516
|
|
$
457
|
|
$
(45)
|
|
$
(217)
|
|
$
—
|
|
$
4,711
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months
ended March 31,
2022
|
Travelzoo
North
America
|
|
Travelzoo
Europe
|
|
Jack's
Flight
Club
|
|
New
Initiatives
|
|
Elimination
|
|
Consolidated
|
Revenue from
unaffiliated
customers
|
$
11,498
|
|
$
6,127
|
|
$
823
|
|
$
5
|
|
$
—
|
|
$
18,453
|
Intersegment
revenue
|
193
|
|
(193)
|
|
—
|
|
—
|
|
—
|
|
—
|
Total net
revenues
|
11,691
|
|
5,934
|
|
823
|
|
5
|
|
—
|
|
18,453
|
Operating income
(loss)
|
$
1,820
|
|
$
178
|
|
$
23
|
|
$
(102)
|
|
$
—
|
|
$
1,919
|
Travelzoo
Reconciliation of
GAAP to Non-GAAP Information
(Unaudited)
(In thousands,
except per share amounts)
|
|
|
|
Three months
ended
|
|
March
31
|
|
2023
|
|
2022
|
GAAP operating
expense
|
$
14,199
|
|
$
13,702
|
Non-GAAP
adjustments:
|
|
|
|
Amortization of
intangibles (A)
|
398
|
|
226
|
Stock option expenses
(B)
|
396
|
|
541
|
Severance-related
expenses (C)
|
39
|
|
13
|
Non-GAAP operating
expense
|
13,366
|
|
12,922
|
|
|
|
|
GAAP operating
income
|
4,711
|
|
1,919
|
Non-GAAP adjustments (A
through C)
|
833
|
|
780
|
Non-GAAP operating
income
|
5,544
|
|
2,699
|
Investor Relations:
ir@travelzoo.com
View original content to download
multimedia:https://www.prnewswire.com/news-releases/travelzoo-reports-first-quarter-2023-results-301808867.html
SOURCE Travelzoo