NEW YORK--(BUSINESS WIRE)--Travelzoo Inc. (NASDAQ: 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 ended | Twelve months ended | ||||||||||||||||||||||
December 31, | December 31, | ||||||||||||||||||||||
2012 | 2011 | 2012 | 2011 | ||||||||||||||||||||
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 marketing | 18,489 | 13,921 | 68,242 | 65,490 | |||||||||||||||||||
General and administrative | 10,109 | 9,380 | 38,692 | 34,547 | |||||||||||||||||||
Unexchanged promotional merger shares | - | - | 3,000 | 20,000 | |||||||||||||||||||
Total operating expenses | 28,598 | 23,301 | 109,934 | 120,037 | |||||||||||||||||||
Income from operations | 4,357 | 8,175 | 25,489 | 15,022 | |||||||||||||||||||
Other income | 92 | 197 | 309 | 302 | |||||||||||||||||||
Income before income taxes | 4,449 | 8,372 | 25,798 | 15,324 | |||||||||||||||||||
Income taxes | 692 | 1,944 | 7,600 | 12,005 | |||||||||||||||||||
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: | |||||||||||||||||||||||
Basic | 15,659 | 15,962 | 15,866 | 16,315 | |||||||||||||||||||
Diluted | 15,659 | 16,026 | 15,901 | 16,414 | |||||||||||||||||||
Travelzoo Inc. | ||||||||||||||
Condensed Consolidated Balance Sheets | ||||||||||||||
(Unaudited) | ||||||||||||||
(In thousands) | ||||||||||||||
December 31, | December 31, | |||||||||||||
2012 | 2011 | |||||||||||||
Assets |
||||||||||||||
Current assets: | ||||||||||||||
Cash and cash equivalents | $ | 61,169 | $ | 38,744 | ||||||||||
Accounts receivable, net | 13,626 | 13,340 | ||||||||||||
Income taxes receivable |
6,682 |
3,625 | ||||||||||||
Deposits | 389 | 278 | ||||||||||||
Prepaid expenses and other current assets |
2,260 |
2,123 | ||||||||||||
Deferred tax assets | 2,194 | 1,754 | ||||||||||||
Total current assets | 86,320 | 59,864 | ||||||||||||
Deposits, less current portion | 1,107 | 776 | ||||||||||||
Deferred tax assets, less current portion | 1,710 | 344 | ||||||||||||
Restricted cash | 3,396 | 3,103 | ||||||||||||
Property and equipment, net | 4,314 | 3,557 | ||||||||||||
Intangible assets, net | 986 | 704 | ||||||||||||
Total assets | $ | 97,833 | $ | 68,348 | ||||||||||
Liabilities and Stockholders' Equity | ||||||||||||||
Current liabilities: | ||||||||||||||
Accounts payable | $ | 28,695 | $ | 21,731 | ||||||||||
Accrued expenses | 11,993 | 6,311 | ||||||||||||
Deferred revenue | 2,698 | 2,168 | ||||||||||||
Deferred rent | 280 | 114 | ||||||||||||
Income tax payable | - | 279 | ||||||||||||
Total current liabilities | 43,666 | 30,603 | ||||||||||||
Long-term tax liabilities | 10,030 | 2,225 | ||||||||||||
Deferred rent, less current portion | 798 | 761 | ||||||||||||
Total liabilities | 54,494 | 33,589 | ||||||||||||
Common stock | 163 | 164 | ||||||||||||
Treasury stock | (7,898) | (15,123) | ||||||||||||
Additional paid-in capital | 8,863 | 7,656 | ||||||||||||
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 ended | Twelve months ended | |||||||||||||||||||||
December 31, | December 31, | |||||||||||||||||||||
2012 | 2011 | 2012 | 2011 | |||||||||||||||||||
Cash flows from operating activities: | ||||||||||||||||||||||
Net income | $ | 3,757 | $ | 6,428 | $ | 18,198 | $ | 3,319 | ||||||||||||||
Adjustments to reconcile net income to net cash |
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Depreciation and amortization | 683 | 671 | 2,539 | 2,725 | ||||||||||||||||||
Deferred income taxes | (2,174) | (546) | (2,178) | (337) | ||||||||||||||||||
Stock-based compensation | 307 | 187 | 1,207 | 750 | ||||||||||||||||||
Provision for losses on accounts receivable | 46 | 76 | 162 | 52 | ||||||||||||||||||
Tax benefit from exercise of stock options | - | - | - | (268) | ||||||||||||||||||
Net foreign currency effects | 1 | 58 | (4) | 81 | ||||||||||||||||||
Changes in operating assets and liabilities: | ||||||||||||||||||||||
Accounts receivable | 1,784 | 576 | (285) | (146) | ||||||||||||||||||
Deposits | (24) | (99) | (406) | (667) | ||||||||||||||||||
Income tax receivable |
3,351 |
(1,061) |
5,171 |
(3,093) | ||||||||||||||||||
Prepaid expenses and other current assets |
328 |
188 |
87 |
(584) | ||||||||||||||||||
Accounts payable | 5,211 | 4,620 | 6,403 | 12,074 | ||||||||||||||||||
Accrued expenses | (630) | (4,737) | 5,568 | 256 | ||||||||||||||||||
Deferred revenue | 190 | 585 | 513 | 853 | ||||||||||||||||||
Deferred rent | 25 | 30 | 45 | 209 | ||||||||||||||||||
Income tax payable | (1) | (15) | (285) | (369) | ||||||||||||||||||
Other non-current liabilities | 156 | 117 | (35) | 776 | ||||||||||||||||||
Net cash provided by operating activities | 13,010 | 7,078 | 36,700 | 15,631 | ||||||||||||||||||
Cash flows from investing activities: | ||||||||||||||||||||||
Purchases of restricted cash | (272) | - | (272) | - | ||||||||||||||||||
Purchases of intangible asset | (677) | - | (677) | - | ||||||||||||||||||
Purchases of property and equipment | (698) | (558) | (2,744) | (2,460) | ||||||||||||||||||
Net cash used in investing activities | (1,647) | (558) | (3,693) | (2,460) | ||||||||||||||||||
Cash flows from financing activities: | ||||||||||||||||||||||
Cash used in purchase of common stock | (7,898) | - | (11,509) | (15,124) | ||||||||||||||||||
Proceeds from exercise of stock options | - | - | - | 40 | ||||||||||||||||||
Tax benefit of stock option exercises | - | - | - | 268 | ||||||||||||||||||
Net cash used in financing activities | (7,898) | - | (11,509) | (14,816) | ||||||||||||||||||
Effect of exchange rate on cash and cash equivalents | 70 | (209) | 927 | (795) | ||||||||||||||||||
Net increase (decrease) in cash and cash equivalents | 3,535 | 6,311 | 22,425 | (2,440) | ||||||||||||||||||
Cash and cash equivalents at beginning of period | 57,634 | 32,433 | 38,744 | 41,184 | ||||||||||||||||||
Cash and cash equivalents at end of period | $ | 61,169 | $ | 38,744 | $ | 61,169 | $ | 38,744 | ||||||||||||||
Supplemental disclosure of cash flow information: | ||||||||||||||||||||||
Cash paid (received) for income taxes, net | (631) | 3,453 | 5,081 | 15,025 | ||||||||||||||||||
Travelzoo Inc. | ||||||||||||||||||||||||||||||
Segment Information | ||||||||||||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||||||||
Three months ended December 31, 2012 |
North |
Europe |
Elimination |
Consolidated |
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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 | $ | 969 | $ | - | $ | 4,356 | ||||||||||||||||||||||
Three months ended December 31, 2011 |
North |
Europe |
Elimination |
Consolidated |
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Revenue from unaffiliated customers | $ | 25,500 | $ | 9,656 | $ | - | $ | 35,156 | ||||||||||||||||||||||
Intersegment revenue | 124 | 42 | (166) | - | ||||||||||||||||||||||||||
Total net revenues | 25,624 | 9,698 | (166) | 35,156 | ||||||||||||||||||||||||||
Operating income | $ | 6,504 | $ | 1,671 | $ | - | $ | 8,175 | ||||||||||||||||||||||
Twelve months ended December 31, 2012 |
North |
Europe |
Elimination |
Consolidated |
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Revenue from unaffiliated customers | $ | 108,788 | $ | 42,380 | $ | - | $ | 151,168 | ||||||||||||||||||||||
Intersegment revenue | 728 | 143 | (871) | - | ||||||||||||||||||||||||||
Total net revenues | 109,516 | 42,523 | (871) | 151,168 | ||||||||||||||||||||||||||
Operating income | $ | 21,481 | $ | 7,008 | $ | (3,000) | $ | 25,489 | ||||||||||||||||||||||
Twelve months ended December 31, 2011 |
North |
Europe |
Elimination |
Consolidated |
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Revenue from unaffiliated customers | $ | 108,549 | $ | 39,793 | $ | - | $ | 148,342 | ||||||||||||||||||||||
Intersegment revenue | 466 | 134 | (600) | - | ||||||||||||||||||||||||||
Total net revenues | 109,015 | 39,927 | (600) | 148,342 | ||||||||||||||||||||||||||
Operating income | $ | 30,110 | $ | 4,912 | $ | (20,000) | $ | 15,022 | ||||||||||||||||||||||
(a) Includes a charge related to unexchanged promotional merger shares for the twelve months ended December 31, 2012 and 2011. |
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Travelzoo Inc. | ||||||||||||
Reconciliation of GAAP to Non-GAAP Measures | ||||||||||||
(Unaudited) | ||||||||||||
(In thousands, except per share amounts) | ||||||||||||
Twelve months ended | ||||||||||||
December 31, | ||||||||||||
2012 | 2011 | |||||||||||
GAAP operating income | $ | 25,489 | $ | 15,022 | ||||||||
Unexchanged promotional merger shares (a) | 3,000 | 20,000 | ||||||||||
Non-GAAP operating income | $ | 28,489 | $ | 35,022 | ||||||||
GAAP net income | $ | 18,198 | $ | 3,319 | ||||||||
Unexchanged promotional merger shares (a) | 3,000 | 20,000 | ||||||||||
Non-GAAP net income | $ | 21,198 | $ | 23,319 | ||||||||
Diluted net Income per share | $ | 1.14 | $ | 0.20 | ||||||||
Unexchanged promotional merger shares (a) | 0.19 | 1.22 | ||||||||||
Non-GAAP diluted net income per share | $ | 1.33 | $ | 1.42 | ||||||||
(a) Includes a charge related to unexchanged promotional merger
shares of $20.0 |
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