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Tuesday, August 07, 2012 11:01:34 AM
• Revenue of $39.4 million, up 5% year-over-year
• Operating Income of $10.4 million, up 36% year-over-year
• Net income of $7.3 million, up 48% year-over-year
• Earnings per share of $0.45, compared to $0.30 in the prior-year period
• Cash flow from operations of $7.1 million
Travelzoo Inc., a global Internet media company, today announced financial results for the second quarter ended June 30, 2012, with revenue of $39.4 million, an increase of 5% year-over-year. Operating income was $10.4 million, up 36% year-over-year. Net income was $7.3 million, with earnings per share of $0.45, up from $0.30 in the prior-year period.
“Our strategy of publishing high-quality deals, combined with efficient execution, has led to record operating profits in Europe and North America and an overall operating margin of 26%, the highest since 2007,” said Chris Loughlin, chief executive officer of Travelzoo. “We now intend to reaccelerate growth by investing more significantly into growing our audience, expanding our mobile offerings, and continuing our sales force ramp.”
North America
North America business segment revenue grew 4% year-over-year to $28.7 million. Operating income for the second quarter was $7.8 million, or 27% of revenue, up from $6.5 million, or 24% of revenue, in the prior-year period.
Europe
Europe business segment revenue grew 7% year-over-year to $10.6 million. In local currency terms, revenue for the second quarter grew 10% year-over-year. Operating income for the second quarter was $2.5 million, compared to an operating profit of $1.1 million in the prior-year period.
Subscribers
Travelzoo had a total unduplicated number of subscribers in North America and Europe of 22.1 million as of June 30, 2012, up 6% from June 30, 2011. In North America, total unduplicated number of subscribers was 15.9 million as of June 30, 2012, up 4% from June 30, 2011. In Europe, total unduplicated number of subscribers was 6.1 million as of June 30, 2012, up 12% from June 30, 2011.
Income Taxes
Income tax expense was $3.1 million, compared to $2.8 million in the prior-year period. The effective income tax rate was 30%, down from 36% in the prior-year period.
Asset Management
During the second quarter 2012, Travelzoo generated $7.1 million of cash from operating activities. Accounts receivable decreased by $700,000 over the prior-year period to $15.2 million. Accounts payable increased by $6.5 million over the prior-year period to $22.1 million. Capital expenditures were $595,000, up from $356,000 in the prior-year period. Travelzoo exited the second quarter with $54.2 million in cash and cash equivalents.
Conference Call
Travelzoo will host a conference call to discuss first 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 25 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
Six months ended
June 30,
June 30,
2012
2011
2012
2011
Revenues
$ 39,360
$ 37,565
$ 78,693
$ 74,525
Cost of revenues
3,630
2,940
7,683
5,382
Gross profit
35,730
34,625
71,010
69,143
Operating expenses:
Sales and marketing
16,061
18,702
32,326
34,833
General and administrative
9,303
8,295
18,747
16,689
Unexchanged merger shares
-
-
3,000
20,000
Total operating expenses
25,364
26,997
54,073
71,522
Operating income (loss)
10,366
7,628
16,937
(2,379)
Other income (expense)
(16)
42
83
104
Income (loss) before income taxes
10,350
7,670
17,020
(2,275)
Income taxes
3,090
2,752
6,012
6,762
Net income (loss)
$ 7,260
$ 4,918
$ 11,008
$ (9,037)
Net income (loss) per share:
Basic
$ 0.45
$ 0.30
$ 0.69
$ (0.55)
Diluted
$ 0.45
$ 0.30
$ 0.69
$ (0.55)
Weighted Average Shares:
Basic
15,962
16,462
15,962
16,456
Diluted
16,006
16,585
16,012
16,456
Travelzoo Inc.
Condensed Consolidated Balance Sheets
(Unaudited)
(In thousands)
June 30,
2012
December 31,
2011
Assets
Current assets:
Cash and cash equivalents
$
54,161
$
38,744
Accounts receivable, net
15,236
13,340
Income taxes receivable
2,493
3,625
Deposits
376
278
Prepaid expenses and other current assets
2,601
2,123
Deferred tax assets
1,755
1,754
Total current assets
76,622
59,864
Deposits, less current portion
1,038
776
Deferred tax assets, less current portion
344
344
Restricted cash
3,045
3,103
Property and equipment, net
3,711
3,557
Intangible assets, net
528
704
Total assets
$
85,288
$
68,348
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable
$
22,129
$
21,731
Accrued expenses
11,606
6,311
Deferred revenue
2,108
2,168
Deferred rent
217
114
Income tax payable
-
279
Total current liabilities
36,060
30,603
Long-term tax liabilities
2,001
2,225
Deferred rent, less current portion
929
761
Total liabilities
38,990
33,589
Common stock
164
164
Treasury stock
-
(15,123)
Additional paid-in capital
8,249
7,656
Accumulated other comprehensive loss
(1,484)
(1,422)
Retained earnings
39,369
43,484
Total stockholders' equity
46,298
34,759
Total liabilities and stockholders' equity
$
85,288
$
68,348
Travelzoo Inc.
Condensed Consolidated Statements of Cash Flows
(Unaudited)
(In thousands)
Three months ended
Six months ended
June 30,
June 30,
2012
2011
2012
2011
Cash flows from operating activities:
Net income (loss)
$ 7,260
$ 4,918
$ 11,008
$ (9,037)
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization
599
666
1,225
1,309
Deferred income taxes
-
74
-
160
Stock-based compensation
307
187
593
375
Provision for losses on accounts receivable
91
24
199
43
Tax benefit from exercise of stock options
-
-
-
(268)
Net foreign currency effects
75
1
40
(29)
Changes in operating assets and liabilities:
Accounts receivable
(851)
462
(2,122)
(2,456)
Deposits
(232)
(99)
(364)
(660)
Income tax receivable
285
(2,654)
1,130
(2,390)
Prepaid expenses and other current assets
215
(309)
(79)
(117)
Accounts payable
48
2,164
508
5,600
Accrued expenses
(317)
(16,248)
5,302
7,185
Deferred revenue
(194)
78
(60)
98
Deferred rent
41
82
(34)
95
Income tax payable
1
(607)
(283)
(519)
Other non-current liabilities
(276)
14
(224)
29
Net cash provided by (used in) operating activities
7,052
(11,247)
16,839
(582)
Cash flows from investing activities:
Purchases of property and equipment
(595)
(356)
(1,272)
(1,056)
Net cash used in investing activities
(595)
(356)
(1,272)
(1,056)
Cash flows from financing activities:
Proceeds from exercise of stock options
-
-
-
40
Tax benefit of stock option exercises
-
-
-
268
Net cash provided by financing activities
-
-
-
308
Effect of exchange rate on cash and cash equivalents
(855)
(9)
(150)
232
Net increase (decrease) in cash and cash equivalents
5,602
(11,612)
15,417
(1,098)
Cash and cash equivalents at beginning of period
48,559
51,698
38,744
41,184
Cash and cash equivalents at end of period
$ 54,161
$ 40,086
$ 54,161
$ 40,086
Supplemental disclosure of cash flow information:
Cash paid for income taxes, net
3,082
5,918
5,391
9,476
Travelzoo Inc.
Segment Information
(Unaudited)
(In thousands)
Three months ended June 30, 2012
North
America
Europe
Elimination
Consolidated
Revenue from unaffiliated customers
$
28,712
$
10,648
$
-
$
39,360
Intersegment revenue
205
21
(226)
-
Total net revenues
28,917
10,669
(226)
39,360
Operating income
$
7,831
$
2,535
$
-
$
10,366
Three months ended June 30, 2011
North
America
Europe
Elimination
Consolidated
Revenue from unaffiliated customers
$
27,588
$
9,977
$
-
$
37,565
Intersegment revenue
112
57
(169)
-
Total net revenues
27,700
10,034
(169)
37,565
Operating income
$
6,543
$
1,086
$
-
$
7,629
Six months ended June 30, 2012
North
America
Europe
Elimination
and Other (a)
Consolidated
Revenue from unaffiliated customers
$
57,268
$
21,425
$
-
$
78,693
Intersegment revenue
470
31
(501)
-
Total net revenues
57,738
21,456
(501)
78,693
Operating income
$
14,972
$
4,965
$
(3,000)
$
16,937
Six months ended June 30, 2011
North
America
Europe
Elimination
and Other (a)
Consolidated
Revenue from unaffiliated customers
$
55,105
$
19,420
$
-
$
74,525
Intersegment revenue
213
61
(274)
-
Total net revenues
55,318
19,481
(274)
74,525
Operating income (loss)
$
15,794
$
1,827
$
(20,000)
$
(2,379)
(a) Includes a charge related to unexchanged shares for the six months ended June 30, 2012 and June 30, 2011.
.
.
Contact:.
.
Travelzoo
Media:
Christie McConnell, +1 212-484-4912
cmcconnell@travelzoo.com
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