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Travelzoo Reports Fourth Quarter 2012 Results

Stocks in this article: TZOO

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 cashprovided by operating activities:

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 America

 

Europe

 

Elimination

 

Consolidated

 
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 America

 

Europe

 

Elimination

 

Consolidated

 
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 America

 

Europe

Elimination and Other (a)

 

Consolidated

 
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 America

 

Europe

Elimination and Other (a)

 

Consolidated

 
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.

 

           
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 $20.0million and $3.0 million for the twelve months ended December 31, 2011 and 2012,respectively.

 




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