NEW
YORK, Feb. 28, 2024 /PRNewswire/ -- Travelzoo®
(NASDAQ: TZOO):
- Revenue of $21.1 million, up 14%
year-over-year
- Consolidated operating profit of $4.5
million
- Non-GAAP consolidated operating profit of $5.2 million
- Cash flow from operations of $1.4
million
- Earnings per share (EPS) of $0.27
Travelzoo, the club for travel enthusiasts, today announced
financial results for the fourth quarter ended December 31,
2023. Consolidated revenue was $21.1
million, up 14% from $18.6
million year-over-year. In constant currencies, revenue was
$20.8 million, up 12% year-over-year.
Travelzoo's reported revenue consists of advertising revenues and
commissions, derived from and generated in connection with
purchases made by Travelzoo members.
Net income attributable to Travelzoo was $3.7 million for Q4 2023, or $0.27 per share, compared with $0.20 in the prior-year period. Net income
attributable to Travelzoo from continuing operations was
$3.3 million for Q4 2023, or
$0.24 per share, compared with
$0.20 in the prior-year period.
Non-GAAP operating profit was $5.2
million. Non-GAAP operating profit excludes amortization of
intangibles ($0.4 million) and stock
option expenses ($0.4 million).
Please refer to "Non-GAAP Financial Measures" and the tabular
reconciliation below.
"Q4 concluded a strong year for Travelzoo, with each
quarter achieving year-over-year revenue growth, profitability and
positive cash flow from operations," said Holger Bartel, Travelzoo's Global CEO. "We will
continue to leverage Travelzoo's global reach, trusted brand, and
strong relationships with top travel suppliers to negotiate more
exclusive offers for members. It is in times of large increases in
travel prices that Travelzoo is most valuable for consumers.
Travelzoo members enjoy high quality travel experiences that
represent outstanding value."
"With more than 30 million members, 8 million mobile app users,
and 5 million social media followers, Travelzoo is loved by
travel enthusiasts who are affluent, active, and open to new
experiences."
Cash Position
As of December 31, 2023, consolidated cash, cash
equivalents and restricted cash were $16.4
million. Net cash provided by operations was $1.4 million.
Travelzoo North America
North America business segment
revenue increased 5% year-over-year to $13.8
million. Operating profit for Q4 2023 was $4.0 million, or 29% of revenue, compared to
operating profit of $4.2 million in
the prior-year period.
Travelzoo Europe
Europe business segment revenue
increased 34% year-over-year to $6.3
million. In constant currencies, Europe business segment revenue increased 27%
year-over-year. Operating profit for Q4 2023 was $832,000, or 13% of revenue, compared to
operating profit of $42,000 in the
prior-year period.
Jack's Flight Club
Jack's Flight Club business segment revenue, which is impacted
by the accounting for an intragroup marketing agreement, increased
11% year-over-year to $949,000.
Revenue from unaffiliated customers increased 29% year-over-year to
$1.1 million. Jack's Flight Club is a
membership subscription service in which Travelzoo has a 60%
ownership interest. The number of premium subscribers increased 21%
year-over-year. Revenue from subscriptions is recognized monthly
pro rata over the subscription period (quarterly, semi-annually,
annually). Non-GAAP operating loss for Q4 2023 was
$61,000, compared to a non-GAAP
operating profit of $220,000 in the
prior-year period. Non-GAAP operating loss excludes amortization of
intangibles ($0.2 million) related to
the acquisition of Travelzoo's ownership interest in Jack's Flight
Club in 2020. The Q4 2023 operating loss was caused by marketing
expenses in connection with growth in members.
New Initiatives
New Initiatives business segment revenue, which includes
Licensing and Travelzoo META, was $155,000. Operating loss for Q4 2023 was
$104,000.
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. Travelzoo
recorded $23,000 in licensing revenue
from the licensee in Japan in Q4
2023. Travelzoo recorded $9,000 in
licensing revenue from the licensee in Australia, New
Zealand, and Singapore in
Q4 2023. Licensing revenue is expected to increase going
forward.
Members and Subscribers
As of December 31, 2023, we were 31.1 million members
worldwide, up from 30.4 million as of December 31, 2022. In
North America, Travelzoo had 16.2
million unduplicated members as of December 31, 2023,
consistent with December 31, 2022. In Europe, Travelzoo had 9.2 million unduplicated
members as of December 31, 2023, up from 9.0 million as of
December 31, 2022. Jack's Flight Club had 2.4 million
subscribers as of December 31, 2023, up from 1.9 million as of
December 31, 2022.
Discontinued Operations
In March 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. 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 $1.6 million for
income taxes was recorded for Q4 2023, compared to an income tax
expense of $1.1 million in the
prior-year period. Travelzoo intends to utilize available net
operating losses (NOLs) to largely offset its actual tax liability
for Q4 2023.
Looking Ahead
For Q1 2024, we expect continued growth in revenue, albeit at a
smaller pace than 2023. We expect higher cash flow from operations
and higher profitability. In December
2023, we announced the introduction of a membership fee for
Travelzoo beginning January 1, 2024.
Existing members as of December 31,
2023, are exempt from the fee during 2024. Therefore, we do
not anticipate to generate membership fee revenue from existing
members before 2025.
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: impairment of intangible and
goodwill, 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.
Conference Call
Travelzoo will host a conference call to discuss fourth 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
We, Travelzoo®, are the club for travel enthusiasts. Our 30
million members receive 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
Condensed
Consolidated Statements of Operations
(Unaudited)
(In thousands,
except per share amounts)
|
|
|
Three months
ended
|
|
Twelve months
ended
|
|
December
31,
|
|
December
31,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
Revenues
|
$
21,149
|
|
$
18,608
|
|
$
84,477
|
|
$
70,599
|
|
Cost of
revenues
|
2,698
|
|
2,684
|
|
10,934
|
|
10,003
|
|
Gross
profit
|
18,451
|
|
15,924
|
|
73,543
|
|
60,596
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
Sales and
marketing
|
8,496
|
|
7,499
|
|
37,774
|
|
33,072
|
|
Product
development
|
580
|
|
673
|
|
2,113
|
|
2,064
|
|
General and
administrative
|
4,896
|
|
4,168
|
|
18,084
|
|
17,903
|
|
Total operating
expenses
|
13,972
|
|
12,340
|
|
57,971
|
|
53,039
|
|
Operating
income
|
4,479
|
|
3,584
|
|
15,572
|
|
7,557
|
|
Other income (expense),
net
|
398
|
|
(53)
|
|
1,541
|
|
2,401
|
|
Income from continuing
operations before income taxes
|
4,877
|
|
3,531
|
|
17,113
|
|
9,958
|
|
Income tax
expense
|
1,618
|
|
1,057
|
|
5,105
|
|
3,270
|
|
Income from continuing
operations
|
3,259
|
|
2,474
|
|
12,008
|
|
6,688
|
|
Income (loss) from
discontinued operations, net of tax
|
465
|
|
(63)
|
|
460
|
|
(59)
|
|
Net income
|
3,724
|
|
2,411
|
|
12,468
|
|
6,629
|
|
Net income (loss)
attributable to non-controlling interest
|
5
|
|
(41)
|
|
102
|
|
(5)
|
|
Net income attributable
to Travelzoo
|
$ 3,719
|
|
$ 2,452
|
|
$
12,366
|
|
$ 6,634
|
|
|
|
|
|
|
|
|
|
Net income attributable
to Travelzoo—continuing operations
|
$ 3,254
|
|
$ 2,515
|
|
$
11,906
|
|
$ 6,693
|
|
Net income (loss)
attributable to Travelzoo—discontinued operations
|
$
465
|
|
$
(63)
|
|
$
460
|
|
$
(59)
|
|
|
|
|
|
|
|
|
|
Income per
share—basic
|
|
|
|
|
|
|
|
|
Continuing
operations
|
$ 0.24
|
|
$ 0.20
|
|
$
0.80
|
|
$
0.54
|
|
Discontinued
operations
|
$ 0.03
|
|
$
—
|
|
$
0.03
|
|
$
—
|
|
Net income per
share—basic
|
$ 0.27
|
|
$ 0.20
|
|
$
0.83
|
|
$
0.54
|
|
|
|
|
|
|
|
|
|
Income per
share—diluted
|
|
|
|
|
|
|
|
|
Continuing
operations
|
$ 0.24
|
|
$ 0.20
|
|
$
0.80
|
|
$
0.53
|
|
Discontinued
operations
|
$ 0.03
|
|
$
—
|
|
$
0.03
|
|
$
—
|
|
Net income per
share—diluted
|
$ 0.27
|
|
$ 0.20
|
|
$
0.83
|
|
$
0.53
|
|
Shares used in per
share calculation from continuing operations—basic
|
13,873
|
|
12,425
|
|
14,897
|
|
12,372
|
|
Shares used in per
share calculation from discontinued operations—basic
|
13,873
|
|
12,425
|
|
14,897
|
|
12,372
|
|
Shares used in per
share calculation from continuing operations—diluted
|
13,946
|
|
12,487
|
|
14,964
|
|
12,561
|
|
Shares used in per
share calculation from discontinued operations—diluted
|
13,946
|
|
12,487
|
|
14,964
|
|
12,561
|
|
Travelzoo
Condensed
Consolidated Balance Sheets
(Unaudited)
(In
thousands)
|
|
|
December 31,
2023
|
|
December 31,
2022
|
|
Assets
|
|
|
|
|
Current
assets:
|
|
|
|
|
Cash and cash
equivalents
|
$
15,713
|
|
$
18,693
|
|
Accounts receivable,
net
|
12,965
|
|
13,820
|
|
Prepaid income
taxes
|
629
|
|
1,778
|
|
Prepaid expenses and
other
|
1,460
|
|
1,289
|
|
Assets from
discontinued operations
|
1
|
|
11
|
|
Total current
assets
|
30,768
|
|
35,591
|
|
Deposits and
other
|
1,115
|
|
5,094
|
|
Deferred tax
assets
|
3,196
|
|
3,222
|
|
Restricted
cash
|
675
|
|
675
|
|
Operating lease
right-of-use assets
|
6,015
|
|
7,440
|
|
Property and
equipment, net
|
578
|
|
657
|
|
Intangible assets,
net
|
2,091
|
|
3,651
|
|
Goodwill
|
10,944
|
|
10,944
|
|
Total
assets
|
$
55,382
|
|
$
67,274
|
|
Liabilities and
Equity
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
Accounts
payable
|
$
4,546
|
|
$
4,271
|
|
Merchant
payables
|
20,622
|
|
32,574
|
|
Accrued expenses and
other
|
3,658
|
|
5,049
|
|
Deferred
revenue
|
2,044
|
|
2,216
|
|
Income tax
payable
|
766
|
|
—
|
|
Operating lease
liabilities
|
2,530
|
|
2,972
|
|
Liabilities from
discontinued operations
|
24
|
|
452
|
|
Total current
liabilities
|
34,190
|
|
47,534
|
|
Long-term tax
liabilities
|
4,681
|
|
1,569
|
|
Long-term operating
lease liabilities
|
6,717
|
|
8,326
|
|
Other long-term
liabilities
|
911
|
|
994
|
|
Total
liabilities
|
46,499
|
|
58,423
|
|
Common
stock
|
136
|
|
165
|
|
Treasury stock (at
cost)
|
—
|
|
(7,130)
|
|
Tax
indemnification
|
(9,537)
|
|
(9,537)
|
|
Note receivable from
shareholder
|
(1,753)
|
|
(4,753)
|
|
Additional paid-in
capital
|
439
|
|
23,274
|
|
Retained
earnings
|
19,508
|
|
7,142
|
|
Accumulated other
comprehensive loss
|
(4,607)
|
|
(4,905)
|
|
Total Travelzoo
stockholders' equity
|
4,186
|
|
4,256
|
|
Non-controlling
interest
|
4,697
|
|
4,595
|
|
Total stockholder's
equity
|
8,883
|
|
8,851
|
|
Total liabilities and
equity
|
$
55,382
|
|
$
67,274
|
|
Travelzoo
Condensed
Consolidated Statements of Cash Flows
(Unaudited)
(In
thousands)
|
|
|
Three months
ended
|
|
Twelve months
ended
|
|
December
31,
|
|
December
31,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
Cash flows from
operating activities:
|
|
|
|
|
|
|
|
|
Net income
|
$ 3,724
|
|
$ 2,411
|
|
$
12,468
|
|
$ 6,629
|
|
Adjustments to
reconcile net income to net cash provided by (used in) operating
activities:
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
476
|
|
537
|
|
1,893
|
|
2,189
|
|
Stock-based
compensation
|
380
|
|
349
|
|
1,567
|
|
1,805
|
|
Deferred income
tax
|
169
|
|
73
|
|
58
|
|
774
|
|
Impairment of
intangible assets and goodwill
|
—
|
|
200
|
|
—
|
|
200
|
|
Loss on long-lived
assets
|
—
|
|
9
|
|
10
|
|
47
|
|
Gain on sale of equity
investment in WeGo
|
—
|
|
—
|
|
—
|
|
(196)
|
|
Net foreign currency
effects
|
(115)
|
|
198
|
|
(62)
|
|
232
|
|
Reversal of reserves
on accounts receivable and other reserves
|
(72)
|
|
(965)
|
|
(1,016)
|
|
(4,367)
|
|
Changes in operating
assets and liabilities:
|
|
|
|
|
|
|
|
|
Accounts
receivable
|
(2,231)
|
|
(1,223)
|
|
1,086
|
|
1,317
|
|
Prepaid income
taxes
|
61
|
|
1,098
|
|
1,189
|
|
1,452
|
|
Prepaid expenses,
deposits and other
|
1,603
|
|
1,586
|
|
3,835
|
|
1,627
|
|
Accounts
payable
|
1,181
|
|
501
|
|
(523)
|
|
902
|
|
Merchant
payables
|
(3,338)
|
|
(6,334)
|
|
(12,095)
|
|
(35,228)
|
|
Accrued expenses and
other
|
(1,450)
|
|
(649)
|
|
(876)
|
|
(496)
|
|
Income tax
payable
|
456
|
|
23
|
|
749
|
|
(162)
|
|
Other
liabilities
|
547
|
|
(86)
|
|
2,401
|
|
154
|
|
Net cash provided by
(used in) operating activities
|
1,391
|
|
(2,272)
|
|
10,684
|
|
(23,121)
|
|
Cash flows from
investing activities:
|
|
|
|
|
|
|
|
|
Proceeds from
repayment of note receivable
|
103
|
|
—
|
|
216
|
|
—
|
|
Purchases of
intangible assets
|
—
|
|
—
|
|
—
|
|
(1,049)
|
|
Proceeds from sale of
equity investment in WeGo
|
—
|
|
—
|
|
—
|
|
196
|
|
Purchases of property
and equipment
|
(38)
|
|
(226)
|
|
(255)
|
|
(462)
|
|
Net cash (provided by)
used in investing activities
|
65
|
|
(226)
|
|
(39)
|
|
(1,315)
|
|
Cash flows from
financing activities:
|
|
|
|
|
|
|
|
|
Repurchase of common
stock
|
(5,016)
|
|
(472)
|
|
(16,782)
|
|
(1,642)
|
|
Proceeds from short
swing settlement
|
—
|
|
—
|
|
—
|
|
46
|
|
Proceeds from issuance
of common stock
|
|
|
1,006
|
|
|
|
1,006
|
|
Proceeds from note
receivable from shareholder
|
3,000
|
|
—
|
|
3,000
|
|
—
|
|
Exercise of stock
options and taxes paid for net share settlement of equity
awards
|
(69)
|
|
(13)
|
|
(368)
|
|
1,872
|
|
Net cash provided by
(used in) financing activities
|
(2,085)
|
|
521
|
|
(14,150)
|
|
1,282
|
|
Effect of exchange rate
on cash, cash equivalents and restricted cash
|
436
|
|
810
|
|
516
|
|
(2,457)
|
|
Net decrease in cash,
cash equivalents and restricted cash
|
(193)
|
|
(1,167)
|
|
(2,989)
|
|
(25,611)
|
|
Cash, cash equivalents
and restricted cash at beginning of period
|
16,582
|
|
20,545
|
|
19,378
|
|
44,989
|
|
Cash, cash equivalents
and restricted cash at end of period
|
$
16,389
|
|
$
19,378
|
|
$
16,389
|
|
$
19,378
|
|
Travelzoo
Segment Information
from Continuing Operations
(Unaudited)
(In
thousands)
|
|
|
Three months ended
December 31, 2023
|
Travelzoo
North
America
|
|
Travelzoo
Europe
|
|
Jack's
Flight Club
|
|
New
Initiatives
|
|
Consolidated
|
|
Revenue from
unaffiliated customers
|
$
13,534
|
|
$
6,354
|
|
$
1,106
|
|
$
155
|
|
$
21,149
|
|
Intersegment revenue
(loss)
|
247
|
|
(90)
|
|
(157)
|
|
—
|
|
—
|
|
Total net
revenues
|
13,781
|
|
6,264
|
|
949
|
|
155
|
|
21,149
|
|
Operating income
(loss)
|
$
3,970
|
|
$
832
|
|
$
(219)
|
|
$
(104)
|
|
$
4,479
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
December 31, 2022
|
Travelzoo
North
America
|
|
Travelzoo
Europe
|
|
Jack's
Flight Club
|
|
New
Initiatives
|
|
Consolidated
|
|
Revenue from
unaffiliated customers
|
$
12,921
|
|
$
4,825
|
|
$
855
|
|
$
7
|
|
$
18,608
|
|
Intersegment revenue
(loss)
|
162
|
|
(162)
|
|
—
|
|
—
|
|
—
|
|
Total net
revenues
|
13,083
|
|
4,663
|
|
855
|
|
7
|
|
18,608
|
|
Operating income
(loss)
|
$
4,235
|
|
$
42
|
|
$
(196)
|
|
$
(497)
|
|
$
3,584
|
|
|
|
|
|
|
|
|
|
|
|
Twelve months ended
December 31, 2023
|
Travelzoo
North
America
|
|
Travelzoo
Europe
|
|
Jack's
Flight Club
|
|
New
Initiatives
|
|
Consolidated
|
|
Revenue from
unaffiliated customers
|
$
54,837
|
|
$
25,291
|
|
$
4,145
|
|
$
204
|
|
$
84,477
|
|
Intersegment revenue
(loss)
|
1,243
|
|
(1,270)
|
|
27
|
|
—
|
|
—
|
|
Total net
revenues
|
56,080
|
|
24,021
|
|
4,172
|
|
204
|
|
84,477
|
|
Operating income
(loss)
|
$
15,254
|
|
$
1,317
|
|
$
(23)
|
|
$
(976)
|
|
$
15,572
|
|
|
|
|
|
|
|
|
|
|
|
Twelve months ended
December 31, 2022
|
Travelzoo
North
America
|
|
Travelzoo
Europe
|
|
Jack's
Flight Club
|
|
New
Initiatives
|
|
Consolidated
|
|
Revenue from
unaffiliated customers
|
$
47,029
|
|
$
20,068
|
|
$
3,477
|
|
$
25
|
|
$
70,599
|
|
Intersegment revenue
(loss)
|
613
|
|
(613)
|
|
—
|
|
—
|
|
—
|
|
Total net
revenues
|
47,642
|
|
19,455
|
|
3,477
|
|
25
|
|
70,599
|
|
Operating income
(loss)
|
$
10,348
|
|
$
(1,803)
|
|
$
—
|
|
$
(988)
|
|
$
7,557
|
|
Travelzoo
Reconciliation of
GAAP to Non-GAAP Information
(Unaudited)
(In thousands,
except per share amounts)
|
|
|
Three months
ended
|
|
Twelve months
ended
|
|
December
31,
|
|
December
31,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
GAAP operating
expense
|
$
13,972
|
|
$
12,340
|
|
$
57,971
|
|
$
53,039
|
|
Non-GAAP
adjustments:
|
|
|
|
|
|
|
|
|
Impairment of
intangible and goodwill (A)
|
—
|
|
200
|
|
—
|
|
200
|
|
Amortization of
intangibles (A)
|
389
|
|
453
|
|
1,560
|
|
1,771
|
|
Stock option expenses
(B)
|
380
|
|
349
|
|
1,566
|
|
1,805
|
|
Severance-related
expenses (C)
|
—
|
|
200
|
|
56
|
|
336
|
|
Non-GAAP operating
expense
|
13,203
|
|
11,138
|
|
54,789
|
|
48,927
|
|
|
|
|
|
|
|
|
|
GAAP operating
income
|
4,479
|
|
3,584
|
|
15,572
|
|
7,557
|
|
Non-GAAP adjustments (A
through C)
|
769
|
|
1,202
|
|
3,182
|
|
4,112
|
|
Non-GAAP operating
income
|
5,248
|
|
4,786
|
|
18,754
|
|
11,669
|
Investor Relations:
ir@travelzoo.com
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SOURCE Travelzoo
