Exhibit 99.1
|
| |
| Travelzoo Inc. 590 Madison Avenue 37th Floor New York, NY 10022
Investor Relations Contact: Glen Ceremony Chief Financial Officer Travelzoo Inc. +1 (212) 484-4998 ir@travelzoo.com
|
FOR IMMEDIATE RELEASE
Travelzoo Reports Fourth Quarter 2014 Results
NEW YORK, January 22, 2015 - Travelzoo Inc. (NASDAQ: TZOO):
| |
| • | Revenue of $31.5 million, down 16% year-over-year |
| |
| • | Operating profit of $1.2 million, down 72% year-over-year |
| |
| • | Earnings per share of $0.09, compared to $0.21 in the prior-year period |
| |
| • | Non-GAAP loss per share of $0.04, compared to non-GAAP earnings per share of $0.21 in the prior-year period |
| |
| • | Cash flow used by operations of $100,000 |
Travelzoo Inc., a global Internet media company, today announced financial results for the fourth quarter ended December 31, 2014, with revenue of $31.5 million, a decrease of 16% year-over-year. Net income was $1.2 million, with earnings per share of $0.09. Non-GAAP net loss was $579,000, with non-GAAP loss per share of $0.04. Non-GAAP net loss and non-GAAP loss per share exclude a $1.8 million release of reserve for Travelzoo Inc.'s anticipated settlement agreements in connection with a dispute over unclaimed property audits.
"Investment in products and audience resulted in an operating loss for the quarter," said Chris Loughlin, chief executive officer. "Our objective remains to leverage Travelzoo's global scale and trusted brand for improved earnings in future periods."
North America
North America business segment revenue decreased 18% year-over-year to $21.1 million. Operating loss for the fourth quarter was $936,000, or (4)% of revenue, down from $2.7 million, or 10% of revenue, in the prior-year period.
Europe
Europe business segment revenue decreased 12% year-over-year to $10.4 million. In local currency terms, revenue decreased 10% year-over-year. Operating profit for the fourth quarter was $337,000, or 3% of revenue, down from $1.8 million, or 15% of revenue in the prior-year period.
Members
Travelzoo had a total unduplicated number of members in North America and Europe of 24.2 million as of December 31, 2014, up 4% from December 31, 2013. In North America, total unduplicated number of members was 16.9 million as of December 31, 2014, up 2% from December 31, 2013. In Europe, total unduplicated number of members was 7.3 million as of December 31, 2014, up 9% from December 31, 2013.
Income Taxes
Income tax benefit was $66,000, compared to $1.3 million income tax expense in the prior-year period, driven by lower operating income.
Asset Management
During the fourth quarter of 2014, Travelzoo used $100,000 of cash from operating activities. Accounts receivable increased by $622,000 over the prior-year period to $14.6 million. Accounts payable decreased by $8.8 million over the prior-year period to $23.0 million. Capital expenditures were $346,000, down from $1.9 million in the prior-year period. As of December 31, 2014, cash and cash equivalents were $54.8 million.
Non-GAAP Information
To give an enhanced view of Travelzoo's operating performance, management has calculated non-GAAP operating expense, non-GAAP operating profit, non-GAAP operating margin, non-GAAP effective tax rate, non-GAAP net income and non-GAAP earnings per share by excluding the release of a reserve related to our unexchanged promotional shares. The company believes these metrics assist investors to assess certain business trends in the same way that these trends are analyzed by management. The discussion of these non-GAAP metrics are not in accordance with GAAP and may differ from non-GAAP methods of accounting and reporting used by other companies. Non-GAAP metrics are merely a supplement to, and not a replacement for GAAP financial information. As the only difference between GAAP and non-GAAP information is the release of a reserve related to our unexchanged promotional shares, today’s reporting should not be viewed as Travelzoo’s intention to report non-GAAP information in future periods. Refer to the “Reconciliation of GAAP to Non-GAAP Information” section of this press release for important information.
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; |
About Travelzoo
Travelzoo Inc. is a global Internet media company. With more than 27 million members 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. All other names are trademarks and/or registered 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, |
| | 2014 | | 2013 | | 2014 | | 2013 |
| Revenues | $ | 31,498 |
| | $ | 37,475 |
| | $ | 142,076 |
| | $ | 158,234 |
|
| Cost of revenues | 4,279 |
| | 4,670 |
| | 17,906 |
| | 17,402 |
|
| Gross profit | 27,219 |
| | 32,805 |
| | 124,170 |
| | 140,832 |
|
| Operating expenses: | | | | | | | |
| Sales and marketing | 16,552 |
| | 17,307 |
| | 67,233 |
| | 74,870 |
|
| General and administrative | 11,266 |
| | 11,025 |
| | 43,470 |
| | 41,684 |
|
| Unexchanged promotional shares | (1,834 | ) | | — |
| | (7,583 | ) | | 22,000 |
|
| Total operating expenses | 25,984 |
| | 28,332 |
| | 103,120 |
| | 138,554 |
|
| Income from operations | 1,235 |
| | 4,473 |
| | 21,050 |
| | 2,278 |
|
| Other income (loss) | (46 | ) | | 61 |
| | 141 |
| | 429 |
|
| Income before income taxes | 1,189 |
| | 4,534 |
| | 21,191 |
| | 2,707 |
|
| Income taxes | (66 | ) | | 1,304 |
| | 4,839 |
| | 7,718 |
|
| Net income (loss) | $ | 1,255 |
| | $ | 3,230 |
| | $ | 16,352 |
| | $ | (5,011 | ) |
| Net income (loss) per share: | | | | | | | |
| Basic | $ | 0.09 |
| | $ | 0.22 |
| | $ | 1.11 |
| | $ | (0.33 | ) |
| Diluted | $ | 0.09 |
| | $ | 0.21 |
| | $ | 1.10 |
| | $ | (0.33 | ) |
| Weighted average shares: | | | | | | | |
| Basic | 14,730 |
| | 14,997 |
| | 14,768 |
| | 15,269 |
|
| Diluted | 14,730 |
| | 15,072 |
| | 14,809 |
| | 15,269 |
|
Travelzoo Inc.
Condensed Consolidated Balance Sheets
(Unaudited)
(In thousands)
|
| | | | | | | |
| | December 31,
2014 | | December 31, 2013 |
| Assets | | | |
| Current assets: | | | |
| Cash and cash equivalents | $ | 54,812 |
| | $ | 66,223 |
|
| Accounts receivable, net | 14,608 |
| | 13,986 |
|
| Income taxes receivable | 3,889 |
| | 2,656 |
|
| Deposits | 74 |
| | 396 |
|
| Prepaid expenses and other | 2,610 |
| | 3,202 |
|
| Deferred tax assets | 1,302 |
| | 1,143 |
|
| Restricted cash | — |
| | 200 |
|
| Funds held for reverse/forward stock split | 192 |
| | 13,668 |
|
| Total current assets | 77,487 |
| | 101,474 |
|
| Deposits | 1,087 |
| | 1,168 |
|
| Deferred tax assets | 1,336 |
| | 2,032 |
|
| Restricted cash | 1,393 |
| | 1,479 |
|
| Property and equipment, net | 9,022 |
| | 8,245 |
|
| Intangible assets, net | 163 |
| | 404 |
|
| Total assets | $ | 90,488 |
| | $ | 114,802 |
|
| Liabilities and Stockholders’ Equity | | | |
| Current liabilities: | | | |
| Accounts payable | $ | 23,008 |
| | $ | 31,766 |
|
| Accrued expenses and other | 9,943 |
| | 10,824 |
|
| Deferred revenue | 1,192 |
| | 1,578 |
|
| Income tax payable | 574 |
| | — |
|
| Reserve for unexchanged promotional shares | 1,393 |
| | 12,726 |
|
| Payable to shareholders for reverse/forward stock split | 192 |
| | 13,668 |
|
| Total current liabilities | 36,302 |
| | 70,562 |
|
| Long-term tax liabilities | 10,936 |
| | 10,436 |
|
| Long term deferred rent and other | 3,436 |
| | 2,469 |
|
| Total liabilities | 50,674 |
| | 83,467 |
|
| Common stock | 163 |
| | 163 |
|
| Treasury stock | (21,517 | ) | | (15,662 | ) |
| Additional paid-in capital | 11,043 |
| | 10,247 |
|
| Accumulated other comprehensive loss | (2,997 | ) | | (530 | ) |
| Retained earnings | 53,122 |
| | 37,117 |
|
| Total stockholders’ equity | 39,814 |
| | 31,335 |
|
| Total liabilities and stockholders’ equity | $ | 90,488 |
| | $ | 114,802 |
|
Travelzoo Inc.
Condensed Consolidated Statements of Cash Flows
(Unaudited)
(In thousands)
|
| | | | | | | | | | | | | | | |
| | Three months ended | | Twelve months ended |
| | December 31, | | December 31, |
| | 2014 | | 2013 | | 2014 | | 2013 |
| Cash flows from operating activities: | | | | | | | |
| Net income (loss) | $ | 1,255 |
| | $ | 3,230 |
| | $ | 16,352 |
| | $ | (5,011 | ) |
| Adjustments to reconcile net income (loss) to net cash provided by operating activities: | | | | | | | |
| Depreciation and amortization | 790 |
| | 795 |
| | 2,824 |
| | 2,980 |
|
| Impairment of software | — |
| | — |
| | 249 |
| | — |
|
| Deferred income taxes | 545 |
| | 65 |
| | 437 |
| | 706 |
|
| Stock-based compensation | 148 |
| | 395 |
| | 982 |
| | 1,384 |
|
| Provision for losses on accounts receivable | 45 |
| | 15 |
| | 40 |
| | (29 | ) |
| Net foreign currency effects | 85 |
| | (5 | ) | | 68 |
| | 33 |
|
| Changes in operating assets and liabilities: | | | | | | | |
| Accounts receivable | 835 |
| | 932 |
| | (1,154 | ) | | (173 | ) |
| Deposits | 157 |
| | (67 | ) | | 398 |
| | (50 | ) |
| Income tax receivable | (296 | ) | | 1,873 |
| | (1,248 | ) | | 4,042 |
|
| Prepaid expenses and other | (458 | ) | | 161 |
| | (4 | ) | | (1,058 | ) |
| Accounts payable | 2,270 |
| | 3,623 |
| | (6,883 | ) | | 2,826 |
|
| Accrued expenses and other | (247 | ) | | 693 |
| | (306 | ) | | 1,076 |
|
| Income tax payable | (1,198 | ) | | (1,298 | ) | | 608 |
| | (6 | ) |
| Reserve for unexchanged promotional shares | (4,150 | ) | | (12,274 | ) | | (11,333 | ) | | 9,726 |
|
| Other non-current liabilities | 119 |
| | 47 |
| | 500 |
| | 406 |
|
| Net cash provided by (used in) operating activities | (100 | ) | | (1,815 | ) | | 1,530 |
| | 16,852 |
|
| Cash flows from investing activities: | | | | | | | |
| Release of restricted cash | — |
| | — |
| | 200 |
| | 1,786 |
|
| Purchases of property and equipment | (346 | ) | | (1,866 | ) | | (3,260 | ) | | (5,461 | ) |
| Net cash used in investing activities | (346 | ) | | (1,866 | ) | | (3,060 | ) | | (3,675 | ) |
| Cash flows from financing activities: | | | | | | | |
| Repurchase of common stock | — |
| | (7,764 | ) | | (5,855 | ) | | (7,764 | ) |
| Reverse/forward stock split, including transaction costs | — |
| | (688 | ) | | (479 | ) | | (688 | ) |
| Net cash used in financing activities | — |
| | (8,452 | ) | | (6,334 | ) | | (8,452 | ) |
| Effect of exchange rate on cash and cash equivalents | (1,948 | ) | | 456 |
| | (3,547 | ) | | 329 |
|
| Net increase (decrease) in cash and cash equivalents | (2,394 | ) | | (11,677 | ) | | (11,411 | ) | | 5,054 |
|
| Cash and cash equivalents at beginning of period | 57,206 |
| | 77,900 |
| | 66,223 |
| | 61,169 |
|
| Cash and cash equivalents at end of period | $ | 54,812 |
| | $ | 66,223 |
| | $ | 54,812 |
| | $ | 66,223 |
|
| Supplemental disclosure of cash flow information: | | | | | | | |
| Cash paid for income taxes, net | $ | 690 |
| | $ | 691 |
| | $ | 4,606 |
| | $ | 2,609 |
|
Travelzoo Inc.
Segment Information
(Unaudited)
(In thousands)
|
| | | | | | | | | | | | | | | |
| Three months ended December 31, 2014 | North America | | Europe | | Elimination and Other (a) | | Consolidated |
| Revenue from unaffiliated customers | $ | 21,054 |
| | $ | 10,444 |
| | $ | — |
| | $ | 31,498 |
|
| Intersegment revenue | 228 |
| | 8 |
| | (236 | ) | | — |
|
| Total net revenues | 21,282 |
| | 10,452 |
| | (236 | ) | | 31,498 |
|
| Operating income (loss) | $ | (936 | ) | | $ | 337 |
| | $ | 1,834 |
| | $ | 1,235 |
|
| Three months ended December 31, 2013 | North America | | Europe | | Elimination and Other (b) | | Consolidated |
| Revenue from unaffiliated customers | $ | 25,586 |
| | $ | 11,889 |
| | $ | — |
| | $ | 37,475 |
|
| Intersegment revenue | 194 |
| | 11 |
| | (205 | ) | | — |
|
| Total net revenues | 25,780 |
| | 11,900 |
| | (205 | ) | | 37,475 |
|
| Operating income | $ | 2,680 |
| | $ | 1,793 |
| | $ | — |
| | $ | 4,473 |
|
| | | | | | | | |
| Twelve months ended December 31, 2014 | North
America | | Europe | | Elimination and Other (a) | | Consolidated |
| Revenue from unaffiliated customers | $ | 95,183 |
| | $ | 46,893 |
| | $ | — |
| | $ | 142,076 |
|
| Intersegment revenue | 1,350 |
| | 163 |
| | (1,513 | ) | | — |
|
| Total net revenues | 96,533 |
| | 47,056 |
| | (1,513 | ) | | 142,076 |
|
| Operating income | $ | 7,679 |
| | $ | 5,788 |
| | $ | 7,583 |
| | $ | 21,050 |
|
| Twelve months ended December 31, 2013 | North
America | | Europe | | Elimination and Other (b) | | Consolidated |
| Revenue from unaffiliated customers | $ | 111,955 |
| | $ | 46,279 |
| | $ | — |
| | $ | 158,234 |
|
| Intersegment revenue | 814 |
| | 452 |
| | (1,266 | ) | | — |
|
| Total net revenues | 112,769 |
| | 46,731 |
| | (1,266 | ) | | 158,234 |
|
| Operating income | $ | 16,568 |
| | $ | 7,710 |
| | $ | (22,000 | ) | | $ | 2,278 |
|
| |
| (a) | Includes a $1.8 million and a $7.6 million release of reserve for the three and twelve months ended December 31, 2014, respectively, related to anticipated settlement agreements in connection with a dispute over unclaimed property audits. |
| |
| (b) | Includes a charge of $22.0 million for the twelve months ended December 31, 2013 related to settlement agreements in connection with a dispute over unclaimed property audits. |
|
| | | | | | | | | | | | | | | |
| Travelzoo Inc. |
| Reconciliation of GAAP to Non-GAAP Information |
| (Unaudited) |
| (In thousands, except per share amounts) |
| | | | | | |
| | | | | | | | |
| | Three months ended | | Twelve months ended |
| | December 31, | | December 31, |
| | 2014 | | 2013 | | 2014 | | 2013 |
| GAAP operating expense | $ | 25,984 |
| | $ | 28,332 |
| | $ | 103,120 |
| | $ | 138,554 |
|
| Unexchanged promotional shares (a) (b) | (1,834 | ) | | — |
| | (7,583 | ) | | 22,000 |
|
| Non-GAAP operating expense | $ | 27,818 |
| | $ | 28,332 |
| | $ | 110,703 |
| | $ | 116,554 |
|
| | | | | | | | |
| GAAP operating income | $ | 1,235 |
| | $ | 4,473 |
| | $ | 21,050 |
| | $ | 2,278 |
|
| Unexchanged promotional shares (a) (b) | (1,834 | ) | | — |
| | (7,583 | ) | | 22,000 |
|
| Non-GAAP operating income (loss) | $ | (599 | ) | | $ | 4,473 |
| | $ | 13,467 |
| | $ | 24,278 |
|
| | | | | | | | |
| GAAP operating margin | 3.9 | % | | 11.9 | % | | 14.8 | % | | 1.4 | % |
| Unexchanged promotional shares (a) (b) | (5.8 | )% | | — | % | | (5.3 | )% | | 13.9 | % |
| Non-GAAP operating margin | (1.9 | )% | | 11.9 | % | | 9.5 | % | | 15.3 | % |
| | | | | | | | |
| GAAP effective tax rate | (5.6) | % | | 28.8 | % | | 22.8 | % | | 285.1 | % |
| Unexchanged promotional shares (a) (b) | 15.8 | % | | 0.1 | % | | 12.7 | % | | (253.9) | % |
| Non-GAAP effective tax rate | 10.2 | % | | 28.9 | % | | 35.5 | % | | 31.2 | % |
| | | | | | | | |
| GAAP net income (loss) | $ | 1,255 |
| | $ | 3,230 |
| | $ | 16,352 |
| | $ | (5,011 | ) |
| Unexchanged promotional shares (a) (b) | (1,834 | ) | | — |
| | (7,583 | ) | | 22,000 |
|
| Non-GAAP earnings (loss) | $ | (579 | ) | | $ | 3,230 |
| | $ | 8,769 |
| | $ | 16,989 |
|
| | | | | | | | |
| Earnings (loss) per share | $ | 0.09 |
| | $ | 0.21 |
| | $ | 1.10 |
| | $ | (0.33 | ) |
| Unexchanged promotional shares (a) (b) | (0.13 | ) | | — |
| | (0.51 | ) | | 1.44 |
|
| Non-GAAP earnings (loss) per share (c) | $ | (0.04 | ) | | $ | 0.21 |
| | $ | 0.59 |
| | $ | 1.11 |
|
| | | | | | | | |
| | | | | | | | |
| |
| (a) | Includes a $1.8 million and a $7.6 million release of reserve for the three and twelve months ended December 31, 2014, respectively, related to anticipated settlement agreements in connection with a dispute over unclaimed property audits. |
| |
| (b) | Includes a charge of $22.0 million for the twelve months ended December 31, 2013 related to settlement agreements in connection with a dispute over unclaimed property audits. |
| |
| (c) | Shares used to calculate non-GAAP earnings per share for the twelve months ended December 31, 2013 were 15,355,160 which were different than the shares used in GAAP loss per share calculation due to the anti-dilutive effect on the GAAP loss per share. |
