TZOO - Earnings call transcript Q4 2019

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Operator

Hello, everyone. Welcome to the Travelzoo's Fourth Quarter 2019 Financial Results Conference Call. [Operator Instructions] Today's call is being recorded.

The company would like to remind everyone that all statements made during this conference call and presented in the slides that are not statements of historical facts constitute forward-looking statements and are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Actual results could vary materially from those contained in the forward-looking statements. periodic actual statements differ company's are and and cause in from Forms could SEC. XX-Q, forward-looking the the described other that results materially to those XX-K Factors with filings in the

this Unless required no update future result any publicly company's events a company or statements, as refer new obligation Web to whether the to forward-looking of An conference law, company's by the earnings undertakes information, will press issued otherwise. archived information, Please site recording on important morning. of travelzoo.com/ir. available Relations including the made for Investor Web call at earlier be release Travelzoo this the site

Now it's start overview of Bartel; floor Holger and to my the XXXX the Chief fourth with Travelzoo's an quarter Lisa the financial will over Global Accounting results. Chief Lisa Officer, to pleasure Executive Officer, turn Su.

Lisa Su

And today. us Investor along presentation Jimmy. on is you you, to Please our available open welcome in prepared to of follow management remarks. Web The site. presentation format with those joining Thank PDF Relations the our

The Page consistent quarter the the provide quarter, X In fourth on Number financial for In $XX.X currencies, highlight. revenue revenue year-over-year. million. constant was was slide first

However, was revenue nominal less $XXX,XXX in year-over-year. terms,

share expenses to recorded per quarter loss diluted CapEx negative. Certain in one-time the Our $X.XX. and QX was go caused for EPS provisions higher the

highlight and next compared new On in when up positive. year. Page income operating cash in like growth was X, accelerated slide, operations was to on would flow last the you can Travelzoo from see to QX We members also

growth XX% higher. member was New

in Europe and year-over-year Pacific increase a than decreased reaching Asia year-over-year our nominal million, periods. segment. substantially of It very goal less our fixed going a North QX, details was are in in XXXX, be of currency. X%. progress decrease million was in year-over-year in restructuring an $XX.X terms year-over-year previous of good million, of $X.X Pacific. X to important Revenue in by in After forward. increase we Asia In decrease was QX believe from X% business less profitability X% $X.X million. of constant Revenue costs smaller than to a we Slide revenue Revenue made in expected America $X.X

to On in businesses highlight America core positive would in our like performance and we Slide the North X, Europe.

Europe performance EPS, Continued our XX our from XX.X%. at business an months grew of share margins is strong masked trailing were income core Earnings In and per operating our are businesses in and in and the development XXXX of business, rate business by in for Pacific. revenues, at core these $X.XX. Asia operating America annual North running

consolidated a Asia Asia operating Pacific North On losses and level, used Please to also are keep mind, Pacific as currently in from on operating high in This results tax effective smaller Europe. shrink. losses income a result margins. earnings, and rate Pacific America not in from decrease offset corporate taxable much would in in profits losses Asia which

who Travelzoo's for revenue detail We want our allow Travelzoo. Slide shows many in revenue while creating something of to important grow very of slides few margins Increasing is have continue three grow and still each higher to investing consumers. our we following next cover our about are more There business The visibility heard and EPS, future yet. for people us us X success. to believe amongst segments. not for

to America decreased increase category The X% from year-over-year million. X% revenues million. travel North $XX.X Slide the year-over-year $X.X to local X shows category

category new from travel constant vacations Turning in year-over-year. currencies, local to product. $X.X the Europe to the revenue million. decreased revenue result In year-over-year $X.X from X. from Revenue as a X% increase grew increased of category X% million Slide an our

not year period. a revenue $X.X trend. million this On is in Pacific down million, believe $X.X Asia XX, prior was Slide you the from that see We

revenue, the XX to decreased as to margins. X.X%. percentage revenue of of Cost operating of year-over-year. cost of revenue, increased Slide Pacific, a overall Asia shows margin operating slightly Because and XX.X% our

expenses Slide Number XX North marketing presents including our to one, operating of expenses. operating HR in Germany, Pacific increased, Europe, campaign one-time in expenses. America a Operating special partner, one-time primarily factors. related two Bahn, because primarily segment. by expenses initiatives, with In TV Asia and advertising restructuring in due expenses Deutsche increased

the Slide XX consistent. shows remains productivity organization of

increased to balance on ended XX. an Moving million. quarter with $XX.X cash We the slide of

a has forward, expect counter cyclical the we Looking following. Travelzoo business.

several travel are operating our history times does rates occupancy decreasing, in suppliers when seen have of We Travelzoo better.

QX. For some into advertisers delay QX, business, to inclusions the are expecting for we Travelzoo

we fully Flight Jack's the contribution with offset see the However, by this Club. profitable revenue additional currently effect highly

For growing forecast or consistent revenue. QX, we

be the be introduced to growth all Club. to driven revenue Flight Club as primarily to we update better and how Flight expect visibility We For year by fast members. on can Jack's XXXX, plan have growth Jack's EPS investors we Travelzoo

want to create Now, on value. and shareholder XXXX Holger an for will provide more we our update how strategy

Holger Bartel

Thank you, Lisa.

Travelzoo many counter possible decreasing I a of Travelzoo does down, are When can suppliers. suppliers of As of business. and received rates travel slowdown economy We rates about imagine, cyclical travel global of know is questions the impact you a the better. occupancy occupancy

Declining our quantity occupancy and allows the discounting compelling attractive members, for they more up best, more XX becoming good them. even and what go Travel in rates at to want for is to million rates deals and is marketplaces. into that. Travelzoo deals to their very the occupancy that's producers Travelzoo find find suppliers aggressive more This do travel

high Travelzoo, spending not service with a XX% Hotels stake affluent. In year, XX% money airfare a money. Jack's profitable over on company we to Club, price are capital members a fast-growing at Our has that $XXX,XXX respond general. January, spend high-quality rate in they are acquired sales. take them majority earn highly we returns and that This about discounts. passport these because guests of love consumers leads a informs to Flight subscription

and between service free a as as $XX primarily in Flight $XX premium are acquisition. excited In offers the UK. the and this about subscribers Slide well annually. The paid to turn subscription, Club a investor presentation, We is Management members which please Jack's XX. consolidated believe for on Jack's EPS an on January additional to Club results additional $X.XX a projected beyond. contribute and Travelzoo's XXXX. in have X% Flight existing XXXX acquisition is in might big financial growth revenue business the XX, in alone the impact positive After it

Please turn to Slide XX.

many profitable, we Our Club can of strategy introduce Flight Flight next be cannot members show global We Jack's the successfully our conference reach will XX We Club subscription high number on to to how leverage and profit up new bring right and strong quality will the Each to operating subscribers. million time to know contribution revenue. update provide members. Jack's see our earnings to consumers The introduce by will Jack's driven Travelzoo chart will be premium investors member how in more service Club. an we call. is at their this Travelzoo for Flight

the Now back operator. to

Operator

question first with Instructions] NOBLE Michael Markets. Our [Operator from Capital comes Kupinski

line Your now is open.

Michael Kupinski

Thanks for you. Thank them. a taking of the have I couple question.

particular you you then Can companies of virus? sense First but us seeing or of seeing that I particular we it, you're corona travel cyclical, and virus the to or Are corona issues this some any impact specifically. just countries with be that responding a travel, Silicon New know of seeing related counter that obviously kind Valley consumers? terms are that from including in give any markets some restrict York plans in indicated to of might are what you you and non-essential even

Holger Bartel

more now Michael, North is America. affected Europe right that

to trips. I drive As ultimately, inclusions. take business, the want they advisers postponing they need said, people we to see But travel companies,

us of So businesses occupancy for travel, when are rates we certainly believe that our empty an that of load that's impact more or rooms, And the canceling will to restricting grow. the non-essential benefit the members. means our and more deals year, hotel or over in for we ultimately because see down more good be empty and factors while company this more result us airlines airplanes, rest offers, might that for QX, allows

Michael Kupinski

that? in you then delaying seeing -- I by impact just you're you're just you Is mean that understand And trying it or to travel -- I'm QX. what can an guess

Holger Bartel

just an agreement that delaying want it. agreements, includes are certain advisers they're canceling a or it than promote to advertising now delaying Yes, they and right advertising offers rather

Michael Kupinski

a you Club, some, particular seasonality any acquisition. Have it contribution next a provided to us bit year premium premium great like about demographics, us provide should, maybe the at a revenues might you can in else the subscribers, is What quite full little do a we really then ideas what And a a be you some like and But anything book you're subscription details can they provide interesting. assume that Jack's would there Flight is indicated sounds Club? us And the there trips attributes, the Flight you that year? about of more in details margins that? I business is there but give quarter. terms subscriber many going for that being looks how And that

Holger Bartel

this that weeks just noticed XXXX subscribers, paying At or the X Club already the the to when subscriber. look XXX,XXX information time, subscribers, is they to in have we $XXX,XXX had provided of all you that of Jack's earnings grown might we information point presentation later But at we six provide. Flight end and you the at went premium have premium

world. make members really business are this we Travelzoo with loyal about can having we that impact on So million the the excited XX around

Michael Kupinski

what you where real quick. us can sense expect give sounds give those contribution be? margins Can a And us of then It to? just you Asia the Asia might you turning think you're margins sense you grow like a to fixed. But getting might of

Holger Bartel

expenses. primarily as result we restructuring, expect down which expenses So this Lisa Japan in and in QX, in had In earlier increased as as was we said Taiwan. of XXXX, and a explained going we

all changes don't would again. that outside Pacific, are in right of our see that's we have can in made we situation I seeing Japan, top publishing virus expected. China in impact what right China, from also Australia, Also, of we We less lot Asia are XX China now. is really in the that than now say a And itself, some actually we

we see book offers We and are promoting offers. there members to also Chinese these

Operator

you. Thank

Steve next Research. Our question with Argus Silver from comes

Your open. line is now

Steve Silver

if thoughts the acquisitions some tech hoping global to industry. about provide I’m landscape for travel across material the you additional media

and the growing really acquisition doubled carrying extremely more Those high operating year-over-year, like almost companies are in market. subscription would at be demand would competitive over that margins acquisition, kinds a companies sparked of businesses Looking Jack's it XX%. seem

So that moving and additional forward? Jack's of just the thoughts to deal that given that getting on done. congratulations on parameters the prospects business, And deals for trying get your nature of

Holger Bartel

of Yes, to you're Microsoft, revenue. once companies, a very with we lot absolutely subscription right. they Subscription going technology the has like Adobe attractive, businesses feed how for switching up evaluation the or are example, that started

subscription a really and whether of explore member Flight about are business we we our also excited Travelzoo Jack's within can certainly Club So certain build base. will we elements

Operator

Thank you.

next with comes Ascendiant from Woo the question Capital. Our Ed

Your open. line is now

Ed Woo

My looked and on question seeing impacted you’re is more it now the that well? Is and like Asia America. by Europe first, Obviously, what geographies. your North as business in been impact has

Holger Bartel

starting We already are seeing to Asia rebound.

see we also as America and So still said again. XX Asia, I members to members top trips actually China, America in are to trips we Europe in booking see in We publishing North Europe. booking North

In stopping to situation it's we happens as now America, know, see related weeks. every travel. have to changes So to virus with trips and primarily minor the day Europe. not in to next right relatively impact would the few is the I what is that the everybody say, just But you North

Ed Woo

that advertising comment about more temporary What’s deals they to uncertainty? competitors blip? travel more of your a up some view it’s customers, how and as Asia And these of due Or are these being your there's general in do QX QX. really pushed are of providers, seeing then the actually think from there out you follow to

Holger Bartel

it consumers the Maybe get Ultimately people but is strongly all situation. have regarding exaggerated, over very to are people this. travel. that fear people of deals this are and is media We traveling communicating virus know right will now motivating some

very tight will and financial business in As operating well. the recession, back We more very, at XX% was I of periods said these we back right the and in X/XX our had at we look before, after look when margins periods. doing

course think of I So short-term, in are advertisements. will I yes postponements In seeing the think of while we long over the the XXXX, benefit. we run

Ed Woo

opportunities guys with good out then going Club. on a Jack’s look a And have more your touching taking you obviously, you Fight guys that to mean it acquisition back very probably be Does are M&A, there? at

Holger Bartel

potential we Right grow the now, business. and players believe coming any landscape. seen look changes competitive for activity will haven't that our to looking more But that I to we really we’re always for will companies continue certainly M&A up. in interesting be Established are

Operator

Thank you.

Goss Our next question comes from Barrington. James with

now open. is line Your

Unidentified Analyst

consumer comps if Pat some was epidemics This more with. many I maybe of to comments Jim. I in affected talk maybe how mean, prior about wondering for terms recent aren’t on there guess go those behavior. you could is with have I

Just seen historically. anything that you guys have

Holger Bartel

a We spending to a analyze of data lot are not right of now in lot detail. time

cannot you a of So provide I information. lot

focus to right we assist to travel them in really to across assist partners assist industry, can we with now industry, actually them work how Our how this period, period. benefits create is we in can business how to drive more our and assistance and this airline the can

Operator

will back call Bartel. I the to now turn Holger Mr.

Holger Bartel

gentlemen. teleconference. ladies Thank Great. This today's and concludes you,

day. You at may disconnect your a nice lines time, and have this

Travelzoo (TZOO) 2 Mar 202019 Q4 Earnings call transcript