TZOO - Earnings call transcript Q1 2020

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Operator

Hello, everyone. Welcome to the Travelzoo First Quarter 2020 Financial Results Conference Call. All participants have been placed in a listen-only mode. And the floor will be open for questions following the presentation. Today's call is being recorded. facts to call that slides the and not of like during statements that safe would and Act statements conference statements of the this presented historical Litigation harbor Company provisions remind pursuant Private all you made are are of The made forward-looking Securities to Reform constitute in the XXXX. from forward-looking statements. Actual these results in could those contained vary materially differ Company's materially are that XX-K from in Factors results could other statements the actual the the and described XX-Q, to in with SEC. Forms cause and forward-looking filings those periodic no Unless whether to required by new otherwise. law, the result a publicly Company information, statements, undertakes forward-looking events or obligation any of future update as earlier the important Company's Please including refer for website Company's to morning. this release information, issued the earnings press of be An Travelzoo this on the at will Relations conference available call Investor made website travelzoo.com/ir. archived recording

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

Lisa Su

operator. And welcome joining you, of those today. us you to Thank

format Travelzoo's on open Pacific explain by with let to presentation circumstances which delay related Investor of Flight reclassifications is why allowed PDF This the Jack's to along allowed to more work acquisition impairment long-lived related website. for filing the presentation our follow have remarks. and to our business, Asia the time analysis available report quarterly today. In The Relations asset. for management QX accounting me due March, the and Club, the prepared a the companies for please required First, Please the their COVID-XX pandemic. of release, XX earnings days SEC reports issued we to the us to

the decreased on page caused million. by $X.X certain to Revenues of year-over-year number effects go The pandemic. one-time first revenues three expenses and EPS negative. the Loss the COVID-XX of provides slide

one-time one-time the to and due to can pandemic. next a of the current we bad have put impairment expenses XXXX, which On together related to four, of are effects charges include page slide, what in directly the you were, on chart the see, which QX the debt, show goodwill

due due in financing, relatively net operating our loss seven, promissory advertising we million. loss page non-cash Without six, reported Company million items would America saw five $X.X one-time On significantly operations our non-cash revenue book by is income segment. was XX% While from and both around our recorded a still in FX off When by page detailed decrease revenue expenses, North due these down of compared year-over-year. balance to to XXXX. these used increased were advertisers pandemic. a $X.X for negative, the $XX.X advertising of provide continuing North and But drop have page QX decreased figures, March to to XXXX loss and the to from We we pandemic. QX, the to QX business you which but revenue. million million expect America, expenses canceling at note. cash includes in generate $XX to operations XXXX, offset by the pay in on Company's cash the end of negative reducing number into $XX the the shown we went a million to The as cash Consequently, due of in in both Europe to Europe or flat position million $X

[Technical the due page $XX attempted Difficulty]. the but summary million. Difficulty] revenue We experienced to nine, million by to with reduce COVID-XX Company through On that revenue number is to $XX decline lost around expenses We pandemic. QX expect QX, to end [Technical the time the

discontinued for non-cash Company [Technical [Technical also increased business highly to Difficulty]. bad XXXX, Difficulty] $X.X and [Technical significant Difficulty] the two We significant will [Technical expenses We profitable had QX unusual million eliminate expect impairment related an Difficulty] APAC the in which Difficulty]. the debt Difficulty]. reductions [Technical [Technical are

also Difficulty]. [Technical onetime had a We

[Technical an Difficulty] open will update floor the provide Holger before Now, for we on questions.

Lisa Su

Thank you, Lisa.

and summer, deals XX, XX% week’s After survey Travel from fall in travel of the more in been best the on weekly internet, extended to of Travelzoo generated In online list million already told offers. were Going on QX, has content the an are into into of has we QX, our to for and interested strong worry-free Accelerating our a were created deals we XX the demand they adjust if we our members were members $XX offering XXXX. receiving quarter-to-date. flow successfully. cash able operations flexible, focused dates for quickly Travelzoo. travel definite from have or deals flexible the offers even years relatively business which of most Top late past than

will, to launched worked opportunity and slide XX cash on And Flight a it Club in as leverage also announced, QX achieved already expenses. where profitable have particularly to We XX. in being XXXX. reduction operating grow we Please subscription and U.S. significant in focused the on previously positive refer generating revenue, Jack's flow, the besides

the to operator. back Now,

Operator

Our Barrington from Instructions] Research. first quarter [Operator comes Jim of Goss

Jim Goss

or Travelzoo several you. if there is, aspects a will that turmoil not them versus that the significantly your part I'm bigger might wondering have might have business you? Thank the that things and questions. this that more of a penetrate positive out share creates is developed that can market One profile, come opportunity owned of of might competitors, this by you Okay. situation you for I other that for are think be been be

Holger Bartel

about. that with are providing that Jim. so. members is, they irresistible didn't I think Hi, on Yes, does to What think trips Travelzoo offers go motivate them we our

when the that create the to consumers demand. that's at respect, time our industry exactly to a many is And hesitant travel, service travel So, to needs. are travel in industry what

for lines economic good crisis, our that X/XX, was normally business that's the the what around business demand? why to right hotels or in time now do. When want periods the always You quite we our airlines have world, it that's a cruise can see like like when And past. did imagine and well. all are And times we

the us few probably one a over So, for opportunity yes, years. and I next next think two the or there's for months good even

Jim Goss

talk were to also wondering and you providers offering. you travel negotiations something, then flexible buy-in with the could the travel just formulation need travel that of issue an a you and and And in providers, on I'm about deals of talk the about creating assuming But things could part those if the if you're resell you buy were you process more hook? there on be had the

Holger Bartel

they But members but can is it's question offers don't have And when to have even a lock deal, voucher to that deal model like the can, but our cases, flexible. decide Yes, it. is And in to. like it. refundable. don't providers they they In is the most importantly, travel away do the they what they many right travel; members

the some So, when can plan when high make decisions travel these of not the what and even uncertainty members allows the travel clear still is that at to you countries. to time and it's

or are that creates hotels the have demand I exactly no that now. spoke And and travel with America is the unique. in They same also that And and quite travel it's that very So, about. model. happy an Europe other companies offering North particularly are the right that's resorts offering why industry

Jim Goss

have don't that Expedia have really deals number so I might intermediary, you were, you an flights and you're those don't where the resell any rooms think buy then of a So, have travel you someone risk issue certain hotel might on -- flexible exposure them. like or

for your the elements have type exposure in of any business? of that of any don't You

Holger Bartel

Yes, to correct. We don't the in assume And them fact, trip travel only the providers after any the is retain completed. we pay risk. and funds

Jim Goss

Travelzoo Okay. persist thing The current into cases, creates global crisis. the in might will would in for industry? and category the of last that that I of changes the might that future, beyond you a ask What I think pandemic think fall elements is, number the for

Holger Bartel

for industry plan back we also travel, leisure, take restaurants not and time we're to activities. course in in some to we're come Well, only the of

more planning of prudently of quickly slow travel are for we expect. can that believe lot much a than the very return people return, course come to but We possibly also

In people at months hotels after again. travel as rates. are fact, occupancy destinations stuck the imagine, all And home, some and they to are most X.X can XXXX much in higher eager already of being seeing of you

have So, June. the actually already and we travel to in excited see last very seeing are April members we to the from and for again, has that seen May our accelerated two are and that months we that demand to

quickly So possibly much than people travel industry recover now. more expect right yes, I think the could

Jim Goss

And I at restrictions airports. to more throw might and international relates travel that and in one

that a you some that significant into airports and area, sort COVID certain Some there you charge you facilitated are get any show of might with an once symptoms, costs. how the lockdown which going wonder if need showed travel that much of but something the XX-hour might are to again. is else or of window negative, I they be you reopening evidence that proved that having had face requirements be and say stumbling to quarantine block test process get to a that end you up you once might in

Holger Bartel

important tell hear things We that and us our accept two to members it, are consumers that them.

security resorts, they to flexibility about worry and that something is buy flying their to and second, offers. they cancel willing not need have safety of First, Anything contains want if it; a to understand. hotels, trip, do and they at When increases they to the have airlines. are that and cleanliness

back So, members. from we that's what our heard

Operator

with comes question Noble Capital Michael Kupinski next Our from Markets.

is now Your open. line

Michael Kupinski

of good Thank lot you. asked Jim questions. my and a questions

even may the just seems international phases rather United -- more in have maybe at industry domestically, doing a So, the are are with more recover that and after saying drives experts States, lifted, I do than before more. restrictions travel. they The here is, least I in airlines question the like and travel have few particularly traveling it consumers the

is -- that? us you between secondly, as what do state travel in are affecting a point? international. I kind flavor all, wondering give you domestic of they this First of U.S. America could the agree was just restrictions And at with versus if North bookings then,

Holger Bartel

that correct. and behavior. We're members our in from Yes, Michael, we it absolutely their see hearing exactly

are trips is domestic drive place First to. they can they taking if

and the Next Hawaii travel trips vouchers, within to long our the step and vouchers into U.S. And all Pacific full sure world more we opportunities comfortable to trips with for Asia they in starting it is are international Pacific with Mexico. And that trips. possibly to addressed for maybe and travel to or or Asia for Europe have we we Europe the have XXXX. or to

All offers XXXX. at valid, are of least these until

a couple deal that any that had we Maldives, for negotiated members. one until In which to we in There members ever record were valid had our we of our that the fact, was offer every even XXXX. broke supplied

purchase and travel would trip Maldives. who to a So, thought would how comfortable members to have the be

So, we we in were a we Europe. quite surprised in U.S., operate then, business. a way. keep not only And mind, in We're in are positive but with that global the also

have And a Xst, travel everywhere. lot in around Europe, Europe. within starting of people We can members again, July

So, impact travel on doesn't that restrictions lifting something it's model trips, now. much is are that our right planning But, based since everywhere. future even us

Michael Kupinski

in The Maldives But compelling. was of… anyway, terms offer

Holger Bartel

Did you buy it?

Michael Kupinski

No, but was wish I take very frequently. -- I tempting. I didn't, it don't vacations that

traveling could. how to really in consumers I international just that domestic -- money you versus wish do it of -- trying or actually you is there guess, But much the I make I there difference international, that is particular the am make are domestically. to doesn't any terms is more that -- I more -- understand So, on

Holger Bartel

And no us. for there's difference

you if you at will where see Top more compare see, country look will and XX every four will to month domestic -- -- we in offers. find if three, publish the look at you You Top months XX the XX this Top the you find ago, will it much

easily we to So, can and very that. adjust adopt

Michael Kupinski

been significant that you're you this whether of time opportunities seeing I kind if the give for a in whether like you've to for and wrong take the Club. kind U.S. Flight hope is in that you rates before. to to a just sense second I've a to you achieve, could are one it'd quarter, seem subscription introduced me Jack's And encouraging. not, of It like this. be now me would you and of launch just the could big was or of something which the wondering be the general, opportunity growth But, tough benchmarks

about the are at the in point? this thoughts what your U.S. subscription So, business

Holger Bartel

Yes, interesting. very

to counterintuitive And counterintuitive have sometimes think. are things to been or what you

Flight and in Jack's now. of Club XX% So, are their subscribers started the the in UK UK

a is have that it's service. subscription their This launched And quarter in they beauty U.S. the one business of of course model

travel subscription a but Flight to So Club their we're mean, charge really nosedived, while company, travel fees -- travel I not while members. continuing revenues Jack's is companies’ to

members ourselves plan time April very a home -- I at to trips. when We told it's future attractive I'm So, travel were this our us in stuck want model. that use to surprised to

the the you airfares. U.S., was actually So, that airfares, Flight see Club to when see in look high have right Jack's them seen very a now, we as see at quickly that amazing you sales, see time. lot airfares, information of They during provided you great before. important change And as never airfares, you you

the sold service So, our ever -- -- timing alerted because Curacao hour to in see launch we from round we extent, New We is, had members. best a York trip. saw to literally Within it to out. deal for the U.S. the one now the some to $XX

get that of information. I and to consumers kind So, members eager very are think

to good a was year service right introduce So, we there's even than believe half this ago. now, a maybe it opportunity better

the but -- will future So tell.

Michael Kupinski

you Got cutting the that those not cut, permanent expenses was kind you I significantly. or how just of the quite revenues just for of you. is can in of surprising of I second sense the give that sense prepared that? kind temporary? kind a of just worse. much so are little I you've that that of impacting indicated frame you us expenses far was even a wondering, us It's the quarter. something Could quarter? you're bit If that maybe versus you know of well doing can give you a whether -- level

Holger Bartel

much in our a look, QX lot other indeed we you no Lisa why your about and much, Well, for other many compared be down, I QX will results to companies, of said, for late. we it. doubt think, better revenues clearly explained as But, companies. came thanks have than compliment, fared

happening this see don't we QX, For again.

quarter after you our for the quickly provide QX more is goal And end. results to have So, much then, will more insights.

say particularly by of On down almost the lot of which probably area two staff a marketing, and our expense expenses, reductions main more XX%. that the went staff would front, I cost the XXX%, by in are expenses and than marketing

of to as significant presentation, structure would there building profitability to we we a reach year. again decreases. are long-term in So, run as now can. again the we this as business like And said the quickly We this are profitably end before

Operator

Ed from Ascendiant Capital. Our next question comes with Woo

Ed Woo

question versus significant taking that how Thank Yes. for react in have in versus in or bit Europe is, consumers any hit a of are U.S.? you getting my U.S., like the My later, question. like and little in you the differences seen the regions Italy, earlier the travelers some that particularly hit regions maybe were Spain

Holger Bartel

bit a flights, more interesting more exactly road. is we really sooner. shorter said only the as see consumers it's longer difference simple for were the earlier and U.S. with trips little is Ed, you domestic that almost everywhere optimistic the Hi, same answer down trips, then question, smaller in and trips then the The

released was affected. then, not last. patents in and quickly countries followed Spain And other was more as same Germany and Next than France much where because restrictions Germany everywhere. UK But, were

Ed Woo

about And the you're particularly question cases couple any another weeks? places, you lockdown. possibly last in change hearing bit, within is, about behavior, in in down resurgence in consumer little slowing a of some Have and talk U.S. noticed

Holger Bartel

No.

negatively. to members, deal because not no better closures worry-free but that and have we I anything about future. that's flexibility simply And product be fact, book and lock are weeks, result affected knows again, the any deals In is allows one of the a we past a appreciate happens exactly members in they if that the from even in will what a happen the saw them that offering. response of the couple And think our it

Ed Woo

your is subscriber question launched Club? recently quarter When notice final you My U.S. Flight on from mentioned all the you second stopped Flight that Jack's customer you airlines the attrition the it big base, Jack's didn't have or Club. in Obviously, any base flying, in

Holger Bartel

that as same our we signups changing. before, Jack's period as that much was begun really haven't period didn't The the have difference three, also U.S., in over new Club We before, during many to haven't we last members. but there. was four-month U.S., we pretty is would that so as Flight attrition the seen see now rates no it And

couple starting weeks. consumers We U.S. is the and in I'm this will do time this earlier, to to that And next that more of in I as more mentioned quite the a optimistic good introduce service

Ed Woo

being any a volatile flight airlines significantly about either definitely or or business schedules? the prices lot there go discount. are more and correct as reduced, more but out definitely But, lot concerns You're of a

Holger Bartel

look We received will massive from around, industry you see. support has governments. if the airline But,

to home. at not you're road. the much anywhere more So, the good already a to three business ones we more for very down caution. that diet just three for That’s able is out that probably there. day, and travel. are out go optimistic creates want gone months, People -- we on are for day have a will tired see, more interest the And And still staying three and that I'm it just after about eat that the you weak are you than people of day have but in and after I after simply Imagine -- again. trips, what the months, around if after is. go day to ones airline themselves even more hearing firstly, bolstered even what think of makes People weeks are out industry consensus that want

Operator

Argus comes Silver with Steve from question next Our Research.

is line now open. Your

Steve Silver

Most the everything upon considering for going been Thank sale the outlook, to and financial release mentions on grow you my on that business as sense the base on very that hoping legacy any perhaps base the implications a Travelzoo came really touch that the the new one in in the maintain business does just relationship? moving business. in call resiliency the and from of have the as to congratulations the out world. the could agreement touch the of get licensing the the does the future want questions impressive economics it's of was Company the and member really participate Japan you of of way answered of would in just didn’t that. ownership The press I membership quarter forward. as deal The Travelzoo if that under I was you upon well. second

Holger Bartel

Yes. very attractive Steve, us. of I the time, eliminating any Japan. it's the a from performance think retain in ownership same for and at any positive agreement assets, We obviously, while risk

obtained So, according K.K. Japan license the Travelzoo property to to intellectual license use of the Travelzoo. a agreement,

the the is payment, And And on we royalty that's exclusively net exchange, the receive based So, a of cetera. that's targets. revenue et processes, trademark, in software, which the for Japan. achievement certain

about. is So,, a what agreement that's nutshell in the

Steve Silver

Okay, you so great. And much. Thank again. congratulations,

Holger Bartel

you, everyone. Thank Great.

So, back to the operator then.

Operator

today's you. gentlemen, and concludes this Thank teleconference. Ladies

disconnect may at lines and day. this safe stay You your have time. a Please nice

Travelzoo (TZOO) 25 Jun 202020 Q1 Earnings call transcript