TZOO - Earnings call transcript Q2 2020

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Hello, everyone. Welcome to the Travelzoo Second 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 the 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 second 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 the format joining open available PDF Please follow presentation Investor you, presentation our website at The of Relations those on to remarks. today. with management us along is you in travelzoo.com/ir. our to prepared Thank

succeeded $X able net caused operating provides believe limited We to Loss slide on expenses second quickly to QX Page year-over-year of were effects we The onetime the first COVID-XX in loss revenues certain the number the million. keep Revenues decreased relatively of the XX% expenses. we reducing by in X and as pandemic. of quarter loss XXXX the XXXX. with of

less America of FX revenue most in detail than Page entertainment others the X business neutralizing X, On impacted were Slides but When global company as and space. in the travel due recorded segment revenue the the in due the a XX% and off we QX began business canceling We advertisers Travelzoo of by was see XXXX Europe or changes, segment. pandemic. pandemic. and XX% and Europe media companies in the Internet both revenues beginning decrease North next of in drop decrease you X advertising can our impacted severely year-over-year by on America the see to pandemic to a reducing segment to XXXX, due significantly business slide, of to March advertising a In in recorded June, a recovery. North saw

furlough number Jack’s million, $XX.X expenses significantly staff can loss $XX payment Page of cash you cost on X, shown our to X, Club. the We were cost-cutting of Page of around structure balance year-over-year. took $XX $X.X we of As revenue, expenses of as see compared increased including extreme million Flight to reduction even the March On operating from X, travel acquisition staff, a to after you making of see reduced measures million worldwide. for due quarter. of permanently Slide marketing On have reduction a XX the and our million reduced

we So in QX. breakeven to achieve hope

will Holger the update XX. provide management to Now please an Slide turn on focus.

Holger Bartel

Lisa. you, Thank

For sourcing for strength members. industry exceptional deals for travel, an entertainment business it’s local the we success our of advantage of that the the brand, of important opportunity and long-term and take the

We previously. are already deals unheard which seeing the of irresistibly were coming to priced market,

cost are about focus structure. responding positively Also, we the this. in deals as deals, very optimize the Travelzoo for very members future to love call, on best and will opportunity explained last deals. took tell the to and worry-free as offering We travel. flexible members crisis members Our an Travelzoo members its our

QX. in A profitability priorities. higher also profitability Flight list and already QX for permanent savings Club’s to breakeven management’s management and stays subscription very on managing of in are crisis. is for revenue achieve important We profitable Jack’s are cost making Growing or regain many even post goal

Lastly, in balance to us. very generating and we important flow is cash positive increased cash our QX,

back operator. Now to the

Operator

Barrington The from floor is of comes now open for questions. Research. Our first [Operator Goss Instructions] Jim question

Jim Goss

thank you. Okay,

the numbers if in particular developed G&A the that sales you expect performance. I in rate talk very quarters. quarter, good could and marketing of you at next the Looking you run and wonder over categories about those the couple

cost You cutting you indicated longer-term be were basis. What a had some expecting? back perhaps we should on

Holger Bartel

the US$XX where expenses now, in XXXX, are million, cost to right of before. now, and expense from sales, be company, approximately right rate down is from we will were which somewhere US$XX all we XX% million where run for to So – the probably including around

Jim Goss

Okay. And I wonder…

Holger Bartel

sort Obviously, that’s forecasting Jim, right are we that but can what of change, now.

Jim Goss

given Okay. or even wonder a Because you talk indicated that’s the think, could if on also improving are I about I’m deals, moving environment. the also who of of the offerings. sort you sourcing if No, have little pandemic I good a impact sustainable target, getting now. your those some and bit been wondering it’s you

Holger Bartel

Yes. how It’s the is industry really responding. travel things two

airlines, to First, consumer. they almost uncertainty flexibility company able to not are Consumers book because the a lot if a the just be trip. offering will cancel of travel every hotels, for is very hesitant

the that’s So thing. first

at at are we Second, clearly and occupancy occupancy factors and very all hotels, know, airlines as load depressed.

long as a to will for will this levels years says two there good for of normal to are back last? take deals. before. it be us. it three to The to industry very that’s How recovery So lot Yes, complete,

members and will company, will – see amount we deals will obviously good benefit. a So that’s there’s I where think where I I period coming enjoy, a that through, that’s as and see long of have we, a and something our

Jim Goss

are influencing last to for providing? promotions? your of you’re the one base give the noticing to that advertisers What attract more offers ability thing in receptivity user you how you this moment. terms And is maybe to And the of your

Holger Bartel

general is We that that’s promote seeing travel quite Europe North are – year next can for in to a both consumers and want because now, domestic offers planning the Yes. travel. members our what tomorrow, more flexible next in for for for same model are don’t interested and long they in They is we long – we and our are distance. in time, trips Right fly year. But at distance. that today, America

– for weeks for before Well, So two Europe. It year, an response was summer saw come XXXX. why? the the ago, next flexibility. as offers travel for in for that had And saw America we example, same because what with offer North we we almost the pandemic. And offer

losing risk members the away taking travel money. whatever they are for in not we still internationally the that if, are reason, for XXXX, any they cannot So

the to. an offering that’s respond members that So ultimately

So again, short term, more domestic travel.

seeing the example, for travel like to next lot from the And are year, for in also a Mexico, of interest Towards international the end U.S., travel. of places year, Caribbean. we clearly,

Jim Goss

now. for thanks. let Thank Okay, you. it I’ll go there

Operator

question next Kupinski from of Our Capital. NOBLE comes Michael

Michael Kupinski

Thank environment. questions. position the impressive. It’s cash pretty kind in a you Congratulations of for pivoting for building this your actually on and model

as that I is, so look are the question you or vouchers that my sense to are you so on somewhat when cash when do position that, be And they’re with these guess, you going have. hook, these going – vouchers being guess, that obviously, sold, a to be to used being you’re I of have coming,

there we next of year, looking should these because go vouchers and So is have it’s speak, real are as cash into when number vouchers redeemed. at liability, that so of view, we like actually a you your a to of some how not way? position a these Do element sense in

Holger Bartel

and first for all, so Michael, accounting vouchers, we that. are are there on reserving refunds for of yes, the we that, are also

are sales from we – this as will because voucher we revenues by quarter, example, don’t but – be has probably I reduced and For think some high. number, expecting refunds. the exact around XX% they Lisa

vouchers expired. already actually Some of the have

They numbers actually had have lower Some expected. than so what of refunds. them travel June, are on were for in we some we

future So us that vouchers the don’t these paying use the the has actually collect cash for merchants. only to And the as increase. merchants. balance go because cash to then we some profitability continue make will money quarter. we last of to strategy mind, important some that will And and it’s keep that’s continue also shift still that that’s best bolster the good. be the that important was to in balance important. in need It now the money say, the to for for actually of towards very But But company we then you cash

Michael Kupinski

that point? even and some concern issues you And a there concern much in Correct. permanent the businesses, there is at the that? be How have going things this instance, do the may a of or about hotels much some maybe that restaurants closing, bankruptcies of how through some of and some of disruption of like like for maybe

Holger Bartel

model the actually the we knows. Certainly, with close. with we some hotels because and will will vouchers why one we hotels funds. close, restaurants, like No some – particularly the retain restaurants That’s

anyone any and or We we at money out anyone out risk all business. we consumer. at are if in If closes, the of goes back a goes the hotel just give control, to business not are of

Michael Kupinski

of are great. level? of is point? you or How those which cost million sense get for thought business much business us how the trying be kind reengineering terms do even for I base to – back? Exactly. And mentioned expectations? probably might to million that operating reductions, that $XX just much a you about the of maybe about completely million. be to sounds the reductions of at is you cost kind will are reductions? like as the Or next year of that much remanaging of in permanent need I’m significant. less I’m you look next think a Can lower How the you then – to you you a think at That’s do you Jim those revenue think your of in sense really about invest forward just how $XX cost structure. it $XX growth business terms we year, the get entails XX% – talked or to give And of that kind Or coming what trying like of guess sense, to the the

Holger Bartel

we marketing expenses. million advertising which This assumption marketing QX, long-term But in already of or expenses, – vision, this little should includes the on very $XX and say, QX. spent marketing I haven’t in midterm includes

Michael, question focus. it’s really of a Second,

And focusing the that doing more. ultimately are the are We productive very for are company. things we

– with with we and processes. even that resources, similar revenues believe with are generated before. We And structure achieve what we these restructuring cost we of that can actually

to even we an So are the tell. for us, There’s lot question rebuild But time it’s a will a way of that in industry. what this opportunity travel we more than before. profitable organization really marks about were

again I we see to increasingly, half for part big generate revenues And vouchers close example, quarter. say, see. we wanted the revenues will look, QX, of this now the advertising also were but what U.S., of in a are We revenues. of to advertising revenues getting in

So boards And vouchers, it’s that advertising probably tourism boards, saw particularly And a as are not the well also strong what than to that’s we the again. didn’t because just before destinations are we there see members interest tourism – come traveling at one this area about, it’s is gets crisis. that even think more budgets. think us what we time. the as increasing to revenues like are There’s and about well advertising significant tourism they interest our to where even brand boards

Operator

Woo of Ascendiant comes your Woo, Capital. line question next open. from Ed Mr. Our

Ed Woo

seen Europe on you you in has a a control on between geographies? more is question My like Europe virus. It U.S.? have better recovery the the seems versus better seen differences Have any

Holger Bartel

Europe, the we don’t have cases. the in Ed, roughly it’s increase yes, latest again, But of would now in say, we really I in in – news have same, Spain, cases.

bit in hesitant, think So little general, more but a bit environment the more risk a friendly, In more U.S., I the little probably consumers a is worse. risk consumers Europe are in maybe averse. are bit in general,

companies see within And in consistent it’s will French a same. that that clearly in on all the also Germans geographies, from within the hear reporting about you clear That’s France focus travel Germany, the travel. it’s net-net, are in Americans, U.S. the So we probably future. other domestic the want primarily the trend to and what

Ed Woo

year in of travel now? That and focused summer much travel. And people possibly in? pretty just good. next August already really much terms September? this Is Is there uptick on are pretty chance even in baked any of maybe big Then sounds right for a

Holger Bartel

demand. It’s in in – sorry, virus Europe our might Yes, travel for be are – XXXX very some as the that news in that’s optimistic of soon The have because also model this as in America. they That’s it members these they and travel, the really hard something focus travel, because but for depends year. probably as can are And solution or evolving are are comfortable, under why might a are a sure, and by then, purchased next can can to be as members it’s redeem they they planning as North things control they can on go. they vaccine found. on And as soon short They’re soon love then they the pent-up is term, situation vouchers, how they good hotels them. hesitating, really now the predict. that is

So will August no predict can whether manifest now. something already in that September is or one right

Ed Woo

York a City. you final states seem I have the in how in be has know hotspot have about same we kind it difference any like big is, geographic Northeast started All of Or – seen question throughout the right. all consumers real U.S.? been – you getting the one in Have And a within in responded? we some now the like New wave sun with And hard. and the to then seems hit in the and differences U.S.? seen Southwest the it regions

Holger Bartel

provides the the members cities. our New are U.S. in most big a how City call – kind that are are to trip our accommodation Interest about is members there consumers probably Miami so And in really any is, locations, not consumers I and go of the same York Beach more, Canyon. number second, seeking. privacy the the than to interested something everywhere. Grand trends center is should It’s of of remote go to we that into into it, or one, less The see more that and

if So that’s accommodation that is love. members bit a like domestically, for example, private doing And like internationally, anything private, an that’s that’s villa a it’s same extremely more our well. something

Ed Woo

luck. you Thank Well, answering and for questions good Great. thank my you.

Operator

I’ll Bartel. Mr. back turn Holger to Okay.

Holger Bartel

great your much Ladies and Have and Okay. next for look We you day. forward again so quarter. time speaking a you gentlemen, to thank support. with

Operator

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

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

Travelzoo (TZOO) 1 Aug 202020 Q2 Earnings call transcript