NEW YORK, June 25, 2020 (GLOBE NEWSWIRE) — Travelzoo® (NASDAQ: TZOO):
Revenue of $20.3 million, down from $29.2 million year-over-year
Operating loss of $3.7 million
Earnings per share (EPS) of ($0.32) attributable to Travelzoo from continuing operations
Cash flow used in operations of $3.1 millionTravelzoo, a global Internet media company that publishes exclusive offers and experiences for members, today announced financial results for the first quarter ended March 31, 2020. Revenue was $20.3 million, down from $29.2 million year-over-year. Reported revenue excludes revenue from discontinued operations in Asia Pacific. Travelzoo’s reported revenue consists of advertising revenues and commissions, derived from and generated in connection with purchases made by Travelzoo® members.The operating loss for Q1 was $3.7 million attributable to Travelzoo from continuing operations. At the consolidated level, including minority interests, the operating loss from continuing operations was $5.3 million. The losses were primarily caused by two unusual, non-recurring expenses: a one-time impairment charge of $2.9 million for intangible assets and goodwill due to the COVID-19 pandemic, and an increased bad debt provision of $1.0 million. EPS was ($0.32), down from $0.41 in the prior-year period.“Going into Q2, we were able to adjust our content offering quickly and successfully. After 92% of Travelzoo members indicated in an online survey they were interested in receiving travel deals if the offers were flexible, we focused our weekly Top 20®, which has for the past 20 years been the definitive list of the week’s best travel deals on the Internet, on flexible and worry-free offers. Travel dates of most deals are extended to late summer, fall or even into 2021. Accelerating demand from members has created a relatively strong business for Travelzoo. In Q2, we have already generated cash flow from operations of more than $11 million quarter-to-date,” said Travelzoo’s Global CEO, Holger Bartel.Cash Position
During Q2 2020, Travelzoo’s cash position will be increasing significantly. As of March 31, 2020, cash, cash equivalents and restricted cash were $14.4 million. The estimated cash flow from operations in Q2 2020 is $13 to $14 million. In April, Travelzoo received a low-interest government loan of $3.1 million. In June, a payment of $6.8 million was made to partially settle the outstanding note due to the sellers of Jack’s Flight Club, leaving a balance of $1.7 million as an outstanding note. Travelzoo’s estimated cash balance as of June 30, 2020, will be in the range of $24 million to $25 million.North America
North America business segment revenue decreased 32% year-over-year to $12.7 million. Operating loss for the first quarter was $976,000, or (8%) of revenue, compared to an operating profit of $4.5 million, or 24% of revenue in the prior-year period.Europe
Europe business segment revenue decreased 34% year-over-year to $6.9 million. In constant currencies, revenue decreased 33% year-over-year. Operating loss for the first quarter was $1.3 million, or (19%) of revenue, compared to an operating profit of $2.1 million, or 20% of revenue in the prior-year period.Jack’s Flight Club
On January 13, 2020, Travelzoo acquired 60% of Jack’s Flight Club®, a subscription service. For the period from January 13, 2020 to March 31, 2020, the new Jack’s Flight Club business segment generated $1.1 million in revenue from subscriptions with operating profit of $592,000. After the consolidation with Travelzoo, Jack’s Flight Club reported an operating loss of $3.0 million, with $1.8 million attributable to Travelzoo, as a result of recording one-time impairment charges for indefinite-lived intangible assets (tradenames) for $810,000 and goodwill for $2.1 million along with acquisition related expenses.Discontinued Operations
As announced in a press release on March 10, 2020, Travelzoo decided to exit its Asia Pacific business which incurred a loss of $7.2 million in 2019 and reduced EPS by $0.60. The Asia Pacific business was classified as discontinued operations at March 31, 2020. Prior periods have been reclassified to conform with the current presentation. Certain reclassifications have been made for current and prior periods between the continued operations and the discontinued operations in accordance with U.S. GAAP.Members and Subscribers
As of March 31, 2020, Travelzoo had an unduplicated number of members of 26.0 million from North America and Europe. In Europe, the unduplicated number of members was 9.2 million as of March 31, 2020, up 3% from March 31, 2019. In North America, the unduplicated number of members was 16.9 million as of March 31, 2020, down 3% from March 31, 2019. The number of new members in Q1 2020 was 634,000, compared to 667,000 in Q1 2019. On June 16, Travelzoo disclosed that it has sold its subsidiary in Japan, Travelzoo Japan K.K., to Mr. Hajime Suzuki. In connection with the sale, Travelzoo and Travelzoo Japan K.K. entered into a licensing agreement. Under the licensing agreement, Travelzoo’s existing members in Japan will continue to be owned by Travelzoo as the licensor. Jack’s Flight Club had 1.7 million subscribers as of March 31, 2020, up 38% from March 31, 2019.Income Taxes
Income tax benefit was $517,000, compared to an income tax expense of $1.7 million in the prior-year period.Asset Management
During the first quarter of 2020, Travelzoo used $3.1 million of cash in operating activities. Accounts payable decreased by $6.4 million to $12.8 million. Accounts receivable decreased by $2.5 million to $7.7 million. Cash used in investing activities was $810,000. Cash used in financing activities of $2.2 million. As of March 31, 2020, cash, cash equivalents and restricted cash were $14.4 million.Conference Call
Travelzoo will host a conference call to discuss first quarter results today at 11:00 a.m. ET. Please visit http://ir.travelzoo.com/events-presentations todownload the management presentation (PDF format) to be discussed in the conference call; andaccess the webcast.About Travelzoo
Travelzoo® provides our 30 million members insider deals and one-of-a-kind experiences personally reviewed by one of our deal experts around the globe. We have our finger on the pulse of outstanding travel, entertainment, and lifestyle experiences. For over 20 years we have worked in partnership with more than 5,000 top travel suppliers-our long-standing relationships give Travelzoo members access to irresistible deals.Travelzoo and Top 20 are registered trademarks of Travelzoo.Investor Relations:
Almira Pusch
[email protected]
Travelzoo
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