Travelzoo Reports Third Quarter 2021 Results

NEW YORK, 
Oct. 29, 2021 (GLOBE NEWSWIRE) — 
Travelzoo^® (NASDAQ: TZOO):

• Consolidated revenue of 
  $15.7 million, up 14% year-over-year
• Non-GAAP consolidated operating profit of 
  $1.1 million
• Earnings per share (EPS) of 
  $0.22 attributable to 
  Travelzoo from continuing operations

Travelzoo, a global Internet media company that provides exclusive offers and experiences for members, today announced financial results for the third quarter ended 
September 30, 2021.
Consolidated revenue was 
$15.7 million, up 14% from 
$13.8 million year-over-year and down 18%
from the prior quarter. 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 reported net income attributable to 
Travelzoo from continuing operations was 
$2.8 million for Q3 2021. At the consolidated level, including minority interests, the reported net income from continuing operations was 
$2.9 million. EPS from continuing operations was 
$0.22, compared to a loss per share of (
$0.10) in the prior-year period. GAAP operating loss was 
$261,000.

Non-GAAP operating profit was 
$1.1 million. The calculation of non-GAAP operating profit excludes amortization of intangibles (
$0.3 million), stock option expenses (
$1.0 million), and severance-related expenses (
$0.1 million). See section “Non-GAAP Financial Measures” below.

“We saw robust growth in our revenue and operating profit from 
Travelzoo in Europe,” said  Holger Bartel, Global CEO. “Unfortunately, revenue from 
Travelzoo in 
North America was negatively impacted by press coverage about the 
COVID-19 Delta variant and 
Do Not Travel advisories for nearly 100 countries. We believe this to be a short-term effect. We see strong pent-up demand from 
Travelzoo members to get away as soon as possible.”

Cash Position
As of 
September 30, 2021, consolidated cash, cash equivalents, and restricted cash were 
$66.4 million. Net cash used in operations was 
$12.7 million. Cash was used primarily in connection with the switch to a more efficient merchant payment processing solution. There were no significant capital expenditures.

Reserve
Reported revenues include a reserve of 
$3.1 million related to commissions to be earned from refundable vouchers sold. The reserve is booked as contra revenue.

Travelzoo North America

North America business segment revenue increased 6% year-over-year to 
$9.7 million. Operating loss for Q3 2021 was 
$918,000, compared to an operating loss of 
$696,000 in the prior-year period.

Travelzoo Europe

Europe business segment revenue increased 43% year-over-year to 
$5.2 million. Operating profit for Q3 2021 was 
$600,000, or 11% of revenue, compared to an operating loss of 
$757,000 in the prior-year period.

Jack’s Flight Club 
On 
January 13, 2020, 
Travelzoo acquired 60% of Jack’s 
Flight Club, a membership subscription service. Jack’s 
Flight Club revenue decreased 19% year-over-year to 
$796,000. Operating income for Q3 2021 was 
$57,000, compared to an operating income of 
$250,000 in the prior-year period. After consolidation with 
Travelzoo, Jack’s 
Flight Club’s net income was 
$20,000 with 
$12,000 attributable to 
Travelzoo as a result of recording 
$274,000 of amortization of intangible assets related to the acquisition.

Licensing
In June of 2020, 
Travelzoo entered into a royalty-bearing licensing agreement with a local licensee in 
Japan for the exclusive use of Travelzoo’s brand, business model, and members in 
Japan. In August of 2020, 
Travelzoo entered into a royalty-bearing licensing agreement with a local licensee in 
Australia for the exclusive use of Travelzoo’s brand, business models, and members in 
Australia, 
New Zealand and 
Singapore. Under these arrangements, Travelzoo’s existing members in 
Australia, 
Japan, 
New Zealand, and 
Singapore will continue to be owned by 
Travelzoo as the licensor. Licensing revenue is booked with a lag of one quarter. 
Travelzoo recorded 
$2,000 in licensing revenue from the licensee in 
Australia, 
New Zealand and 
Singapore in Q3 2021. Licensing revenue is expected to increase as the licensees develop their business and effects of the pandemic subside.

Members and Subscribers
As of 
September 30, 2021, we had 30.7 million members worldwide. In 
North America, the unduplicated number of 
Travelzoo members was 17.2 million as of 
September 30, 2021, up 5% from 
September 30, 2020. In 
Europe, the unduplicated number of 
Travelzoo members was 8.4 million as of 
September 30, 2021, down 5% from 
September 30, 2020. Jack’s 
Flight Club had 1.7 million subscribers as of 
September 30, 2021, consistent with 1.7 million subscribers as of 
September 30, 2020.

Discontinued Operations
As announced in a press release on 
March 10, 2020, 
Travelzoo decided to exit its 
Asia Pacific business and operate it as a licensing business going forward. Consequently, the 
Asia Pacific business has been classified as discontinued operations since 
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.

Income Taxes
Income tax expense was 
$233,000 in Q3 2021, compared to an income tax benefit of 
$244,000 in the prior-year period.

Non-GAAP Financial Measures
Management calculates non-GAAP operating income when evaluating the financial performance of the business. Travelzoo’s calculation of non-GAAP operating income, also called “non-GAAP operating profit” in this press release and today’s earnings conference call, excludes the following items: impairment of intangibles and goodwill, amortization of intangibles, stock option expenses, and severance-related expenses. This press release includes a table which reconciles GAAP operating income to the calculation of non-GAAP operating income. Non-GAAP operating income is not required by, or presented in accordance with, generally accepted accounting principles in 
the United States of America (“GAAP”). This information should be considered as supplemental in nature and should not be considered in isolation or as a substitute for the financial information prepared in accordance with GAAP. In addition, these non-GAAP financial measures may not be the same as similarly titled measures reported by other companies.

Looking Ahead
We currently expect to achieve profitability in Q4 2021. We continue to see a trend of recovery of our revenue. However, there could be unexpected fluctuations in the short-term. We have been able to reduce our operating expenses, and we believe we can continue the trend of lower fixed costs in the foreseeable future.

Conference Call

Travelzoo will host a conference call to discuss third quarter results today at 
11:00 a.m. ET. Please visit http://ir.travelzoo.com/events-presentations to download the management presentation (PDF format) to be discussed in the conference call; and access the webcast.

About Travelzoo

Travelzoo^® provides its 30 million members exclusive offers and one-of-a-kind experiences personally reviewed by our deal experts around the globe. We have our finger on the pulse of outstanding travel, entertainment, and lifestyle experiences. We work in partnership with more than 5,000 top travel suppliers—our long-standing relationships give 
Travelzoo members access to irresistible deals.

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, Top 20, and 
Jack’s Flight Club are registered trademarks of 
Travelzoo.

Travelzoo
Condensed Consolidated Statements of Operations
(Unaudited)
(In thousands, except per share amounts)

Travelzoo
Condensed Consolidated Balance Sheets
(Unaudited)
(In thousands)

Travelzoo
Condensed Consolidated Statements of Cash Flows
(Unaudited)
(In thousands)

Travelzoo
Segment Information from Continuing Operations
(Unaudited)
(In thousands)

Travelzoo
Reconciliation of GAAP to Non-GAAP Information
(Unaudited)
(In thousands, except per share amounts)

Investor Relations:
Almira Pusch
[email protected]

Source: Travelzoo