Travelzoo Reports Fourth Quarter 2020 Results

NEW YORK, 
March 17, 2021 (GLOBE NEWSWIRE) — Travelzoo® (NASDAQ: TZOO):

• Consolidated revenue of 
  $12.5 million, down 51% from 
  $25.3 million year-over-year
• Net income of 
  $702,000
• Non-GAAP consolidated operating profit of 
  $547,000
• Earnings per share (EPS) of 
  $0.02 attributable to 
  Travelzoo from continuing operations
• Cash flow from operations of 
  $9.2 million

Travelzoo, a global Internet media company that publishes exclusive offers and experiences for members, today announced financial results for the fourth quarter ended 
December 31, 2020. Consolidated revenue was 
$12.5 million, down 51% from 
$25.3 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 reported net income attributable to 
Travelzoo from continuing operations was 
$173,000 for Q4 2020. At the consolidated level, including minority interests, the reported net income from continuing operations was 
$702,000. EPS from continuing operations was 
$0.02, down from 
$0.15 in the prior-year period.

Non-GAAP operating profit was 
$547,000. The calculation of non-GAAP operating profit excludes amortization of intangibles (
$0.3 million), stock option expenses (
$1.0 million), and severance-related expenses (
$0.2 million). See section “Non-GAAP Financial Measures” below.

“We see continued improvement in our business. We are seeing irresistibly priced deals from travel companies, and 
Travelzoo, as the most trusted media brand publishing and recommending deals, is bringing the very best deals to its members,” said  Holger Bartel, Global CEO.

“In 
March 2021, we saw the strongest activity from 
Travelzoo members in the 
U.S. since 
March 2020, as measured by user sessions on the 
Travelzoo site and app.”

Cash Position
As of 
December 31, 2020, consolidated cash, cash equivalents and restricted cash were 
$64.2 million.

Reserve
Reported revenues include a reserve of 
$3.9 million related to commissions to be earned from vouchers sold. The reserve was booked contra revenue and reduced reported Q4 2020 revenue by 
$1.6 million.

Travelzoo North America
North America business segment revenue decreased 45% year-over-year to 
$8.9 million. Operating profit for Q4 2020 was 
$1.3 million, or 15% of revenue, compared to an operating profit of 
$2.0 million, or 12% of revenue in the prior-year period.

Travelzoo Europe
Europe business segment revenue decreased 71% year-over-year to 
$2.7 million. Operating loss for Q4 2020 was 
$2.4 million, compared to an operating profit of 
$925,000, or 10% of revenue 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. In Q4 2020, the 
Jack’s Flight Club business segment generated 
$971,000 in revenue from subscriptions with operating profit of 
$582,000. After consolidation with 
Travelzoo, Jack’s 
Flight Club’s net loss was 
$62,000, with 
$37,000 attributable to 
Travelzoo as a result of recording 
$333,000 of amortization of intangible assets related to the acquisition and haircut of revenue (derived from deferred revenue sold prior to acquisition) of 
$49,000 due to purchase accounting in accordance with 
U.S. GAAP.

Licensing
In 
June 2020, 
Travelzoo 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 royalty-bearing licensing agreement for the exclusive use of 
Travelzoo members in 
Japan. In 
August 2020, 
Travelzoo sold its 
Singapore subsidiary to Mr.  Julian Rembrandt and entered into a royalty-bearing licensing agreement for, among other things, the exclusive use of 
Travelzoo’s members in 
Australia, 
New Zealand, and 
Singapore. Under the licensing agreements, 
Travelzoo’s existing members in 
Australia, 
Japan, 
New Zealand, and 
Singapore will continue to be owned by 
Travelzoo as the licensor. Licensing revenue from 
Japan was 
$9,000 in Q4 2020. However, licensing revenue is booked with a lag of one quarter.

Members and Subscribers
As of 
December 31, 2020, we had 30.2 million members worldwide. In 
Europe, the unduplicated number of 
Travelzoo members was 8.7 million as of 
December 31, 2020, down 4% from 
December 31, 2019. In 
North America, the unduplicated number of 
Travelzoo members was 16.3 million as of 
December 31, 2020, down 8% from 
December 31, 2019. On 
March 15, 2021, 
Travelzoo added more than 2 million new members in the 
U.S. in connection with a direct competitor from 
Europe exiting the U.S. market. Jack’s 
Flight Club had 1.7 million subscribers as of 
December 31, 2020, up 6% from 
December 31, 2019.

Discontinued Operations
As announced in a press release on 
March 10, 2020, 
Travelzoo decided to exit its 
Asia Pacific business which in 2019 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.

Income Taxes
Income tax benefit was 
$368,000 in Q4 2020, compared to an income tax expense of 
$1.1 million 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, 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 see a trend of recovery of our revenue. We have been able to reduce our operating expenses significantly. As a result of recovery of revenue and substantially lower operating expenses, we currently expect to achieve for Q1 a result close to break-even or a profit.

Conference Call
Travelzoo will host a conference call to discuss fourth 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 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.

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 and Top 20 are registered trademarks of 
Travelzoo.

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

Investor Relations: Almira Pusch[email protected]

SOURCE: Travelzoo