Travelzoo On Thursday July 22, 2010, 8:00 am EDT
•Revenue of $28.1 million, up 19% year-over-year
•Operating profit from continuing operations of $5.9 million, up 76% year-over-year
•Cash flow from operations of $2.3 million
•Net income per share from continuing operations of $0.20, compared to $0.10 in the prior-year period
•Earnings per share of $0.20, compared to loss per share of ($0.01) in the prior-year period
Travelzoo Inc., a global Internet media company, today announced financial results for the second quarter ended June 30, 2010, with revenue of $28.1 million, an increase of 19% year-over-year. All revenues were generated from the sale of online advertising. Operating profit from continuing operations was $5.9 million, up 76% year-over-year. Net income from continuing operations was $3.2 million, with diluted net income per share from continuing operations of $0.20, compared to diluted net income per share from continuing operations of $0.10 in the prior-year period. Revenue, operating profit and income from continuing operations for all periods exclude the results of Travelzoo’s former Asia Pacific business segment, which are reported as discontinued operations.
“Travelzoo continued its strong revenue growth in the quarter, despite a challenging environment in Europe,” said Chris Loughlin, CEO of Travelzoo. “The Company’s net income doubled, and we remain keenly focused on improving operational efficiency and further growing earnings per share.”
North America
North America business segment revenue grew 12% year-over-year to $22.2 million. Operating profit was $6.7 million, or 30% of revenue, up from an operating profit of $4.5 million, or 23% of revenue, in the prior-year period.
Europe
Europe business segment revenue grew 49% year-over-year to $6.0 million. In local currency terms, revenue grew 55% year-over-year. Operating loss was $807,000, compared to an operating loss of $1.1 million in the prior-year period. Travelzoo began operations in the U.K. in May 2005, in Germany in September 2006, and in France in March 2007. In May 2008, Travelzoo began publishing its weekly Top 20® list in Spain, after having operated a sales office in Barcelona since November 2006.
Subscribers
Travelzoo had a total unduplicated number of newsletter subscribers in North America and Europe of 18.3 million as of June 30, 2010, up 20% from June 30, 2009, and up 3% from March 31, 2010. In North America, total unduplicated number of subscribers was 14.1 million as of June 30, 2010, up 14% from June 30, 2009 and up 2% from March 31, 2010. In Europe, total unduplicated number of subscribers was 4.2 million as of June 30, 2010, up 50% from June 30, 2009 and up 7% from March 31, 2010.
Income Taxes
Income tax expense was $2.7 million, compared to $1.7 million in the prior-year period for continuing operations. The effective income tax rate was 46%, down from 51% in the prior-year period. Operating losses from our Europe business segment were treated as having no recognizable tax benefit.
Asset Management
During the second quarter, Travelzoo generated $2.3 million of cash from operating activities. Accounts receivable increased by $168,000 quarter-over-quarter and increased by $1.5 million over the prior-year period to $13.6 million. Accounts payable decreased by $474,000 quarter-over-quarter and decreased by $1.3 over the prior-year period to $6.3 million. Capital expenditures were $355,000, down from $396,000 in the prior quarter and up from $320,000 in the prior-year period. Travelzoo exited the second quarter with $31.9 million in cash and cash equivalents.
