NEW YORK, October 21, 2010 -- Travelzoo Inc. (NASDAQ: TZOO): •
•Revenue of $27.7 million, up 17% year-over-year •
•Operating profit from continuing operations of $5.7 million, up 150% year-over-year •
•Cash flow from operations of $3.1 million •
•Net income per share from continuing operations of $0.22, up 175% from $0.08 in the prior-year period •
•Earnings per share of $0.22, compared to loss per share of ($0.02) in the prior-year period
Travelzoo Inc., a global Internet media company, today announced financial results for the third quarter ended September 30, 2010, with revenue of $27.7 million, an increase of 17% year-over-year. Operating profit from continuing operations was $5.7 million, up 150% year-over-year. Net income from continuing operations was $3.7 million, with diluted net income per share from continuing operations of $0.22, compared to diluted net income per share from continuing operations of $0.08 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 more than doubled earnings per share and in Europe, we finally reached profitability. We continued our strong revenue growth, despite one fewer Top 20 publishing day in Q3 2010 compared to the same period in 2009,” said Chris Loughlin, CEO of Travelzoo. “Our new Local Deals business has seen rapid adoption among our existing subscribers and the new publication is now in 12 cities across the U.S. We remain keenly focused on growth and further improving earnings per share.”
North America business segment revenue grew 12% year-over-year to $21.3 million. Operating profit was $5.5 million, or 26% of revenue, up from an operating profit of $3.6 million, or 19% of revenue, in the prior-year period.
Europe business segment revenue grew 37% year-over-year to $6.5 million. In local currency terms, revenue grew 45% year-over-year. Operating profit was $248,000, compared to an operating loss of $1.3 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.
Travelzoo had a total unduplicated number of newsletter subscribers in North America and Europe of 18.7 million as of September 30, 2010, up 15% from September 30, 2009, and up 2% from June 30, 2010. In North America, total unduplicated number of subscribers was 14.2 million as of September 30, 2010, up 9% from September 30, 2009 and up 1% from June 30, 2010. In Europe, total unduplicated number of subscribers was 4.5 million as of September 30, 2010, up 38% from September 30, 2009 and up 7% from June 30, 2010.
During the third quarter, Travelzoo generated $3.1 million of cash from operating activities. Accounts receivable increased by $601,000 quarter-over-quarter and increased by $2.4 million over the prior-year period to $14.2 million. Accounts payable increased by $990,000 quarter-over-quarter and decreased by $77,000 over the prior-year period to $7.3 million. Capital expenditures were $391,000, up from $355,000 in the prior quarter and down from $405,000 in the prior-year period. Travelzoo exited the third quarter with $34.7 million in cash and cash equivalents.