Company Quick10K Filing
Travelzoo
Price11.38 EPS1
Shares12 P/E22
MCap138 P/FCF72
Net Debt-13 EBIT11
TEV125 TEV/EBIT11
TTM 2019-09-30, in MM, except price, ratios
10-Q 2020-06-30 Filed 2020-08-10
10-Q 2020-03-31 Filed 2020-06-25
10-K 2019-12-31 Filed 2020-03-20
10-Q 2019-09-30 Filed 2019-11-01
10-Q 2019-06-30 Filed 2019-08-09
10-Q 2019-03-31 Filed 2019-05-10
10-K 2018-12-31 Filed 2019-03-11
10-Q 2018-09-30 Filed 2018-11-01
10-Q 2018-06-30 Filed 2018-08-02
10-Q 2018-03-31 Filed 2018-05-10
10-K 2017-12-31 Filed 2018-03-16
10-Q 2017-09-30 Filed 2017-11-02
10-Q 2017-06-30 Filed 2017-08-03
10-Q 2017-03-31 Filed 2017-05-05
10-K 2016-12-31 Filed 2017-03-15
10-Q 2016-09-30 Filed 2016-11-03
10-Q 2016-06-30 Filed 2016-08-04
10-Q 2016-03-31 Filed 2016-05-05
10-K 2015-12-31 Filed 2016-03-14
10-Q 2015-09-30 Filed 2015-11-09
10-Q 2015-06-30 Filed 2015-07-23
10-Q 2015-03-31 Filed 2015-04-24
10-K 2014-12-31 Filed 2015-02-17
10-Q 2014-09-30 Filed 2014-10-23
10-Q 2014-06-30 Filed 2014-07-25
10-Q 2014-03-31 Filed 2014-04-25
10-K 2013-12-31 Filed 2014-02-12
10-Q 2013-09-30 Filed 2013-10-24
10-Q 2013-06-30 Filed 2013-07-25
10-Q 2013-03-31 Filed 2013-05-01
10-K 2012-12-31 Filed 2013-02-11
10-Q 2012-09-30 Filed 2012-10-26
10-Q 2012-06-30 Filed 2012-07-30
10-Q 2012-03-31 Filed 2012-04-30
10-K 2011-12-31 Filed 2012-02-21
10-Q 2011-09-30 Filed 2011-10-28
10-Q 2011-06-30 Filed 2011-08-04
10-Q 2011-03-31 Filed 2011-05-10
10-K 2010-12-31 Filed 2011-03-16
10-Q 2010-09-30 Filed 2010-11-09
10-Q 2010-06-30 Filed 2010-08-09
10-Q 2010-03-31 Filed 2010-05-10
10-K 2009-12-31 Filed 2010-03-16
8-K 2020-07-30 Earnings, Exhibits
8-K 2020-06-25
8-K 2020-06-22
8-K 2020-05-29
8-K 2020-05-29
8-K 2020-05-11
8-K 2020-04-24
8-K 2020-04-03
8-K 2020-03-10
8-K 2020-03-02
8-K 2020-01-15
8-K 2019-11-06
8-K 2019-10-23
8-K 2019-10-10
8-K 2019-09-10
8-K 2019-07-24
8-K 2019-05-14
8-K 2019-05-07
8-K 2019-04-25
8-K 2019-04-16
8-K 2019-02-13
8-K 2019-02-06
8-K 2019-01-23
8-K 2018-10-25
8-K 2018-10-24
8-K 2018-10-24
8-K 2018-07-25
8-K 2018-06-28
8-K 2018-06-14
8-K 2018-05-17
8-K 2018-05-15
8-K 2018-05-01
8-K 2018-04-25
8-K 2018-03-05
8-K 2018-02-08

TZOO 10Q Quarterly Report

Part I - Financial Information
Item 1. Financial Statements
Note 1: Summary of Significant Accounting Policies
Note 2: Net Income (Loss) per Share
Note 3: Acquisition
Note 4: Commitments and Contingencies
Note 5: Income Taxes
Note 6: Accumulated Other Comprehensive Loss
Note 7: Stock - Based Compensation and Stock Options
Note 8: Stock Repurchase Program
Note 9: Segment Reporting and Significant Customer Information
Note 11: Leases
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Item 4. Controls and Procedures
Part II - Other Information
Item 1. Legal Proceedings
Item 1A. Risk Factors
Item 2: Unregistered Sales of Equity Securities and Use of Proceeds
Item 6. Exhibits
EX-31.1 tzoo-exx3116x30x20.htm
EX-31.2 tzoo-exx3126x30x20.htm
EX-32.1 tzoo-exx3216x30x20.htm
EX-32.2 tzoo-exx3226x30x20.htm

Travelzoo Earnings 2020-06-30

Balance SheetIncome StatementCash Flow
1159269462302012201420172020
Assets, Equity
5036228-6-202012201420172020
Rev, G Profit, Net Income
1581-6-13-202012201420172020
Ops, Inv, Fin

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
______________________________________________________________________________
Form 10-Q
______________________________________________________________________________ 
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2020
or 
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from              to             .
Commission File No.: 000-50171
_______________________________________________________________________________ 
Travelzoo
(Exact name of registrant as specified in its charter)
 ________________________________________________________________________________
Delaware36-4415727
(State or other jurisdiction of
incorporation or organization)
(I.R.S. employer
identification no.)
590 Madison Avenue, 35th Floor
New York, New York
10022
(Address of principal executive offices)(Zip code)
Registrant’s telephone number, including area code: (212484-4900
_________________________________________________________________________________ 
Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  x    No  ¨
Indicate by check mark whether the Registrant has submitted electronically and posted on its corporate website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the Registrant was required to submit and post such files).    Yes  x    No  ¨
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See definition of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer¨Accelerated filer
Non-accelerated filer
¨  (Do not check if a smaller reporting company)
Smaller reporting company
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revisited financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.¨
Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes      No  x
The number of shares of Travelzoo common stock outstanding as of August 7, 2020 was 11,310,431 shares.
1


TRAVELZOO
Table of Contents
 
PART I—FINANCIAL INFORMATIONPage
PART II—OTHER INFORMATION
 
2



PART I—FINANCIAL INFORMATION

Item 1.  Financial Statements

3


TRAVELZOO
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(In thousands, except par value) 
June 30,
2020
December 31,
2019
ASSETS
Current assets:
Cash and cash equivalents$25,563  $18,743  
Accounts receivable, less allowance for doubtful accounts of $2,813 and $1,106 as of June 30, 2020 and December 31, 2019, respectively
4,031  11,209  
Prepaid income taxes  989  
Deposits112  105  
Prepaid expenses and other 1,173  2,288  
Assets from discontinued operations590  3,961  
Total current assets31,469  37,295  
Deposits and other829  572  
Deferred tax assets4,341  2,051  
Restricted cash1,138  1,135  
Investment in WeGo 2,152  2,484  
Operating lease right-of-use assets9,929  8,140  
Property and equipment, net1,689  2,861  
Intangible assets, net5,200    
Goodwill10,944    
Total assets$67,691  $54,538  
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)
Current liabilities:
Accounts payable$29,674  $19,349  
Accrued expenses and other 5,436  6,281  
Deferred revenue2,779  786  
Operating lease liabilities4,440  4,847  
Promissory notes payable1,700    
Income tax payable773  914  
Liabilities from discontinued operations1,456  3,135  
Total current liabilities46,258  35,312  
PPP notes payable3,663    
Deferred tax liabilities1,044    
Long-term operating lease liabilities12,062  7,920  
Other long-term liabilities457  443  
Total liabilities63,484  43,675  
Commitments and contingencies
Non-controlling interest4,508    
Stockholders’ equity (deficit):
Common stock, $0.01 par value (20,000 shares authorized; 11,310 and 11,479 shares issued and outstanding as of June 30, 2020 and December 31, 2019)
113  115  
Additional paid in capital4,031    
Retained earnings221  14,200  
Accumulated other comprehensive loss(4,666) (3,452) 
Total stockholders’ equity (deficit)(301) 10,863  
Total liabilities and stockholders’ equity (deficit)$67,691  $54,538  
See accompanying notes to unaudited condensed consolidated financial statements.
4


TRAVELZOO
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(In thousands, except per share amounts)
 Three Months EndedSix Months Ended
June 30,June 30,
 2020201920202019
Revenues$7,004  $26,606  $27,331  $55,766  
Cost of revenues2,141  2,672  4,844  5,537  
Gross profit4,863  23,934  22,487  50,229  
Operating expenses:
Sales and marketing4,288  13,104  17,382  26,638  
Product development 566  1,763  1,994  3,422  
General and administrative6,642  4,914  12,164  9,446  
Impairment of intangible assets and goodwill    2,920    
Total operating expenses11,496  19,781  34,460  39,506  
Operating income (loss)(6,633) 4,153  (11,973) 10,723  
Other income (loss), net(179) (29) (185) 16  
Income (loss) from continuing operations before income taxes(6,812) 4,124  (12,158) 10,739  
Income tax expense (benefit)(1,309) 1,066  (1,826) 2,736  
Income (loss) from continuing operations(5,503) 3,058  (10,332) 8,003  
Income (loss) from discontinued operations, net of taxes(795) (1,730) (3,714) (3,555) 
Net income (loss)(6,298) 1,328  (14,046) 4,448  
Net income (loss) attributable to non-controlling interest(108)   (1,247)   
Net income (loss) attributable to Travelzoo$(6,190) $1,328  $(12,799) $4,448  
Net income (loss) attributable to Travelzoo—continuing operations$(5,395) $3,058  $(9,085) $8,003  
Net income (loss) attributable to Travelzoo—discontinued operations$(795) $(1,730) $(3,714) $(3,555) 
Income (loss) per share—basic
Continuing operations$(0.48) $0.25  $(0.80) $0.67  
Discontinued operations$(0.07) $(0.14) $(0.33) $(0.30) 
Net income (loss) per share —basic$(0.55) $0.11  $(1.13) $0.37  
Income (loss) per share—diluted
Continuing operations$(0.48) $0.25  $(0.80) $0.66  
Discontinued operations$(0.07) $(0.14) $(0.33) $(0.30) 
Net income (loss) per share—diluted$(0.55) $0.11  $(1.13) $0.36  
Shares used in per share calculation from continuing operations—basic11,310  12,003  11,375  11,959  
Shares used in per share calculation from discontinued operations—basic11,310  12,003  11,375  11,959  
Shares used in per share calculation from continuing operations—diluted11,310  12,278  11,375  12,251  
Shares used in per share calculation from discontinued operations—diluted11,310  12,003  11,375  11,959  
See accompanying notes to unaudited condensed consolidated financial statements.
5


TRAVELZOO
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(Unaudited)
(In thousands)
 
 Three Months EndedSix Months Ended
June 30,June 30,
 2020201920202019
Net income (loss)$(6,298) $1,328  $(14,046) $4,448  
Other comprehensive income (loss):
Foreign currency translation adjustment(343) 74  (1,214) (15) 
Total comprehensive income (loss)$(6,641) $1,402  $(15,260) $4,433  

See accompanying notes to unaudited condensed consolidated financial statements.

6


TRAVELZOO
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(In thousands)
 Six Months Ended
June 30,
 20202019
Cash flows from operating activities:
Net income (loss)$(14,046) $4,448  
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization1,218  663  
Stock-based compensation4,054  482  
Deferred income tax(1,761) 345  
Impairment of intangible assets and goodwill 2,920    
Loss on long-lived assets437    
Loss on equity investment in WeGo336  397  
Gain on promissory notes payable settlement(1,500)   
Net foreign currency effect(456) (26) 
Provision for loss on accounts receivable and other2,427  26  
Changes in operating assets and liabilities, net of acquisitions:
Accounts receivable6,183  (2,779) 
Prepaid income taxes989  (428) 
Prepaid expenses and other 1,420  239  
Accounts payable10,309  (2,788) 
Accrued expenses and other(1,380) 1,291  
Deferred revenue1,249    
Income tax payable(67) (96) 
Other liabilities1,091  (174) 
Net cash provided by operating activities13,423  1,600  
Cash flows from investing activities:
Acquisition of business, net of cash acquired(679)   
Other investments(430) (673) 
Purchases of property and equipment(203) (201) 
Net cash used in investing activities(1,312) (874) 
Cash flows from financing activities:
Repurchase of common stock(1,205) (6,460) 
Payment of promissory notes payable(7,800)   
Proceeds from PPP notes payable3,663    
Proceeds from exercise of stock options, net of taxes paid for net share settlement   1,712  
Net cash used in financing activities(5,342) (4,748) 
Effect of exchange rate changes on cash, cash equivalents and restricted cash(511) 5  
Net increase (decrease) in cash, cash equivalents and restricted cash6,258  (4,017) 
Cash, cash equivalents and restricted cash at beginning of period20,710  19,461  
Cash, cash equivalents and restricted cash at end of period$26,968  $15,444  
Supplemental disclosure of cash flow information:
Cash paid for income taxes, net$482  $2,859  
Right-of-use assets obtained in exchange for lease obligations—operating leases$3,207  $2,802  
Cash paid for amounts included in the measurement of lease liabilities$1,622  $2,557  
Non-cash investing and financing activities:
Issuance of promissory notes to the sellers of Jack's Flight Club$11,000  $  
See accompanying notes to unaudited condensed consolidated financial statements.
7


TRAVELZOO
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (DEFICIT)
(Unaudited)
 (In thousands)
 Common StockAdditional
Paid-In
Capital
Retained
Earnings
Accumulated
Other
Comprehensive
Loss
Total
Stockholders’
Equity (Deficit)
 SharesAmount
Balances, January 1, 202011,479  $115  $  $14,200  $(3,452) $10,863  
Stock-based compensation expense—  —  23  —  —  23  
Repurchase and retirement of common stock(169) (2) (23) (1,180) —  (1,205) 
Foreign currency translation adjustment—  —  —  —  (871) (871) 
Net loss–Travelzoo—  —  —  (6,609) —  (6,609) 
Balances, March 31, 202011,310  113    6,411  (4,323) 2,201  
Stock-based compensation expense—  —  4,031  —  —  4,031  
Foreign currency translation adjustment—  —  —  —  (343) (343) 
Net loss—Travelzoo—  —  —  (6,190) —  (6,190) 
Balances, June 30, 202011,310  $113  $4,031  $221  $(4,666) $(301) 

 Common StockAdditional
Paid-In
Capital
Retained
Earnings
Accumulated
Other
Comprehensive
Loss
Total
Stockholders’
Equity
 SharesAmount
Balances, January 1, 201911,962  $120  $  $18,153  $(4,214) $14,059  
Stock-based compensation expense—  —  163  —  —  163  
Repurchase and retirement of common stock(100) (1) (137) (1,452) —  (1,590) 
Taxes paid for net share settlement of equity awards3  —  (26) —  —  (26) 
Foreign currency translation adjustment—  —  —  —  (89) (89) 
Net income—  —  —  3,120  —  3,120  
Balances, March 31, 201911,865  119    19,821  (4,303) 15,637  
Stock-based compensation expense—  —  319  —  —  319  
Repurchase and retirement of common stock(250) (2) (2,055) (2,812) —  (4,869) 
Exercise of stock options and taxes paid for net share settlement of equity awards250  2  1,736  —  —  1,738  
Foreign currency translation adjustment—  —  —  —  74  74  
Net income—  —  —  1,328  —  1,328  
Balances, June 30, 201911,865  $119  $  $18,337  $(4,229) $14,227  


See accompanying notes to unaudited condensed consolidated financial statements.

8


TRAVELZOO
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

Note 1: Summary of Significant Accounting Policies
(a) The Company and Basis of Presentation
Travelzoo® is a global Internet media company. We provide 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's revenues are generated primarily from advertising fees.
Our publications and products include the Travelzoo website, the Travelzoo iPhone and Android apps, the Travelzoo Top 20® email newsletter, the Newsflash email alert service, and the Travelzoo Network, a network of third-party websites that list travel deals published by Travelzoo (“Travelzoo” or the "Company"). Our Travelzoo website includes Local Deals and Getaways listings that allow our members to purchase vouchers for deals from local businesses such as spas, hotels and restaurants. We receive a percentage of the face value of the voucher from the local businesses.
APAC Exit
In March 2020, Travelzoo exited its loss-making Asia Pacific business. The Company’s Asia Pacific business was classified as discontinued operations at March 31, 2020. Prior periods have been reclassified to conform with the current presentation. On June 16, 2020, in connection with its Asia Pacific exit plan, the Company completed a sale of 100% of the outstanding capital stock of Travelzoo Japan K.K to Mr. Hajime Suzuki, the General Manager of Japan (the "Buyer") for consideration of JPY 1. The Company recorded approximately $128,000 loss upon disposal of Japan in the Condensed Consolidated Financial Statements during the three and six months ended June 30, 2020. The parties also entered into a License Agreement, whereby the Buyer obtained a license to use intellectual property from Travelzoo exclusively in Japan in exchange for quarterly royalty payments based on revenue over a 5 year term, with an option to renew. An interest free loan was provided to the Buyer for JPY 46.0 million (approximately $430,000) to be repaid over 3 years which the Company recorded as other assets on the unaudited condensed consolidated balance sheet as of June 30, 2020.
WeGo Investment
The Company has a minority investment in weekengo GmbH ("WeGo"). WeGo is a technology company which provides an app and a search engine for spontaneous travelers looking for short getaways. The Company accounts for this private company investment using the equity method of accounting by recording its share of the results of WeGo in “Other income (expense)”, net on a one-quarter lag basis. In accounting for the initial investment, the Company allocated $1.0 million of its purchase price to tangible assets and allocated approximately $485,000 of the purchase price to technology-related intangible assets to be amortized over a three-year life. The remaining $1.5 million of the purchase price was allocated to goodwill.
In February 2020, Travelzoo signed an amended investment agreement (the “Investment Agreement”) with WeGo and agreed to invest an additional $1.7 million when WeGo meets certain performance targets. The original Investment Agreement with WeGo was executed in April 2018. At that time, Travelzoo invested $3.0 million in WeGo for a 25% ownership interest. In April 2019, the Company invested an additional $673,000 in WeGo and increased the Company's ownership interest to 26.6%.
As of June 30, 2020, WeGo has not met these performance targets and no additional investment has been made by the Company. In connection with the Investment Agreement, WeGo signed an insertion order for $2.1 million in advertising services with Travelzoo in April 2018. The Company's advertising services provided to WeGo in the three months ended June 30, 2020 and 2019 were $3,000 and $239,000, respectively. The Company's advertising services provided to WeGo in the six months ended June 30, 2020 and 2019 were $360,000 and $794,000, respectively.
During the three and six months ended June 30, 2020, the Company recorded $106,000 and $333,000 for its share of WeGo losses, amortization of basis differences and currency translation adjustment. During the three and six months ended June 30, 2019, the Company recorded $198,000 and $409,000 for its share of WeGo losses, amortization of basis differences and currency translation adjustment. This equity method investment is reported as a long-term investment on the Company's condensed consolidated balance sheets.

9


Jack’s Flight Club
In January 2020, Travelzoo acquired JFC Travel Group Co. (“Jack’s Flight Club”), which operates Jack’s Flight Club, a subscription service that provides members with information about exceptional airfares. As of June 30, 2020, Jack’s Flight Club had 1.7 million subscribers. Jack’s Flight Club’s revenues are generated by subscription fees paid by members. In June 2020, the Company renegotiated certain aspects of that certain Stock Purchase Agreement, dated as of January 13, 2020 (the “SPA”), by and among Travelzoo, Jack’s Flight Club and the sellers party thereto (the “Sellers”) with the Sellers and reached a settlement for the outstanding Promissory Notes, dated as of January 13, 2020, by and between Travelzoo and each Seller (the “Promissory Notes”). See Note 3 to the unaudited condensed consolidated financial statements for further information.
PPP Loans
On April 24, 2020 and May 5, 2020, the Company received $3.1 million and $535,000, respectively, pursuant to loans under the Paycheck Protection Program (the “PPP”) of the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) administered by the Small Business Association. The loans have a maturity of two (2) years from the disbursement of the funds and an interest rate of 1%. The PPP loan was recorded as long-term PPP notes payable on the unaudited condensed consolidated balance sheet as of June 30, 2020. Interest expense for the PPP notes payable was $7,000 for the six months ended June 30, 2020. The Company intends to use the funds from these loan only for the purposes included in the PPP, including payroll, employee benefits, and rent, and to apply for forgiveness of a portion of the loans in compliance with the CARES Act.
Ownership
Ralph Bartel, who founded the Company and who is a Director of the Company is the sole beneficiary of the Ralph Bartel 2005 Trust, which is the controlling shareholder of Azzurro Capital Inc. (“Azzurro”). As of June 30, 2020, Azzurro is the Company's largest shareholder, holding approximately 39.5% of the Company's outstanding shares. Azzurro currently holds a proxy given to it by Holger Bartel that provides it with a total of