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Travelzoo Reports Second Quarter 2011 Results

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^{Published in Science and Technology on Thursday, July 21st 2011 at 5:12 GMT by Market Wire}  

NEW YORK--([ BUSINESS WIRE ])--Travelzoo Inc. (NASDAQ: TZOO):

"We achieved record revenues and our fastest growth rate in 4 years. We accelerated our investment in future growth, adding 27 new Local Deals markets, 800,000 new subscribers and we grew our headcount faster than in any prior quarter"

• Revenue of $37.6 million, up 34% year-over-year
• Operating profit of $7.6 million, up 29% year-over-year
• Net income of $4.9 million, up 51% year-over-year
• Earnings per share of $0.30, compared to $0.20 in the prior year period

Travelzoo Inc., a global Internet media company, today announced financial results for the second quarter ended June 30, 2011, with revenue of $37.6 million, an increase of 34% year-over-year. Operating profit was $7.6 million, up 29% year-over-year. Net income was $4.9 million, with diluted net income per share (EPS) of $0.30, up from $0.20 in the prior-year period.

aWe achieved record revenues and our fastest growth rate in 4 years. We accelerated our investment in future growth, adding 27 new Local Deals markets, 800,000 new subscribers and we grew our headcount faster than in any prior quarter,a said Chris Loughlin, CEO of Travelzoo. aWe also ran a television advertising test, which negatively impacted earnings per share by approximately $0.07. We are pleased with our accelerated growth rate and confident that our investments will fuel future growth.a

North America

North America business segment revenue grew 25% year-over-year to $27.7 million. Operating profit was $6.5 million, or 24% of revenue, down from $6.7 million, or 30% of revenue, in the prior-year period.

Europe

Europe business segment revenue grew 67% year-over-year to $10.0 million. In local currency terms, revenue grew 53% year-over-year. Operating profit was $1.1 million, compared to an operating loss of $808,000 in the prior-year period.

Subscribers

Travelzoo had a total unduplicated number of newsletter subscribers in North America and Europe of 20.7 million as of June 30, 2011, up 13% from June 30, 2010, and up 4% from March 31, 2011. In North America, total unduplicated number of subscribers was 15.3 million as of June 30, 2011, up 9% from June 30, 2010 and up 3% from March 31, 2011. In Europe, total unduplicated number of subscribers was 5.5 million as of June 30, 2011, up 29% from June 30, 2010 and up 7% from March 31, 2011.

Asset Management

During the second quarter, Travelzoo used $11.2 million of cash for operating activities. Accounts receivable decreased by $473,000 quarter-over-quarter and increased by $2.4 million over the prior-year period to $15.9 million. Accounts payable increased by $2.1 million quarter-over-quarter and increased by $9.3 million over the prior-year period to $15.7 million. Capital expenditures were $356,000, down from $699,000 in the prior quarter and up from $355,000 in the prior-year period. Travelzoo exited the second quarter with $40.1 million in cash and cash equivalents.

Conference Call

Travelzoo will host a conference call to discuss second quarter results at 11:00 a.m. ET today. Please visit [ http://www.travelzoo.com/earnings ] to

• download the management presentation (PDF format) to be discussed in the conference call;
• access the webcast.

About Travelzoo

Travelzoo Inc. is a global Internet media company. With more than 23 million subscribers in North America, Europe, and Asia Pacific and 23 offices worldwide, Travelzoo® publishes deals from more than 2,000 travel and entertainment companies. Travelzooa™s deal experts review offers to find the best deals and confirm their true value. In Asia Pacific, Travelzoo is independently owned and operated by Travelzoo (Asia) Ltd. and Travelzoo Japan K.K. under a license agreement with Travelzoo Inc.

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 aexpect,a apredict,a aproject,a aanticipate,a abelieve,a aestimate,a aintend,a aplan,a aseeka 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 Inc. All other company and product names mentioned are trademarks of their respective owners.