0001133311FALSETravelzoo00011333112024-02-282024-02-28


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
____________________________________________________
FORM 8-K
____________________________________________________
CURRENT REPORT
Pursuant To Section 13 or 15(d) of the
Securities Exchange Act of 1934

Date of Report (Date of earliest event reported):  February 28, 2024
____________________________________________________

image0a212a14.jpg
(Exact name of registrant as specified in its charter)
____________________________________________________
Delaware000-5017136-4415727
(State or Other
Jurisdiction of
Incorporation)
(Commission
File Number)
(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 +1 (212) 516-1300
(Former Name or Former Address, if Changed Since Last Report)
____________________________________________________

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions ( see General Instruction A.2. below):

☐       Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐       Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐       Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐       Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock, $0.01 par valueTZOOThe NASDAQ Stock Market



Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter)
                                         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 revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act ☐ 



Item 2.02.         Results of Operations and Financial Condition.
 
On February 28, 2024, Travelzoo (the "Company") reported its fourth quarter 2023 financial results. A copy of the Company’s press release containing this information is being furnished as Exhibit 99.1 to this report on Form 8-K and is incorporated herein by reference.
 
The information furnished pursuant to Item 2.02, including Exhibit 99.1, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) or otherwise subject to the liabilities under that Section and shall not be deemed to be incorporated by reference into any filing of the Company under the Securities Act of 1933, as amended, or the Exchange Act.
 

Item 9.01.        Financial Statements and Exhibits.
(d)           Exhibits.  See Exhibit Index



SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
TRAVELZOO
Date:February 28, 2024By:/s/ Lijun Qi
Lijun Qi
Principal Accounting Officer



EXHIBIT INDEX
ExhibitDescription
Press Release, dated February 28, 2024.


Exhibit 99.1
travellogo11062017a13.jpg
Travelzoo
590 Madison Avenue
35th Floor
New York, NY 10022

Investor Relations:
ir@travelzoo.com

FOR IMMEDIATE RELEASE

Travelzoo Reports Fourth Quarter 2023 Results

NEW YORK, February 28, 2024 — Travelzoo® (NASDAQ: TZOO):

•Revenue of $21.1 million, up 14% year-over-year
•Consolidated operating profit of $4.5 million
•Non-GAAP consolidated operating profit of $5.2 million
•Cash flow from operations of $1.4 million
•Earnings per share (EPS) of $0.27

Travelzoo, the club for travel enthusiasts, today announced financial results for the fourth quarter ended December 31, 2023. Consolidated revenue was $21.1 million, up 14% from $18.6 million year-over-year. In constant currencies, revenue was $20.8 million, up 12% year-over-year. Travelzoo's reported revenue consists of advertising revenues and commissions, derived from and generated in connection with purchases made by Travelzoo members.

Net income attributable to Travelzoo was $3.7 million for Q4 2023, or $0.27 per share, compared with $0.20 in the prior-year period. Net income attributable to Travelzoo from continuing operations was $3.3 million for Q4 2023, or $0.24 per share, compared with $0.20 in the prior-year period.

Non-GAAP operating profit was $5.2 million. Non-GAAP operating profit excludes amortization of intangibles ($0.4 million) and stock option expenses ($0.4 million). Please refer to “Non-GAAP Financial Measures” and the tabular reconciliation below.

“Q4 concluded a strong year for Travelzoo, with each quarter achieving year-over-year revenue growth, profitability and positive cash flow from operations”, said Holger Bartel, Travelzoo's Global CEO. "We
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will continue to leverage Travelzoo's global reach, trusted brand, and strong relationships with top travel suppliers to negotiate more exclusive offers for members. It is in times of large increases in travel prices that Travelzoo is most valuable for consumers. Travelzoo members enjoy high quality travel experiences that represent outstanding value."

“With more than 30 million members, 8 million mobile app users, and 5 million social media followers, Travelzoo is loved by travel enthusiasts who are affluent, active, and open to new experiences.”

Cash Position
As of December 31, 2023, consolidated cash, cash equivalents and restricted cash were $16.4 million. Net cash provided by operations was $1.4 million.

Travelzoo North America
North America business segment revenue increased 5% year-over-year to $13.8 million. Operating profit for Q4 2023 was $4.0 million, or 29% of revenue, compared to operating profit of $4.2 million in the prior-year period.

Travelzoo Europe
Europe business segment revenue increased 34% year-over-year to $6.3 million. In constant currencies, Europe business segment revenue increased 27% year-over-year. Operating profit for Q4 2023 was $832,000, or 13% of revenue, compared to operating profit of $42,000 in the prior-year period.

Jack’s Flight Club
Jack’s Flight Club business segment revenue, which is impacted by the accounting for an intragroup marketing agreement, increased 11% year-over-year to $949,000. Revenue from unaffiliated customers increased 29% year-over-year to $1.1 million. Jack’s Flight Club is a membership subscription service in which Travelzoo has a 60% ownership interest. The number of premium subscribers increased 21% year-over-year. Revenue from subscriptions is recognized monthly pro rata over the subscription period (quarterly, semi-annually, annually). Non-GAAP operating loss for Q4 2023 was $61,000, compared to a non-GAAP operating profit of $220,000 in the prior-year period. Non-GAAP operating loss excludes amortization of intangibles ($0.2 million) related to the acquisition of Travelzoo’s ownership interest in Jack’s Flight Club in 2020. The Q4 2023 operating loss was caused by marketing expenses in connection with growth in members.


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New Initiatives
New Initiatives business segment revenue, which includes Licensing and Travelzoo META, was $155,000. Operating loss for Q4 2023 was $104,000.

In June 2020, Travelzoo entered into a royalty-bearing licensing agreement with a local licensee in Japan for the exclusive use of Travelzoo’s brand, business model, and members in Japan. In August of 2020, Travelzoo entered into a royalty-bearing licensing agreement with a local licensee in Australia for the exclusive use of Travelzoo’s brand, business models, and members in Australia, New Zealand, and Singapore. Under these arrangements, Travelzoo’s existing members in Australia, Japan, New Zealand, and Singapore will continue to be owned by Travelzoo as the licensor. Travelzoo recorded $23,000 in licensing revenue from the licensee in Japan in Q4 2023. Travelzoo recorded $9,000 in licensing revenue from the licensee in Australia, New Zealand, and Singapore in Q4 2023. Licensing revenue is expected to increase going forward.

Members and Subscribers
As of December 31, 2023, we were 31.1 million members worldwide, up from 30.4 million as of December 31, 2022. In North America, Travelzoo had 16.2 million unduplicated members as of December 31, 2023, consistent with December 31, 2022. In Europe, Travelzoo had 9.2 million unduplicated members as of December 31, 2023, up from 9.0 million as of December 31, 2022. Jack’s Flight Club had 2.4 million subscribers as of December 31, 2023, up from 1.9 million as of December 31, 2022.

Discontinued Operations
In March 2020, Travelzoo decided to exit its Asia Pacific business and operate it as a licensing business going forward. Consequently, the Asia Pacific business has been classified as discontinued operations. 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
A provision of $1.6 million for income taxes was recorded for Q4 2023, compared to an income tax expense of $1.1 million in the prior-year period. Travelzoo intends to utilize available net operating losses (NOLs) to largely offset its actual tax liability for Q4 2023.


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Looking Ahead
For Q1 2024, we expect continued growth in revenue, albeit at a smaller pace than 2023. We expect higher cash flow from operations and higher profitability. In December 2023, we announced the introduction of a membership fee for Travelzoo beginning January 1, 2024. Existing members as of December 31, 2023, are exempt from the fee during 2024. Therefore, we do not anticipate to generate membership fee revenue from existing members before 2025.

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 intangible and goodwill, amortization of intangibles, stock option expenses and 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.

Conference Call
Travelzoo will host a conference call to discuss fourth quarter 2023 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
•access the webcast.


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About Travelzoo
We, Travelzoo®, are the club for travel enthusiasts. Our 30 million members receive exclusive offers and one-of-a-kind experiences personally reviewed by our deal experts around the globe. We have our finger on the pulse of outstanding travel, entertainment, and lifestyle experiences. We work 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.


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Travelzoo
Condensed Consolidated Statements of Operations
(Unaudited)
(In thousands, except per share amounts)
 Three months endedTwelve months ended
 December 31,December 31,
 2023202220232022
Revenues$21,149 $18,608 $84,477 $70,599 
Cost of revenues2,698 2,684 10,934 10,003 
Gross profit18,451 15,924 73,543 60,596 
Operating expenses:
Sales and marketing8,496 7,499 37,774 33,072 
Product development 580 673 2,113 2,064 
General and administrative4,896 4,168 18,084 17,903 
Total operating expenses13,972 12,340 57,971 53,039 
Operating income 4,479 3,584 15,572 7,557 
Other income (expense), net398 (53)1,541 2,401 
Income from continuing operations before income taxes4,877 3,531 17,113 9,958 
Income tax expense 1,618 1,057 5,105 3,270 
Income from continuing operations3,259 2,474 12,008 6,688 
Income (loss) from discontinued operations, net of tax465 (63)460 (59)
Net income 3,724 2,411 12,468 6,629 
Net income (loss) attributable to non-controlling interest5 (41)102 (5)
Net income attributable to Travelzoo$3,719 $2,452 $12,366 $6,634 
Net income attributable to Travelzoo—continuing operations$3,254 $2,515 $11,906 $6,693 
Net income (loss) attributable to Travelzoo—discontinued operations$465 $(63)$460 $(59)
Income per share—basic
Continuing operations$0.24 $0.20 $0.80 $0.54 
Discontinued operations$0.03 $— $0.03 $— 
Net income per share—basic$0.27 $0.20 $0.83 $0.54 
Income per share—diluted
Continuing operations$0.24 $0.20 $0.80 $0.53 
Discontinued operations$0.03 $— $0.03 $— 
Net income per share—diluted$0.27 $0.20 $0.83 $0.53 
Shares used in per share calculation from continuing operations—basic13,873 12,425 14,897 12,372 
Shares used in per share calculation from discontinued operations—basic13,873 12,425 14,897 12,372 
Shares used in per share calculation from continuing operations—diluted13,946 12,487 14,964 12,561 
Shares used in per share calculation from discontinued operations—diluted13,946 12,487 14,964 12,561 
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Travelzoo
Condensed Consolidated Balance Sheets
(Unaudited)
(In thousands)
December 31,
2023		December 31,
2022
Assets
Current assets:
Cash and cash equivalents$15,713 $18,693 
Accounts receivable, net12,965 13,820 
Prepaid income taxes629 1,778 
Prepaid expenses and other1,460 1,289 
Assets from discontinued operations1 11 
Total current assets30,768 35,591 
Deposits and other1,115 5,094 
Deferred tax assets3,196 3,222 
Restricted cash675 675 
Operating lease right-of-use assets6,015 7,440 
Property and equipment, net578 657 
Intangible assets, net2,091 3,651 
Goodwill10,944 10,944 
Total assets$55,382 $67,274 
Liabilities and Equity
Current liabilities:
Accounts payable$4,546 $4,271 
Merchant payables20,622 32,574 
Accrued expenses and other 3,658 5,049 
Deferred revenue2,044 2,216 
Income tax payable766 — 
Operating lease liabilities2,530 2,972 
Liabilities from discontinued operations24 452 
Total current liabilities34,190 47,534 
Long-term tax liabilities4,681 1,569 
Long-term operating lease liabilities6,717 8,326 
Other long-term liabilities911 994 
Total liabilities46,499 58,423 
Common stock136 165 
Treasury stock (at cost) — (7,130)
Tax indemnification(9,537)(9,537)
Note receivable from shareholder(1,753)(4,753)
Additional paid-in capital439 23,274 
Retained earnings 19,508 7,142 
Accumulated other comprehensive loss(4,607)(4,905)
Total Travelzoo stockholders’ equity4,186 4,256 
Non-controlling interest4,697 4,595 
Total stockholder's equity8,883 8,851 
Total liabilities and equity$55,382 $67,274 
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Travelzoo
Condensed Consolidated Statements of Cash Flows
(Unaudited)
(In thousands)
 Three months endedTwelve months ended
 December 31,December 31,
 2023202220232022
Cash flows from operating activities:
Net income $3,724 $2,411 $12,468 $6,629 
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation and amortization476 537 1,893 2,189 
Stock-based compensation380 349 1,567 1,805 
Deferred income tax169 73 58 774 
Impairment of intangible assets and goodwill — 200 — 200 
Loss on long-lived assets— 9 10 47 
Gain on sale of equity investment in WeGo— — — (196)
Net foreign currency effects(115)198 (62)232 
Reversal of reserves on accounts receivable and other reserves(72)(965)(1,016)(4,367)
Changes in operating assets and liabilities:
Accounts receivable(2,231)(1,223)1,086 1,317 
Prepaid income taxes61 1,098 1,189 1,452 
Prepaid expenses, deposits and other 1,603 1,586 3,835 1,627 
Accounts payable1,181 501 (523)902 
Merchant payables(3,338)(6,334)(12,095)(35,228)
Accrued expenses and other(1,450)(649)(876)(496)
Income tax payable456 23 749 (162)
Other liabilities547 (86)2,401 154 
Net cash provided by (used in) operating activities1,391 (2,272)10,684 (23,121)
Cash flows from investing activities:
Proceeds from repayment of note receivable103 — 216 — 
Purchases of intangible assets— — — (1,049)
Proceeds from sale of equity investment in WeGo— — — 196 
Purchases of property and equipment(38)(226)(255)(462)
Net cash (provided by) used in investing activities65 (226)(39)(1,315)
Cash flows from financing activities:
Repurchase of common stock(5,016)(472)(16,782)(1,642)
Proceeds from short swing settlement— — — 46 
Proceeds from issuance of common stock1,006 1,006 
Proceeds from note receivable from shareholder3,000 — 3,000 — 
Exercise of stock options and taxes paid for net share settlement of equity awards(69)(13)(368)1,872 
Net cash provided by (used in) financing activities(2,085)521 (14,150)1,282 
Effect of exchange rate on cash, cash equivalents and restricted cash436 810 516 (2,457)
Net decrease in cash, cash equivalents and restricted cash(193)(1,167)(2,989)(25,611)
Cash, cash equivalents and restricted cash at beginning of period16,582 20,545 19,378 44,989 
Cash, cash equivalents and restricted cash at end of period$16,389 $19,378 $16,389 $19,378 
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Travelzoo
Segment Information from Continuing Operations
(Unaudited)
(In thousands)
Three months ended December 31, 2023Travelzoo North
America		Travelzoo EuropeJack's Flight ClubNew InitiativesConsolidated
Revenue from unaffiliated customers$13,534 $6,354 $1,106 $155 $21,149 
Intersegment revenue (loss)247 (90)(157)— — 
Total net revenues13,781 6,264 949 155 21,149 
Operating income (loss)$3,970 $832 $(219)$(104)$4,479 
Three months ended December 31, 2022Travelzoo North
America		Travelzoo EuropeJack's Flight ClubNew InitiativesConsolidated
Revenue from unaffiliated customers$12,921 $4,825 $855 $7 $18,608 
Intersegment revenue (loss)162 (162)— — — 
Total net revenues13,083 4,663 855 7 18,608 
Operating income (loss)$4,235 $42 $(196)$(497)$3,584 

Twelve months ended December 31, 2023Travelzoo North
America		Travelzoo EuropeJack's Flight ClubNew InitiativesConsolidated
Revenue from unaffiliated customers$54,837 $25,291 $4,145 $204 $84,477 
Intersegment revenue (loss)1,243 (1,270)27 — — 
Total net revenues56,080 24,021 4,172 204 84,477 
Operating income (loss)$15,254 $1,317 $(23)$(976)$15,572 
Twelve months ended December 31, 2022Travelzoo North
America		Travelzoo EuropeJack's Flight ClubNew InitiativesConsolidated
Revenue from unaffiliated customers$47,029 $20,068 $3,477 $25 $70,599 
Intersegment revenue (loss)613 (613)— — — 
Total net revenues47,642 19,455 3,477 25 70,599 
Operating income (loss)$10,348 $(1,803)$— $(988)$7,557 







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Travelzoo
Reconciliation of GAAP to Non-GAAP Information
(Unaudited)
(In thousands, except per share amounts)
 Three months endedTwelve months ended
 December 31,December 31,
 2023202220232022
GAAP operating expense$13,972 $12,340 $57,971 $53,039 
Non-GAAP adjustments:
Impairment of intangible and goodwill (A)— 200 — 200 
Amortization of intangibles (A)389 453 1,560 1,771 
Stock option expenses (B)380 349 1,566 1,805 
Severance-related expenses (C)— 200 56 336 
Non-GAAP operating expense13,203 11,138 54,789 48,927 
GAAP operating income 4,479 3,584 15,572 7,557 
Non-GAAP adjustments (A through C)769 1,202 3,182 4,112 
Non-GAAP operating income 5,248 4,786 18,754 11,669 





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v3.24.0.1
Cover Page
Feb. 28, 2024
Cover [Abstract]  
Document Type 8-K
Document Period End Date Feb. 28, 2024
Entity Registrant Name Travelzoo
Entity Incorporation, State or Country Code DE
Entity File Number 000-50171
Entity Tax Identification Number 36-4415727
Entity Address, Address Line One 590 Madison Avenue
Entity Address, Address Line Two 35th Floor
Entity Address, City or Town New York
Entity Address, State or Province NY
Entity Address, Postal Zip Code 10022
City Area Code 212
Local Phone Number 516-1300
Written Communications false
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Pre-commencement Tender Offer false
Pre-commencement Issuer Tender Offer false
Title of 12(b) Security Common Stock, $0.01 par value
Trading Symbol TZOO
Security Exchange Name NASDAQ
Entity Emerging Growth Company false
Entity Central Index Key 0001133311
Amendment Flag false
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