Travelzoo Inc., a global Internet media company, today announced financial results for the first quarter ended March 31, 2010, with revenue of $28.5 million, an increase of 24% year-over-year. All revenues were generated from the sale of online advertising. Operating profit from continuing operations was $5.2 million, up 14% year-over-year. Net income from continuing operations was $2.5 million, with diluted net income per share from continuing operations of $0.15, compared to diluted net income per share from continuing operations of $0.13 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.
“We kicked off 2010 with record revenue and strong growth in the number of Travelzoo subscribers. We continue to make great progress with building a strong Travelzoo brand and business in Europe,” said Holger Bartel, CEO of Travelzoo. “While we are making significant investments in growing our audience and our Fly.com business, we also intend to become more efficient and to further improve earnings per share.”
North America
North America business segment revenue grew 12% year-over-year to $22.4 million. Operating profit was $6.1 million, or 27% of revenue, up from an operating profit of $5.8 million, or 29% of revenue, in the prior-year period.
Europe
Europe business segment revenue grew 107% year-over-year to $6.2 million. In local currency terms, revenue grew 91% year-over-year. Operating loss was $951,000, 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.
Subscribers
Travelzoo had a total unduplicated number of newsletter subscribers in North America and Europe of 17.8 million as of March 31, 2010, up 25% from March 31, 2009, and up 6% from December 31, 2009. In North America, total unduplicated number of subscribers was 13.8 million as of March 31, 2010, up 18% from March 31, 2009 and up 4% from December 31, 2009. In Europe, total unduplicated number of subscribers was 4.0 million as of March 31, 2010, up 60% from March 31, 2009 and up 10% from December 31, 2009.
Asset Management
During the first quarter, Travelzoo generated $9.8 million of cash from operating activities. Accounts receivable increased by $2.1 million quarter-over-quarter and increased by $1.5 million over the prior-year period to $13.4 million. Accounts payable decreased by $19,000 quarter-over-quarter and increased by $985,000 over the prior-year period to $6.8 million. Capital expenditures were $396,000, up from $384,000 in the prior quarter and down from $884,000 in the prior-year period. Travelzoo exited the first quarter with $30.1 million in cash and cash equivalents.
