Travelzoo Inc., a global Internet media company, today announced financial results for the second quarter ended June 30, 2014, with revenue of $36.9 million, a decrease of 11% year-over-year. Net income was $7.9 million, with earnings per share of $0.54. Non-GAAP net income was $4.4 million, with non-GAAP earnings per share of $0.30. Non-GAAP net income and non-GAAP earnings per share exclude a $3.5 million release of reserve for Travelzoo Inc.'s anticipated settlement agreements in connection with a dispute over unclaimed property audits.
"In North America, our revenues declined due to lower Local and Search revenues, as previously
announced. In Europe, our revenues and operating income increased. Europe contributed 43% of our operating income this quarter," said Chris Loughlin, chief executive officer. "We continue to invest in mobile products and in our new hotel booking platform."
North America
North America business segment revenue decreased 17% year-over-year to $25.2 million.
Non-GAAP operating profit for the second quarter was $3.8 million, or 15% of revenue, down from $5.9 million, or 20% of revenue, in the prior-year period.
Europe
Europe business segment revenue increased 6% year-over-year to $11.7 million. In local currency terms, revenue decreased 4% year-over-year. Non-GAAP operating profit for the second quarter was $2.9 million, or 24% of revenue, up from $1.9 million, or 17% of revenue in the prior-year period.
Subscribers
Travelzoo had a total unduplicated number of subscribers in North America and Europe of 23.7 million as of June 30, 2014, up 3% from June 30, 2013. In North America, total unduplicated number of subscribers was 16.7 million as of June 30, 2014, up 2% from June 30, 2013. In Europe, total unduplicated number of subscribers was 7.0 million as of June 30, 2014, up 6% from June 30, 2013.
Update on Hotel Booking Platform
Travelzoo began testing its new hotel booking platform in North America in April on desktop and in June on mobile. In the second quarter, the booking engine was presented to a limited number of Travelzoo subscribers. Booking revenue is recognized upon stay, which is typically 40 to 50 days after the booking occurs.
Asset Management
During the second quarter of 2014, Travelzoo used $509,000 of cash from operating activities
primarily due to new terms with Local Deals merchants which resulted in faster payments. Accounts receivable increased by $1.1 million over the prior-year period to $16.5 million. Accounts payable decreased by $4.8 million over the prior-year period to $24.1 million. Capital expenditures were $405,000, down from $1.2 million in the prior-year period. As of June 30, 2014, cash and cash
equivalents were $60.5 million.
