NEW YORK, July 18, 2013—Travelzoo Inc. (NASDAQ: TZOO):
• Revenue of $41.3 million, up 5% year-over-year
• Net income of $5.2 million, down 28% year-over-year
• Earnings per share of $0.34, compared to $0.45 in the prior-year period
• Cash flow from operations of $10.0 million
Travelzoo Inc., a global Internet media company, today announced financial results for the second quarter ended June 30, 2013, with revenue of $41.3 million, an increase of 5% year-over-year. Operating profit was $7.8 million. Net income was $5.2 million, with earnings per share of $0.34, down from $0.45 in the prior-year period.
"Continued growth in our Travel businesses in North America and Europe drove a solid quarter," said Chris Loughlin, chief executive officer, "Audience engagement reached record levels and we made good progress in social media and mobile. Our earnings were still impacted by our investments into a hotel booking platform, aimed at simplifying our user experience on web and mobile. We plan to introduce the platform later this year."
North America business segment revenue increased 5% year-over-year to $30.2 million. Operating profit for the second quarter was $5.9 million, or 20% of revenue, down from $7.8 million, or 27% of revenue, in the prior-year period. The decrease in operating profit was a result of increased expenses related to sales force expansion, hotel booking platform development and traffic acquisition.
Europe business segment revenue increased 4% year-over-year to $11.1 million. In local currency terms, revenue for the second quarter increased 7% year-over-year. Operating profit was $1.9 million, or 17% of revenue, down from an operating profit of $2.5 million, or 24% of revenue in the prior-year period.
Travelzoo had a total unduplicated number of subscribers in North America and Europe of 23.0 million as of June 30, 2013, up 4% from June 30, 2012. In North America, total unduplicated number of subscribers was 16.4 million as of June 30, 2013, up 3% from June 30, 2012. In Europe, total unduplicated number of subscribers was 6.6 million as of June 30, 2013, up 8% from June 30, 2012.
Income tax expense was $2.7 million, compared to $3.1 million in the prior-year period. The effective income tax rate was 34%, up from 30% in the prior-year period.
During the second quarter 2013, Travelzoo generated $10.0 million of cash from operating activities. Accounts receivable increased by $227,000 over the prior-year period to $15.5 million. Accounts payable increased by $6.8 million over the prior-year period to $29.0 million. Capital expenditures were $1.2 million, up from $595,000 in the prior-year period. Travelzoo exited the second quarter with $73.4 million in cash and cash equivalents.