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Travelzoo Inc Reports Operating Results (10-Q)

October 26, 2012 | About:
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10qk

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Travelzoo Inc (TZOO) filed Quarterly Report for the period ended 2012-09-30.

Travelzoo, Inc. has a market cap of $286.5 million; its shares were traded at around $17.96 with a P/E ratio of 11 and P/S ratio of 1.9. Travelzoo, Inc. had an annual average earning growth of 22.8% over the past 10 years.

Highlight of Business Operations:

Cost of revenue increased $2.1 million for the nine months ended September 30, 2012 from the nine months ended September 30, 2011. This increase was primarily due to an increase in Local Deals and Getaways costs including $582,000 in subscriber refunds and $615,000 in credit card fees, a $390,000 increase in salary and employee related expenses due primarily to an increase in customer service headcount. In addition, there was an increase of $463,000 in payments made to third-party partners of the Travelzoo Network, offset by a $332,000 decrease in depreciation expense.

North America net revenues decreased $2.7 million for the three months ended September 30, 2012 from the three months ended September 30, 2011 (see “Revenues” above). North America expenses increased $2.2 million for the three months ended September 30, 2012 from the three months ended September 30, 2011. This increase was primarily due to a $1.0 million increase in salary and employee related expenses due in part to a headcount increase, a $550,000 increase in subscriber acquisition cost, a $435,000 increase in professional services and other expenses, and a $202,000 increase in rent, office and insurance expenses, offset by a $422,000 decrease in Search traffic acquisition costs.

North America net revenues decreased $479,000 for the nine months ended September 30, 2012 from the nine months ended September 30, 2011 (see “Revenues” above). North America expenses increased $3.1 million for the nine months ended September 30, 2012 from the nine months ended September 30, 2011. This increase was primarily due to a $3.8 million increase in salary and employee related expenses due in part to a headcount increase and a $1.5 million increase in cost of revenue primarily related to Local Deals and Getaways credit card fees, customer service and certain subscriber refunds, and a $755,000 increase in rent, office and insurance expenses, offset by a $2.0 million decrease in television advertising expense and a $1.1 million decrease in subscriber acquisition cost.

Europe net revenues decreased $437,000 for the three months ended September 30, 2012 from the three months ended September 30, 2011 (see “Revenues” above). Europe expenses decreased $91,000 for the three months ended September 30, 2012 from the three months ended September 30, 2011. This decrease was primarily due to a $612,000 decrease in Search traffic acquisition costs, offset by a $228,000 increase in salary and employee related expense due in part to a headcount increase, a $199,000 increase in corporate development expense and a $129,000 increase in subscriber acquisition cost. Foreign currency movements relative to the U.S. dollar negatively impacted our income from our operations in Europe by approximately $546,000 for the three months ended September 30, 2012. Foreign currency movements relative to the U.S. dollar negatively impacted our income from our operations in Europe by approximately $17,000 for the three months ended September 30, 2011.

Europe net revenues increased $1.5 million for the nine months ended September 30, 2012 from the nine months ended September 30, 2011 (see “Revenues” above). Europe expenses decreased $1.4 million for the nine months ended September 30, 2012 from the nine months ended September 30, 2011. This decrease was primarily due to a $2.2 million decrease in subscriber acquisition cost, offset by a $1.1 million increase in salary and employee related expense due in part to a headcount increase. Foreign currency movements relative to the U.S. dollar negatively impacted our income from our operations in Europe by approximately $1.4 million for the nine months ended September 30, 2012. Foreign currency movements relative to the U.S. dollar positively impacted our income from our operations in Europe by approximately $111,000 for the nine months ended September 30, 2011.

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10qk
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