Travelzoo Inc (TZOO, Financial) filed Quarterly Report for the period ended 2009-06-30.
Travelzoo Inc publishes Travelzoo and Weekend.com. Reaching several million users per month Travelzoo lists sales and specials from more than 200 advertisers including Alamo Rent-a-Car American Airlines American Express Travel Avis Rent A Car Best Western International British Airways Carnival Cruise Lines Delta Air Lines Fairmont Hotels & Resorts Funjet Vacations Gate 1 Travel Ian Schrager Hotels JetBlue Airways Kimpton Hotel & Restaurant Group Marriott Hotels Omni Hotels Pleasant Holidays Royal Caribbean Cruises Six Continents Hotels Starwood Hotels & Resorts Vail Resorts Virgin Atlantic Airways and Wyndham Hotels & Resorts. Travelzoo Inc has a market cap of $195.52 million; its shares were traded at around $11.89 with and P/S ratio of 2.4. Travelzoo Inc had an annual average earning growth of 66.8% over the past 5 years.
Our total revenues increased to $47.6 million for the six months ended June 30, 2009 from $42.7 million for the six months ended June 30, 2008. This represents an increase of $4.9 million or 12%. $2.3 million of the increase in revenues came from our operations in Europe, which had an increase of 52% in revenues year over year. In local currency terms, revenues from our operations in Europe increased 100% year over year. The strengthening of the U.S dollar relative to the British Pounds Sterling and the Euro in the six months ended June 30, 2009 compared to the six months ended June 30, 2008 had an unfavorable impact on the revenues from our operations in Europe. Had foreign exchange rates remained constant in these periods, revenues from our operations in Europe for the six months ended June 30, 2009 would have been approximately $2.2 million higher than reported revenues of $7.0 million. $1.7 million of the increase in revenues came from our operations in North America and was attributed primarily to a $957,000 increase in revenues from our search products, which consists of SuperSearch and Fly.com, a $357,000 increase in revenues from our publications, which includes the Travelzoo Web site, the Top 20 e-mail newsletter and the Newsflash e-mail alert service, and a $310,000 increase in revenues from the Travelzoo Network. We launched Fly.com in February 2009. We also had a $920,000 increase in revenues from our operations in Asia Pacific. The increase in revenues from our operations in Asia Pacific was primarily due to increased acceptance of our publications and products by consumers and advertisers in the countries in which we operate. We began operations in Asia Pacific in 2007.
Cost of revenues consists primarily of network expenses, including fees we pay for co-location services and depreciation and maintenance of network equipment, payments made to third-party partners of the Travelzoo Network, fees we pay related to user searches on Fly.com, amortization of capitalized Web site development costs, and salary expenses associated with network operations staff. Our cost of revenues increased to $1.5 million for the three months ended June 30, 2009 from $637,000 for the three months ended June 30, 2008. As a percentage of revenue, cost of revenues increased to 6.2% for the three months ended June 30, 2009 from 2.9% for the three months ended June 30, 2008. The $874,000 increase in cost of revenues for the three months ended June 30, 2009 compared to the three months ended June 30, 2008 was primarily due to a $397,000 increase in fees we pay related to user searches on Fly.com, a $224,000 increase in depreciation and maintenance costs, a $145,000 increase in fees we pay for co-location services, and a $122,000 increase in payments made to third-party partners of the Travelzoo Network.
Our cost of revenues increased to $2.8 million for the six months ended June 30, 2009 from $1.2 million for the six months ended June 30, 2008. As a percentage of revenue, cost of revenues increased to 5.8% for the six months ended June 30, 2009 from 2.7% for the six months ended June 30, 2008. The $1.6 million increase in cost of revenues for the six months ended June 30, 2009 compared to the six months ended June 30, 2008 was primarily due to a $521,000 increase in fees we pay related to user searches on Fly.com, a $418,000 increase in depreciation and maintenance costs, a $348,000 increase in payments made to third-party partners of the Travelzoo Network, and a $284,000 increase in fees we pay for co-location services.
Sales and marketing expenses consist primarily of advertising and promotional expenses, salary expenses associated with sales, marketing and production staff, expenses related to our participation in industry conferences, and public relations expenses. Sales and marketing expenses increased to $13.8 million for the three months ended June 30, 2009 from $12.5 million for the three months ended June 30, 2008. The goal of our advertising was to acquire new subscribers for our e-mail products, increase the traffic to our Web sites, and increase brand awareness for Travelzoo and Fly.com. The $1.3 million increase in sales and marketing expenses for the three months ended June 30, 2009 compared to the three months ended June 30, 2008 was primarily due to a $914,000 increase in marketing expenses for Fly.com, a $419,000 increase in salary and employee related expenses, and a $268,000 increase in advertising to acquire traffic to our Web sites, offset by a $273,000 decrease in brand and trade marketing expense. For the three months ended June 30, 2009 and 2008, advertising expenses accounted for 63% and 59%, respectively, of total sales and marketing expenses.
Sales and marketing expenses increased to $26.1 million for the six months ended June 30, 2009 from $25.9 million for the six months ended June 30, 2008. The $222,000 increase in sales and marketing expenses for the six months ended June 30, 2009 compared to the six months ended June 30, 2008 was primarily due to a $1.3 million increase in salary and employee related expenses, a $942,000 increase in marketing expenses for Fly.com and a $143,000 increase in advertising to acquire traffic to our Web sites, offset by a $1.2 million decrease in brand, trade and other marketing expenses and a $981,000 decrease in advertising to acquire new subscribers for our e-mail products. For the six months ended June 30, 2009 and 2008, advertising expenses accounted for 67% and 63%, respectively, of total sales and marketing expenses.
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Travelzoo Inc publishes Travelzoo and Weekend.com. Reaching several million users per month Travelzoo lists sales and specials from more than 200 advertisers including Alamo Rent-a-Car American Airlines American Express Travel Avis Rent A Car Best Western International British Airways Carnival Cruise Lines Delta Air Lines Fairmont Hotels & Resorts Funjet Vacations Gate 1 Travel Ian Schrager Hotels JetBlue Airways Kimpton Hotel & Restaurant Group Marriott Hotels Omni Hotels Pleasant Holidays Royal Caribbean Cruises Six Continents Hotels Starwood Hotels & Resorts Vail Resorts Virgin Atlantic Airways and Wyndham Hotels & Resorts. Travelzoo Inc has a market cap of $195.52 million; its shares were traded at around $11.89 with and P/S ratio of 2.4. Travelzoo Inc had an annual average earning growth of 66.8% over the past 5 years.
Highlight of Business Operations:
Our total revenues increased to $24.3 million for the three months ended June 30, 2009 from $21.8 million for the three months ended June 30, 2008. This represents an increase of $2.5 million or 12%. $1.5 million of the increase in revenues came from our operations in Europe, which had an increase of 57% in revenues year over year. In local currency terms, revenues from our operations in Europe increased 100% year over year. The strengthening of the U.S dollar relative to the British Pounds Sterling and the Euro in the three months ended June 30, 2009 compared to the three months ended June 30, 2008 had an unfavorable impact on the revenues from our operations in Europe. Had foreign exchange rates remained constant in these periods, revenues from our operations in Europe for the three months ended June 30, 2009 would have been approximately $1.1 million higher than reported revenues of $4.0 million. $509,000 of the increase in revenues came from our operations in North America and was attributed primarily to a $603,000 increase in revenues from our search products, which consists of SuperSearch and Fly.com, offset by a $111,000 decrease in revenues from our publications, which includes the Travelzoo Web site, the Top 20 e-mail newsletter and the Newsflash e-mail alert service. We launched Fly.com in February 2009. We also had a $552,000 increase in revenues from our operations in Asia Pacific. The increase in revenues from our operations in Asia Pacific was primarily due to increased acceptance of our publications and products by consumers and advertisers in the countries in which we operate. We began operations in Asia Pacific in 2007.Our total revenues increased to $47.6 million for the six months ended June 30, 2009 from $42.7 million for the six months ended June 30, 2008. This represents an increase of $4.9 million or 12%. $2.3 million of the increase in revenues came from our operations in Europe, which had an increase of 52% in revenues year over year. In local currency terms, revenues from our operations in Europe increased 100% year over year. The strengthening of the U.S dollar relative to the British Pounds Sterling and the Euro in the six months ended June 30, 2009 compared to the six months ended June 30, 2008 had an unfavorable impact on the revenues from our operations in Europe. Had foreign exchange rates remained constant in these periods, revenues from our operations in Europe for the six months ended June 30, 2009 would have been approximately $2.2 million higher than reported revenues of $7.0 million. $1.7 million of the increase in revenues came from our operations in North America and was attributed primarily to a $957,000 increase in revenues from our search products, which consists of SuperSearch and Fly.com, a $357,000 increase in revenues from our publications, which includes the Travelzoo Web site, the Top 20 e-mail newsletter and the Newsflash e-mail alert service, and a $310,000 increase in revenues from the Travelzoo Network. We launched Fly.com in February 2009. We also had a $920,000 increase in revenues from our operations in Asia Pacific. The increase in revenues from our operations in Asia Pacific was primarily due to increased acceptance of our publications and products by consumers and advertisers in the countries in which we operate. We began operations in Asia Pacific in 2007.
Cost of revenues consists primarily of network expenses, including fees we pay for co-location services and depreciation and maintenance of network equipment, payments made to third-party partners of the Travelzoo Network, fees we pay related to user searches on Fly.com, amortization of capitalized Web site development costs, and salary expenses associated with network operations staff. Our cost of revenues increased to $1.5 million for the three months ended June 30, 2009 from $637,000 for the three months ended June 30, 2008. As a percentage of revenue, cost of revenues increased to 6.2% for the three months ended June 30, 2009 from 2.9% for the three months ended June 30, 2008. The $874,000 increase in cost of revenues for the three months ended June 30, 2009 compared to the three months ended June 30, 2008 was primarily due to a $397,000 increase in fees we pay related to user searches on Fly.com, a $224,000 increase in depreciation and maintenance costs, a $145,000 increase in fees we pay for co-location services, and a $122,000 increase in payments made to third-party partners of the Travelzoo Network.
Our cost of revenues increased to $2.8 million for the six months ended June 30, 2009 from $1.2 million for the six months ended June 30, 2008. As a percentage of revenue, cost of revenues increased to 5.8% for the six months ended June 30, 2009 from 2.7% for the six months ended June 30, 2008. The $1.6 million increase in cost of revenues for the six months ended June 30, 2009 compared to the six months ended June 30, 2008 was primarily due to a $521,000 increase in fees we pay related to user searches on Fly.com, a $418,000 increase in depreciation and maintenance costs, a $348,000 increase in payments made to third-party partners of the Travelzoo Network, and a $284,000 increase in fees we pay for co-location services.
Sales and marketing expenses consist primarily of advertising and promotional expenses, salary expenses associated with sales, marketing and production staff, expenses related to our participation in industry conferences, and public relations expenses. Sales and marketing expenses increased to $13.8 million for the three months ended June 30, 2009 from $12.5 million for the three months ended June 30, 2008. The goal of our advertising was to acquire new subscribers for our e-mail products, increase the traffic to our Web sites, and increase brand awareness for Travelzoo and Fly.com. The $1.3 million increase in sales and marketing expenses for the three months ended June 30, 2009 compared to the three months ended June 30, 2008 was primarily due to a $914,000 increase in marketing expenses for Fly.com, a $419,000 increase in salary and employee related expenses, and a $268,000 increase in advertising to acquire traffic to our Web sites, offset by a $273,000 decrease in brand and trade marketing expense. For the three months ended June 30, 2009 and 2008, advertising expenses accounted for 63% and 59%, respectively, of total sales and marketing expenses.
Sales and marketing expenses increased to $26.1 million for the six months ended June 30, 2009 from $25.9 million for the six months ended June 30, 2008. The $222,000 increase in sales and marketing expenses for the six months ended June 30, 2009 compared to the six months ended June 30, 2008 was primarily due to a $1.3 million increase in salary and employee related expenses, a $942,000 increase in marketing expenses for Fly.com and a $143,000 increase in advertising to acquire traffic to our Web sites, offset by a $1.2 million decrease in brand, trade and other marketing expenses and a $981,000 decrease in advertising to acquire new subscribers for our e-mail products. For the six months ended June 30, 2009 and 2008, advertising expenses accounted for 67% and 63%, respectively, of total sales and marketing expenses.
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