Travelzoo (NASDAQ:TZOO) Q3 2021 Earnings Conference Call October 29, 2021 11:00 AM ET Company Participants Lisa Su - CAO Holger Bartel - CEO Conference Call Participants Michael Kupinski - NOBLE Capital Markets Steve Silver - Argus Research James Goss - Barrington Research Edward Woo - Ascendiant Capital Operator Hello, everyone. Welcome to the Travelzoo Third Quarter 2021 Financial Results Conference Call. All participants have been placed in a listen-only mode and the floor will be open for questions fo ...

[PART I—FINANCIAL INFORMATION](index=4&type=section&id=PART%20I%E2%80%94FINANCIAL%20INFORMATION) [Item 1. Financial Statements (Unaudited)](index=4&type=section&id=Item%201.%20Financial%20Statements) This section presents Travelzoo's unaudited condensed consolidated financial statements, including balance sheets, statements of operations, and cash flows, for the periods ended June 30, 2021, and 2020 [Condensed Consolidated Balance Sheets](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) The balance sheet as of June 30, 2021, shows total assets increased to **$126.8 million**, driven by cash, while total liabilities rose to **$121.2 million** due to merchant payables, leading to a decrease in stockholders' equity Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | June 30, 2021 | December 31, 2020 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $80,962 | $63,061 | | Accounts receivable, net | $9,905 | $4,519 | | Total current assets | $95,925 | $70,044 | | Total assets | $126,800 | $102,400 | | **Liabilities & Equity** | | | | Accounts payable | $8,503 | $6,996 | | Merchant payables | $82,236 | $57,104 | | Total current liabilities | $105,505 | $82,870 | | Total liabilities | $121,198 | $95,900 | | Total stockholders' equity | $1,002 | $1,891 | [Condensed Consolidated Statements of Operations](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) For Q2 2021, Travelzoo reported a significant turnaround, with revenues increasing to **$19.1 million** and achieving a net income of **$3.0 million**, a substantial improvement from a net loss in the prior-year period Q2 2021 vs Q2 2020 Performance (in thousands, except per share) | Metric | Q2 2021 | Q2 2020 | | :--- | :--- | :--- | | Revenues | $19,079 | $7,004 | | Gross Profit | $16,557 | $4,863 | | Operating Income (Loss) | $3,476 | $(6,633) | | Net Income (Loss) attributable to Travelzoo | $3,014 | $(6,190) | | Diluted EPS | $0.22 | $(0.55) | Six Months Ended June 30 Performance (in thousands, except per share) | Metric | 2021 | 2020 | | :--- | :--- | :--- | | Revenues | $33,363 | $27,331 | | Gross Profit | $27,823 | $22,487 | | Operating Income (Loss) | $2,709 | $(11,973) | | Net Income (Loss) attributable to Travelzoo | $1,372 | $(12,799) | | Diluted EPS | $0.10 | $(1.13) | [Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) For the six months ended June 30, 2021, net cash provided by operating activities significantly increased to **$22.0 million**, primarily due to higher merchant payables, resulting in a **$17.8 million** net increase in cash and equivalents Cash Flow Summary for Six Months Ended June 30 (in thousands) | Cash Flow Activity | 2021 | 2020 | | :--- | :--- | :--- | | Net cash provided by operating activities | $21,950 | $13,423 | | Net cash used in investing activities | $(84) | $(1,312) | | Net cash used in financing activities | $(4,760) | $(5,342) | | **Net increase in cash, cash equivalents and restricted cash** | **$17,803** | **$6,258** | [Notes to Condensed Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) The notes detail accounting policies and financial results, including the exit from APAC business, impairment charges from the Jack's Flight Club acquisition, segment reporting, stock-based compensation, and PPP loan forgiveness - The company exited its loss-making Asia Pacific (APAC) business in March 2020, which is now classified as a discontinued operation. The Japan and Singapore units were sold, and the company entered into licensing agreements for use of its intellectual property in the region[28](index=28&type=chunk)[29](index=29&type=chunk)[30](index=30&type=chunk) - In January 2020, Travelzoo acquired a 60% stake in Jack's Flight Club. Due to the COVID-19 pandemic's impact, the company recorded a **$2.1 million** goodwill impairment and an **$810,000** intangible asset impairment related to this acquisition in Q1 2020[38](index=38&type=chunk)[64](index=64&type=chunk)[78](index=78&type=chunk) - The company received **$3.6 million** in Paycheck Protection Program (PPP) loans in 2020. In Q2 2021, a **$535,000** PPP loan was settled, with **$429,000** forgiven. The remaining **$3.1 million** loan was forgiven subsequent to the quarter end on July 1, 2021[132](index=132&type=chunk) - In March 2021, the company entered into a one-year license agreement with Azzurro Brands Inc., its largest shareholder, to use a database of **2.2 million** subscribers for a quarterly fee of **$413,000**[133](index=133&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=30&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the company's financial performance, highlighting revenue recovery, segment-specific growth, and liquidity, noting a negative working capital position offset by sufficient cash on hand - The company's business is showing continued improvement and a trend of revenue recovery from the global pandemic in 2020[172](index=172&type=chunk) - As of June 30, 2021, the company had negative working capital of **$12.7 million**, primarily due to an **$82.2 million** liability in merchant payables from voucher sales. Management believes cash on hand is sufficient for working capital needs for at least the next twelve months[68](index=68&type=chunk)[203](index=203&type=chunk) Consolidated Revenue by Segment (in thousands) | Segment | Q2 2021 | Q2 2020 | Six Months 2021 | Six Months 2020 | | :--- | :--- | :--- | :--- | :--- | | Travelzoo North America | $13,985 | $4,202 | $23,804 | $16,899 | | Travelzoo Europe | $4,234 | $1,857 | $7,812 | $8,804 | | Jack's Flight Club | $860 | $945 | $1,747 | $1,628 | | **Total Revenues** | **$19,079** | **$7,004** | **$33,363** | **$27,331** | [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=43&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section is not required for smaller reporting companies, and consequently, no information is provided regarding market risk disclosures - Disclosure about market risk is not required as Travelzoo qualifies as a smaller reporting company[220](index=220&type=chunk) [Item 4. Controls and Procedures](index=43&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that the company's disclosure controls and procedures were effective as of June 30, 2021, with no material changes to internal control over financial reporting identified during the quarter - The company's CEO and CAO concluded that disclosure controls and procedures were effective as of June 30, 2021[221](index=221&type=chunk) - There were no changes in internal control over financial reporting during the quarter ended June 30, 2021, that materially affected, or are reasonably likely to materially affect, the company's internal controls[222](index=222&type=chunk) [PART II—OTHER INFORMATION](index=44&type=section&id=PART%20II%E2%80%94OTHER%20INFORMATION) [Item 1. Legal Proceedings](index=44&type=section&id=Item%201.%20Legal%20Proceedings) This section refers to Note 4 of the financial statements, indicating that the company believes the likelihood of any material liability from pending legal claims is remote - The company believes that the likelihood of any material liability from pending legal claims is remote[88](index=88&type=chunk) [Item 1A. Risk Factors](index=44&type=section&id=Item%201A.%20Risk%20Factors) This section incorporates by reference the risk factors from the Annual Report on Form 10-K for December 31, 2020, with no new or updated risk factors presented in this report - The report refers to the risk factors disclosed in the Annual Report on Form 10-K for the year ended December 31, 2020, without providing updates[226](index=226&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=44&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company did not repurchase equity securities during Q2 2021, with **395,029 shares** remaining available under the May 2019 program, following a separate private repurchase in Q1 2021 - No equity securities were repurchased during the three months ended June 30, 2021[227](index=227&type=chunk) - As of June 30, 2021, **395,029 shares** remained authorized for repurchase under the May 2019 program[228](index=228&type=chunk) [Item 6. Exhibits](index=45&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including CEO and CAO certifications and XBRL data files - The exhibits filed with this report include CEO and CAO certifications under Sections 302 and 906 of the Sarbanes-Oxley Act[230](index=230&type=chunk)

Financial Data and Key Metrics Changes - Q2 2021 revenue was $19.1 million, showing continued improvement and expected upward trend for the rest of 2021 [5][6] - The company returned to profitability with an operating profit of $3.5 million [6] - Non-GAAP operating income improved from a loss of $2.1 million to a profit of $4.9 million year-over-year [9] - Consolidated cash and cash equivalents increased to $82.1 million, up by $10.1 million from $72 million as of March 31 [10] Business Segment Data and Key Metrics Changes - North America segment revenue is at 78% of 2019 levels, with operating income nearly equal to 2019 [7] - Europe segment revenue is at only 48% of 2019 levels but has narrowed the gap on operating income [8] - North America recorded a revenue increase of 188% year-over-year, while Europe recorded a 105% increase when neutralizing FX changes [11] Market Data and Key Metrics Changes - The company noted a significant recovery in advertising revenue as advertisers returned [11] - Vaccination rates among Travelzoo members are roughly twice the country average, indicating a strong readiness to travel [16] Company Strategy and Development Direction - The company aims to provide exclusive travel offers and experiences to its members, focusing on flexible and worry-free deals for future travel [17] - Plans to grow Jack's Flight Club's profitable subscription revenue and increase EPS and profits as travel demand returns [18] Management Comments on Operating Environment and Future Outlook - Management expressed optimism about the recovery in Europe, noting strong interest among members despite political restrictions [22] - The company expects Q3 revenue in the range of $20 million to $21 million and to remain profitable [13] - Operating expenses are expected to remain around the current percentage of revenue going forward [12] Other Important Information - The company has seen a slight decline in members from 31.8 million to 31.3 million [6] - The interest in vouchers remains strong, although their percentage of overall revenue is expected to decrease [39] Q&A Session Summary Question: Thoughts on Europe's recovery compared to North America - Management noted that interest among members in Europe is strong, but political restrictions are currently holding back travel [22] Question: Status of travel restrictions in Europe - Restrictions are becoming less severe, but coordination among EU countries remains a challenge [23] Question: Drivers of higher gross margins - Higher gross margins were influenced by a decrease in voucher sales as a portion of revenue [24] Question: Recovery of Jack's Flight Club - The service is increasing in the U.S., but flight restrictions in the U.K. are currently holding back growth [26] Question: Cash position and merchant payables - Management is comfortable with the cash position, noting that not all vouchers will be redeemed immediately [30][31] Question: Impact of Delta variant on travel decisions - Management has not seen significant impacts from the Delta variant on member travel decisions [37] Question: Future importance of vouchers - Vouchers remain popular due to their flexibility, although their revenue percentage is expected to decrease [39] Question: Operating expenses and profitability - Operating expenses are expected to remain stable as a percentage of revenue, with potential increases in marketing spend [41]

NASDAQ: TZOO Second Quarter 2021 Performance July 21, 2021 Important Notice to Investors Please read this management presentation together with the Company's press release issued earlier today announcing the Company's second quarter 2021 financial results and in conjunction with the Company's recent Annual Report and Quarterly Results as filed with the Securities and Exchange Commission (SEC). Certain statements contained in this presentation that are not historical facts may be forward looking statements w ...

[PART I—FINANCIAL INFORMATION](index=4&type=section&id=PART%20I%E2%80%94FINANCIAL%20INFORMATION) [Financial Statements (Unaudited)](index=4&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) Unaudited Q1 2021 financial statements show decreased revenues and a net loss, with improved operating cash flow and increased total assets [Condensed Consolidated Balance Sheets](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets increased to **$114.8 million** as of March 31, 2021, driven by cash and merchant payables, leading to a stockholders' deficit Condensed Consolidated Balance Sheet Highlights (in thousands) | Balance Sheet Item | March 31, 2021 | December 31, 2020 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $70,862 | $63,061 | | Total current assets | $83,097 | $70,044 | | Total assets | $114,825 | $102,400 | | **Liabilities & Equity** | | | | Merchant payable | $70,094 | $57,104 | | Total current liabilities | $100,123 | $82,870 | | Total liabilities | $113,147 | $95,900 | | Total stockholders' equity (deficit) | $(2,883) | $1,891 | [Condensed Consolidated Statements of Operations](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Q1 2021 revenues decreased to **$14.3 million**, but operating loss significantly narrowed to **$0.8 million** due to the absence of prior-year impairment charges Condensed Consolidated Statements of Operations (in thousands, except per share amounts) | Metric | Q1 2021 | Q1 2020 | | :--- | :--- | :--- | | Revenues | $14,284 | $20,327 | | Gross Profit | $11,266 | $17,624 | | Total operating expenses | $12,033 | $22,964 | | Impairment of intangible assets and goodwill | $0 | $2,920 | | Operating loss | $(767) | $(5,340) | | Net loss attributable to Travelzoo | $(1,642) | $(6,609) | | Loss per share—basic & diluted | $(0.14) | $(0.58) | [Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash provided by operating activities significantly improved to **$9.1 million** in Q1 2021, primarily due to increased merchant payables Summary of Cash Flows (in thousands) | Cash Flow Activity | Q1 2021 | Q1 2020 | | :--- | :--- | :--- | | Net cash provided by (used in) operating activities | $9,064 | $(3,056) | | Net cash used in investing activities | $(7) | $(810) | | Net cash used in financing activities | $(1,583) | $(2,205) | | **Net increase (decrease) in cash** | **$7,744** | **$(6,343)** | [Notes to Condensed Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) Notes detail accounting policies, the Jack's Flight Club acquisition, Asia Pacific business discontinuation, PPP loans, and related party transactions - In March 2020, Travelzoo exited its loss-making Asia Pacific (APAC) business, classified as discontinued operations, with Japan and Singapore units subsequently sold under licensing agreements[27](index=27&type=chunk)[28](index=28&type=chunk)[29](index=29&type=chunk) - In January 2020, Travelzoo acquired a **60%** stake in Jack's Flight Club for **$12.0 million**, establishing a new reporting segment[37](index=37&type=chunk)[72](index=72&type=chunk) - Due to COVID-19, the company recorded a goodwill impairment of **$2.1 million** and an intangible asset impairment of **$810,000** related to the Jack's Flight Club acquisition in Q1 2020[63](index=63&type=chunk)[77](index=77&type=chunk) - The company received **$3.7 million** in Paycheck Protection Program (PPP) loans in April and May 2020, with forgiveness applications pending as of March 31, 2021[130](index=130&type=chunk) - In March 2021, a license agreement with Azzurro Brands Inc. was established for a **$413,000** quarterly fee to access a **2.2 million** subscriber database[131](index=131&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=29&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the COVID-19 pandemic's impact, leading to a **30%** revenue decline, cost-cutting, narrowed operating loss, and sufficient liquidity despite negative working capital - The company's revenue model, based on advertising fees, was significantly impacted by the pandemic, though sales of fully refundable Getaways hotel vouchers show a slight reversal[141](index=141&type=chunk)[142](index=142&type=chunk)[149](index=149&type=chunk) - Significant cost-cutting measures were implemented in response to the pandemic, including ceasing Asia Pacific operations, employee furloughs, and renegotiating vendor contracts[158](index=158&type=chunk) - As of March 31, 2021, the company held **$70.9 million** in cash, deemed sufficient for the next twelve months despite **$17.0 million** negative working capital from high merchant payables[187](index=187&type=chunk)[188](index=188&type=chunk) [Results of Operations](index=33&type=section&id=Results%20of%20Operations) Q1 2021 revenues decreased **30%** to **$14.3 million** across segments, while operating expenses were nearly halved, significantly narrowing the operating loss Consolidated Revenue by Segment (in thousands) | Segment | Q1 2021 | Q1 2020 | | :--- | :--- | :--- | | Travelzoo North America | $9,819 | $12,697 | | Travelzoo Europe | $3,578 | $6,947 | | Jack's Flight Club | $887 | $683 | | **Total revenues** | **$14,284** | **$20,327** | - North America revenue decreased by **$2.9 million**, primarily from lower Top 20/Newsflash and hotel commission revenues, partially offset by a **$3.4 million** increase in Getaways voucher sales[169](index=169&type=chunk) - Europe revenue decreased by **$3.4 million**, driven by declines in travel advertising, partially offset by a **$1.9 million** increase in Getaways voucher sales[170](index=170&type=chunk) - Sales and marketing expenses nearly halved to **$6.8 million** from **$13.1 million**, primarily due to **$1.7 million** lower headcount costs and **$1.5 million** cut in member acquisition[174](index=174&type=chunk)[175](index=175&type=chunk) - General and administrative expenses decreased to **$4.6 million** from **$5.5 million**, mainly due to a **$1.3 million** reduction in bad debt expense, partially offset by an **$845,000** increase in stock-based compensation[177](index=177&type=chunk)[178](index=178&type=chunk) [Liquidity and Capital Resources](index=38&type=section&id=Liquidity%20and%20Capital%20Resources) The company held **$70.9 million** in cash as of March 31, 2021, with a **$7.8 million** increase from operations, despite **$17.0 million** negative working capital Cash Flow Summary (in thousands) | Activity | Q1 2021 | Q1 2020 | | :--- | :--- | :--- | | Net cash provided by (used in) operating activities | $9,064 | $(3,056) | | Net cash used in investing activities | $(7) | $(810) | | Net cash used in financing activities | $(1,583) | $(2,205) | | **Net increase (decrease) in cash** | **$7,744** | **$(6,343)** | - The company has negative working capital of **$17.0 million** as of March 31, 2021, primarily due to a large increase in merchant payables from voucher sales[188](index=188&type=chunk) - Cash used in financing activities of **$1.6 million** in Q1 2021 was for the repurchase of common stock[194](index=194&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=41&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) Disclosure about market risk is not required as the company qualifies as a smaller reporting company - Disclosure about market risk is not required as Travelzoo qualifies as a smaller reporting company[207](index=207&type=chunk) [Controls and Procedures](index=41&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of March 31, 2021, with no material changes to internal control over financial reporting - Management concluded that disclosure controls and procedures were effective as of March 31, 2021[208](index=208&type=chunk) - No material changes to internal control over financial reporting were identified during the quarter ended March 31, 2021[209](index=209&type=chunk) [PART II—OTHER INFORMATION](index=42&type=section&id=PART%20II%E2%80%94OTHER%20INFORMATION) [Legal Proceedings](index=42&type=section&id=Item%201.%20Legal%20Proceedings) The company is subject to various legal proceedings, with management assessing the likelihood of material liability as remote, as detailed in Note 4 - The company incorporates by reference information on legal proceedings from 'Note 4—Commitments and Contingencies'[212](index=212&type=chunk) [Risk Factors](index=42&type=section&id=Item%201A.%20Risk%20Factors) This section incorporates by reference the risk factors detailed in the company's Annual Report on Form 10-K for fiscal year 2020 - The company refers to the risk factors detailed in its Form 10-K for the year ended December 31, 2020[213](index=213&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=42&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) In Q1 2021, the company repurchased **100,000** shares from its CEO for **$1.6 million**, separate from the existing stock repurchase program with **395,029** shares remaining - In March 2021, the company repurchased **100,000** shares from CEO Holger Bartel at an average price of **$15.83** per share[214](index=214&type=chunk)[215](index=215&type=chunk) - As of March 31, 2021, **395,029** shares remained available for repurchase under the May 2019 stock repurchase program[215](index=215&type=chunk) [Exhibits](index=43&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with the Form 10-Q, including corporate governance documents and CEO/CFO certifications

NASDAQ: TZOO First Quarter 2021 Performance April 22, 2021 Important Notice to Investors Please read this management presentation together with the Company's press release issued earlier today announcing the Company's first quarter 2021 financial results and in conjunction with the Company's recent Annual Report and Quarterly Results as filed with the Securities and Exchange Commission (SEC). Certain statements contained in this presentation that are not historical facts may be forward looking statements wi ...

Travelzoo (NASDAQ:TZOO) Q1 2021 Earnings Conference Call April 22, 2021 11:00 AM ET Company Participants Lisa Su - CAO Holger Bartel - CEO Conference Call Participants Michael Kupinski - NOBLE Capital Markets Jim Goss - Barrington Research Steve Silver - Argus Research Ed Woo - Ascendiant Capital Operator Hello, everyone. Welcome to the Travelzoo First Quarter 2021 Financial Results Conference Call. All participants have been placed in a listen-only mode and the floor will be open for questions following th ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ______________________________________________________________________________ Form 10-K ______________________________________________________________________________ (Mark One) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2020 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to . ...

Travelzoo (NASDAQ:TZOO) Q4 2020 Earnings Conference Call March 17, 2021 11:00 AM ET Company Participants Lisa Su - CAO Holger Bartel - CEO Conference Call Participants Michael Kupinski - NOBLE Capital Markets Jim Goss - Barrington Research Ed Woo - Ascendiant Capital Steve Silver - Argus Research Operator Hello, everyone. Welcome to the Travelzoo Fourth Quarter 2020 Financial Results Conference Call. [Operator Instructions] Today's call is being recorded. The company would like to remind you that all state ...

NASDAQ: TZOO Fourth Quarter 2020 Performance March 17, 2021 Important Notice to Investors Please read this management presentation together with the Company's press release issued earlier today announcing the Company's fourth quarter 2020 financial results and in conjunction with the Company's recent Annual Report and Quarterly Results as filed with the Securities and Exchange Commission (SEC). Certain statements contained in this presentation that are not historical facts may be forward looking statements ...