tzoo-20220331

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

______________________________________________________________________________

Form 10-Q

______________________________________________________________________________

(Mark One)


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2022


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to .

Commission File No.: 000-50171

_______________________________________________________________________________

Travelzoo

(Exact name of registrant as specified in its charter)

________________________________________________________________________________


Delaware			36-4415727
(State or other jurisdiction of incorporation or organization)			(I.R.S. employer identification no.)

590 Madison Avenue, 35th Floor New York, New York			10022
(Address of principal executive offices)			(Zip code)

Registrant’s telephone number, including area code: (212) 484-4900

SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common Stock, $0.01 par value

TZOO

The NASDAQ Stock Market

_________________________________________________________________________________

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨

Indicate by check mark whether the Registrant has submitted electronically every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the Registrant was required to submit and post such files). Yes x No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See definition of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer	¨	Accelerated filer	¨
Non-accelerated filer	☒	Smaller reporting company	☒
		Emerging growth company	¨
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revisited financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.			¨

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No x

The number of shares of Travelzoo common stock outstanding as of May 2, 2022 was 12,595,762 shares.

TRAVELZOO

Table of Contents


PART I—FINANCIAL INFORMATION			Page

Item 1. Financial Statements (Unaudited)			3
Condensed Consolidated Balance Sheets as of March 31, 2022			4
Condensed Consolidated Statements of Operations for the Three Months Ended March 31, 2022 and 2021			5
Condensed Consolidated Statements of Comprehensive Income (Loss) for the Three Months Ended March 31, 2022 and 2021			6
Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2022 and 2021			7
Condensed Consolidated Statements of Stockholders' Equity for the Three Months Ended March 31, 2022 and 2021			8
Notes to Condensed Consolidated Financial Statements			9
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations			27
Item 3. Quantitative and Qualitative Disclosures About Market Risk			39
Item 4. Controls and Procedures			39

PART II—OTHER INFORMATION

Item 1. Legal Proceedings			40

Item 1A. Risk Factors			40

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds			40

Item 6. Exhibits			41
Signature			42

PART I—FINANCIAL INFORMATION

Item 1. Financial Statements

TRAVELZOO

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

(In thousands, except par value)


	March 31, 2022		December 31, 2021
ASSETS
Current assets:
Cash and cash equivalents	$	35,617	$	43,815
Accounts receivable, less allowance for doubtful accounts of $1,981 and $2,094 as of March 31, 2022 and December 31, 2021, respectively	18,163		14,871
Prepaid income taxes	2,547		3,325
Prepaid expenses and other	1,513		1,891
Prepaid expenses—related party	—		1,150
Assets from discontinued operations	63		71
Total current assets	57,903		65,123
Deposits and other	6,588		6,784
Deferred tax assets	3,887		3,949
Restricted cash	1,121		1,142
Operating lease right-of-use assets	6,679		7,700
Property and equipment, net	572		659
Intangible assets, net	5,189		3,426
Goodwill	10,944		10,944
Total assets	$	92,883	$	99,727
LIABILITIES AND STOCKHOLDERS’ DEFICIT
Current liabilities:
Accounts payable	$	3,453	$	3,411
Merchant payables	60,479		68,678
Accrued expenses and other	9,171		10,212
Deferred revenue	2,317		1,733
Operating lease liabilities	2,813		3,180
Income tax payable	30		185
Liabilities from discontinued operations	488		485
Total current liabilities	78,751		87,884

Long-term operating lease liabilities	8,617		9,111
Other long-term liabilities	2,380		2,364
Total liabilities	89,748		99,359
Commitments and contingencies	—		—
Non-controlling interest	4,604		4,600
Stockholders’ deficit:
Common stock, $0.01 par value (20,000 shares authorized; 12,551 shares issued and 12,056 shares issued and outstanding as of March 31, 2022 and December 31, 2021)	126		126
Treasury stock (at cost, 495 shares at March 31, 2022 and December 31, 2021)	(5,488)		(5,488)
Additional paid in capital	4,957		4,415
Retained earnings	2,867		508
Accumulated other comprehensive loss	(3,931)		(3,793)
Total stockholders’ deficit	(1,469)		(4,232)
Total liabilities and stockholders’ deficit	$	92,883	$	99,727

See accompanying notes to unaudited condensed consolidated financial statements.

TRAVELZOO

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

(In thousands, except per share amounts)


	Three Months Ended
	March 31,
	2022		2021
Revenues	$	18,453	$	14,284
Cost of revenues	2,832		3,018
Gross profit	15,621		11,266
Operating expenses:
Sales and marketing	8,581		6,790
Product development	453		683
General and administrative	4,668		4,560
Impairment of intangible assets and goodwill	—

SEC Form 10-Q filed by Travelzoo