What changed in this filing

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Item 1. Financial Statements

2024-11-08 compared with 2024-08-09 · 150 added, 129 removed, 588 unchanged (32% of the section changed)

2 unchanged sentences

(In thousands, except par value)

September 30,

2024 December 31,

1 unchanged sentence

Cash and cash equivalents $ 11,429 $ 15,713

Accounts receivable, less allowance for doubtful accounts of $ 1,554 and $ 1,484 as of June 30, 2024 and December 31, 2023, respectively

Accounts receivable, less allowance for doubtful accounts of $ 1,719 and $ 1,484 as of September 30, 2024 and December 31, 2023, respectively

13,167 12,965

26 unchanged sentences

Stockholders’ equity:

Common stock, $ 0.01 par value ( 20,000 shares authorized;

12,402 shares issued and outstanding as of June 30, 2024, 13,575 shares issued and outstanding as of December 31, 2023)

Common stock, $ 0.01 par value ( 20,000 shares authorize d;

11,880 shares issued and outstanding as of September 30, 2024, 13,575 shares issued and outstanding as of December 31, 2023)

Additional paid in capital — 439

Tax indemnification ( 9,537 ) ( 9,537 )

Note receivable from shareholder ( 1,753 ) ( 1,753 )

Note receivable and account receivable from shareholder ( 1,929 ) ( 1,753 )

Retained earnings 14,195 19,508

Accumulated other comprehensive loss ( 5,079 ) ( 4,607 )

Total Travelzoo stockholders’ equity 966 4,186

Total Travelzoo stockholders’ equity (deficit) ( 2,231 ) 4,186

Non-controlling interest 4,751 4,697

4 unchanged sentences

(In thousands, except per share amounts)

Three Months Ended Six Months Ended

June 30, June 30,

Three Months Ended Nine Months Ended

September 30, September 30,

2024 2023 2024 2023

12 unchanged sentences

Income from continuing operations 3,256 2,405 10,401 8,749

Income from discontinued operations, net of taxes — 2 — —

Loss from discontinued operations, net of taxes — ( 5 ) — ( 5 )

Net income 3,256 2,400 10,401 8,744

Net income (loss) attributable to non-controlling interest ( 7 ) 37 ( 18 ) 45

Net income attributable to non-controlling interest 72 52 54 97

Net income attributable to Travelzoo $ 3,184 $ 2,348 $ 10,347 $ 8,647

Net income attributable to Travelzoo—continuing operations $ 3,184 $ 2,353 $ 10,347 $ 8,652

Net income attributable to Travelzoo—discontinued operations $ — $ 2 $ — $ —

Net loss attributable to Travelzoo—discontinued operations $ — $ ( 5 ) $ — $ ( 5 )

Income per share—basic

13 unchanged sentences

(In thousands)

Three Months Ended Six Months Ended

June 30, June 30,

Three Months Ended Nine Months Ended

September 30, September 30,

2024 2023 2024 2023

6 unchanged sentences

(In thousands)

Six Months Ended

Nine Months Ended

September 30,

Cash flows from operating activities:

6 unchanged sentences

Net foreign currency effect ( 165 ) 53

Net recoveries of accounts receivable and refund reserves ( 7 ) ( 829 )

Recoveries of (loss on) accounts receivable and refund reserves 121 ( 944 )

Changes in operating assets and liabilities, net of acquisitions:

18 unchanged sentences

Effect of exchange rate changes on cash, cash equivalents and restricted cash ( 214 ) 80

Net increase (decrease) in cash, cash equivalents and restricted cash ( 3,146 ) 819

Net decrease in cash, cash equivalents and restricted cash ( 4,283 ) ( 2,796 )

Cash, cash equivalents and restricted cash at beginning of period 16,389 19,378

14 unchanged sentences

Travelzoo Stockholders’

Equity Non-controlling interest Total

Equity (Deficit) Non-controlling interest Total

Stockholders’

Shares Amount

Balances, March 31, 2024 13,202 $ 132 $ — $ — $ ( 9,537 ) $ ( 1,753 ) $ 20,125 $ ( 4,861 ) $ 4,106 $ 4,686 $ 8,792

Balances, June 30, 2024 12,402 $ 124 $ — $ — $ ( 9,537 ) $ ( 1,753 ) $ 17,083 $ ( 4,951 ) $ 966 $ 4,679 $ 5,645

Stock-based compensation expense — — — 456 — — — — 456 — 456

3 unchanged sentences

Exercise of stock options and taxes paid for net share settlement 31 — — ( 335 ) — — — — ( 335 ) — ( 335 )

Account receivable from shareholder — — — — — ( 176 ) — — ( 176 ) — ( 176 )

Foreign currency translation adjustment — — — — — — — ( 128 ) ( 128 ) — ( 128 )

Net income — — — — — — 3,184 — 3,184 72 3,256

Balances, June 30, 2024 12,402 $ 124 $ — $ — $ ( 9,537 ) $ ( 1,753 ) $ 17,083 $ ( 4,951 ) $ 966 $ 4,679 $ 5,645

Balances, September 30, 2024 11,880 $ 119 $ — $ — $ ( 9,537 ) $ ( 1,929 ) $ 14,195 $ ( 5,079 ) $ ( 2,231 ) $ 4,751 $ 2,520

(1) Includes a 1 % excise tax applicable to share repurchases.

7 unchanged sentences

Shares Amount

Balances, March 31, 2023 16,505 $ 165 $ ( 7,316 ) $ 23,670 $ ( 9,537 ) $ ( 4,753 ) $ 10,815 $ ( 4,825 ) $ 8,219 $ 4,603 $ 12,822

Balances, June 30, 2023 15,170 $ 152 $ — $ 11,816 $ ( 9,537 ) $ ( 4,753 ) $ 13,441 $ ( 4,690 ) $ 6,429 $ 4,640 $ 11,069

Stock-based compensation expense — — — 359 — — — — 359 — 359

4 unchanged sentences

Net income — — — — — — 2,348 — 2,348 52 2,400

Balances, June 30, 2023 15,170 $ 152 $ — $ 11,816 $ ( 9,537 ) $ ( 4,753 ) $ 13,441 $ ( 4,690 ) $ 6,429 $ 4,640 $ 11,069

Balances, September 30, 2023 14,166 $ 142 $ — $ 5,186 $ ( 9,537 ) $ ( 4,753 ) $ 15,789 $ ( 4,803 ) $ 2,024 $ 4,692 $ 6,716

Common Stock Treasury Stock Additional

3 unchanged sentences

Travelzoo Stockholders’

Equity Non-controlling interest Total

Equity (Deficit) Non-controlling interest Total

Stockholders’

6 unchanged sentences

Exercise of stock options and taxes paid for net share settlement 58 — — ( 591 ) — — — — ( 591 ) — ( 591 )

Account receivable from shareholder — — — — — ( 176 ) — — ( 176 ) — ( 176 )

Foreign currency translation adjustment — — — — — — — ( 472 ) ( 472 ) — ( 472 )

Net income — — — — — — 10,347 — 10,347 54 10,401

Balances, June 30, 2024 12,402 $ 124 $ — $ — $ ( 9,537 ) $ ( 1,753 ) $ 17,083 $ ( 4,951 ) $ 966 $ 4,679 $ 5,645

Balances, September 30, 2024 11,880 $ 119 $ — $ — $ ( 9,537 ) $ ( 1,929 ) $ 14,195 $ ( 5,079 ) $ ( 2,231 ) $ 4,751 $ 2,520

(1) Includes a 1 % excise tax applicable to share repurchases.

14 unchanged sentences

Net income — — — — — — 8,647 — 8,647 97 8,744

Balances, June 30, 2023 15,170 $ 152 $ — $ 11,816 $ ( 9,537 ) $ ( 4,753 ) $ 13,441 $ ( 4,690 ) $ 6,429 $ 4,640 $ 11,069

Balances, September 30, 2023 14,166 $ 142 $ — $ 5,186 $ ( 9,537 ) $ ( 4,753 ) $ 15,789 $ ( 4,803 ) $ 2,024 $ 4,692 $ 6,716

See accompanying notes to unaudited condensed consolidated financial statements.

8 unchanged sentences

Offers are sourced from more than 5,000 top travel and entertainment partners.

The Company generates revenues from advertising, membership fees, and other.

The Company generates revenues from advertising, membership fees, and other sources.

In March 2022, the Company began the development of Travelzoo META, a subscription service that is intended to provide Metaverse travel experiences.

6 unchanged sentences

Azzurro Capital Inc.

is the Company’s largest shareholder, and as of June 30, 2024, holds approximately 40.8 % of the Company's outstanding shares.

Holger Bartel, the Company's Global CEO, is Ralph Bartel's brother and separately holds 2.5 % of the Company's outstanding shares as of June 30, 2024.

is the Company’s largest shareholder, and as of September 30, 2024, holds approximately 40.8 % of the Company's outstanding shares.

Financial Statements

11 unchanged sentences

Actual results could differ materially from those estimates.

The results of operations for the six months ended June 30, 2024 are not necessarily indicative of the results that may be expected for the year ending December 31, 2024 or any other future period, and the Company makes no representations related thereto.

The results of operations for the nine months ended September 30, 2024 are not necessarily indicative of the results that may be expected for the year ending December 31, 2024 or any other future period, and the Company makes no representations related thereto.

(b) Recent Accounting Pronouncements

14 unchanged sentences

The Company's revenues consist of (1) advertising revenues and commissions, derived from and generated in connection with purchases made by Travelzoo members, (2) membership fees and (3) other.

Advertising Revenues

Advertising Revenues and Commissions

Advertising revenues are generated from the publishing of travel and entertainment deals on the Travelzoo website, in Top 20 email newsletters, in Standalone email newsletters and through the Travelzoo Network .

27 unchanged sentences

Deferred revenue primarily consists of deferred membership fees, customer prepayments and undelivered Company performance obligations related to contracts comprising multiple performance obligations.

As of December 31, 2023, $ 1.5 million was recorded as deferred revenue for Jack's Flight Club, of which $ 1.2 million was recognized in the six months ended June 30, 2024 , $ 569,000 was recorded as deferred revenue for Travelzoo North America and Travelzoo Europe, of which $ 532,000 was recognized as revenue in the six months ended June 30, 2024 .

As of June 30, 2024, the deferred revenue balance was $ 3.2 million, of which $ 2.0 million was for Jack's Flight Club and the remaining $ 1.2 million was for Travelzoo North America and Travelzoo Europe.

As of December 31, 2023, $ 1.5 million was recorded as deferred revenue for Jack's Flight Club, of which $ 1.4 million was recognized in the nine months ended September 30, 2024 , $ 569,000 was recorded as deferred revenue for Travelzoo North America and Travelzoo Europe, of which $ 559,000 was recognized as revenue in the nine months ended September 30, 2024 .

As of September 30, 2024, the deferred revenue balance was $ 3.9 million, of which $ 2.3 million was for Jack's Flight Club and the remaining $ 1.5 million was for Travelzoo North America and Travelzoo Europe.

Reserve for Refunds to Members

4 unchanged sentences

The Company's refund policy is a 14-day refund period from date of purchase, with an option to extend refund eligibility until voucher redemption or expiration, for a surcharge.

As of June 30, 2024, the expiration dates of unexpired vouchers ranged from July 2024 through December 2025;

As of September 30, 2024, the expiration dates of unexpired vouchers ranged from October 2024 through December 2025;

provided, that expiration dates may sometimes be extended on a case-by-case basis and final payments to merchants upon expiration may not be due for up to a year later.

As of June 30, 2024, the Company had approximately $ 4.2 million of unredeemed vouchers that had been sold, representing the Company’s commission earned.

The Company estimated and recorded a refund reserve of $ 177,000 for these unredeemed vouchers as of June 30, 2024, which is recorded as a reduction of revenues on the condensed consolidated statements of operations and accrued expenses and other on the condensed consolidated balance sheet.

As of September 30, 2024, the Company had approximately $ 4.3 million of unredeemed vouchers that had been sold, representing the Company’s commission earned.

The Company estimated and recorded a refund reserve of $ 142,000 for these unredeemed vouchers as of September 30, 2024, which is recorded as a reduction of revenues on the condensed consolidated statements of operations and accrued expenses and other on the condensed consolidated balance sheet.

As of December 31, 2023, the Company had approximately $ 5.2 million of unredeemed vouchers that had been sold representing the Company’s commission earned from the sale and estimated a refund reserve of $ 268,000 for these unredeemed vouchers as of December 31, 2023, as a reduction of revenues on the condensed consolidated statements of operations and accrued expenses and other on the condensed consolidated balance sheet.

If our judgments regarding estimated member refunds are inaccurate, reported results of operations could differ from amounts previously accrued.

Merchant payables of $ 16.7 million as of June 30, 2024 is recorded on the consolidated balance sheet, representing amounts payable to merchants by the Company for vouchers sold but not redeemed.

Merchant payables of $ 17.3 million as of September 30, 2024 is recorded on the consolidated balance sheet, representing amounts payable to merchants by the Company for vouchers sold but not redeemed.

Identifiable intangible assets

6 unchanged sentences

The Company performed its annual impairment testing as of October 31, 2023 and no impairment charge was identified in connection with the annual impairment test .

The Company did no t identify any indicators of impairment during the six months ended June 30, 2024.

The Company did no t identify any indicators of impairment during the nine months ended September 30, 2024.

Operating Leases

14 unchanged sentences

and internationally.

As of June 30, 2024 and December 31, 2023, the Company did not have any customers that accounted for 10% or more of accounts receivable.

As of June 30, 2024, the Company had merchant payables of $ 16.7 million related to the sale of vouchers.

As of September 30, 2024 and December 31, 2023, the Company did not have any customers that accounted for 10% or more of accounts receivable.

As of September 30, 2024, the Company had merchant payables of $ 17.3 million related to the sale of vouchers.

In the Company’s financial statements presented in this 10-Q report, following GAAP accounting principles, we classified all merchant payables as current.

As such, the consolidated balance sheet reflects negative net working capital (defined as current assets minus current liabilities) of $ 4.3 million at June 30, 2024.

As such, the consolidated balance sheet reflects negative net working capital (defined as current assets minus current liabilities) of $ 7.0 million at September 30, 2024.

Payables to merchants are generally due upon redemption of vouchers by members who purchased them from the Company.

As of June 30, 2024, unredeemed vouchers have maturities ranging from July 2024 through December 2025 ;

As of September 30, 2024, unredeemed vouchers have maturities ranging from October 2024 through December 2025 ;

however, expiration dates may be extended on a case-by-case basis and final payment to merchants upon expiration may not be due for up to a year after.

Based on current projections of future redemption activity, management expects that cash on hand as of June 30, 2024 will be sufficient to provide for working capital needs for at least the next twelve months.

Based on current projections of future redemption activity, management expects that cash on hand as of September 30, 2024 will be sufficient to provide for working capital needs for at least the next twelve months.

Cash, Cash Equivalents and Restricted Cash

3 unchanged sentences

The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the unaudited condensed consolidated balance sheets to the total amounts shown in the unaudited condensed consolidated statements of cash flows:

June 30, December 31,

September 30, December 31,

Cash and cash equivalents $ 11,429 $ 15,713

2 unchanged sentences

Total cash, cash equivalents and restricted cash in the condensed consolidated statements of cash flows $ 12,106 $ 16,389

The Company’s restricted cash was included in noncurrent assets as of June 30, 2024 and December 31, 2023.

The Company’s restricted cash was included in noncurrent assets as of September 30, 2024 and December 31, 2023.

Net Income Per Share

3 unchanged sentences

The following table sets forth the calculation of basic and diluted net income (loss) per share (in thousands, except per share amounts):

Three Months Ended Six Months Ended

June 30, June 30,

Three Months Ended Nine Months Ended

September 30, September 30,

2024 2023 2024 2023

Net income attributable to Travelzoo—continuing operations $ 3,184 $ 2,353 $ 10,347 $ 8,652

Net income attributable to Travelzoo—discontinued operations $ — $ 2 $ — $ —

Net loss attributable to Travelzoo—discontinued operations $ — $ ( 5 ) $ — $ ( 5 )

Weighted average common shares—basic 12,176 14,769 12,851 15,242

10 unchanged sentences

Net income per share—diluted $ 0.26 $ 0.16 $ 0.79 $ 0.56

For the three months ended June 30, 2024 and 2023, options to purchas e 850,000 and 750,000 shares of common stock, respectively, were not included in the computation of diluted net income per share because the effect would have been anti-dilutive.

For each of the six months ended June 30, 2024 and 2023, options to purchas e 750,000 shares of common stock were not included in the computation of diluted net income per share because the effect would have been anti-dilutive.

For the three and nine months ended September 30, 2024, options to purchas e 612,500 shares of common stock were not included in the computation of diluted net income per share because the effect would have been anti-dilutive.

For the three and nine months ended September 30, 2023, options to purchas e 950,000 and 750,000 shares of common stock, respectively, were not included in the computation of diluted net income per share because the effect would have been anti-dilutive.

Jack’s Flight Club

14 unchanged sentences

During the year ended December 31, 2023, Azzurro paid $ 3.0 million of principal.

The remaining principal amount of $ 1.8 million promissory note is collateralized by the Shares and is expected to be paid in 2024.

Azzurro paid interest of $ 70,000 and $ 190,000 in the three months ended September 30, 2024 and 2023 , respectively.

Azzurro paid interest of $ 210,000 and

$ 285,000 in the three months ended June 30, 2024 and 2023 , respectively.

Azzurro paid interest of $ 140,000 and $ 285,000 in the six months ended June 30, 2024 and 2023, respectively.

$ 475,000 in the nine months ended September 30, 2024 and 2023, respectively.

The remaining principal amount of $ 1.8 million, together with interest of $ 19,000 , was paid off in October 2024.

Intangible Assets

15 unchanged sentences

Amortization of Acquired Intangible Assets

The following table represents the activities of intangible assets for the three months ended June 30, 2024 and 2023 (in thousands):

The following table represents the activities of intangible assets for the three months ended September 30, 2024 and 2023 (in thousands):

Jack’s Flight Club Secret Escape Spain Secret Escape U.S.

12 unchanged sentences

Intangible assets—June 30, 2024 1,576 110 —

Amortization expense for acquired intangibles was $ 87,000 and $ 388,000 for the three months ended June 30, 2024 and 2023, respectively.

Amortization expense for acquired intangibles was $ 405,000 and $ 790,000 for the six months ended June 30, 2024 and 2023, respectively.

Expected future amortization expense of acquired intangible assets as of June 30, 2024 is as follows (in thousands):

Amortization of intangible assets with definite lives ( 58 ) ( 37 ) —

Intangible assets—September 30, 2024 $ 1,518 $ 73 $ —

Amortization expense for acquired intangibles was $ 95,000 and $ 381,000 for the three months ended September 30, 2024 and 2023, respectively.

Amortization expense for acquired intangibles was $ 500,000 and $ 1.2 million for the nine months ended September 30, 2024 and 2023, respectively.

Expected future amortization expense of acquired intangible assets as of September 30, 2024 is as follows (in thousands):

Years ending December 31,

2024 (excluding the six months ended June 30, 2024) 189

2024 (excluding the nine months ended September 30, 2024) 94

The Company performed its annual impairment testing of Trade name as of October 31, 2023 using a relief from royalty method.

No impairment was identified in 2023.

As of June 30, 2024, the carrying value of the Trade name was $ 1.5 million.

The Company did not identify any indicators of impairment during the six months ended June 30, 2024.

As of September 30, 2024, the carrying value of the Trade name was $ 1.5 million.

The Company did not identify any indicators of impairment during the nine months ended September 30, 2024.

Commitments and Contingencies

1 unchanged sentence

The Company accrues for legal contingencies if the Company can estimate the potential liability and believes it is probable that the matter will be ruled on adversely.

Accruals for legal contingencies were not material as of June 30, 2024 and December 31, 2023.

Accruals for legal contingencies were not material as of September 30, 2024 and December 31, 2023.

If a legal claim for which the Company did not accrue is resolved against it, the Company would record the expense in the period in which the ruling was made.

7 unchanged sentences

The LOCs are collateralized with cash which is included in the line item “Restricted cash” in the condensed consolidated balance sheets.

The Company has purchase commitments aggregating approximately $ 256,000 as of June 30, 2024, which represent the minimum obligations the Company has under agreements with certain suppliers.

The Company has purchase commitments aggregating approximately $ 112,000 as of September 30, 2024, which represent the minimum obligations the Company has under agreements with certain suppliers.

These minimum obligations are less than the Company’s projected use for those periods.

7 unchanged sentences

In determining the quarterly provisions for income taxes, the Company uses an estimated annual effective tax rate, which is generally based on our expected annual income and statutory tax rates in the U.S., Canada, and the U.K.

The Company’s effective tax rate from continuing operations was 30 % and 29 %, respectively, for the three months ended June 30, 2024 and 2023.

The Company’s effective tax rate for the three months ended June 30, 2024 changed from the three months ended June 30, 2023 primarily due to an increase in certain non-deductible expenses in the three months ended June 30, 2024.

The Company’s effective tax rate from continuing operations was 28 % for each of the six months ended June 30, 2024 and 2023.

As of June 30, 2024, the Company is permanently reinvested in certain of its non-U.S.

The Company’s effective tax rate from continuing operations was 26 % and 30 % for the three months ended September 30, 2024 and 2023, respectively.

The Company’s effective tax rate for the three months ended September 30, 2024 changed from the three months ended September 30, 2023 primarily due to a decrease of non-deductible expenses in certain jurisdictions in the three months ended September 30, 2024.

The Company’s effective tax rate from continuing operations was 27 % and 28 % for the nine months ended September 30, 2024 and 2023, respectively.

The Company’s effective tax rate for the nine months ended September 30, 2024 changed from the nine months ended September 30, 2023 primarily due to a decrease of non-deductible expenses in certain jurisdictions in the nine months ended September 30, 2024.

As of September 30, 2024, the Company is permanently reinvested in certain of its non-U.S.

subsidiaries and does not have a deferred tax liability related to its undistributed foreign earnings.

2 unchanged sentences

The Company maintains liabilities for uncertain tax positions.

As of June 30, 2024, the Company had approximately $ 23.9 million in total unrecognized tax benefits, of which up to $ 16.6 million would favorably affect the Company’s effective income tax rate if realized.

As of September 30, 2024, the Company had approximately $ 23.9 million in total unrecognized tax benefits, of which up to $ 16.6 million would favorably affect the Company’s effective income tax rate if realized.

The Company’s policy is to include interest and penalties related to unrecognized tax positions in income tax expense.

To the extent accrued interest and penalties do not ultimately become payable, amounts accrued will be reduced and reflected as a reduction in the overall income tax provision in the period that such determination is made.

As of June 30, 2024 and December 31, 2023, the Company had approximately $ 905,000 and $ 803,000 in accrued interest and penalties, respectively.

As of September 30, 2024 and December 31, 2023, the Company had approximately $ 989,000 and $ 803,000 in accrued interest and penalties, respectively.

The Company files income tax returns in the U.S.

5 unchanged sentences

The following table summarizes the changes in accumulated other comprehensive loss (in thousands):

Three Months Ended Six Months Ended

June 30, June 30,

Three Months Ended Nine Months Ended

September 30, September 30,

2024 2023 2024 2023

2 unchanged sentences

Ending balance $ ( 5,079 ) $ ( 4,803 ) $ ( 5,079 ) $ ( 4,803 )

There were no amounts reclassified from accumulated other comprehensive loss for the three and six months ended June 30, 2024 and 2023.

There were no amounts reclassified from accumulated other comprehensive loss for the three and nine months ended September 30, 2024 and 2023.

Accumulated other comprehensive income (loss) consists of foreign currency translation gain or loss.

6 unchanged sentences

Pursuant to the applicable amendments, the exercise price for the options was repriced to the official NASDAQ closing share price on March 30, 2020 (the date of execution of the amendments to the Option Agreements, which immediately followed the date of approval of the grants from the Board of Directors of the Company), which was $ 3.49 , the option grants were each increased to 100,000 each, resulting in 300,000 additional options in the aggregate.

In 2020, 100,000 unvested options were forfeited upo n an employee’s departure, 75,000 options were exercised and 54,258 shares of common stock were issued as the result of a cashless exercise which were approved by Travelzoo ’ s Board of Directors.

In 2021, 125,000 unvested options were forfeited upon employees’ departure, 150,000 options were exercised and 88,917 shares of common stock were issued as the result of the cashless exercises or net settlement with respect to the option exercise price which were approved by Travelzoo’s Board of Directors.

No option was exercised in 2022.

In 2023, 50,000 options were exercised and 18,098 shares of common stock were issued as the result of the cashless exercises or net settlement with respect to the option exercise price which were approved by Travelzoo’s Board of Directors.

As of December 31, 2023, stock-based compensation related to these Option Agreements and applicable Option Agreement Amendments were fully expensed.

During the six months ended June 30, 2024, 75,000 options were exercised and 26,871 shares of common stock were issued as the result of the cashless exercises or net settlement with respect to the option exercise price which were approved by Travelzoo’s Board of Directors.

As of June 30, 2024, all options granted under these Option Agreements have been exercised or forfeited.

During the nine months ended September 30, 2024, 75,000 options were exercised and 26,871 shares of common stock were issued as the result of the cashless exercises or net settlement with respect to the option exercise price which was approved by Travelzoo’s Board of Directors.

As of September 30, 2024, all options granted under these Option Agreements have been exercised or forfeited.

On May 29, 2020, pursu ant to an executed Option Agreement, the shareholders of the Company approved the grant of stock options to purchase 800,000 shares of common stock to Mr.

2 unchanged sentences

This grant was approved at the 2020 Annual Meeting of the shareholders.

In 2021, 600,000 options were exercised and 390,809 shares of common stock were issued as the result of the cashless exercises which were approved by Travelzoo’s Board of Directors.

In 2021, 600,000 options were exercised and 390,809 shares of common stock were issued as the result of the cashless exercises which was approved by Travelzoo’s Board of Directors.

S tock-based compensation related to this grant was fully expensed in 2022.

In 2023, the remaining 200,000 options were exercised and 121,307 shares of common stock were issued as the result of the cashless exercises which were approved by Travelzoo’s Board of Directors.

In 2023, the remaining 200,000 options were exercised and 121,307 shares of common stock were issued as the result of the cashless exercises which was approved by Travelzoo’s Board of Directors.

On May 29, 2020, pursuant to an execut ed Option Agreement, the shareholders of the Company approved the grant of stock options to purchase 200,000 shares of common stock to two key employees, with an exercise price of $ 3.49 with annual vesting starting March 30, 2021 and ending on March 31, 2024.

The options expire in March 2025.

In 2021, 50,000 options were exercised, and 24,474 shares of common stock were issued as the result of the cashless exercises which were approved by Travelzoo’s Board of Directors.

In 2022, 50,000 unvested options were forfeited upon one employee’s departure, 25,000 options were exercised and 4,676 shares of common stock were issued as the result of the cashless exercises or net settlement with respect to the option exercise price which were approved by Travelzoo’s Board of Directors.

In 2023 , 50,000 options were exercised and 16,619 shares of common stock were issued as the result of the cashless exercises which were approved by Travelzoo’s Board of Directors.

As of June 30, 2024, 25,000 options were vested and outstanding.

In 2021, 50,000 options were exercised, and 24,474 shares of common stock were issued as the result of the cashless exercises which was approved by Travelzoo’s Board of Directors.

In 2023 , 50,000 options were exercised and 16,619 shares of common stock were issued as the result of the cashless exercises which was approved by Travelzoo’s Board of Directors.

During the three months ended September 30, 2024, 25,000 options were exercised and 8,420 shares of common stock were issued as the result of the cashless exercises or net settlement with respect to the option exercise price which was approved by Travelzoo’s Board of Directors.

Total stock-based compensation related to this option grant of $ 25,000 was recorded in general and administrative expenses for the nine months ended September 30, 2024.

S tock-based compensation related to this grant was fully expensed as of March 31, 2023.

Total stock-based compensation related to this option grant of $ 25,000 was recorded in general and administrative expenses for the six months ended June 30, 2024.

Total stock-based compensation related to this option grant of $ 25,000 and $ 50,000 was recorded in general and administrative expenses for the three and six months ended June 30, 2023, respectively.

Total stock-based compensation related to this option grant of $ 25,000 and $ 74,000 was recorded in general and administrative expenses for the three and nine months ended September 30, 2023, respectively.

As of September 30, 2024, all options granted under this Option Agreement have been exercised or forfeited.

On June 1, 2021, pursuant t o an executed Option Agreement, the shareholders of the Company approved the grant of stock options to purchase 50,000 shares of common stock to one employee, with an exercise price of $ 9.44 , with annual vesting starting January 1, 2022 and ending on January 1, 2025.

The options expire in January 2026.

As of June 30, 2024, 50,000 options were outstanding and 37,500 of these options were vested.

Total stock-based compensation related to this option grant of $ 36,000 was recorded in general and administrative expenses for each of the three months ended June 30, 2024 and 2023, respectively.

Total stock-based compensation related to this option grant of $ 72,000 was recorded in general and administrative expenses for each of the six months ended June 30, 2024 and 2023, respectively.

As of June 30, 2024, there was approximately $ 72,000 of unrecognized stock-based compensation expense relating to these options.

During the three months ended September 30, 2024, 37,500 options were exercised and 3,358 shares of common stock were issued as the result of the cashless exercises or net settlement with respect to the option exercise price which was approved by Travelzoo’s Board of Directors.

As of September 30, 2024, 12,500 options were outstanding and none of these options was vested.

Total stock-based compensation related to this option grant of $ 36,000 was recorded in general and administrative expenses for each of the three months ended September 30, 2024 and 2023, respectively.

Total stock-based compensation related to this option grant of $ 108,000 was recorded in general and administrative expenses for each of the nine months ended September 30, 2024 and 2023, respectively.

As of September 30, 2024, there was approximately $ 36,000 of unrecognized stock-based compensation expense relating to these options.

This amount is expected to be recognized over the next 0.3 years.

2 unchanged sentences

This grant was approved at the 2022 Annual Meeting of the shareholders.

As of June 30, 2024, 600,000 options were vested and outstanding.

During the three and six months ended June 30, 2023, $ 216,000 and $ 433,000 , respectively, was recorded in general and administrative expenses.

As of September 30, 2024, 600,000 options were vested and outstanding.

During the three and nine months ended September 30, 2023, $ 216,000 and $ 649,000 , respectively, was recorded in general and administrative expenses.

S tock-based compensation related to this grant was fully expensed in 2023.

3 unchanged sentences

The Company did not recognize stock-based compensation expense for this grant as the performance targets were not achieved and thus no shares were vested in 2022.

As of June 30, 2024, 100,000 options were outstanding and 33,333 of these options were vested.

The Company did not record stock-based compensation related to this option grant during the six months ended June 30, 2024 and thus no shares vested in the six months ended June 30, 2024.

Total stock-based compensation related to this option grant of $ 30,000 and $ 60,000 was recorded in sales and marketing expenses for the three and six months ended June 30, 2023, respectively.

As of June 30, 2024, there was approximately $ 239,000 of unrecognized stock-based compensation expense relating to these options.

Total stock-based compensation related to this option grant of $ 89,000 was recorded in sales and marketing expenses for the three and nine months ended September 30, 2024 and thus 25,000 shares were vested.

The Company did not record stock-based compensation expense for the three months ended September 30, 2023.

Total stock-based compensation related to this option grant of $ 60,000 was recorded in sales and marketing expenses for the nine months ended September 30, 2023 and thus 16,666 shares were vested.

As of September 30, 2024, 100,000 options were outstanding and 58,333 of these options were vested.

As of September 30, 2024, there was approximately $ 149,000 of unrecognized stock-based compensation expense relating to these options.

This amount is expected to be recognized over 1.0 year.

2 unchanged sentences

The options expire in March 2025.

As of June 30, 2024, 200,000 options were outstanding and 75,000 of these options were vested.

Total stock-based compensation related to this option grant of $ 35,000 and $ 52,000 was recorded in general and administrative expenses for the three months ended June 30, 2024 and 2023, respectively.

Total stock-based compensation related to this option grant of $ 70,000 was recorded in general and administrative expenses for each of the six months ended June 30, 2024 and 2023, respectively.

As of June 30, 2024, there was approximately $ 348,000 of unrecognized stock-based compensation expense relating to these options.

During the three months ended September 30, 2024, 75,000 options were exercised and 19,584 shares of common stock were issued as the result of the cashless exercises or net settlement with respect to the option exercise price which was approved by Travelzoo’s Board of Directors.

As of September 30, 2024, 125,000 options were outstanding and none of these options was vested.

Total stock-based compensation related to this option grant of $ 35,000 was recorded in general and administrative expenses for each the three months ended September 30, 2024 and 2023, respectively.

Total stock-based compensation related to this option grant of $ 104,000 was recorded in general and administrative expenses for each of the nine months ended September 30, 2024 and 2023, respectively.

As of September 30, 2024, there was approximately $ 313,000 of unrecognized stock-based compensation expense relating to these options.

This amount is expected to be recognized over 2.3 years.

2 unchanged sentences

The options expire in March 2029.

As of June 30, 2024, 600,000 options were outstanding and 150,000 of these options were vested.

Total stock-based compensation related to this option grant of $ 609,000 was recorded in general and administrative expenses for the three and six months ended June 30, 2024.

As of June 30, 2024, there was approximately $ 1.8 million of unrecognized stock-based compensation expense relating to these options.

As of September 30, 2024, 600,000 options were outstanding and 150,000 of these options were vested.

Total stock-based compensation related to this option grant of $ 305,000 and $ 914,000 was recorded in general and administrative expenses for the three and nine months ended September 30, 2024.

As of September 30, 2024, there was approximately $ 1.5 million of unrecognized stock-based compensation expense relating to these options.

This amount is expected to be recognized over 1.3 years .

1 unchanged sentence

The options expire in June 2029.

As of June 30, 2024, 100,000 options were outstanding and none of these options was vested.

Total stock-based compensation related to this option grant of $ 8,000 was recorded in general and administrative expenses for the three and six months ended June 30, 2024.

As of June 30, 2024, there was approximately $ 394,000 of unrecognized stock-based compensation expense relating to these options.

This amount is expected to be recognized over 4.0 years .

Upon management’s strategic decision to terminate the employee's employment in the three months ended September 30, 2024, 100,000 unvested options were forfeited.

Stock Repurchase Program

14 unchanged sentences

On April 29, 2024, Travelzoo announced that its board of directors has authorized the repurchase of up to 1,000,000 shares of the Company’s outstanding common stock.

During the three months ended June 30, 2024, the Company repurchased 600,000 shares of common stock for an aggregate purchase price of $ 5.0 million, excluding excise tax due under the Inflation Reduction Act of 2022, with such shares retired and recorded as a reduction of additional paid-in capital until extinguished with the remaining amount reflected as a reduction of retained earnings.

As of June 30, 2024, there were 400,000 shares remaining to be repurchased under this program.

The Company repurchased 600,000 shares and 352,679 shares of common stock for an aggregate purchase price of $ 5.0 million and $ 3.8 million, respectively, for the second and third quarter of 2024, excluding excise tax due under the Inflation Reduction Act of 2022, with such shares retired and recorded as a reduction of additional paid-in capital until extinguished with the remaining amount reflected as a reduction of retained earnings.

As of September 30, 2024, there were 47,321 shares remaining to be repurchased under this program.

On June 15, 2024, the Company entered into a Stock Repurchase Agreement with Mr.

2 unchanged sentences

Related Party Transactions for further information.

On September 5, 2024, the Company entered into a Stock Repurchase Agreement with Mr.

Holger Bartel to privately repurchase an aggregate of 200,000 shares of the Company’s common stock for an aggregate purchase price of $ 2.4 million, excluding excise tax due under the Inflation Reduction Act of 2022, with such shares retired and recorded as a reduction of additional paid-in capital until extinguished with the remaining amount reflected as a reduction of retained earnings.

This transaction was approved by the Compensation Committee of the Board of Directors.

Related Party Transactions for further information.

Segment Reporting and Significant Customer Information

9 unchanged sentences

The following is a summary of operating results by business segment (in thousands):

Three Months Ended June 30, 2024 Travelzoo North

Three Months Ended September 30, 2024 Travelzoo North

America Travelzoo Europe Jack’s Flight Club New Initiatives Consolidated

3 unchanged sentences

Operating profit (loss) $ 3,150 $ 1,028 $ 27 $ ( 160 ) $ 4,045

Three Months Ended June 30, 2023 Travelzoo North

Three Months Ended September 30, 2023 Travelzoo North

America Travelzoo Europe Jack’s Flight Club New Initiatives Consolidated

3 unchanged sentences

Operating profit (loss) $ 3,015 $ 267 $ 144 $ ( 317 ) $ 3,109

Six Months Ended June 30, 2024 Travelzoo North

Nine Months Ended September 30, 2024 Travelzoo North

America Travelzoo Europe Jack’s Flight Club New Initiatives Consolidated

3 unchanged sentences

Operating profit (loss) $ 11,305 $ 2,922 $ ( 106 ) $ ( 474 ) $ 13,647

Six Months Ended June 30, 2023 Travelzoo North

Nine Months Ended September 30, 2023 Travelzoo North

America Travelzoo Europe Jack’s Flight Club New Initiatives Consolidated

6 unchanged sentences

The following is a summary of assets by business segment (in thousands):

As of June 30, 2024 Travelzoo North

As of September 30, 2024 Travelzoo North

America Travelzoo Europe Jack’s Flight Club New Initiatives Elimination Consolidated

5 unchanged sentences

Total assets excluding discontinued operations $ 96,865 $ 22,655 $ 19,472 $ 3,570 $ ( 87,181 ) $ 55,381

For the three and six months ended June 30, 2024 and 2023, the Company did not have any customers that accounted for 10% or more of revenue.

As of June 30, 2024 and December 31, 2023, the Company did not have any customers that accounted for 10% or more of accounts receivable.

For the three and nine months ended September 30, 2024 and 2023, the Company did not have any customers that accounted for 10% or more of revenue.

As of September 30, 2024 and December 31, 2023, the Company did not have any customers that accounted for 10% or more of accounts receivable.

The following table sets forth the breakdown of revenues (in thousands) by category:

4 unchanged sentences

Other includes licensing fees from license agreements and the existing retail business acquired by the Company in the MTE transaction.

Three Months Ended Six Months Ended

June 30, June 30,

Three Months Ended Nine Months Ended

September 30, September 30,

2024 2023 2024 2023

7 unchanged sentences

The following table sets forth revenue for countries that exceed 10% of total revenue (in thousands):

Three Months Ended Six Months Ended

June 30, June 30,

Three Months Ended Nine Months Ended

September 30, September 30,

2024 2023 2024 2023

5 unchanged sentences

The following table sets forth property and equipment by geographic area (in thousands):

June 30, December 31,

September 30, December 31,

United States $ 78 $ 115

8 unchanged sentences

All of our leases qualify as operating leases.

The following table summarizes the components of lease expense for the three and six months ended June 30, 2024 and 2023 (in thousands):

Three Months Ended Six Months Ended

June 30, June 30,

The following table summarizes the components of lease expense for the three and nine months ended September 30, 2024 and 2023 (in thousands):

Three Months Ended Nine Months Ended

September 30, September 30,

2024 2023 2024 2023

4 unchanged sentences

Total lease cost $ 827 $ 678 $ 2,375 $ 2,174

Cash payments against the operating lease liabilities total ed $ 1.7 million for each of the six months ended June 30, 2024 and 2023, respectively.

ROU assets obtained in exchange for lease obligations was $ 646,000 for the six months ended June 30, 2024.

There wa s no ROU asset obtained in exchange for lease obligations for six months ended June 30, 2023.

Cash payments against the operating lease liabilities total ed $ 2.5 million for each of the nine months ended September 30, 2024 and 2023.

ROU assets obtained in exchange for lease obligations was $ 1.3 million for the nine months ended September 30, 2024.

ROU assets obtained in exchange for lease obligations was $ 512,000 for the nine months ended September 30, 2023.

The following table s ummarizes the presentation in our condensed consolidated balance sheets of our operating leases (in thousands):

June 30, 2024 December 31, 2023

September 30, 2024 December 31, 2023

Operating lease right-of-use assets $ 6,080 $ 6,015

6 unchanged sentences

Years ending December 31,

2024 (excluding the six months ended June 30, 2024) $ 1,311

2024 (excluding the nine months ended September 30, 2024) $ 713

Thereafter 1,681

4 unchanged sentences

The Company’s consolidated financial statements include Jack’s Flight Club where the Company has operating control but owns 60 % of the equity interest.

The non-controlling interest for the three and six months ended June 30, 2024 and 2023 was as follows (in thousands):

The non-controlling interest for the three and nine months ended September 30, 2024 and 2023 was as follows (in thousands):

Non-controlling interest—December 31, 2022 $ 4,595

11 unchanged sentences

Non-controlling interest—June 30, 2024 4,679

Net income attributable to non-controlling interest 72

Non-controlling interest—September 30, 2024 $ 4,751

Related Party Transactions

7 unchanged sentences

Donoghue and Mark Rubenstein, against Ralph Bartel, the Ralph Bartel 2005 Trust and Azzurro Capital Inc.

Stock Repurchase Agreement

Travelzoo, from time to time, engages in share repurchases, and on June 15, 2024, the Company entered into a Stock Repurchase Agreement (the “SRA”) with Holger Bartel, the Company's Global Chief Executive Officer, to repurchase an aggregate of 200,000 shares of the Company’s common stock at a price of $ 7.66 per share.

Travelzoo's compensation committee negotiated the purchase price with Holger Bartel after receiving advice from an independent financial adviser.

The aggregate purchase price of $ 1.5 million was paid during the three months ended June 30, 2024, following the execution of the SRA.

Stock Repurchase Agreements

Travelzoo, from time to time, engages in share repurchases.

On June 15, 2024, the Company entered into a Stock Repurchase Agreement (the “First SRA”) with Holger Bartel, the Company's Global Chief Executive Officer, to repurchase an aggregate of 200,000 shares of the Company’s common stock at a price of $ 7.66 per share.

The Compensation Committee of the Board of Directors negotiated the purchase price with Holger Bartel after receiving advice from an independent financial adviser.

The aggregate purchase price of $ 1.5 million was paid during the second quarter of 2024, following the execution of the First SRA.

On September 5, 2024, the Company entered into a Stock Repurchase Agreement (the “Second SRA”) with Holger Bartel, the Company's Global Chief Executive Officer, to repurchase an aggregate of 200,000 shares of the Company’s common stock at a price of $ 11.44 per share.

The Compensation Committee of the Board of Directors negotiated the purchase price with Holger Bartel after receiving advice from an independent financial adviser.

The aggregate purchase price of $ 2.4 million was paid during the three months ended September 30, 2024, following the execution of the Second SRA.

Subsequent Event

On October 23, 2024, Travelz oo announced that its board of directors has authorized the repurchase of up to 1,000,000 shares of the Company’s outstanding common stock.

Purchases may be made, from time to time, in the open market and will be funded from available cash.

The number of shares to be purchased and the timing of purchases will be based on the level of Travelzoo’s cash balances, general business and market conditions, and other factors, including alternative investment opportunities.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements