Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2017 | Oct. 26, 2017 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | Travelzoo | |
Entity Central Index Key | 1,133,311 | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2017 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | Q3 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 12,461,553 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Current assets: | ||
Cash and cash equivalents | $ 18,822 | $ 26,838 |
Accounts receivable, less allowance for doubtful accounts of $295 as of September 30, 2017 and December 31, 2016, respectively | 11,434 | 14,415 |
Income tax receivable | 1,540 | 542 |
Deferred tax assets | 0 | 793 |
Deposits | 396 | 105 |
Prepaid expenses and other | 1,961 | 1,773 |
Total current assets | 34,153 | 44,466 |
Deposits and other | 508 | 702 |
Deferred tax assets | 1,800 | |
Deferred tax assets | 1,052 | |
Restricted cash | 1,438 | 1,152 |
Property and equipment, net | 5,265 | 6,158 |
Total assets | 43,164 | 53,530 |
Current liabilities: | ||
Accounts payable | 15,966 | 19,714 |
Accrued expenses and other | 7,932 | 8,699 |
Deferred revenue | 897 | 719 |
Income tax payable | 936 | 691 |
Total current liabilities | 25,731 | 29,823 |
Long-term tax liabilities | 2,563 | 2,879 |
Long-term deferred rent and other | 2,721 | 2,764 |
Commitments and contingencies | ||
Stockholders’ equity: | ||
Common stock, $0.01 par value (40,000 shares authorized; 12,465 shares and 13,462 shares issued and outstanding as of September 30, 2017 and December 31, 2016, respectively) | 125 | 135 |
Additional paid in capital | 0 | 0 |
Retained earnings | 15,580 | 21,716 |
Accumulated other comprehensive loss | (3,556) | (3,787) |
Total stockholders’ equity | 12,149 | 18,064 |
Total liabilities and stockholders’ equity | $ 43,164 | $ 53,530 |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (Parenthetical) (Unaudited) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Statement of Financial Position [Abstract] | ||
Allowance for doubtful accounts | $ 295 | $ 295 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 40,000,000 | 40,000,000 |
Common stock, shares issued (in shares) | 12,465,000 | 13,462,000 |
Common stock, shares outstanding (in shares) | 12,465,000 | 13,462,000 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Income Statement [Abstract] | ||||
Revenues | $ 24,687 | $ 26,823 | $ 79,527 | $ 87,450 |
Cost of revenues | 3,018 | 3,270 | 9,447 | 10,593 |
Gross profit | 21,669 | 23,553 | 70,080 | 76,857 |
Operating expenses: | ||||
Sales and marketing | 13,973 | 14,075 | 43,542 | 45,060 |
Product development | 2,315 | 2,230 | 7,016 | 7,019 |
General and administrative | 5,363 | 5,373 | 16,056 | 16,620 |
Total operating expenses | 21,651 | 21,678 | 66,614 | 68,699 |
Income from continuing operations | 18 | 1,875 | 3,466 | 8,158 |
Other income (loss), net | 86 | 251 | 111 | 293 |
Income from continuing operations before income taxes | 104 | 2,126 | 3,577 | 8,451 |
Income tax expense | 680 | 748 | 2,660 | 3,450 |
Income (loss) from continuing operations | (576) | 1,378 | 917 | 5,001 |
Income from discontinued operations, net of income taxes | 0 | 241 | 1,938 | 687 |
Net income (loss) | $ (576) | $ 1,619 | $ 2,855 | $ 5,688 |
Income (loss) per share—basic: | ||||
Continuing operations (in dollars per share) | $ (0.05) | $ 0.10 | $ 0.07 | $ 0.35 |
Discontinued operations (in dollars per share) | 0 | 0.02 | 0.15 | 0.05 |
Net income (loss) per share - basic (in dollars per share) | (0.05) | 0.12 | 0.22 | 0.40 |
Income (loss) per share—diluted: | ||||
Continuing operations (in dollars per share) | (0.05) | 0.10 | 0.07 | 0.35 |
Discontinued operations (in dollars per share) | 0 | 0.02 | 0.15 | 0.05 |
Net income (loss) per share - diluted (in dollars per share) | $ (0.05) | $ 0.12 | $ 0.22 | $ 0.40 |
Shares used in computing basic net income (loss) per share (in shares) | 12,628 | 13,839 | 13,023 | 14,109 |
Shares used in computing diluted net income (loss) per share (in shares) | 12,628 | 13,867 | 13,040 | 14,119 |
Condensed Consolidated Stateme5
Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income (loss) | $ (576) | $ 1,619 | $ 2,855 | $ 5,688 |
Other comprehensive income (loss): | ||||
Foreign currency translation adjustment | 131 | (184) | 231 | 99 |
Total comprehensive income (loss) | $ (445) | $ 1,435 | $ 3,086 | $ 5,787 |
Condensed Consolidated Stateme6
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Cash flows from operating activities: | ||
Net income | $ 2,855 | $ 5,688 |
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | ||
Depreciation and amortization | 1,605 | 1,856 |
Discontinued operations: gain on sale of Fly.com domain name | (2,890) | 0 |
Provision for losses (gains) on accounts receivable | (34) | 17 |
Stock-based compensation | 686 | 692 |
Deferred income tax | 28 | (224) |
Net foreign currency effect | (293) | (308) |
Changes in operating assets and liabilities: | ||
Accounts receivable | 3,388 | (547) |
Income tax receivable | (868) | (299) |
Prepaid expenses and other | (417) | (387) |
Accounts payable | (4,695) | (4,391) |
Accrued expenses | (1,009) | (2,074) |
Income tax payable | 109 | 1,772 |
Other non-current liabilities | (349) | 121 |
Net cash provided by (used in) operating activities | (1,884) | 1,916 |
Cash flows from investing activities: | ||
Proceeds from sale of Fly.com domain name | 2,890 | 0 |
Purchases of property and equipment | (486) | (802) |
Net cash provided by (used in) investing activities | 2,404 | (802) |
Cash flows from financing activities: | ||
Acquisition of the Asia Pacific business | 0 | 58 |
Payment of loan to related party | 0 | (5,658) |
Repurchase of common stock | (9,556) | (5,727) |
Net cash used in financing activities | (9,556) | (11,327) |
Effect of exchange rate changes on cash and cash equivalents | 1,020 | (76) |
Net decrease in cash and cash equivalents | (8,016) | (10,289) |
Cash and cash equivalents at beginning of period | 26,838 | 35,128 |
Cash and cash equivalents at end of period | 18,822 | 24,839 |
Supplemental disclosure of cash flow information: | ||
Cash paid for income taxes, net | 4,858 | 2,198 |
Cash paid for interest on related party loan | $ 0 | $ 110 |
The Company and Basis of Presen
The Company and Basis of Presentation | 9 Months Ended |
Sep. 30, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
The Company and Basis of Presentation | The Company and Basis of Presentation Travelzoo (the “Company”) is a global publisher of travel and entertainment offers. The Company informs its members in Asia Pacific, Europe and North America, as well as website users, about the best travel, entertainment and local deals available from thousands of companies. The Company's deal experts source, negotiate, research and test-book offers, recommending only those that meet Travelzoo’s rigorous quality standards. The Company provides travel, entertainment, and local businesses with a fast, flexible, and cost effective way to reach consumers. The Company's revenues are generated primarily from advertising fees. Our publications and products include the Travelzoo website (travelzoo.com), the Travelzoo iPhone and Android apps, the Travelzoo Top 20 e-mail newsletter, the Newsflash e-mail alert service, and the Travelzoo Network , a network of third-party websites that list travel deals published by Travelzoo. Our Travelzoo website includes Local Deals and Getaway listings that allow our members to purchase vouchers for deals from local businesses such as spas, hotels and restaurants. We receive a percentage of the face value of the voucher from the local businesses. Ralph Bartel, who founded Travelzoo and who is a Director of the Company, is the sole beneficiary of the Ralph Bartel 2005 Trust, which is the controlling shareholder of Azzurro Capital Inc. ("Azzurro"). As of September 30, 2017 , Azzurro is the Company's largest stockholder, holding approximately 57.8% of the Company's outstanding shares. During the first quarter of 2017, the Company discontinued operations of its SuperSearch and Fly.com products to focus on its global Travelzoo® brand and reflected the revenues and expenses for these products as discontinued operations, net of taxes, for the current and prior periods presented. See "Note 9: Discontinued Operations" for further information. The accompanying unaudited condensed consolidated financial statements have been prepared by the Company in accordance with the rules and regulations of the U.S. Securities and Exchange Commission (SEC). Certain information and footnote disclosures normally included in consolidated financial statements prepared in accordance with generally accepted accounting principles in the United States of America have been condensed or omitted in accordance with such rules and regulations. In the opinion of management, the accompanying unaudited condensed consolidated financial statements reflect all adjustments, consisting only of normal recurring adjustments, necessary to state fairly the financial position of the Company and its results of operations and cash flows. These unaudited condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and related notes as of and for the year ended December 31, 2016, included in the Company’s Form 10-K filed with the SEC on March 15, 2017. The condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. The results of operations for the three and nine months ended September 30, 2017 are not necessarily indicative of the results that may be expected for the year ending December 31, 2017 or any other future period, and the Company makes no representations related thereto. Recently Adopted Accounting Pronouncements In November 2015, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Updates ("ASU") 2015-17, "Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes," which simplifies the presentation of deferred income taxes by requiring deferred tax assets and liabilities be classified as noncurrent on the balance sheet. The Company adopted ASU 2015-17 in the first quarter of 2017 on a prospective basis. Accordingly, the Company reclassified current deferred taxes of $793,000 to noncurrent on its March 31, 2017 consolidated balance sheet. No prior periods were retrospectively adjusted. In March, 2016, the FASB issued ASU 2016-09, "Compensation-Stock Compensation: Improvements to Employee Share-Based Payment Accounting," which is intended to simplify several aspects of the accounting for employee share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. The Company adopted ASU 2016-09 in the first quarter of 2017. The Company elected to account for forfeitures as they occur and did not have unrecognized tax benefits of stock-based compensation; therefore, the adoption of this guidance did not have a material impact on our financial position or results of operations. Recent Accounting Pronouncements Not Yet Adopted In May 2014, the FASB issued ASU 2014-09, "Revenue from Contracts with Customers," which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. ASU 2014-09 will replace most of the existing revenue recognition guidance in U.S. GAAP when it becomes effective. This new accounting standard is effective for the Company for annual periods in fiscal years beginning after December 15, 2017 (as amended in August 2015 by ASU 2015-14, "Deferral of the Effective Date"). In December 27, 2016, FASB issued ASU 2016-20, "Technical Corrections and Improvements to Topic 606, Revenue from Contracts with Customers," which addresses loan guarantee fees, impairment testing of contract costs, provisions for losses on construction-type and production-type contracts, and various disclosures. ASU 2016-20 will go into effect once ASU 2014-09 takes effect. The Company is currently assessing the timing of revenue for its various advertising products including Top 20 , Newsflash , Local Deals and Getaway vouchers and Hotel Platform commissions. Under this new guidance, the Company expects it will be required to recognize Local Deals and Getaway revenue on selected deals that is related to unredeemed vouchers based upon estimates at the time of sale of the vouchers rather than the current practice of waiting to recognize this revenue upon expiration of the legal obligation. Although the Company is still currently evaluating the impact of the adoption on its financial position, results of operations and cash flows and has not yet determined whether the effect will be material, the adoption is expected to result in additional required disclosures related to its revenue arrangements. The Company expects to adopt this standard effective January 1, 2018 with a cumulative adjustment to retained earnings using the modified retrospective method. In February 2016, the FASB issued an accounting standard update ASU 2016-02, "Leases," which requires that lease arrangements longer than 12 months result in an entity recognizing an asset and liability on its balance sheet. ASU 2016-02 is effective for interim and annual periods beginning after December 15, 2018, and early adoption is permitted. This accounting standard update will be effective for the Company on January 1, 2019. For operating leases with terms longer than 12 months, the Company will recognize a lease liability for the obligation to make lease payments and a right-of-use asset for the right to use the underlying asset for the lease term. The Company is currently in the process of evaluating the impact of the adoption on its financial position, results of operations and cash flows. In August 2016, the FASB issued ASU No. 2016-15, "Classification of Certain Cash Receipts and Cash Payments," which addresses eight classification issues related to the statement of cash flows. In November 2016, the FASB issued ASU 2016-18, "Statement of Cash Flows: Restricted Cash," which addresses classification and presentation of changes in restricted cash on the statement of cash flows. The standard requires that restricted cash and restricted cash equivalents be included as components of total cash and cash equivalents as presented on the statement of cash flows. Both ASU 2016-15 and ASU 2016-18 are effective for public business entities for annual and interim periods in fiscal years beginning after December 15, 2017 and should apply using a retrospective transition method to each period presented. These accounting standard updates will be effective for the Company on January 1, 2018. The Company is currently in the process of evaluating the impact of the adoption on its financial position, results of operations and cash flows. In October 2016, the FASB issued ASU 2016-16, "Intra-Entity Transfers of Assets Other Than Inventory," which requires immediate recognition of the income tax consequences of intercompany asset transfers other than inventory. This update is effective for annual reporting periods beginning after December 15, 2017, and interim periods within those annual periods. This accounting standard update will be effective for the Company on January 1, 2018 with early adoption permitted. The Company is currently in the process of evaluating the impact of the adoption on its financial position, results of operations and cash flows. In May 2017, the FASB issued ASU 2017-09, "Compensation-Stock Compensation (Topic 718): Scope of Modification Accounting," which gives direction on which changes to the terms or conditions of these awards require an entity to apply modification accounting in ASC Topic 718, "Compensation-Stock Compensation." The guidance is effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2017 for all entities with early adoption permitted. The Company is currently in the process of evaluating the impact of the adoption on its financial position, results of operations and cash flows. |
Net Income (Loss) Per Share
Net Income (Loss) Per Share | 9 Months Ended |
Sep. 30, 2017 | |
Earnings Per Share [Abstract] | |
Net Income (Loss) Per Share | Net Income (Loss) Per Share Basic net income (loss) per share is computed using the weighted-average number of common shares outstanding for the period. Diluted net income (loss) per share is computed by adjusting the weighted-average number of common shares outstanding for the effect of dilutive potential common shares outstanding during the period. Potential common shares included in the diluted calculation consist of incremental shares issuable upon the exercise of outstanding stock options calculated using the treasury stock method. 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 Nine Months Ended September 30, September 30, 2017 2016 2017 2016 Numerator: Income (loss) from continuing operations $ (576 ) $ 1,378 $ 917 $ 5,001 Income from discontinued operations, net of income taxes — 241 1,938 687 Net income (loss) $ (576 ) $ 1,619 $ 2,855 $ 5,688 Denominator: Weighted average common shares—basic 12,628 13,839 13,023 14,109 Effect of dilutive securities: stock options — 28 17 10 Weighted average common shares—diluted 12,628 13,867 13,040 14,119 Income (loss) per share—basic: Continuing operations $ (0.05 ) $ 0.10 $ 0.07 $ 0.35 Discontinued operations — 0.02 0.15 0.05 Net income (loss) per share—basic $ (0.05 ) $ 0.12 $ 0.22 $ 0.40 Income (loss) per share—diluted: Continuing operations $ (0.05 ) $ 0.10 $ 0.07 $ 0.35 Discontinued operations — 0.02 0.15 0.05 Net income (loss) per share—diluted $ (0.05 ) $ 0.12 $ 0.22 $ 0.40 For the three and nine months ended September 30, 2017 , options to purchase 562,500 and 162,500 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, 2016 , options to purchase 200,000 shares of common stock were not included in the computation of diluted net income per share because the effect would have been anti-dilutive. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies The Company was formed as a result of a combination and merger of entities founded by the Company’s principal stockholder, Ralph Bartel. In 2002, Travelzoo.com Corporation was merged into Travelzoo. Under and subject to the terms of the merger agreement, holders of promotional shares of Travelzoo.com Corporation (“Netsurfers”) who established that they had satisfied certain prerequisite qualifications were allowed a period of 2 years following the effective date of the merger to receive one share of Travelzoo in exchange for each share of common stock of Travelzoo.com Corporation. In 2004, two years following the effective date of the merger, certain promotional shares remained unexchanged. As the right to exchange these promotional shares expired, no additional shares were reserved for issuance. Thereafter, the Company began to offer a voluntary cash program for those who established that they had satisfied certain prerequisite qualifications for Netsurfer promotional shares as further described below. During 2010 through 2014, the Company became subject to unclaimed property audits of various states in the United States related to the above unexchanged promotional shares and completed settlements with all states. Although the Company has settled the unclaimed property claims with all states, the Company may still receive inquiries from certain potential Netsurfer promotional stockholders that had not provided their state of residence to the Company by April 25, 2004. Therefore, the Company is continuing its voluntary program under which it makes cash payments to individuals related to the promotional shares for individuals whose residence was unknown by the Company and who establish that they satisfy the original conditions required for them to receive shares of Travelzoo.com Corporation, and who failed to submit requests to convert their shares into shares of Travelzoo within the required time period. This voluntary program is not available for individuals whose promotional shares have been escheated to a state by the Company, except those individuals for which their residence was unknown to the Company. The accompanying condensed consolidated financial statements include charges in general and administrative expenses of zero and $1,000 for the three and nine months ended September 30, 2016 , respectively. The Company did not make any payment for the three and nine months ended September 30, 2017 . The total cost of this program cannot be reliably estimated because it is based on the ultimate number of valid requests received and future levels of the Company’s common stock price. The Company’s common stock price affects the liability because the amount of cash payments under the program is based in part on the recent level of the stock price at the date valid requests are received. The Company does not know how many of the requests for shares originally received by Travelzoo.com Corporation in 1998 were valid, but the Company believes that only a portion of such requests were valid. In order to receive payment under this voluntary program, a person is required to establish that such person validly held shares in Travelzoo.com Corporation. The Company leases office space in Australia, Canada, China, France, Germany, Hong Kong, Japan, Singapore, Spain, Taiwan, the U.K., and the U.S. under operating leases which expire between March 2017 and November 2024. The Company has purchase commitments which represent the minimum obligations the Company has under agreements with certain suppliers. These minimum obligations are less than our projected use for those periods. Payments may be more than the minimum obligations based on actual use. The following table summarizes principal contractual commitments as of September 30, 2017 (in thousands): 2017 Remaining 2018 2019 2020 2021 Thereafter Total Operating leases $ 1,542 $ 5,240 $ 4,494 $ 3,825 $ 3,198 $ 5,626 $ 23,925 Purchase obligations 408 579 260 11 — — 1,258 Total commitments $ 1,950 $ 5,819 $ 4,754 $ 3,836 $ 3,198 $ 5,626 $ 25,183 Local Deals and Getaway merchant payables included in accounts payable were $11.0 million and $14.8 million , as of September 30, 2017 and December 31, 2016 , respectively. |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2017 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes 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, Japan, Hong Kong, and the U.K. For the three months ended September 30, 2017 and 2016 , the Company's effective tax rate was 654% and 34% , respectively. For the nine months ended September 30, 2017 and 2016 , the Company's effective tax rate was 74% and 40% , respectively. The Company's effective tax rate increased for the three and nine months ended September 30, 2017 from the corresponding three and nine months ended September 30, 2016 , due primarily to the change of geographic mix of income (loss) from continuing operations, including a relative increase in foreign losses not benefited, for the three and nine months ended September 30, 2017 . U.S. income and foreign withholding taxes have not been provided on undistributed earnings for certain non-U.S. subsidiaries. The undistributed earnings on a book basis for the non-U.S. subsidiaries as of September 30, 2017 are approximately $13.9 million . The Company intends to reinvest these earnings indefinitely in its operations outside the U.S. If the undistributed earnings are remitted to the U.S., these amounts would be taxable in the U.S. at the current federal and state tax rates net of foreign tax credits. Also, depending on the jurisdiction any distribution may be subject to withholding taxes at rates applicable for that jurisdiction. The estimated amount of the unrecognized deferred tax liability attributed to future dividend distributions of undistributed earnings is approximately $1.2 million at September 30, 2017 . The Company maintains liabilities for uncertain tax positions. At September 30, 2017 , the Company had approximately $1.6 million in total unrecognized tax benefits, which if recognized, would favorably affect the Company’s effective income tax rate. 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 September 30, 2017 and December 31, 2016 , the Company had approximately $985,000 and $951,000 , respectively, in accrued interest and penalties related to uncertain tax positions. The Company is in various stages of multiple year examinations by federal taxing authorities. Although the timing of initiation, resolution and/or closure of audits is highly uncertain, it is reasonably possible that the balance of the gross unrecognized tax benefits related to the method of computing income taxes in certain jurisdictions and losses reported on certain income tax returns could significantly change in the next 12 months . These changes may occur through settlement with the taxing authorities or the expiration of the statute of limitations on the returns filed. The Company is unable to estimate the range of possible adjustments to the balance of the gross unrecognized tax benefits. The Company files income tax returns in the U.S. federal jurisdiction and various states and foreign jurisdictions. The Company is subject to U.S. federal and certain state tax examinations for certain years after 2008 and is subject to California tax examinations for years after 2005. The material foreign jurisdictions where the Company is subject to potential examinations by tax authorities are the France, Germany, Spain and United Kingdom for tax years after 2009. The Company's 2009 federal income tax return is currently under examination, including a review of the impact of the sale of Asia Pacific business segment in 2009. These examinations may lead to ordinary course adjustments or proposed adjustments to the Company's taxes or its net operating income. The Company has received a Revenue Agent’s Report (RAR) generally issued at the conclusion of an IRS examination, which was consistent with the Notice of Proposed Adjustment the Company received earlier from the IRS for the 2009 calendar year related to the sale of our Asia Pacific business segment with additional penalties. The RAR proposes an increase to the Company's U.S. taxable income which would result in additional federal tax, federal penalty and state tax expense totaling approximately $31.0 million , excluding interest and state penalties, if any. The proposed adjustment is primarily driven by the IRS’s view that the Asia Pacific business segment assets sold by the Company had a significantly higher valuation than the sales proceeds the Company received upon the sale. The Company disagrees with the proposed adjustments and intends to vigorously contest them. The Company did not make any adjustments to its liabilities for uncertain tax positions related to the RAR during the three and nine months ended September 30, 2017 because the Company does not believe the IRS’s valuation of the Asia Pacific business segment assets is appropriate. If the Company is not able to resolve these proposed adjustments at the IRS examination level, it plans to pursue all available administrative and, if necessary, judicial remedies. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Loss | 9 Months Ended |
Sep. 30, 2017 | |
Equity [Abstract] | |
Accumulated Other Comprehensive Loss | Accumulated Other Comprehensive Loss The following table summarizes the changes in accumulated balances of other comprehensive loss (in thousands): Three Months Ended Nine Months Ended September 30, September 30, 2017 2016 2017 2016 Beginning balance $ (3,687 ) $ (3,625 ) $ (3,787 ) $ (3,908 ) Other comprehensive income (loss) due to foreign currency translation, net of tax 131 (184 ) 231 99 Ending balance $ (3,556 ) $ (3,809 ) $ (3,556 ) $ (3,809 ) There were no amounts reclassified from accumulated other comprehensive loss for the three and nine months ended September 30, 2017 and 2016 . |
Stock-Based Compensation and St
Stock-Based Compensation and Stock Options | 9 Months Ended |
Sep. 30, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock-Based Compensation and Stock Options | Stock-Based Compensation and Stock Options The Company accounts for its employee stock options under the fair value method, which requires stock-based compensation to be estimated using the fair value on the date of grant using an option-pricing model. The value of the portion of the award that is expected to vest is recognized on a straight-line basis as expense over the related employees’ requisite service periods in the Company’s consolidated statements of operations. In January 2012, the Company granted certain executives stock options to purchase 100,000 shares of common stock with an exercise price of $28.98 , of which 25,000 options became exercisable annually starting January 23, 2013. The options expire in January 2022. During 2015 , 25,000 options were canceled and 25,000 options were forfeited upon the departure of an executive. As of September 30, 2017 , 50,000 options were outstanding and vested. As of September 30, 2017 , there was no unrecognized stock-based compensation expense relating to these options. In September 2015, the Company granted an executive stock options to purchase 400,000 shares of common stock with an exercise price of $8.07 , of which 50,000 options became exercisable quarterly starting March 31, 2016. The options expire in September 2025. As of September 30, 2017 , 400,000 options were outstanding and 350,000 of these options were vested. Total stock-based compensation for the three and nine months ended September 30, 2017 , related to this option grant were $196,000 and $587,000 , respectively. As of September 30, 2017 , there was approximately $196,000 of unrecognized stock-based compensation expense relating to these options. This amount is expected to be recognized over 0.3 years . In March 2016, the Company granted certain executives stock options to purchase 150,000 shares of common stock with an exercise price of $8.55 , of which 37,500 options vest and become exercisable annually starting on March 7, 2017. The options expire in March 2026. During the three months ended September 30, 2017 , 37,500 options were forfeited upon the departure of an executive and the compensation expense of $19,000 was reversed. As of September 30, 2017 , 112,500 options were outstanding and 37,500 of these options were vested. Total stock-based compensation for the three and nine months ended September 30, 2017 , related to these option grants were $11,000 and $100,000 , respectively. As of September 30, 2017 , there was approximately $288,000 of unrecognized stock-based compensation expense relating to these options. This amount is expected to be recognized over 2.4 years . Subsequent to the quarter ended September 30, 2017, on October 30, the Company granted an executive stock options to purchase 400,000 shares of common stock with an exercise price of $6.95 , of which 50,000 shares are exercisable quarterly starting March 31, 2018 and ending on December 31, 2019. The options expire in 2027. |
Stock Repurchase Program
Stock Repurchase Program | 9 Months Ended |
Sep. 30, 2017 | |
Equity [Abstract] | |
Stock Repurchase Program | Stock Repurchase Program The Company's stock repurchase programs assist in offsetting the impact of dilution from employee equity compensation and assist with capital allocation. Management is allowed discretion in the execution of the repurchase program based upon market conditions and consideration of capital allocation. In January 2014 , the Company announced a stock repurchase program authorizing the repurchase of up to 500,000 shares of the Company’s outstanding common stock. During the year ended December 31, 2014 , the Company repurchased 261,000 shares of common stock for an aggregate purchase price of $5.9 million , which were recorded as part of treasury stock as of December 31, 2014 . During the year ended December 31, 2015 , the Company repurchased 212,000 shares of common stock for an aggregate purchase price of $1.7 million . The shares repurchased under this program were retired as of December 31, 2015 . There were 56,000 shares remaining to be repurchased under this program as of December 31, 2015 . In February 2016 , the Company announced a stock repurchase program authorizing the repurchase of up to 1,000,000 shares of the Company’s outstanding common stock. During the year ended December 31, 2016 , the Company repurchased 1,056,000 shares of common stock, including the 56,000 shares from the previous stock repurchase program, for an aggregate purchase price of $9.5 million and therefore there were no shares remaining to be repurchased under the repurchase programs authorized in January 2014 and January 2016 as of December 31, 2016. The shares repurchased were retired and recorded as a reduction of additional paid-in capital until extinguished with the remaining amount reflected as a reduction of retained earnings. In February 2017, the Company announced a stock repurchase program authorizing the repurchase of up to 1,000,000 shares of the Company’s outstanding common stock. During the three and nine months ended September 30, 2017 , the Company repurchased 287,713 and 996,705 shares of common stock, respectively, for an aggregate purchase price of $2.6 million and $ 9.7 million , respectively. The shares repurchased were retired and recorded as a reduction of additional paid-in capital until extinguished with the remaining amount reflected as a reduction of retained earnings. There were 3,295 shares remaining to be repurchased under this program as of September 30, 2017 . |
Segment Reporting and Significa
Segment Reporting and Significant Customer Information | 9 Months Ended |
Sep. 30, 2017 | |
Segment Reporting [Abstract] | |
Segments Reporting and Significant Customer Information | Segment Reporting and Significant Customer Information The Company manages its business geographically and has three reportable operating segments: Asia Pacific, Europe and North America. Asia Pacific consists of the Company's operations in Australia, China, Hong Kong, Japan, Taiwan, and Southeast Asia. Europe consists of the Company’s operations in France, Germany, Spain, and the U.K. North America consists of the Company’s operations in Canada and the U.S. Management relies on an internal management reporting process that provides revenue and segment operating profit (loss) for making financial decisions and allocating resources. Management believes that segment revenues and operating profit (loss) are appropriate measures of evaluating the operational performance of the Company’s segments. These segment disclosures have been adjusted to remove the revenue and operating profit (loss) related to discontinued operations in the current and prior periods. See "Note 9: Discontinued Operations" for further information. The following is a summary of operating results and assets (in thousands) by business segment: Three Months Ended September 30, 2017 Asia Pacific Europe North America Consolidated Revenues from unaffiliated customers $ 1,767 $ 8,008 $ 14,912 $ 24,687 Intersegment revenues 6 (62 ) 56 — Total net revenues 1,773 7,946 14,968 24,687 Operating profit (loss) $ (1,679 ) $ 309 $ 1,388 $ 18 Three Months Ended September 30, 2016 Asia Pacific Europe North America Consolidated Revenues from unaffiliated customers $ 2,521 $ 8,614 $ 15,688 $ 26,823 Intersegment revenues 36 (140 ) 104 — Total net revenues 2,557 8,474 15,792 26,823 Operating profit (loss) $ (798 ) $ 1,412 $ 1,261 $ 1,875 Nine Months Ended September 30, 2017 Asia Pacific Europe North America Consolidated Revenues from unaffiliated customers $ 5,574 $ 25,231 $ 48,722 $ 79,527 Intersegment revenues (38 ) (317 ) 355 — Total net revenues 5,536 24,914 49,077 79,527 Operating profit (loss) $ (4,385 ) $ 1,526 $ 6,325 $ 3,466 Nine Months Ended September 30, 2016 Asia Pacific Europe North America Consolidated Revenues from unaffiliated customers $ 7,173 $ 28,893 $ 51,384 $ 87,450 Intersegment revenues 78 (403 ) 325 — Total net revenues 7,251 28,490 51,709 87,450 Operating profit (loss) $ (3,080 ) $ 5,022 $ 6,216 $ 8,158 As of September 30, 2017 Asia Pacific Europe North America Elimination Consolidated Long-lived assets $ 151 $ 577 $ 4,537 $ — $ 5,265 Total assets $ 3,490 $ 49,721 $ 60,473 $ (70,520 ) $ 43,164 As of December 31, 2016 Asia Pacific Europe North America Elimination Consolidated Long-lived assets $ 209 $ 763 $ 5,186 $ — $ 6,158 Total assets $ 5,295 $ 49,125 $ 65,961 $ (66,851 ) $ 53,530 Revenue for each segment is recognized based on the customer location within a designated geographic region. Property and equipment are attributed to the geographic region in which the assets are located. Revenues from unaffiliated customers excludes intersegment revenues and represents revenue with parties unaffiliated with Travelzoo and its wholly owned subsidiaries. For the three and nine months ended September 30, 2017 and 2016 , the Company did not have any customers that accounted for 10% or more of revenue. As of September 30, 2017 , the Company did not have any customers that accounted for 10% or more of accounts receivable. As of December 31, 2016 , the Company had one customer that accounted for 16% of accounts receivable. The following table sets forth the breakdown of revenues (in thousands) by category and segment. Travel revenue includes travel publications ( Top 20 , Website , Newsflash , Travelzoo Network ), Getaway vouchers and hotel platform. Local revenue includes Local Deals vouchers and entertainment offers (vouchers and direct bookings). Three Months Ended Nine Months Ended September 30, September 30, 2017 2016 2017 2016 Asia Pacific Travel $ 1,644 $ 2,334 $ 5,170 $ 6,582 Local 129 223 366 669 Total Asia Pacific revenues $ 1,773 $ 2,557 $ 5,536 $ 7,251 Europe Travel $ 7,052 $ 7,357 $ 21,852 $ 24,440 Local 894 1,117 3,062 4,050 Total Europe revenues $ 7,946 $ 8,474 $ 24,914 $ 28,490 North America Travel $ 12,146 $ 12,494 $ 40,916 $ 41,490 Local 2,822 3,298 8,161 10,219 Total North America revenues $ 14,968 $ 15,792 $ 49,077 $ 51,709 Consolidated Travel $ 20,842 $ 22,185 $ 67,938 $ 72,512 Local 3,845 4,638 11,589 14,938 Total revenues $ 24,687 $ 26,823 $ 79,527 $ 87,450 Revenue by geography is based on the billing address of the advertiser. Long-lived assets attributed to the U.S. and international geographies are based upon the country in which the asset is located or owned. The following table sets forth revenue for countries that exceed 10% of total revenue (in thousands): Three Months Ended Nine Months Ended September 30, September 30, 2017 2016 2017 2016 Revenue United States $ 13,658 $ 14,467 $ 45,127 $ 47,845 United Kingdom 4,483 4,994 14,136 17,518 Germany 2,881 3,042 9,047 9,436 Rest of the world 3,665 4,320 11,217 12,651 Total revenues $ 24,687 $ 26,823 $ 79,527 $ 87,450 The following table sets forth long lived asset by geographic area (in thousands): September 30, December 31, 2017 2016 United States $ 4,124 $ 4,755 Rest of the world 1,141 1,403 Total long lived assets $ 5,265 $ 6,158 |
Discontinued Operations
Discontinued Operations | 9 Months Ended |
Sep. 30, 2017 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Discontinued Operations | Discontinued Operations On March 30, 2017, the Company decided to discontinue its Search products, consisting of Fly.com and SuperSearch products. This decision supports the Company’s strategy to focus on its global Travelzoo® brand. On March 30, 2017, the Company ceased operations of SuperSearch and on March 31, 2017, the Company sold the Fly.com domain name, which had no net book value, to a third party. There were no other assets or liabilities transferred as part this transaction. A reconciliation of the line items comprising the results of operations of the Search products to the income (loss) from discontinued operations through the date of disposal presented in the condensed consolidated statements of operations for the three and nine months ended September 30, 2017 and 2016, in thousands, is included in the following table: Three Months Ended Nine Months Ended September 30, September 30, 2017 2016 2017 2016 Revenues from Search $ — $ 3,617 $ 2,088 $ 11,839 Cost of revenues — (91 ) (101 ) (389 ) Gross profit — 3,526 1,987 11,450 Total operating expenses — (3,196 ) (1,817 ) (10,479 ) Gain on sale of Fly.com domain name — — 2,890 — Income from discontinued operations before income taxes — 330 3,060 971 Income tax expense — 89 1,122 284 Income from discontinued operations, net of income taxes $ — $ 241 $ 1,938 $ 687 |
The Company and Basis of Pres16
The Company and Basis of Presentation (Policies) | 9 Months Ended |
Sep. 30, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Recently Adopted & Not Yet Adopted Accounting Pronouncements | Recently Adopted Accounting Pronouncements In November 2015, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Updates ("ASU") 2015-17, "Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes," which simplifies the presentation of deferred income taxes by requiring deferred tax assets and liabilities be classified as noncurrent on the balance sheet. The Company adopted ASU 2015-17 in the first quarter of 2017 on a prospective basis. Accordingly, the Company reclassified current deferred taxes of $793,000 to noncurrent on its March 31, 2017 consolidated balance sheet. No prior periods were retrospectively adjusted. In March, 2016, the FASB issued ASU 2016-09, "Compensation-Stock Compensation: Improvements to Employee Share-Based Payment Accounting," which is intended to simplify several aspects of the accounting for employee share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. The Company adopted ASU 2016-09 in the first quarter of 2017. The Company elected to account for forfeitures as they occur and did not have unrecognized tax benefits of stock-based compensation; therefore, the adoption of this guidance did not have a material impact on our financial position or results of operations. Recent Accounting Pronouncements Not Yet Adopted In May 2014, the FASB issued ASU 2014-09, "Revenue from Contracts with Customers," which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. ASU 2014-09 will replace most of the existing revenue recognition guidance in U.S. GAAP when it becomes effective. This new accounting standard is effective for the Company for annual periods in fiscal years beginning after December 15, 2017 (as amended in August 2015 by ASU 2015-14, "Deferral of the Effective Date"). In December 27, 2016, FASB issued ASU 2016-20, "Technical Corrections and Improvements to Topic 606, Revenue from Contracts with Customers," which addresses loan guarantee fees, impairment testing of contract costs, provisions for losses on construction-type and production-type contracts, and various disclosures. ASU 2016-20 will go into effect once ASU 2014-09 takes effect. The Company is currently assessing the timing of revenue for its various advertising products including Top 20 , Newsflash , Local Deals and Getaway vouchers and Hotel Platform commissions. Under this new guidance, the Company expects it will be required to recognize Local Deals and Getaway revenue on selected deals that is related to unredeemed vouchers based upon estimates at the time of sale of the vouchers rather than the current practice of waiting to recognize this revenue upon expiration of the legal obligation. Although the Company is still currently evaluating the impact of the adoption on its financial position, results of operations and cash flows and has not yet determined whether the effect will be material, the adoption is expected to result in additional required disclosures related to its revenue arrangements. The Company expects to adopt this standard effective January 1, 2018 with a cumulative adjustment to retained earnings using the modified retrospective method. In February 2016, the FASB issued an accounting standard update ASU 2016-02, "Leases," which requires that lease arrangements longer than 12 months result in an entity recognizing an asset and liability on its balance sheet. ASU 2016-02 is effective for interim and annual periods beginning after December 15, 2018, and early adoption is permitted. This accounting standard update will be effective for the Company on January 1, 2019. For operating leases with terms longer than 12 months, the Company will recognize a lease liability for the obligation to make lease payments and a right-of-use asset for the right to use the underlying asset for the lease term. The Company is currently in the process of evaluating the impact of the adoption on its financial position, results of operations and cash flows. In August 2016, the FASB issued ASU No. 2016-15, "Classification of Certain Cash Receipts and Cash Payments," which addresses eight classification issues related to the statement of cash flows. In November 2016, the FASB issued ASU 2016-18, "Statement of Cash Flows: Restricted Cash," which addresses classification and presentation of changes in restricted cash on the statement of cash flows. The standard requires that restricted cash and restricted cash equivalents be included as components of total cash and cash equivalents as presented on the statement of cash flows. Both ASU 2016-15 and ASU 2016-18 are effective for public business entities for annual and interim periods in fiscal years beginning after December 15, 2017 and should apply using a retrospective transition method to each period presented. These accounting standard updates will be effective for the Company on January 1, 2018. The Company is currently in the process of evaluating the impact of the adoption on its financial position, results of operations and cash flows. In October 2016, the FASB issued ASU 2016-16, "Intra-Entity Transfers of Assets Other Than Inventory," which requires immediate recognition of the income tax consequences of intercompany asset transfers other than inventory. This update is effective for annual reporting periods beginning after December 15, 2017, and interim periods within those annual periods. This accounting standard update will be effective for the Company on January 1, 2018 with early adoption permitted. The Company is currently in the process of evaluating the impact of the adoption on its financial position, results of operations and cash flows. In May 2017, the FASB issued ASU 2017-09, "Compensation-Stock Compensation (Topic 718): Scope of Modification Accounting," which gives direction on which changes to the terms or conditions of these awards require an entity to apply modification accounting in ASC Topic 718, "Compensation-Stock Compensation." The guidance is effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2017 for all entities with early adoption permitted. The Company is currently in the process of evaluating the impact of the adoption on its financial position, results of operations and cash flows. |
Net Income (Loss) Per Share (Ta
Net Income (Loss) Per Share (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Earnings Per Share [Abstract] | |
Basic and diluted net income per share | 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 Nine Months Ended September 30, September 30, 2017 2016 2017 2016 Numerator: Income (loss) from continuing operations $ (576 ) $ 1,378 $ 917 $ 5,001 Income from discontinued operations, net of income taxes — 241 1,938 687 Net income (loss) $ (576 ) $ 1,619 $ 2,855 $ 5,688 Denominator: Weighted average common shares—basic 12,628 13,839 13,023 14,109 Effect of dilutive securities: stock options — 28 17 10 Weighted average common shares—diluted 12,628 13,867 13,040 14,119 Income (loss) per share—basic: Continuing operations $ (0.05 ) $ 0.10 $ 0.07 $ 0.35 Discontinued operations — 0.02 0.15 0.05 Net income (loss) per share—basic $ (0.05 ) $ 0.12 $ 0.22 $ 0.40 Income (loss) per share—diluted: Continuing operations $ (0.05 ) $ 0.10 $ 0.07 $ 0.35 Discontinued operations — 0.02 0.15 0.05 Net income (loss) per share—diluted $ (0.05 ) $ 0.12 $ 0.22 $ 0.40 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of future lease payments for operating leases | The following table summarizes principal contractual commitments as of September 30, 2017 (in thousands): 2017 Remaining 2018 2019 2020 2021 Thereafter Total Operating leases $ 1,542 $ 5,240 $ 4,494 $ 3,825 $ 3,198 $ 5,626 $ 23,925 Purchase obligations 408 579 260 11 — — 1,258 Total commitments $ 1,950 $ 5,819 $ 4,754 $ 3,836 $ 3,198 $ 5,626 $ 25,183 |
Accumulated Other Comprehensi19
Accumulated Other Comprehensive Loss (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Equity [Abstract] | |
Schedule of changes in accumulated balances of other comprehensive loss | The following table summarizes the changes in accumulated balances of other comprehensive loss (in thousands): Three Months Ended Nine Months Ended September 30, September 30, 2017 2016 2017 2016 Beginning balance $ (3,687 ) $ (3,625 ) $ (3,787 ) $ (3,908 ) Other comprehensive income (loss) due to foreign currency translation, net of tax 131 (184 ) 231 99 Ending balance $ (3,556 ) $ (3,809 ) $ (3,556 ) $ (3,809 ) |
Segment Reporting and Signifi20
Segment Reporting and Significant Customer Information (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Segment Reporting [Abstract] | |
Summary of operating results from continuing operations and assets by business segment | The following is a summary of operating results and assets (in thousands) by business segment: Three Months Ended September 30, 2017 Asia Pacific Europe North America Consolidated Revenues from unaffiliated customers $ 1,767 $ 8,008 $ 14,912 $ 24,687 Intersegment revenues 6 (62 ) 56 — Total net revenues 1,773 7,946 14,968 24,687 Operating profit (loss) $ (1,679 ) $ 309 $ 1,388 $ 18 Three Months Ended September 30, 2016 Asia Pacific Europe North America Consolidated Revenues from unaffiliated customers $ 2,521 $ 8,614 $ 15,688 $ 26,823 Intersegment revenues 36 (140 ) 104 — Total net revenues 2,557 8,474 15,792 26,823 Operating profit (loss) $ (798 ) $ 1,412 $ 1,261 $ 1,875 Nine Months Ended September 30, 2017 Asia Pacific Europe North America Consolidated Revenues from unaffiliated customers $ 5,574 $ 25,231 $ 48,722 $ 79,527 Intersegment revenues (38 ) (317 ) 355 — Total net revenues 5,536 24,914 49,077 79,527 Operating profit (loss) $ (4,385 ) $ 1,526 $ 6,325 $ 3,466 Nine Months Ended September 30, 2016 Asia Pacific Europe North America Consolidated Revenues from unaffiliated customers $ 7,173 $ 28,893 $ 51,384 $ 87,450 Intersegment revenues 78 (403 ) 325 — Total net revenues 7,251 28,490 51,709 87,450 Operating profit (loss) $ (3,080 ) $ 5,022 $ 6,216 $ 8,158 |
Reconciliation of total assets from reportable segments to consolidated assets | As of September 30, 2017 Asia Pacific Europe North America Elimination Consolidated Long-lived assets $ 151 $ 577 $ 4,537 $ — $ 5,265 Total assets $ 3,490 $ 49,721 $ 60,473 $ (70,520 ) $ 43,164 As of December 31, 2016 Asia Pacific Europe North America Elimination Consolidated Long-lived assets $ 209 $ 763 $ 5,186 $ — $ 6,158 Total assets $ 5,295 $ 49,125 $ 65,961 $ (66,851 ) $ 53,530 |
Breakdown of revenues and long-lived assets | The following table sets forth the breakdown of revenues (in thousands) by category and segment. Travel revenue includes travel publications ( Top 20 , Website , Newsflash , Travelzoo Network ), Getaway vouchers and hotel platform. Local revenue includes Local Deals vouchers and entertainment offers (vouchers and direct bookings). Three Months Ended Nine Months Ended September 30, September 30, 2017 2016 2017 2016 Asia Pacific Travel $ 1,644 $ 2,334 $ 5,170 $ 6,582 Local 129 223 366 669 Total Asia Pacific revenues $ 1,773 $ 2,557 $ 5,536 $ 7,251 Europe Travel $ 7,052 $ 7,357 $ 21,852 $ 24,440 Local 894 1,117 3,062 4,050 Total Europe revenues $ 7,946 $ 8,474 $ 24,914 $ 28,490 North America Travel $ 12,146 $ 12,494 $ 40,916 $ 41,490 Local 2,822 3,298 8,161 10,219 Total North America revenues $ 14,968 $ 15,792 $ 49,077 $ 51,709 Consolidated Travel $ 20,842 $ 22,185 $ 67,938 $ 72,512 Local 3,845 4,638 11,589 14,938 Total revenues $ 24,687 $ 26,823 $ 79,527 $ 87,450 Revenue by geography is based on the billing address of the advertiser. Long-lived assets attributed to the U.S. and international geographies are based upon the country in which the asset is located or owned. The following table sets forth revenue for countries that exceed 10% of total revenue (in thousands): Three Months Ended Nine Months Ended September 30, September 30, 2017 2016 2017 2016 Revenue United States $ 13,658 $ 14,467 $ 45,127 $ 47,845 United Kingdom 4,483 4,994 14,136 17,518 Germany 2,881 3,042 9,047 9,436 Rest of the world 3,665 4,320 11,217 12,651 Total revenues $ 24,687 $ 26,823 $ 79,527 $ 87,450 The following table sets forth long lived asset by geographic area (in thousands): September 30, December 31, 2017 2016 United States $ 4,124 $ 4,755 Rest of the world 1,141 1,403 Total long lived assets $ 5,265 $ 6,158 |
Discontinued Operations (Tables
Discontinued Operations (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Discontinued Operations | A reconciliation of the line items comprising the results of operations of the Search products to the income (loss) from discontinued operations through the date of disposal presented in the condensed consolidated statements of operations for the three and nine months ended September 30, 2017 and 2016, in thousands, is included in the following table: Three Months Ended Nine Months Ended September 30, September 30, 2017 2016 2017 2016 Revenues from Search $ — $ 3,617 $ 2,088 $ 11,839 Cost of revenues — (91 ) (101 ) (389 ) Gross profit — 3,526 1,987 11,450 Total operating expenses — (3,196 ) (1,817 ) (10,479 ) Gain on sale of Fly.com domain name — — 2,890 — Income from discontinued operations before income taxes — 330 3,060 971 Income tax expense — 89 1,122 284 Income from discontinued operations, net of income taxes $ — $ 241 $ 1,938 $ 687 |
The Company and Basis of Pres22
The Company and Basis of Presentation - Narrative (Details) - USD ($) | Sep. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 |
Related Party Transaction | |||
Deferred tax assets, current | $ 0 | $ 793,000 | |
Deferred tax asset, noncurrent | $ 1,800,000 | ||
Majority Shareholder | |||
Related Party Transaction | |||
Percent of outstanding shares held by related party | 57.80% | ||
Accounting Standards Update 2015-07 | |||
Related Party Transaction | |||
Deferred tax assets, current | $ (793,000) | ||
Deferred tax asset, noncurrent | $ 793,000 |
Net Income (Loss) Per Share (De
Net Income (Loss) Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Numerator: | ||||
Income (loss) from continuing operations | $ (576) | $ 1,378 | $ 917 | $ 5,001 |
Income from discontinued operations, net of income taxes | 0 | 241 | 1,938 | 687 |
Net income (loss) | $ (576) | $ 1,619 | $ 2,855 | $ 5,688 |
Denominator: | ||||
Weighted average common shares - basic (in shares) | 12,628,000 | 13,839,000 | 13,023,000 | 14,109,000 |
Effect of dilutive securities: stock options (in shares) | 0 | 28,000 | 17,000 | 10,000 |
Weighted average common shares - diluted (in shares) | 12,628,000 | 13,867,000 | 13,040,000 | 14,119,000 |
Income (loss) per share—basic: | ||||
Continuing operations (in dollars per share) | $ (0.05) | $ 0.10 | $ 0.07 | $ 0.35 |
Discontinued operations (in dollars per share) | 0 | 0.02 | 0.15 | 0.05 |
Net income (loss) per share - basic (in dollars per share) | (0.05) | 0.12 | 0.22 | 0.40 |
Income (loss) per share—diluted: | ||||
Continuing operations (in dollars per share) | (0.05) | 0.10 | 0.07 | 0.35 |
Discontinued operations (in dollars per share) | 0 | 0.02 | 0.15 | 0.05 |
Net income (loss) per share - diluted (in dollars per share) | $ (0.05) | $ 0.12 | $ 0.22 | $ 0.40 |
Anti-dilutive shares not included in computation of net income (loss) per common share (in shares) | 562,500 | 200,000 | 162,500 | 200,000 |
Commitments and Contingencies24
Commitments and Contingencies (Details) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2004 | Dec. 31, 2002 | Dec. 31, 2016 | |
Loss Contingencies | |||||||
Charge in general and administrative expenses | $ 0 | $ 0 | $ 0 | $ 1,000 | |||
Operating Leases, Future Minimum Payments Receivable [Abstract] | |||||||
2017 Remaining | 1,542,000 | 1,542,000 | |||||
2,018 | 5,240,000 | 5,240,000 | |||||
2,019 | 4,494,000 | 4,494,000 | |||||
2,020 | 3,825,000 | 3,825,000 | |||||
2,021 | 3,198,000 | 3,198,000 | |||||
Thereafter | 5,626,000 | 5,626,000 | |||||
Total | 23,925,000 | 23,925,000 | |||||
Purchase Obligation, Fiscal Year Maturity [Abstract] | |||||||
2017 Remaining | 408,000 | 408,000 | |||||
2,018 | 579,000 | 579,000 | |||||
2,019 | 260,000 | 260,000 | |||||
2,020 | 11,000 | 11,000 | |||||
2,021 | 0 | 0 | |||||
Thereafter | 0 | 0 | |||||
Total | 1,258,000 | 1,258,000 | |||||
Contractual Obligation, Fiscal Year Maturity [Abstract] | |||||||
2017 Remaining | 1,950,000 | 1,950,000 | |||||
Total Commitments, Due in 2018 | 5,819,000 | 5,819,000 | |||||
Total Commitments, Due in 2019 | 4,754,000 | 4,754,000 | |||||
Total Commitments, Due in 2020 | 3,836,000 | 3,836,000 | |||||
Total Commitments, Due in 2021 | 3,198,000 | 3,198,000 | |||||
Total Commitments, Due Thereafter | 5,626,000 | 5,626,000 | |||||
Total commitments | 25,183,000 | 25,183,000 | |||||
Local deals and getaway merchant payables | $ 11,000,000 | $ 11,000,000 | $ 14,800,000 | ||||
Travel Zoo Com Corporation | |||||||
Loss Contingencies | |||||||
Period for receiving shares under merger (in years) | 2 years | 2 years | |||||
Number of shares exchanged under merger (in shares) | 1 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | |
Income Taxes (Textual) [Abstract] | |||||
Effective tax rate (percent) | 654.00% | 34.00% | 74.00% | 40.00% | |
Undistributed earnings on a book basis for the non-U.S. subsidiaries | $ 13,900 | $ 13,900 | |||
Unrecognized deferred tax liability related to undistributed earnings of non-U.S. subsidiaries | 1,200 | 1,200 | |||
Total unrecognized tax benefits | 1,600 | 1,600 | |||
Accrued interest and penalties | 985 | 985 | $ 951 | ||
Expected additional federal and state tax expense | $ 31,000 | $ 31,000 |
Accumulated Other Comprehensi26
Accumulated Other Comprehensive Loss (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Accumulated Other Comprehensive Income [Roll Forward] | ||||
Beginning balance | $ 18,064,000 | |||
Ending balance | $ 12,149,000 | 12,149,000 | ||
Amounts reclassified from accumulated other comprehensive loss | 0 | $ 0 | 0 | $ 0 |
AOCI | ||||
Accumulated Other Comprehensive Income [Roll Forward] | ||||
Beginning balance | (3,687,000) | (3,625,000) | (3,787,000) | (3,908,000) |
Ending balance | (3,556,000) | (3,809,000) | (3,556,000) | (3,809,000) |
Foreign Currency Translation | ||||
Accumulated Other Comprehensive Income [Roll Forward] | ||||
Other comprehensive income (loss) due to foreign currency translation, net of tax | $ 131,000 | $ (184,000) | $ 231,000 | $ 99,000 |
Stock-Based Compensation and 27
Stock-Based Compensation and Stock Options (Details) - Stock Options - USD ($) | 1 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Nov. 01, 2017 | Mar. 31, 2016 | Sep. 30, 2015 | Jan. 31, 2012 | Sep. 30, 2017 | Sep. 30, 2017 | Dec. 31, 2015 | |
January 2012 Plan | |||||||
Stock-Based Compensation (Textual) [Abstract] | |||||||
Employee options granted to purchase shares of common stock (in shares) | 100,000 | ||||||
Exercise price of employee option shares of common stock (in dollars per share) | $ 28.98 | ||||||
Options vested and become exercisable annually (in shares) | 25,000 | ||||||
Options canceled (in shares) | 25,000 | ||||||
Options forfeited (in shares) | 25,000 | ||||||
Options vested (in shares) | 50,000 | 50,000 | |||||
Unrecognized stock-based compensation expense | $ 0 | $ 0 | |||||
September 2015 Plan | |||||||
Stock-Based Compensation (Textual) [Abstract] | |||||||
Employee options granted to purchase shares of common stock (in shares) | 400,000 | ||||||
Exercise price of employee option shares of common stock (in dollars per share) | $ 8.07 | ||||||
Options vested and become exercisable annually (in shares) | 50,000 | ||||||
Options vested (in shares) | 350,000 | 350,000 | |||||
Options outstanding (in shares) | 400,000 | 400,000 | |||||
Total stock-based compensation expense | $ 196,000 | $ 587,000 | |||||
Unrecognized stock-based compensation expense | $ 196,000 | $ 196,000 | |||||
Expected duration for recognition of stock based compensation expense (in years) | 3 months | ||||||
March 2016 Plan | |||||||
Stock-Based Compensation (Textual) [Abstract] | |||||||
Employee options granted to purchase shares of common stock (in shares) | 150,000 | ||||||
Exercise price of employee option shares of common stock (in dollars per share) | $ 8.55 | ||||||
Options vested and become exercisable annually (in shares) | 37,500 | ||||||
Options vested (in shares) | 37,500 | 37,500 | |||||
Options outstanding (in shares) | 112,500 | 112,500 | |||||
Total stock-based compensation expense | $ 11,000 | $ 100,000 | |||||
Unrecognized stock-based compensation expense | $ 288,000 | $ 288,000 | |||||
Expected duration for recognition of stock based compensation expense (in years) | 2 years 4 months 24 days | ||||||
Executive Officer | March 2016 Plan | |||||||
Stock-Based Compensation (Textual) [Abstract] | |||||||
Options forfeited (in shares) | 37,500 | ||||||
Total stock-based compensation expense | $ (19,000) | ||||||
Subsequent Event | October 2017 Plan | |||||||
Stock-Based Compensation (Textual) [Abstract] | |||||||
Employee options granted to purchase shares of common stock (in shares) | 400,000 | ||||||
Exercise price of employee option shares of common stock (in dollars per share) | $ 6.95 | ||||||
Options vested and become exercisable quarterly (in shares) | 50,000 |
Stock Repurchase Program (Detai
Stock Repurchase Program (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||||
Sep. 30, 2017 | Sep. 30, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Feb. 28, 2017 | Feb. 29, 2016 | Jan. 31, 2014 | |
January 2014 Plan | ||||||||
Class of Stock [Line Items] | ||||||||
Number of shares authorized to be repurchased (up to) (in shares) | 500,000 | |||||||
Remaining number of shares authorized to be repurchased (in shares) | 56,000 | |||||||
January 2014 Plan | Treasury Stock | ||||||||
Class of Stock [Line Items] | ||||||||
Shares repurchase and retired during period (in shares) | 212,000 | 261,000 | ||||||
Stock repurchased during period, value | $ 1.7 | $ 5.9 | ||||||
February 2016 Plan | ||||||||
Class of Stock [Line Items] | ||||||||
Number of shares authorized to be repurchased (up to) (in shares) | 1,000,000 | |||||||
Remaining number of shares authorized to be repurchased (in shares) | 56,000 | |||||||
February 2016 Plan | Treasury Stock | ||||||||
Class of Stock [Line Items] | ||||||||
Shares repurchase and retired during period (in shares) | 1,056,000 | |||||||
Stock repurchased during period, value | $ 9.5 | |||||||
January 2014 and February 2016 Plan | ||||||||
Class of Stock [Line Items] | ||||||||
Remaining number of shares authorized to be repurchased (in shares) | 0 | |||||||
February 2017 Plan | ||||||||
Class of Stock [Line Items] | ||||||||
Number of shares authorized to be repurchased (up to) (in shares) | 1,000,000 | |||||||
Remaining number of shares authorized to be repurchased (in shares) | 3,295 | 3,295 | ||||||
February 2017 Plan | Treasury Stock | ||||||||
Class of Stock [Line Items] | ||||||||
Shares repurchase and retired during period (in shares) | 287,713 | 996,705 | ||||||
Stock repurchased during period, value | $ 2.6 | $ 9.7 |
Segment Reporting and Signifi29
Segment Reporting and Significant Customer Information - Narrative (Details) - segment | 9 Months Ended | 12 Months Ended |
Sep. 30, 2017 | Dec. 31, 2016 | |
Segments (Textual) [Abstract] | ||
Number of reportable operating segments | 3 | |
Customer One | Accounts Receivable | Credit Concentration Risk | ||
Concentration Risk [Line Items] | ||
Concentration risk percentage | 16.00% |
Segment Reporting and Signifi30
Segment Reporting and Significant Customer Information - Operating Results from Continuing Operations and Assets by Business Segment (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Summary of operating results from continuing operations and assets by business segment | ||||
Revenues | $ 24,687 | $ 26,823 | $ 79,527 | $ 87,450 |
Operating profit (loss) | 18 | 1,875 | 3,466 | 8,158 |
Asia Pacific | ||||
Summary of operating results from continuing operations and assets by business segment | ||||
Revenues | 1,773 | 2,557 | 5,536 | 7,251 |
Operating profit (loss) | (1,679) | (798) | (4,385) | (3,080) |
Europe | ||||
Summary of operating results from continuing operations and assets by business segment | ||||
Revenues | 7,946 | 8,474 | 24,914 | 28,490 |
Operating profit (loss) | 309 | 1,412 | 1,526 | 5,022 |
North America | ||||
Summary of operating results from continuing operations and assets by business segment | ||||
Revenues | 14,968 | 15,792 | 49,077 | 51,709 |
Operating profit (loss) | 1,388 | 1,261 | 6,325 | 6,216 |
Operating Segments | Asia Pacific | ||||
Summary of operating results from continuing operations and assets by business segment | ||||
Revenues | 1,767 | 2,521 | 5,574 | 7,173 |
Operating Segments | Europe | ||||
Summary of operating results from continuing operations and assets by business segment | ||||
Revenues | 8,008 | 8,614 | 25,231 | 28,893 |
Operating Segments | North America | ||||
Summary of operating results from continuing operations and assets by business segment | ||||
Revenues | 14,912 | 15,688 | 48,722 | 51,384 |
Other | Asia Pacific | ||||
Summary of operating results from continuing operations and assets by business segment | ||||
Revenues | 6 | 36 | (38) | 78 |
Other | Europe | ||||
Summary of operating results from continuing operations and assets by business segment | ||||
Revenues | (62) | (140) | (317) | (403) |
Other | North America | ||||
Summary of operating results from continuing operations and assets by business segment | ||||
Revenues | $ 56 | $ 104 | $ 355 | $ 325 |
Segment Reporting and Signifi31
Segment Reporting and Significant Customer Information - Assets by Segment (Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Revenue for each segment recognized based on customer location | ||
Long-lived assets | $ 5,265 | $ 6,158 |
Total assets | 43,164 | 53,530 |
Elimination | ||
Revenue for each segment recognized based on customer location | ||
Long-lived assets | 0 | 0 |
Total assets | (70,520) | (66,851) |
Asia Pacific | Operating Segments | ||
Revenue for each segment recognized based on customer location | ||
Long-lived assets | 151 | 209 |
Total assets | 3,490 | 5,295 |
Europe | Operating Segments | ||
Revenue for each segment recognized based on customer location | ||
Long-lived assets | 577 | 763 |
Total assets | 49,721 | 49,125 |
North America | Operating Segments | ||
Revenue for each segment recognized based on customer location | ||
Long-lived assets | 4,537 | 5,186 |
Total assets | $ 60,473 | $ 65,961 |
Segment Reporting and Signifi32
Segment Reporting and Significant Customer Information - Revenue by Type and Segment (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Breakdown of revenues by type and segment | ||||
Total revenues | $ 24,687 | $ 26,823 | $ 79,527 | $ 87,450 |
Asia Pacific | ||||
Breakdown of revenues by type and segment | ||||
Total revenues | 1,773 | 2,557 | 5,536 | 7,251 |
Europe | ||||
Breakdown of revenues by type and segment | ||||
Total revenues | 7,946 | 8,474 | 24,914 | 28,490 |
North America | ||||
Breakdown of revenues by type and segment | ||||
Total revenues | 14,968 | 15,792 | 49,077 | 51,709 |
Travel | ||||
Breakdown of revenues by type and segment | ||||
Total revenues | 20,842 | 22,185 | 67,938 | 72,512 |
Travel | Asia Pacific | ||||
Breakdown of revenues by type and segment | ||||
Total revenues | 1,644 | 2,334 | 5,170 | 6,582 |
Travel | Europe | ||||
Breakdown of revenues by type and segment | ||||
Total revenues | 7,052 | 7,357 | 21,852 | 24,440 |
Travel | North America | ||||
Breakdown of revenues by type and segment | ||||
Total revenues | 12,146 | 12,494 | 40,916 | 41,490 |
Local | ||||
Breakdown of revenues by type and segment | ||||
Total revenues | 3,845 | 4,638 | 11,589 | 14,938 |
Local | Asia Pacific | ||||
Breakdown of revenues by type and segment | ||||
Total revenues | 129 | 223 | 366 | 669 |
Local | Europe | ||||
Breakdown of revenues by type and segment | ||||
Total revenues | 894 | 1,117 | 3,062 | 4,050 |
Local | North America | ||||
Breakdown of revenues by type and segment | ||||
Total revenues | $ 2,822 | $ 3,298 | $ 8,161 | $ 10,219 |
Segment Reporting and Signifi33
Segment Reporting and Significant Customer Information - Revenue for Individual Countries that Exceed 10% of Total Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Revenue, Major Customer [Line Items] | ||||
Total revenues | $ 24,687 | $ 26,823 | $ 79,527 | $ 87,450 |
United States | ||||
Revenue, Major Customer [Line Items] | ||||
Total revenues | 13,658 | 14,467 | 45,127 | 47,845 |
United Kingdom | ||||
Revenue, Major Customer [Line Items] | ||||
Total revenues | 4,483 | 4,994 | 14,136 | 17,518 |
GERMANY | ||||
Revenue, Major Customer [Line Items] | ||||
Total revenues | 2,881 | 3,042 | 9,047 | 9,436 |
Rest of the world | ||||
Revenue, Major Customer [Line Items] | ||||
Total revenues | $ 3,665 | $ 4,320 | $ 11,217 | $ 12,651 |
Segment Reporting and Signifi34
Segment Reporting and Significant Customer Information - Long Lives Assets by Geographic Area (Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Revenues from External Customers and Long-Lived Assets | ||
Long-lived assets | $ 5,265 | $ 6,158 |
United States | ||
Revenues from External Customers and Long-Lived Assets | ||
Long-lived assets | 4,124 | 4,755 |
Rest of the world | ||
Revenues from External Customers and Long-Lived Assets | ||
Long-lived assets | $ 1,141 | $ 1,403 |
Discontinued Operations (Detail
Discontinued Operations (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Gain on sale of Fly.com domain name | $ 2,890 | $ 0 | ||
Income from discontinued operations, net of income taxes | $ 0 | $ 241 | 1,938 | 687 |
Discontinued Operations, Disposed of by Sale | Fly.com domain | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Revenues from Search | 0 | 3,617 | 2,088 | 11,839 |
Cost of revenues | 0 | (91) | (101) | (389) |
Gross profit | 0 | 3,526 | 1,987 | 11,450 |
Total operating expenses | 0 | (3,196) | (1,817) | (10,479) |
Gain on sale of Fly.com domain name | 0 | 0 | 2,890 | 0 |
Income from discontinued operations before income taxes | 0 | 330 | 3,060 | 971 |
Income tax expense | 0 | 89 | 1,122 | 284 |
Income from discontinued operations, net of income taxes | $ 0 | $ 241 | $ 1,938 | $ 687 |