Friday, April 23, 2021

Travelzoo (TZOO)
Risk/Reward Relationship Improves Despite Headwinds

Travelzoo is a US-based company which acts as a publisher of travel and entertainment offers. The company informs a varied number of members in Asia Pacific, Europe, and North America, as well as millions of website users, about the best travel, entertainment and local deals available from various companies. It provides travel, entertainment, and local businesses in a flexible manner to the various customer. The company operates in three geographic segments namely Asia Pacific, Europe, and North America. Travelzoo derives its revenue through advertising fees including listing fees paid by travel, entertainment, and local businesses to advertise their offers on company’s media properties. Most of the company’s revenue is derived from the North America.

Michael Kupinski, Director of Research, Noble Capital Markets, Inc.

Refer to the full report for the price target, fundamental analysis, and rating.

Q1 in line with previously lowered expectations. Total company revenues were $14.3 million versus our $13.7 million estimate. The revenues benefited from moderating advertising trends. Adjusted EBITDA was roughly $600,000 versus our $15,000 estimate, benefiting from slightly better gross margins.


Q2 outlook appears encouraging.  Management guided Q2 revenues to a range of $16 million to $17 million, with expenses to be roughly $15.5 million. Given the improving revenues, the company is expected to swing toward earnings positive in the quarter …

This Company Sponsored Research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).

*Analyst certification and important disclosures included in the full report. NOTE: investment decisions should not be based upon the content of this research summary.  Proper due diligence is required before making any investment decision. 

Thursday, April 22, 2021

FAT Brands Inc. (FAT)
Upsized $144 Million Securitization Provides Multiple Benefits

FAT Brands Inc is a multi-brand restaurant franchising company. It develops, markets, and acquires predominantly fast casual restaurant concepts. The company provides turkey burgers, chicken Sandwiches, chicken tenders, burgers, ribs, wrap sandwiches, and others. Its brand portfolio comprises Fatburger, Buffalo’s Cafe and Express, and Ponderosa and Bonanza. The company’s overall footprint covers nearly 32 countries. Fatburger generates maximum revenue for the company.

Joe Gomes, Senior Research Analyst, Noble Capital Markets, Inc.

Refer to the full report for the price target, fundamental analysis, and rating.

Whole Business Securitization. After the market closed Tuesday, FAT Brands announced the completion of a $144.5 million offering of fixed rate asset-backed notes, structured as a whole business securitization. This is the Company’s third successful securitization over the past twelve months, with the amount raised rising from the initial $40 million raise in March 2020.


More Ammunition.  The upsized deal provides FAT Brands with additional capital to continue its strategy of acquiring high growth potential restaurant concepts to its existing stable of nine restaurant brands. At the end of the fourth quarter, the Company had $80 million of existing Notes and a $5 million sellers note outstanding. If all of these were refinanced, that would leave some $60 million of …

This Company Sponsored Research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).

*Analyst certification and important disclosures included in the full report. NOTE: investment decisions should not be based upon the content of this research summary.  Proper due diligence is required before making any investment decision. 

 

 

Travelzoo Reports First Quarter 2021 Results

 

NEW YORK, 
April 22, 2021 (GLOBE NEWSWIRE) — Travelzoo® (NASDAQ: TZOO):

• Consolidated revenue of 
  $14.3 million, down 30% year-over-year and up 14% quarter-over-quarter
• Non-GAAP consolidated operating profit of 
  $0.6 million
• Earnings per share (EPS) of (
  $0.14) attributable to 
  Travelzoo from continuing operations
• Cash flow from operations of 
  $11.9 million

Travelzoo, a global Internet media company that publishes exclusive offers and experiences for members, today announced financial results for the first quarter ended 
March 31, 2021. Consolidated revenue was 
$14.3 million, down 30% from 
$20.3 million year-over-year and up 14% from 
$12.5 million in the prior quarter. Reported revenue excludes revenue from discontinued operations in 
Asia Pacific. 
Travelzoo’s reported revenue consists of advertising revenues and commissions, derived from and generated in connection with purchases made by 
Travelzoo members.

The reported net loss attributable to 
Travelzoo from continuing operations was 
$1.6 million for Q1 2021. At the consolidated level, including minority interests, the reported net loss from continuing operations was 
$1.7 million. EPS from continuing operations was (
$0.14), compared to (
$0.32) in the prior-year period.

Non-GAAP operating profit was 
$0.6 million. The calculation of non-GAAP operating profit excludes amortization of intangibles (
$0.3 million), stock option expenses (
$0.9 million), and severance-related expenses (
$0.2 million). See section “Non-GAAP Financial Measures” below.

“We see continued improvement in our business. 
Travelzoo is loved by travel enthusiasts who look for quality offers. 
Travelzoo members are affluent, active, and open for new experiences. 75% say 
Travelzoo influences their travel destinations because they trust 
Travelzoo. We believe that trust is becoming an important competitive advantage for Travelzoo,” said  Holger Bartel, Global CEO.

Cash Position
As of 
March 31, 2021, consolidated cash, cash equivalents and restricted cash were 
$72.0 million. Cash flow from operations was 
$11.9 million. There were no significant capital expenditures.

Reserve
Reported revenues include a reserve of 
$4.0 million related to commissions to be earned from vouchers sold. The reserve is booked as contra revenue. For Q1 2021, an adjustment to the reserve reduced reported revenue by 
$56,000.

Travelzoo North America

North America business segment revenue decreased 23% year-over-year to 
$9.8 million. Operating profit for Q1 2021 was 
$39,000, or 0.4% of revenue, compared to an operating loss of 
$976,000 in the prior-year period.

Travelzoo Europe

Europe business segment revenue decreased 48% year-over-year to 
$3.6 million. Operating loss for Q1 2021 was 
$696,000, compared to an operating loss of 
$1.3 million in the prior-year period.

Jack’s Flight Club 
On 
January 13, 2020, 
Travelzoo acquired 60% of Jack’s 
Flight Club, a membership subscription service. Jack’s 
Flight Club revenue increased 30% year-over-year to 
$887,000. Operating loss for Q1 2021 was 
$110,000, compared to an operating loss of 
$3.0 million in the prior-year period. After consolidation with 
Travelzoo, Jack’s 
Flight Club’s net loss was 
$121,000, with 
$73,000 attributable to 
Travelzoo as a result of recording 
$284,000 of amortization of intangible assets related to the acquisition.

Licensing
In 
June 2020, 
Travelzoo sold its subsidiary in 
Japan, Travelzoo Japan K.K., to Mr.  Hajime Suzuki. In connection with the sale, 
Travelzoo and Travelzoo Japan K.K. entered into a royalty-bearing licensing agreement for the exclusive use of 
Travelzoo members in 
Japan. In 
August 2020, 
Travelzoo sold its 
Singapore subsidiary to Mr.  Julian Rembrandt and entered into a royalty-bearing licensing agreement for, among other things, the exclusive use of 
Travelzoo’s members in 
Australia, 
New Zealand, and 
Singapore. Under the licensing agreements, 
Travelzoo’s existing members in 
Australia, 
Japan, 
New Zealand, and 
Singapore will continue to be owned by 
Travelzoo as the licensor. Licensing revenue is booked with a lag of one quarter. Licensing revenue from 
Japan of 
$9,000 generated in Q4 2020 was recognized in Q1 2021.

Members and Subscribers
As of 
March 31, 2021, we had 31.8 million members worldwide. In 
North America, the unduplicated number of 
Travelzoo members was 18.1 million as of 
March 31, 2021, up 7% from 
March 31, 2020. In 
Europe, the unduplicated number of 
Travelzoo members was 8.6 million as of 
March 31, 2021, down 6% from 
March 31, 2020. On 
March 15, 2021, 
Travelzoo added more than 2 million new members in the 
U.S. in connection with a direct competitor from 
Europe exiting the U.S. market. Jack’s 
Flight Club had 1.6 million subscribers as of 
March 31, 2021, down from 1.7 million subscribers as of 
March 31, 2020.

Discontinued Operations
As announced in a press release on 
March 10, 2020, 
Travelzoo decided to exit its 
Asia Pacific business which in 2019 reduced EPS by 
$0.60. The 
Asia Pacific business has been classified as discontinued operations since 
March 31, 2020. Prior periods have been reclassified to conform with the current presentation. Certain reclassifications have been made for current and prior periods between the continued operations and the discontinued operations in accordance with 
U.S. GAAP.

Income Taxes
Income tax expense was 
$742,000 in Q1 2021, compared to an income tax benefit of 
$517,000 in the prior-year period.

Non-GAAP Financial Measures
Management calculates non-GAAP operating income when evaluating the financial performance of the business. Travelzoo’s calculation of non-GAAP operating income, also called “non-GAAP operating profit” in this press release and today’s earnings conference call, excludes the following items: impairment of intangibles and goodwill, amortization of intangibles, stock option expenses, and severance-related expenses. This press release includes a table which reconciles GAAP operating income to the calculation of non-GAAP operating income. Non-GAAP operating income is not required by, or presented in accordance with, generally accepted accounting principles in 
the United States of America (“GAAP”). This information should be considered as supplemental in nature and should not be considered in isolation or as a substitute for the financial information prepared in accordance with GAAP. In addition, these non-GAAP financial measures may not be the same as similarly titled measures reported by other companies.

Looking Ahead
We currently expect for Q2 2021 to report significantly higher revenue and profitability. We see a trend of recovery of our revenue. We have been able to reduce our operating expenses, and we believe we can contain many of the lower costs in the foreseeable future.

Conference Call

Travelzoo will host a conference call to discuss first quarter results today at 
11:00 a.m. ET. Please visit http://ir.travelzoo.com/events-presentations to download the management presentation (PDF format) to be discussed in the conference call; and access the webcast.

About Travelzoo

Travelzoo® provides our 30 million members insider deals and one-of-a-kind experiences personally reviewed by one of our deal experts around the globe. We have our finger on the pulse of outstanding travel, entertainment, and lifestyle experiences. For over 20 years we have worked in partnership with more than 5,000 top travel suppliers—our long-standing relationships give 
Travelzoo members access to irresistible deals.

Certain statements contained in this press release that are not historical facts may be forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities and Exchange Act of 1934. These forward-looking statements may include, but are not limited to, statements about our plans, objectives, expectations, prospects and intentions, markets in which we participate and other statements contained in this press release that are not historical facts. When used in this press release, the words “expect”, “predict”, “project”, “anticipate”, “believe”, “estimate”, “intend”, “plan”, “seek” and similar expressions are generally intended to identify forward-looking statements. Because these forward-looking statements involve risks and uncertainties, there are important factors that could cause actual results to differ materially from those expressed or implied by these forward-looking statements, including changes in our plans, objectives, expectations, prospects and intentions and other factors discussed in our filings with the 
SEC. We cannot guarantee any future levels of activity, performance or achievements. 
Travelzoo undertakes no obligation to update forward-looking statements to reflect events or circumstances occurring after the date of this press release.

Travelzoo, Top 20, and 
Jack’s Flight Club are registered trademarks of 
Travelzoo.

Travelzoo Condensed Consolidated Statements of Operations (Unaudited) (In thousands, except per share amounts)
	Three months ended
	March 31,
	2021				2020
Revenues	$	14,284			$	20,327
Cost of revenues	3,018				2,703
Gross profit	11,266				17,624
Operating expenses:
Sales and marketing	6,790				13,094
Product development	683				1,428
General and administrative	4,560				5,522
Impairment of intangible asset and goodwill	—				2,920
Total operating expenses	12,033				22,964
Operating loss	(767		)		(5,340		)
Other income (loss), net	(166		)		(6		)
Loss from continuing operations before income taxes	(933		)		(5,346		)
Income tax expense (benefit)	742				(517		)
Loss from continuing operations	(1,675		)		(4,829		)
Loss from discontinued operations, net of tax	(15		)		(2,919		)
Net loss	(1,690		)		(7,748		)
Net loss attributable to non-controlling interest	(48		)		(1,139		)
Net loss attributable to  Travelzoo	$	(1,642	)		$	(6,609	)
Net loss attributable to Travelzoo—continuing operations	$	(1,627	)		$	(3,690	)
Net loss attributable to Travelzoo—discontinued operations	$	(15	)		$	(2,919	)
Loss per share—basic
Continuing operations	$	(0.14	)		$	(0.32	)
Discontinued operations	$	—			$	(0.26	)
Net loss per share —basic	$	(0.14	)		$	(0.58	)
Loss per share—diluted
Continuing operations	$	(0.14	)		$	(0.32	)
Discontinued operations	$	—			$	(0.26	)
Net loss per share—diluted	$	(0.14	)		$	(0.58	)
Shares used in per share calculation from continuing operations—basic	11,391				11,439
Shares used in per share calculation from discontinued operations—basic	11,391				11,439
Shares used in per share calculation from continuing operations—diluted	11,391				11,439
Shares used in per share calculation from discontinued operations—diluted	11,391				11,439

 

Travelzoo Condensed Consolidated Balance Sheets (Unaudited) (In thousands)
	March 31, 2021				March 31, 2020
Assets
Current assets:
Cash and cash equivalents	$	70,862			$	63,061
Accounts receivable, net	7,293				4,519
Prepaid income taxes	1,443				931
Deposits	101				137
Prepaid expenses and other	3,275				1,166
Assets from discontinued operations	123				230
Total current assets	83,097				70,044
Deposits and other	1,351				745
Deferred tax assets	4,400				5,067
Restricted cash	1,157				1,178
Operating lease right-of-use assets	8,474				8,541
Property and equipment, net	1,152				1,347
Intangible assets, net	4,250				4,534
Goodwill	10,944				10,944
Total assets	$	114,825			$	102,400
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	8,750			$	6,996
Merchant payables	70,094				57,104
Accrued expenses and other	10,827				8,649
Deferred revenue	2,417				2,688
Operating lease liabilities	3,796				3,587
PPP notes payable (current portion)	3,460				2,849
Income tax payable	201				326
Liabilities from discontinued operations	580				671
Total current liabilities	100,124				82,870
PPP notes payable	204				814
Deferred tax liabilities	235				357
Long-term operating lease liabilities	10,558				10,774
Other long-term liabilities	2,027				1,085
Total liabilities	113,148				95,900
Non-controlling interest	4,560				4,609
Common stock	115				114
Treasury stock (at cost)	(1,583		)		—
Additional paid-in capital	4,279				6,239
Retained earnings (accumulated deficit)	(2,045		)		(403		)
Accumulated other comprehensive loss	(3,649		)		(4,059		)
Total stockholders’ equity	(2,883		)		1,891
Total liabilities and stockholders’ equity	$	114,825			$	102,400

 

Travelzoo Condensed Consolidated Statements of Cash Flows (Unaudited) (In thousands)
	Three months ended
	March 31,
	2021				2020
Cash flows from operating activities:
Net income (loss)	$	(1,690	)		$	(7,748	)
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Depreciation and amortization	484				551
Stock-based compensation	882				23
Deferred income tax	541				(609		)
Impairment of intangible assets and goodwill	—				2,920
Loss on long-lived assets	—				437
Loss on equity investment in WeGo	—				195
Net foreign currency effects	(152		)		(681		)
Provision of loss on accounts receivable and other	(454		)		1,441
Changes in operating assets and liabilities, net of acquisitions:
Accounts receivable	(2,229		)		2,509
Income tax receivable	(545		)		989
Prepaid expenses and other	(2,357		)		862
Accounts payable	1,727				547
Merchant payables	13,212				(6,940		)
Accrued expenses and other	2,199				704
Income tax payable	(126		)		(333		)
Other liabilities	412				2,077
Net cash provided by operating activities	11,904				(3,056		)
Cash flows from investing activities:
Acquisition of business, net of cash acquired	—				(679		)
Purchases of property and equipment	(7		)		(131		)
Net cash provided by (used in) investing activities	(7		)		(810		)
Cash flows from financing activities:
Repurchase of common stock	(1,583		)		(1,205		)
Payment of promissory notes	—				(1,000		)
Proceeds from exercise of stock options, net of taxes for net share settlement	(2,840		)		—
Net cash used in financing activities	(4,423		)		(2,205		)
Effect of exchange rate on cash, cash equivalents and restricted cash	270				(272		)
Net increase in cash, cash equivalents and restricted cash	7,744				(6,343		)
Cash, cash equivalents and restricted cash at beginning of period	64,385				20,710
Cash, cash equivalents and restricted cash at end of period	$	72,129			$	14,367

 

Travelzoo Segment Information from Continuing Operations (Unaudited) (In thousands)
Three months ended March 31, 2021	Travelzoo North America				Travelzoo Europe				Jack’s Flight Club				Elimination				Consolidated
Revenue from unaffiliated customers	$	9,828			$	3,569			$	887			$	—			$	14,284
Intersegment revenue	(9		)		9				—				—				—
Total net revenues	9,819				3,578				887				—				14,284
Operating income (loss)	$	39			$	(696	)		$	(110	)		$	—			$	(767	)
Three months ended March 31, 2020	Travelzoo North America				Travelzoo Europe				Jack’s Flight Club				Elimination				Consolidated
Revenue from unaffiliated customers	$	12,549			$	7,103			$	683			$	(8	)		$	20,327
Intersegment revenue	148				(156		)		—				8				—
Total net revenues	12,697				6,947				683				—				20,327
Operating loss	$	(976	)		$	(1,341	)		$	(3,015	)		$	(8	)		$	(5,340	)

 

Travelzoo Reconciliation of GAAP to Non-GAAP Information (Unaudited) (In thousands, except per share amounts)
	Three months ended March 31
	2021				2020
GAAP operating expense	$	12,033			$	22,964
Non-GAAP adjustments:
Impairment of intangible and goodwill (A)	—				2,920
Amortization of intangibles (B)	284				215
Stock option expenses (C)	882				23
Severance-related expenses (D)	223				217
Non-GAAP operating expense	10,644				19,589
GAAP operating income (loss)	(767		)		(5,340		)
Non-GAAP adjustments (A through D)	1,389				3,375
Non-GAAP operating income (loss)	622				(1,965		)

Investor Relations:
Almira Pusch
ir@travelzoo.com

 

Source: Travelzoo

 

 

Travelzoo Reports First Quarter 2021 Results

 

NEW YORK, 
April 22, 2021 (GLOBE NEWSWIRE) — Travelzoo® (NASDAQ: TZOO):

• Consolidated revenue of 
  $14.3 million, down 30% year-over-year and up 14% quarter-over-quarter
• Non-GAAP consolidated operating profit of 
  $0.6 million
• Earnings per share (EPS) of (
  $0.14) attributable to 
  Travelzoo from continuing operations
• Cash flow from operations of 
  $11.9 million

Travelzoo, a global Internet media company that publishes exclusive offers and experiences for members, today announced financial results for the first quarter ended 
March 31, 2021. Consolidated revenue was 
$14.3 million, down 30% from 
$20.3 million year-over-year and up 14% from 
$12.5 million in the prior quarter. Reported revenue excludes revenue from discontinued operations in 
Asia Pacific. 
Travelzoo’s reported revenue consists of advertising revenues and commissions, derived from and generated in connection with purchases made by 
Travelzoo members.

The reported net loss attributable to 
Travelzoo from continuing operations was 
$1.6 million for Q1 2021. At the consolidated level, including minority interests, the reported net loss from continuing operations was 
$1.7 million. EPS from continuing operations was (
$0.14), compared to (
$0.32) in the prior-year period.

Non-GAAP operating profit was 
$0.6 million. The calculation of non-GAAP operating profit excludes amortization of intangibles (
$0.3 million), stock option expenses (
$0.9 million), and severance-related expenses (
$0.2 million). See section “Non-GAAP Financial Measures” below.

“We see continued improvement in our business. 
Travelzoo is loved by travel enthusiasts who look for quality offers. 
Travelzoo members are affluent, active, and open for new experiences. 75% say 
Travelzoo influences their travel destinations because they trust 
Travelzoo. We believe that trust is becoming an important competitive advantage for Travelzoo,” said  Holger Bartel, Global CEO.

Cash Position
As of 
March 31, 2021, consolidated cash, cash equivalents and restricted cash were 
$72.0 million. Cash flow from operations was 
$11.9 million. There were no significant capital expenditures.

Reserve
Reported revenues include a reserve of 
$4.0 million related to commissions to be earned from vouchers sold. The reserve is booked as contra revenue. For Q1 2021, an adjustment to the reserve reduced reported revenue by 
$56,000.

Travelzoo North America

North America business segment revenue decreased 23% year-over-year to 
$9.8 million. Operating profit for Q1 2021 was 
$39,000, or 0.4% of revenue, compared to an operating loss of 
$976,000 in the prior-year period.

Travelzoo Europe

Europe business segment revenue decreased 48% year-over-year to 
$3.6 million. Operating loss for Q1 2021 was 
$696,000, compared to an operating loss of 
$1.3 million in the prior-year period.

Jack’s Flight Club 
On 
January 13, 2020, 
Travelzoo acquired 60% of Jack’s 
Flight Club, a membership subscription service. Jack’s 
Flight Club revenue increased 30% year-over-year to 
$887,000. Operating loss for Q1 2021 was 
$110,000, compared to an operating loss of 
$3.0 million in the prior-year period. After consolidation with 
Travelzoo, Jack’s 
Flight Club’s net loss was 
$121,000, with 
$73,000 attributable to 
Travelzoo as a result of recording 
$284,000 of amortization of intangible assets related to the acquisition.

Licensing
In 
June 2020, 
Travelzoo sold its subsidiary in 
Japan, Travelzoo Japan K.K., to Mr.  Hajime Suzuki. In connection with the sale, 
Travelzoo and Travelzoo Japan K.K. entered into a royalty-bearing licensing agreement for the exclusive use of 
Travelzoo members in 
Japan. In 
August 2020, 
Travelzoo sold its 
Singapore subsidiary to Mr.  Julian Rembrandt and entered into a royalty-bearing licensing agreement for, among other things, the exclusive use of 
Travelzoo’s members in 
Australia, 
New Zealand, and 
Singapore. Under the licensing agreements, 
Travelzoo’s existing members in 
Australia, 
Japan, 
New Zealand, and 
Singapore will continue to be owned by 
Travelzoo as the licensor. Licensing revenue is booked with a lag of one quarter. Licensing revenue from 
Japan of 
$9,000 generated in Q4 2020 was recognized in Q1 2021.

Members and Subscribers
As of 
March 31, 2021, we had 31.8 million members worldwide. In 
North America, the unduplicated number of 
Travelzoo members was 18.1 million as of 
March 31, 2021, up 7% from 
March 31, 2020. In 
Europe, the unduplicated number of 
Travelzoo members was 8.6 million as of 
March 31, 2021, down 6% from 
March 31, 2020. On 
March 15, 2021, 
Travelzoo added more than 2 million new members in the 
U.S. in connection with a direct competitor from 
Europe exiting the U.S. market. Jack’s 
Flight Club had 1.6 million subscribers as of 
March 31, 2021, down from 1.7 million subscribers as of 
March 31, 2020.

Discontinued Operations
As announced in a press release on 
March 10, 2020, 
Travelzoo decided to exit its 
Asia Pacific business which in 2019 reduced EPS by 
$0.60. The 
Asia Pacific business has been classified as discontinued operations since 
March 31, 2020. Prior periods have been reclassified to conform with the current presentation. Certain reclassifications have been made for current and prior periods between the continued operations and the discontinued operations in accordance with 
U.S. GAAP.

Income Taxes
Income tax expense was 
$742,000 in Q1 2021, compared to an income tax benefit of 
$517,000 in the prior-year period.

Non-GAAP Financial Measures
Management calculates non-GAAP operating income when evaluating the financial performance of the business. Travelzoo’s calculation of non-GAAP operating income, also called “non-GAAP operating profit” in this press release and today’s earnings conference call, excludes the following items: impairment of intangibles and goodwill, amortization of intangibles, stock option expenses, and severance-related expenses. This press release includes a table which reconciles GAAP operating income to the calculation of non-GAAP operating income. Non-GAAP operating income is not required by, or presented in accordance with, generally accepted accounting principles in 
the United States of America (“GAAP”). This information should be considered as supplemental in nature and should not be considered in isolation or as a substitute for the financial information prepared in accordance with GAAP. In addition, these non-GAAP financial measures may not be the same as similarly titled measures reported by other companies.

Looking Ahead
We currently expect for Q2 2021 to report significantly higher revenue and profitability. We see a trend of recovery of our revenue. We have been able to reduce our operating expenses, and we believe we can contain many of the lower costs in the foreseeable future.

Conference Call

Travelzoo will host a conference call to discuss first quarter results today at 
11:00 a.m. ET. Please visit http://ir.travelzoo.com/events-presentations to download the management presentation (PDF format) to be discussed in the conference call; and access the webcast.

About Travelzoo

Travelzoo® provides our 30 million members insider deals and one-of-a-kind experiences personally reviewed by one of our deal experts around the globe. We have our finger on the pulse of outstanding travel, entertainment, and lifestyle experiences. For over 20 years we have worked in partnership with more than 5,000 top travel suppliers—our long-standing relationships give 
Travelzoo members access to irresistible deals.

Certain statements contained in this press release that are not historical facts may be forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities and Exchange Act of 1934. These forward-looking statements may include, but are not limited to, statements about our plans, objectives, expectations, prospects and intentions, markets in which we participate and other statements contained in this press release that are not historical facts. When used in this press release, the words “expect”, “predict”, “project”, “anticipate”, “believe”, “estimate”, “intend”, “plan”, “seek” and similar expressions are generally intended to identify forward-looking statements. Because these forward-looking statements involve risks and uncertainties, there are important factors that could cause actual results to differ materially from those expressed or implied by these forward-looking statements, including changes in our plans, objectives, expectations, prospects and intentions and other factors discussed in our filings with the 
SEC. We cannot guarantee any future levels of activity, performance or achievements. 
Travelzoo undertakes no obligation to update forward-looking statements to reflect events or circumstances occurring after the date of this press release.

Travelzoo, Top 20, and 
Jack’s Flight Club are registered trademarks of 
Travelzoo.

Travelzoo Condensed Consolidated Statements of Operations (Unaudited) (In thousands, except per share amounts)
	Three months ended
	March 31,
	2021				2020
Revenues	$	14,284			$	20,327
Cost of revenues	3,018				2,703
Gross profit	11,266				17,624
Operating expenses:
Sales and marketing	6,790				13,094
Product development	683				1,428
General and administrative	4,560				5,522
Impairment of intangible asset and goodwill	—				2,920
Total operating expenses	12,033				22,964
Operating loss	(767		)		(5,340		)
Other income (loss), net	(166		)		(6		)
Loss from continuing operations before income taxes	(933		)		(5,346		)
Income tax expense (benefit)	742				(517		)
Loss from continuing operations	(1,675		)		(4,829		)
Loss from discontinued operations, net of tax	(15		)		(2,919		)
Net loss	(1,690		)		(7,748		)
Net loss attributable to non-controlling interest	(48		)		(1,139		)
Net loss attributable to  Travelzoo	$	(1,642	)		$	(6,609	)
Net loss attributable to Travelzoo—continuing operations	$	(1,627	)		$	(3,690	)
Net loss attributable to Travelzoo—discontinued operations	$	(15	)		$	(2,919	)
Loss per share—basic
Continuing operations	$	(0.14	)		$	(0.32	)
Discontinued operations	$	—			$	(0.26	)
Net loss per share —basic	$	(0.14	)		$	(0.58	)
Loss per share—diluted
Continuing operations	$	(0.14	)		$	(0.32	)
Discontinued operations	$	—			$	(0.26	)
Net loss per share—diluted	$	(0.14	)		$	(0.58	)
Shares used in per share calculation from continuing operations—basic	11,391				11,439
Shares used in per share calculation from discontinued operations—basic	11,391				11,439
Shares used in per share calculation from continuing operations—diluted	11,391				11,439
Shares used in per share calculation from discontinued operations—diluted	11,391				11,439

 

Travelzoo Condensed Consolidated Balance Sheets (Unaudited) (In thousands)
	March 31, 2021				March 31, 2020
Assets
Current assets:
Cash and cash equivalents	$	70,862			$	63,061
Accounts receivable, net	7,293				4,519
Prepaid income taxes	1,443				931
Deposits	101				137
Prepaid expenses and other	3,275				1,166
Assets from discontinued operations	123				230
Total current assets	83,097				70,044
Deposits and other	1,351				745
Deferred tax assets	4,400				5,067
Restricted cash	1,157				1,178
Operating lease right-of-use assets	8,474				8,541
Property and equipment, net	1,152				1,347
Intangible assets, net	4,250				4,534
Goodwill	10,944				10,944
Total assets	$	114,825			$	102,400
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	8,750			$	6,996
Merchant payables	70,094				57,104
Accrued expenses and other	10,827				8,649
Deferred revenue	2,417				2,688
Operating lease liabilities	3,796				3,587
PPP notes payable (current portion)	3,460				2,849
Income tax payable	201				326
Liabilities from discontinued operations	580				671
Total current liabilities	100,124				82,870
PPP notes payable	204				814
Deferred tax liabilities	235				357
Long-term operating lease liabilities	10,558				10,774
Other long-term liabilities	2,027				1,085
Total liabilities	113,148				95,900
Non-controlling interest	4,560				4,609
Common stock	115				114
Treasury stock (at cost)	(1,583		)		—
Additional paid-in capital	4,279				6,239
Retained earnings (accumulated deficit)	(2,045		)		(403		)
Accumulated other comprehensive loss	(3,649		)		(4,059		)
Total stockholders’ equity	(2,883		)		1,891
Total liabilities and stockholders’ equity	$	114,825			$	102,400

 

Travelzoo Condensed Consolidated Statements of Cash Flows (Unaudited) (In thousands)
	Three months ended
	March 31,
	2021				2020
Cash flows from operating activities:
Net income (loss)	$	(1,690	)		$	(7,748	)
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Depreciation and amortization	484				551
Stock-based compensation	882				23
Deferred income tax	541				(609		)
Impairment of intangible assets and goodwill	—				2,920
Loss on long-lived assets	—				437
Loss on equity investment in WeGo	—				195
Net foreign currency effects	(152		)		(681		)
Provision of loss on accounts receivable and other	(454		)		1,441
Changes in operating assets and liabilities, net of acquisitions:
Accounts receivable	(2,229		)		2,509
Income tax receivable	(545		)		989
Prepaid expenses and other	(2,357		)		862
Accounts payable	1,727				547
Merchant payables	13,212				(6,940		)
Accrued expenses and other	2,199				704
Income tax payable	(126		)		(333		)
Other liabilities	412				2,077
Net cash provided by operating activities	11,904				(3,056		)
Cash flows from investing activities:
Acquisition of business, net of cash acquired	—				(679		)
Purchases of property and equipment	(7		)		(131		)
Net cash provided by (used in) investing activities	(7		)		(810		)
Cash flows from financing activities:
Repurchase of common stock	(1,583		)		(1,205		)
Payment of promissory notes	—				(1,000		)
Proceeds from exercise of stock options, net of taxes for net share settlement	(2,840		)		—
Net cash used in financing activities	(4,423		)		(2,205		)
Effect of exchange rate on cash, cash equivalents and restricted cash	270				(272		)
Net increase in cash, cash equivalents and restricted cash	7,744				(6,343		)
Cash, cash equivalents and restricted cash at beginning of period	64,385				20,710
Cash, cash equivalents and restricted cash at end of period	$	72,129			$	14,367

 

Travelzoo Segment Information from Continuing Operations (Unaudited) (In thousands)
Three months ended March 31, 2021	Travelzoo North America				Travelzoo Europe				Jack’s Flight Club				Elimination				Consolidated
Revenue from unaffiliated customers	$	9,828			$	3,569			$	887			$	—			$	14,284
Intersegment revenue	(9		)		9				—				—				—
Total net revenues	9,819				3,578				887				—				14,284
Operating income (loss)	$	39			$	(696	)		$	(110	)		$	—			$	(767	)
Three months ended March 31, 2020	Travelzoo North America				Travelzoo Europe				Jack’s Flight Club				Elimination				Consolidated
Revenue from unaffiliated customers	$	12,549			$	7,103			$	683			$	(8	)		$	20,327
Intersegment revenue	148				(156		)		—				8				—
Total net revenues	12,697				6,947				683				—				20,327
Operating loss	$	(976	)		$	(1,341	)		$	(3,015	)		$	(8	)		$	(5,340	)

 

Travelzoo Reconciliation of GAAP to Non-GAAP Information (Unaudited) (In thousands, except per share amounts)
	Three months ended March 31
	2021				2020
GAAP operating expense	$	12,033			$	22,964
Non-GAAP adjustments:
Impairment of intangible and goodwill (A)	—				2,920
Amortization of intangibles (B)	284				215
Stock option expenses (C)	882				23
Severance-related expenses (D)	223				217
Non-GAAP operating expense	10,644				19,589
GAAP operating income (loss)	(767		)		(5,340		)
Non-GAAP adjustments (A through D)	1,389				3,375
Non-GAAP operating income (loss)	622				(1,965		)

Investor Relations:
Almira Pusch
ir@travelzoo.com

 

Source: Travelzoo

Tuesday, April 20, 2021

Bassett Furniture (BSET)
The Start of Industry Consolidation?

Bassett Furniture Industries Inc is a manufacturer, importer, and retailer of home furnishings products in the United States. It operates through the following segments: The Wholesale segment focuses on the design, manufacture, sourcing, sale, and distribution of furniture products. The Retail segment consists of company-owned stores. The Logistical Services segment offers shipping, delivery, and warehousing services.

Joe Gomes, Senior Research Analyst, Noble Capital Markets, Inc.

Refer to the full report for the price target, fundamental analysis, and rating.

Herman Miller + Knoll. Yesterday, Herman Miller announced an agreement to acquire competitor Knoll Inc. in a $1.8 billion transaction. The deal brings together two leading office furniture manufacturers, although both also sell into the consumer space. Interestingly, management spoke at length detailing how the merger will enable the combined entity to benefit from the transformation of home and office work and such ongoing trends as industry transformation into direct-to-consumer, e-commerce, and advanced manufacturing.


A Harbinger?  Could yesterday’s announcement be a harbinger of additional industry consolidation? Given their focus on the office space, we believe the flow over to the retail space where Bassett competes will be muted, but we would acknowledge there remains significant opportunity for consolidation on the consumer side given the low percentage of the market held by the top 10 retailers and …

This Company Sponsored Research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).

*Analyst certification and important disclosures included in the full report. NOTE: investment decisions should not be based upon the content of this research summary.  Proper due diligence is required before making any investment decision. 

 

Toilet Paper Sales Unravel as Households are Flush with Paper Goods

 

2020 blurred people’s focus as fight-or-flight instincts sometimes overruled common sense; this caused many to react by… you were there… making runs on toilet paper.

The tear on products from Kimberly Clark (KMB), Proctor and Gamble (PG), and Georgia Pacific (GP) was far from a short squeeze on Charmin; people went very long the paper in 2020, anything left on shelves was spotty. 

 One year later, households are bumping up against expiration dates and storage limits as they work off their load of inventory.

 The numbers are staggering; Americans spent $2 billion more on toilet paper in 2020 ($11 billion) than in a typical year, according to NielsinIQ.  This hoarding of an extra 22% has been cutting into sales in 2021. The current pace is below $9 billion. 

According to reelpaper.com, the expiration date on the package of your favorite toilet paper can be passed as long as you don’t get the product wet or allow dust and dirt to get into the packaging. According to Reel Paper, “the product can last years or even decades.”

 

Sales Circling the Drain

Sales of toilet paper are down 0.2% for the 52-week period ended April 3. In January, according to NielsenIQ, toilet paper sales were down 4.3% from January 2020.

 The declines have accelerated since then, with toilet-paper sales down about 14% in February and 33% in March, according to NielsenIQ. The drops, however, reflect comparisons to periods in which demand was soaring.

 The Under/Over on TP Sales in 2021

 As economist Milton Friedman often repeated, “There ain’t no such thing as a free lunch” this is true of companies that benefitted from last year’s frenzy. They aren’t getting off scott free as they find the current period sales have been perforated. Fortunately, the pile of profits from last year should average out with current lower sales as the year rolls on and consumers eventually work off their last sheet.

 

Paul Hoffman

Channelchek.com

 

(Readers are welcome to share this as a post on social media, or
in their own blog or publication, provided it includes a link to the original)

 

Sources:

https://www.telegram.com/news/20200331/fight-or-flight-response-explains-toilet-paper-hoarding-neuroscientist-says

https://www.wsj.com/articles/americans-have-too-much-toilet-paper-it-is-catching-up-to-companies-11618306200

https://nielseniq.com/?s=toilet+paper&market=global&language=en&orderby=&order=&post_type=

https://reelpaper.com/blogs/reel-talk

Tuesday, April 13, 2021

FAT Brands Inc. (FAT)
Raising Price Target

FAT Brands Inc is a multi-brand restaurant franchising company. It develops, markets, and acquires predominantly fast casual restaurant concepts. The company provides turkey burgers, chicken Sandwiches, chicken tenders, burgers, ribs, wrap sandwiches, and others. Its brand portfolio comprises Fatburger, Buffalo’s Cafe and Express, and Ponderosa and Bonanza. The company’s overall footprint covers nearly 32 countries. Fatburger generates maximum revenue for the company.

Joe Gomes, Senior Research Analyst, Noble Capital Markets, Inc.

Refer to the full report for the price target, fundamental analysis, and rating.

Ongoing Organic Improvement. FAT Brands continues to see a rebounding organic environment. Not only are COVID restrictions loosening but people seem to be energized to eat out. In addition, more existing locations are coming back on-line, with the majority of the remaining temporarily closed locations in unique (i.e. cruise ships/theme parks) locations. Unit expansion continues, with recent announcements on deals in France, Brazil, Chile, Italy, Peru, and Spain.


Strong M&A Pipeline.  FAT Brands’ M&A pipeline remains robust. We would anticipate at least one announcement in 1H21 and additional announcements during the second half of the year, with at least one Johnny Rockets sized acquisition. While adding another burger concept may be a stretch, the addition of a wing concept, sandwich, etc could be on the table in our view …

This Company Sponsored Research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).

*Analyst certification and important disclosures included in the full report. NOTE: investment decisions should not be based upon the content of this research summary.  Proper due diligence is required before making any investment decision. 

Tuesday, April 13, 2021

Travelzoo (TZOO)
Expecting A Slow Start Toward Recovery

Travelzoo is a US-based company which acts as a publisher of travel and entertainment offers. The company informs a varied number of members in Asia Pacific, Europe, and North America, as well as millions of website users, about the best travel, entertainment and local deals available from various companies. It provides travel, entertainment, and local businesses in a flexible manner to the various customer. The company operates in three geographic segments namely Asia Pacific, Europe, and North America. Travelzoo derives its revenue through advertising fees including listing fees paid by travel, entertainment, and local businesses to advertise their offers on company’s media properties. Most of the company’s revenue is derived from the North America.

Michael Kupinski, Director of Research, Noble Capital Markets, Inc.

Refer to the full report for the price target, fundamental analysis, and rating.

Refining estimates. The company recently released its annual 10K and this report refines our estimates for 2021 and 2022 and posts our look into 2023. While the Covid vaccines provide promise of a return toward “normalcy”, we believe that the travel recovery is off to a sluggish start. We are lowering our full year 2021 and 2022 revenue and adj. EBITDA estimates.


Where should gross margins go? Gross margins in Q4 decreased from 78.8% in Q3 to 77.6% in Q4. The gross margins were significantly down from 88.1% in Q4 2019. Our model assumes a gradual improvement in gross margins to 79.2% in 2021 to 81.0% in 2022 to 81.5% in 2023 …

This Company Sponsored Research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).

*Analyst certification and important disclosures included in the full report. NOTE: investment decisions should not be based upon the content of this research summary.  Proper due diligence is required before making any investment decision. 

 

Stem Provides Shareholder Update and Announces Preliminary Gross Revenue of US$12.88 Million for the Second Quarter of 2021, an Increase of 456% Year-Over-Year and Quarterly Gross Margin of Approximately US$5.23 Million

 

BOCA RATON, Fla., April 8, 2021 /PRNewswire/ — Stem Holdings, Inc. (OTCQX: STMH CSE:STEM) (the “Company” or “Stem“), the first multi-state, integrated cultivation and omnichannel technology cannabis company, is providing a business update including select preliminary financial results for the quarter ending March 31, 2021, the first full quarter of combined operations since the acquisition of Driven Deliveries, Inc. (“Driven Deliveries“) in December 2020, as disclosed in the Company’s press release dated December 30, 2020.

 

Stem Provides Shareholder Update and Announces Preliminary Gross Revenue of US$12.88 Million for the Second Quarter of 2021, an Increase of 456% Year-Over-Year and Quarterly Gross Margin of Approximately US$5.23 Million

 

BOCA RATON, Fla., April 8, 2021 /PRNewswire/ — Stem Holdings, Inc. (OTCQX: STMH CSE:STEM) (the “Company” or “Stem“), the first multi-state, integrated cultivation and omnichannel technology cannabis company, is providing a business update including select preliminary financial results for the quarter ending March 31, 2021, the first full quarter of combined operations since the acquisition of Driven Deliveries, Inc. (“Driven Deliveries“) in December 2020, as disclosed in the Company’s press release dated December 30, 2020.

Tuesday, April 06, 2021

Bassett Furniture (BSET)
Strong 1Q21 Results

Bassett Furniture Industries Inc is a manufacturer, importer, and retailer of home furnishings products in the United States. It operates through the following segments: The Wholesale segment focuses on the design, manufacture, sourcing, sale, and distribution of furniture products. The Retail segment consists of company-owned stores. The Logistical Services segment offers shipping, delivery, and warehousing services.

Joe Gomes, Senior Research Analyst, Noble Capital Markets, Inc.

Refer to the full report for the price target, fundamental analysis, and rating.

1Q21 Results. Bassett reported strong 1Q21 results with revenue of $113.7 million and EPS of $0.40. This compares to $112.1 million and $0.12, respectively, in 1Q20, which was unaffected by COVID issues. We had projected revenue of $113.5 million and EPS of $0.24 while consensus was at $114 million and $0.23, respectively.


Environment Remains Positive.  All sales channel recoded written business increases, which resulted in a 44% y-o-y increase in net orders. Wholesale backlog at the end of 1Q21 was $67.5 million, up from $54.9 million at November 28, 2020. Orders from independent dealers jumped 98%, BHF network orders rose 14%, while Lane Venture orders increased 75%. Retail written sales rose 4.1% in the quarter …

This Company Sponsored Research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).

*Analyst certification and important disclosures included in the full report. NOTE: investment decisions should not be based upon the content of this research summary.  Proper due diligence is required before making any investment decision.