Travelzoo 2004 Annual Report Download - page 37

in conjunction with, ""Management's Discussion and Analysis of Financial Condition and Results of
Operations'' and the consolidated Ñnancial statements and the notes thereto included elsewhere herein.
Consolidated Statement of Operations Data:
Year Ended December 31,
2004 2003 2002 2001 2000
(In thousands, except per share data)
Revenues ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $33,679 $17,991 $ 9,848 $ 6,148 $ 3,950
Income from operations ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 11,033 3,739 1,422 885 750
Net income ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 6,037 2,050 853 364 362
Net income per share Ì basicÏÏÏÏÏÏÏÏÏÏÏ $ 0.36 $ 0.11 $ 0.04 $ 0.02 $ 0.02
Net income per share Ì diluted ÏÏÏÏÏÏÏÏÏ $ 0.33 $ 0.10 $ 0.04 $ 0.02 $ 0.02
Shares used in per share calculation Ì
basic ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 16,879 19,425 19,425 19,425 19,373
Shares used in per share calculation Ì
diluted ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 18,475 20,527 19,896 19,425 19,467
Consolidated Balance Sheet Data:
December 31,
2004 2003 2002 2001 2000
(In thousands)
Cash and cash equivalents ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $26,435 $3,522 $1,258 $ 610 $ 46
Working capitalÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 40,027 3,460 1,340 425 186
Total assets ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 43,257 6,726 3,240 2,131 1,556
Long-term debt ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ ÌÌÌÌÌ
Stockholder's equity ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $40,263 $3,841 $1,791 $ 938 $ 574
Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations
The following discussion and analysis of Travelzoo's Ñnancial condition and results of operations should
be read in conjunction with, and is qualiÑed in its entirety by reference to, the consolidated Ñnancial
statements and the notes thereto appearing elsewhere in this report.
Overview
Travelzoo Inc. is an Internet media company that publishes travel oÅers from hundreds of travel
companies. As the Internet is becoming consumers' preferred medium to search for travel oÅers, we provide
airlines, hotels, cruise lines, vacation packagers, and other travel companies with a fast, Öexible, and cost-
eÅective way to reach millions of users. While our products provide advertising opportunities for travel
companies, they also provide Internet users with a free source of information on current sales and specials
from hundreds of travel companies. Our publications include the Travelzoo Web site, the Travelzoo
Top 20 e-mail newsletter, and the NewsÖash e-mail product. We also operate SuperSearch, a pay-per-click
travel search engine. More than 300 travel companies purchase our advertising services.
Our revenues are advertising revenues, consisting of listing fees paid by travel companies to advertise
their oÅers on the Travelzoo Web site, in the Travelzoo Top 20 e-mail newsletter, in the NewsÖash e-mail
product, and in SuperSearch, a pay-per-click travel search engine. Prior to December 2003, we also generated
revenues from banner advertising sales. Revenues are principally generated from the sale of advertising on our
Travelzoo Web site and in our Travelzoo Top 20 newsletter. Listing fees are based on placement, number of
listings, number of impressions, or number of clickthroughs. Banner advertising rates are based on CPM rates
(cost per thousand impressions). Smaller advertising agreements Ì typically $2,000 or less per month Ì
typically renew automatically each month if they are not terminated by the client. Larger agreements are
typically related to advertising campaigns and are not automatically renewed.
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