Travelzoo 2005 Annual Report Download - page 31

Employees
As of December 31, 2005, we had 70 employees, of whom 23 worked in sales and marketing, 33 in
production, 5 in network operations and software engineering and 9 were involved in Ñnance, administration,
and corporate operations. None of our employees is represented under collective bargaining agreements. We
consider our relations with our employees to be good. Because of our anticipated further growth, we expect
that the number of our employees will continue to increase for the foreseeable future.
Internet Access to Other Information
We make available free of charge, on or through our Web site (www.travelzoo.com), annual reports on
Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K and amendments to those
reports Ñled or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as well
as proxy statements, as soon as reasonably practicable after we electronically Ñle such material with, or furnish
it to, the U.S. Securities and Exchange Commission (SEC). Information included on our Web site does not
constitute part of this Annual Report on Form 10-K.
Item 1A. Risk Factors
Investing in our common stock involves a high degree of risk. Any or all of the risks listed below as well
as other variables aÅecting our operating results could have a material adverse eÅect on our business, our
quarterly and annual operating results or Ñnancial condition, which could cause the market price of our stock
to decline or cause substantial volatility in our stock price, in which event the value of your common stock
could decline. You should also keep these risk factors in mind when you read forward-looking statements.
Risks Related to Our Financial Condition and Business Model
We cannot assure you that we will sustain proÑtability.
Although we have been proÑtable in the past, there is no assurance that we will continue to be proÑtable.
We forecast our future expense levels based on our operating plans and our estimates of future revenues. We
may Ñnd it necessary to signiÑcantly accelerate expenditures relating to our sales and marketing eÅorts or
otherwise increase our Ñnancial commitment to creating and maintaining brand awareness among Internet
users and travel companies. If our revenues grow at a slower rate than we anticipate, or if our spending levels
exceed our expectations or cannot be adjusted to reÖect slower revenue growth, we may not generate suÇcient
revenues to sustain proÑtability. If our new U.K. operations and our expected expansion into other European
countries in 2006 incur signiÑcant losses, this will result in a signiÑcant negative impact on our results of
operations. In this case, the value of the shares of Travelzoo could be reduced.
Fluctuations in our operating results may negatively impact our stock price.
Our quarterly operating results may Öuctuate signiÑcantly in the future due to a variety of factors that
could aÅect our revenues or our expenses in any particular quarter. You should not rely on quarter-to-quarter
comparisons of our results of operations as an indication of future performance. Factors that may aÅect our
quarterly results include:
‚ mismatches between resource allocation and client demand due to diÇculties in predicting client
demand in a new market;
‚ changes in general economic conditions that could aÅect marketing eÅorts generally and online
marketing eÅorts in particular;
‚ the magnitude and timing of marketing initiatives, including our expansion eÅorts in Europe;
‚ the introduction, development, timing, competitive pricing and market acceptance of our products and
services and those of our competitors;
‚ our ability to attract and retain key personnel;
10