Travelzoo 2008 Annual Report Download - page 81

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$654,000, $279,000 and $140,000 for the years ended December 31, 2008, December 31, 2007 and December 31,
2006, respectively.
(10) Related Party Transaction
In November 2007, the Company entered into an independent contractor agreement with Holger Bartel, the
Company’s current Chief Executive Officer, a member of the Company’s Board of Directors and brother of Ralph
Bartel, who controls the Company, to provide consulting services. Fees and expenses for these services during the
year ended December 31, 2008 totaled approximately $591,000. Effective October 1, 2008, Holger Bartel was
appointed as Chief Executive Officer of the Company and the independent contractor agreement between the
Company and Holger Bartel was terminated on September 30, 2008.
The Travelzoo Foundation (the “Foundation”), a private charitable trust, was formed in the fourth quarter of
2006. The trustees of the Foundation currently consist of three members, one of whom is Ralph Bartel, the
Company’s Chairman. As of December 31, 2007, the Company held approximately $468,000 of the Foundation’s
cash, which is reflected in cash and cash equivalents, and the Company recorded a liability to repay this amount in
accrued expenses in the Consolidated Balance Sheets. This amount was paid to the Foundation in February 2008.
Certain employees of the Company provide administrative support to the Foundation at no cost to the Foundation.
Such support to date has been insignificant.
(11) Unaudited Quarterly Information
The following represents unaudited quarterly financial data for 2008 and 2007.
Dec 31,
2008
Sept 30,
2008
June 30,
2008
Mar 31,
2008
Dec 31,
2007
Sept 30,
2007
June 30,
2007
Mar 31,
2007
Quarters Ended
(In thousands, except per share amounts)
Revenues .................. $19,880 $18,807 $21,769 $20,948 $19,113 $19,943 $20,115 $19,740
Cost of revenues............. 963 867 637 529 288 295 225 149
Gross profit............. 18,917 17,940 21,132 20,419 18,825 19,648 19,890 19,591
Operating expenses:
Sales and marketing ........ 11,639 11,582 12,520 13,394 10,425 10,953 10,745 9,317
General and administrative. . . . 6,769 6,717 6,930 5,746 5,945 3,756 3,392 2,797
Total operating expenses . . . 18,408 18,299 19,450 19,140 16,370 14,709 14,137 12,114
Income (loss) from operations . . . 509 (359) 1,682 1,279 2,455 4,939 5,753 7,477
Interest income.............. 22 63 77 136 205 312 428 364
Gain (loss) on foreign currency . . 432 (78) (6) 152 76 67 36 (1)
Income (loss) before income tax
expense . . . .............. 963 (374) 1,753 1,567 2,736 5,318 6,217 7,840
Income tax expense . ......... 1,091 1,415 2,946 2,573 2,690 3,164 3,371 3,777
Net income (loss) . . . ......... $ (128) $ (1,789) $ (1,193) $ (1,006) $ 46 $ 2,154 $ 2,846 $ 4,063
Basic net income (loss) per
share ................... $ (.01) $ (.13) $ (.08) $ (.07) $ .00 $ .15 $ .19 $ .27
Diluted net income (loss) per
share ................... $ (.01) $ (.13) $ (.08) $ (.07) $ .00 $ .14 $ .17 $ .25
57
TRAVELZOO INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)