Travelzoo 2011 Annual Report Download - page 81
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54
On October 31, 2009, the Company completed the sale of its Asia Pacific operating segment to Azzurro Capital Inc. pursuant to
the terms of the Asset Purchase Agreements. The results of operations of the Asia Pacific operating segment have been classified as
discontinued operations for all periods presented. The Company has not had significant ongoing involvement with the operations of
the Asia Pacific operating segment and has not had any economic interests in the Asia Pacific operating segment since the completion
of the sale. Accordingly, the sale of the Asia Pacific operating segment is treated as a discontinued operation under the relevant
accounting literature.
At the completion of the sale, the Company received $2.1 million, net of cash provided, and had a net receivable from Travelzoo
(Asia) Limited and Travelzoo Japan K.K. of $1.1 million, which was paid in 2010. The Company realized a gain of $3.4 million
related to the sale of the net assets of the Asia Pacific business segment to Azzurro Capital Inc. The resulting gain on the sale is
reflected as an addition to additional paid-in capital in the accompanying Consolidated Statements of Stockholders’ Equity as both the
Company and Azzurro Capital Inc. are under the common control of Ralph Bartel. The Company recorded a tax benefit of
$4.4 million in discontinued operations for the tax benefit associated with the loss on investments in the Asia Pacific subsidiaries as a
result of their dissolution.
The following table presents the revenues and the components of loss from discontinued operations, net of tax (in thousands):
Twelve Months Ended December 31
2009 2010
2011
Revenues ............................................................................................ $ 2,134 $ — $ —
Cost of revenues ....................................................................... 173 — —
Gross profit ........................................................................................ 1,961 — —
Operating expenses:
Sales and marketing ................................................................. 3,821 — —
General and administrative ....................................................... 3,828 — —
Total operating expenses ................................................ 7,649 — —
Operating loss from discontinued operations ..................................... (5,688) — —
Other income and (expense) .............................................................. (33) — —
Income tax benefit ............................................................................. 79 — —
Loss from discontinued operations .................................................... (5,642) — —
Income tax benefit related to dissolution of Asia Pacific business
segment ......................................................................................... 4,409 — —
Loss from discontinued operations, net of tax ................................... $ (1,233) $ — $ —