Travelzoo : Reports Third Quarter 2017 Results

Travelzoo‌‌‌

590 Madison Avenue 37th Floor

New York, NY 10022

Investor Relations: Lijun Qi ir@travelzoo.com

FOR IMMEDIATE RELEASE

• Revenue of $24.7 million, down 9% year-over-year in constant currencies

• Operating profit of $18,000

• Earnings (loss) per share of $(0.05)

• Cash flow from operations of $122,000

Travelzoo, a global publisher of exclusive deals for members, today announced financial results for the third quarter ended September 30, 2017, with revenue of $24.7 million and operating profit of $18,000. In nominal terms, revenue decreased by 8% year-over-year. In constant currencies, revenue decreased by 9% year-over-year. Net loss was $576,000, with earnings (loss) per share of $(0.05).

"Revenues were impacted by the two large hurricanes hitting the Caribbean and parts of the U.S. during the quarter," said Dr. Holger Bartel, Global CEO of Travelzoo. "We intend to leverage Travelzoo's global reach and trusted brand to improve earnings in future periods."

Asia Pacific business segment revenue decreased 31% year-over-year to $1.8 million. In constant currencies, revenue decreased 28% year-over-year. Operating loss for the third quarter was $1.7 million, compared to an operating loss of $798,000 in the prior-year period.

Europe business segment revenue decreased 6% year-over-year to $7.9 million. In constant currencies, revenue decreased 9% year-over-year. Operating profit for the third quarter was $309,000, or 4% of revenue, compared to operating income of $1.4 million, or 17% of revenue in the prior-year period.

North America business segment revenue decreased 5% year-over-year to $15.0 million. Operating profit for the third quarter was $1.4 million, or 9% of revenue, compared to operating income of $1.3 million, or 8% of revenue in the prior-year period.

As of September 30, 2017, Travelzoo had a worldwide unduplicated number of members of 29.5 million. In Asia Pacific, unduplicated number of members was 3.6 million as of September 30, 2017, up 1% from September 30, 2016. In Europe, unduplicated number of members was 8.5 million as of September 30, 2017, up 4% from September 30, 2016. In North America, unduplicated number of members remained at 17.4 million as of September 30, 2017.

Income tax expense was $680,000, compared to a $748,000 income tax expense in the prior-year period.

During the third quarter of 2017, Travelzoo generated $122,000 of cash for operating activities. Accounts receivable decreased by $5.3 million over the prior-year period to $11.4 million. Accounts payable decreased by $2.6 million over the prior-year period to $16.0 million. Capital expenditures were

$180,000, up from $155,000 in the prior-year period. As of September 30, 2017, cash and cash equivalents were $18.8 million.

Travelzoo will host a conference call to discuss third quarter results at 11:00 a.m. ET today. Please visit http://www.travelzoo.com/earnings to

• download the management presentation (PDF format) to be discussed in the conference call;

• access the webcast.

Travelzoo® provides our 28 million members insider deals and one-of-a-kind experiences personally reviewed by one of our deal experts around the globe. With more than 25 offices worldwide we have our pulse on outstanding travel, entertainment, and lifestyle experiences. For over 15 years we have worked in partnership with more than 2,000 top travel suppliers-our long-standing relationships allow us access to the very best 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 and Top 20 are registered trademarks of Travelzoo. All other names are trademarks and/or registered trademarks of their respective owners.

September 30, September 30,

2017 2016 2017 2016

Income (loss) per share-diluted:

Weighted average shares: