SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (date of earliest event reported) FEBRUARY 11, 2000
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TRAVEL SERVICES INTERNATIONAL, INC.
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(Exact name of registrant as specified in its charter)
FLORIDA
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(State or other jurisdiction of incorporation)
000-29298 52-2030324
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(Commission File Number) (IRS Employer Identification No.)
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220 CONGRESS PARK DRIVE
DELRAY BEACH, FLORIDA 33445
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(Address of principal executive offices, including Zip Code)
Registrant's telephone number, including area code (561) 266-0860
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N/A
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(Former name or former address, if changed since last report)
<PAGE>
ITEM 5. OTHER EVENTS.
Travel Services, International, Inc. (the "COMPANY") announced in a
press release dated February 11, 2000, its results for the quarter and year
ending December 31, 1999.
The Company's Press Release is attached hereto as Exhibit 99.1.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(c) Exhibits
EXHIBIT
NUMBER DESCRIPTION
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99.1 Press Release, dated February 11, 2000, announcing
the results of the Registrant for the quarter and
year ending December 31, 1999.
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<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
TRAVEL SERVICES
INTERNATIONAL, INC.
Dated: February 11, 2000 By: /s/ Suzanne B. Bell
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Suzanne B. Bell
Senior Vice President
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EXHIBIT INDEX
EXHIBIT
NUMBER DESCRIPTION
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99.1 Press Release, dated February 11, 2000, announcing
the results of the Registrant for the quarter and
year ending December 31, 1999.
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EXHIBIT 99.1
TRAVEL SERVICES INTERNATIONAL REPORTS
1999 FOURTH QUARTER AND YEAR-END RESULTS
DELRAY BEACH, FL-- (FEBRUARY 11, 2000) -- Travel Services International, Inc.
(Nasdaq: TRVL), a leading specialized distributor of leisure travel services,
today reported increases in net revenues of 24.9% and 44.0% for the quarter and
year ended December 31, 1999, respectively, as compared to the same periods in
1998.
Net revenues in the fourth quarter of 1999 totaled $40.4 million, an increase of
$8.1 million over net revenues for the fourth quarter of 1998. Net revenues
increased as a result of acquisitions completed early in 1999 as well as
increases in transaction volume and net revenue per transaction in various
reporting segments. As anticipated, however, net income decreased to $925,000,
or $0.07 diluted earnings per share, for the 1999 fourth quarter, as compared to
$2.4 million, or $0.17 diluted earnings per share, for the corresponding period
in the prior year.
For the year ended December 31, 1999, net revenues totaled $187.0 million, an
increase of $57.2 million over net revenues for the corresponding prior year
period. Net income decreased, as expected, to $7.4 million, or $0.53 diluted
earnings per share, for the year ended December 31, 1999, as compared to $12.4
million, or $0.99 diluted earnings per share, for the corresponding prior year
period.
Joseph Vittoria, the Company's Chairman and Chief Executive Officer commented:
"We are very pleased with the continued revenue growth and net results of the
outbound, lodging and other segments. Acquisitions in the outbound and other
segments in 1999 have performed particularly well and we expect them to
contribute significantly to our profitability in 2000.
Net revenues and gross margins in the cruise segment were burdened throughout
the year by ineffective marketing during the early months of 1999, as well as
the additional advertising spending required to rebuild our momentum. We are
encouraged, however, by current cruise booking trends."
Within the outbound reporting segment, net revenues in the fourth quarter
increased 103.3% as compared to prior year period, of which 37.4% was from
internal growth and the remainder from the inclusion of AHI International
Corporation, which was acquired in February 1999. The internal growth was the
result of a combination of increases in transaction volume and net revenue per
transaction.
Within the cruise reporting segment, net revenues in the fourth quarter of 1999
decreased by 19.2%, a significant amount of which is attributable to sales
volumes that were below certain contract targets for commission volume
incentives. The remainder was due primarily to adverse booking trends during the
first half of the year and lower commission yields. Initial cruise cabin sales
results in the call centers and through the Internet for January indicate
improving trends as compared to the prior year.
<PAGE>
Within the lodging reporting segment, net revenues in the fourth quarter of 1999
increased 39.0%, to $9.3 million, primarily due to an increase in transaction
volume attributable to new hotel contracts.
Within the other reporting segment, net revenues in the fourth quarter increased
by 50.3%, of which 26.7% was from internal growth and the remainder from the
inclusion of Lifestyle Vacation Incentives, which was acquired in February 1999.
The internal growth was primarily the result of increases in both volume and net
revenue per transaction at 1-800-Flycheap.
General and administrative expenses increased by $2.5 million in the fourth
quarter of 1999 over same the period in 1998, of which $1.2 million was related
to 1999 acquisitions and the remainder attributable to increases at the
operating subsidiaries.
The Company continued to invest in its Internet technology during the fourth
quarter of 1999. An enhanced version of the Company's website was released on
January 2, 2000. The new mytravelco.com site offers real time cruise pricing and
availability, 20,000 pages of destination content, live messaging with Company
sales agents, virtual tours and chat. The Company expects to introduce its
online cruise booking engine by early spring of 2000. The Company also continues
to receive interest in other potential Internet, technology and strategic
initiatives and alliances.
John Balson, the Company's President and Chief Operating Officer, stated: "We
are quickly moving to establish a major leisure travel Internet presence. The
combination of our proprietary technology, our commitment to provide frequent
high lifetime value customers with the information and interactive community
services needed to plan their vacations, and timely fulfillment is driving a
substantial improvement in cruise Internet sales. Shortly, we will add tour
packages and lodging sales opportunities to mytravelco.com. Our more than
doubling of website traffic, e-mail and live agent contacts has significantly
increased our Internet cruise sales to over 11% of our business. We are
encouraged that this improvement was achieved without a substantial increase in
first quarter Internet marketing spending. Concurrently, the traditional call
center cruise business is also improving."
Travel Services International, Inc. is a leading specialized distributor of
leisure travel products including cruise vacations, vacation packages, domestic
and international airline tickets and European auto rentals, and is a leading
provider of travel services such as electronic hotel reservations, specialized
hotel programs and services and incentive travel programs. The Company provides
travel agents and travelers a unique combination of specialized expertise, the
ability to compare options from multiple travel providers and competitive
prices.
More information about the Company may be obtained through the Company's
websites www.mytravelco.com and www.flycheap.com.
###
STATEMENTS CONTAINED IN THIS PRESS RELEASE REGARDING FUTURE OR ANTICIPATED
FINANCIAL OR OPERATING PERFORMANCE AND RESULTS, SALES, REVENUE, EXPENSES,
INDIVIDUAL REPORTING SEGMENTS, MARKETING PLANS AND INITIATIVES, THE INTERNET,
ACQUISITIONS, OPERATIONAL INITIATIVES, TECHNOLOGY, THE ECONOMY AND OTHER
STATEMENTS THAT ARE NOT HISTORICAL FACTS ARE FORWARD LOOKING STATEMENTS. PAST
PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS, AND ACTUAL RESULTS
COULD DIFFER
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SIGNIFICANTLY FROM ANY RESULTS ANTICIPATED IN OR SUGGESTED BY ANY FORWARD
LOOKING STATEMENT. THE FORWARD LOOKING STATEMENTS ARE SUBJECT TO NUMEROUS RISKS
AND UNCERTAINTIES, INCLUDING BUT NOT LIMITED TO RISKS AND UNCERTAINTIES
ASSOCIATED WITH: SUCCESSFUL DEPLOYMENT AND INTEGRATION OF SYSTEMS, FACTORS
AFFECTING INTERNAL GROWTH AND MANAGEMENT OF GROWTH, AVAILABILITY OF ADEQUATE
FINANCING ON ACCEPTABLE TERMS, THE COMPANY'S ABILITY TO IMPLEMENT ITS STRATEGIC
TECHNOLOGY, MARKETING, ACQUISITION, INTERNET AND OPERATIONAL INITIATIVES, THE
TRAVEL INDUSTRY, THE ABILITY TO RECRUIT AND RETAIN APPROPRIATE PERSONNEL, THE
COST, AVAILABILITY AND EFFECTIVENESS OF ADVERTISING, SEASONALITY, QUARTERLY
FLUCTUATIONS AND GENERAL ECONOMIC CONDITIONS, DEPENDENCE ON PERSONNEL,
TECHNOLOGY AND TRAVEL PROVIDERS, AND OTHER FACTORS, INCLUDING THOSE DISCUSSED IN
THE COMPANY'S FORM 10-K FOR THE YEAR ENDED DECEMBER 31, 1998.
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<TABLE>
<CAPTION>
TRAVEL SERVICES INTERNATIONAL, INC.
HISTORICAL STATEMENTS OF INCOME
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
THREE MONTHS ENDED TWELVE MONTHS ENDED
DECEMBER 31, DECEMBER 31,
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1998 1999 1998 1999
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(UNAUDITED)
<S> <C> <C> <C> <C>
Net revenues $ 32,307 $ 40,363 $ 129,855 $ 187,042
Operating expenses 17,661 25,666 70,920 115,202
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Gross profit 14,646 14,697 58,935 71,840
General and administrative expenses 9,664 12,216 34,550 55,378
Goodwill amortization 824 1,114 2,628 4,316
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Income from operations 4,158 1,367 21,757 12,146
Interest expense and other, net (230) (174) 28 (112)
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Income before income taxes 4,388 1,541 21,729 12,258
Provision for income taxes 2,027 616 9,310 4,903
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Net income $ 2,361 $ 925 $ 12,419 $ 7,355
============ ============ ============ ============
Diluted earnings per share $ 0.17 $ 0.07 $ 0.99 $ 0.53
============ ============ ============ ============
Shares used in computing diluted earnings per share 13,720,242 13,970,694 12,516,196 13,884,610
============ ============ ============ ============
</TABLE>
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<TABLE>
<CAPTION>
TRAVEL SERVICES INTERNATIONAL, INC.
BALANCE SHEETS
(IN THOUSANDS, EXCEPT SHARE DATA)
DECEMBER 31, DECEMBER 31,
1998 1999
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ASSETS
<S> <C> <C>
Current Assets:
Cash and cash equivalents $ 26,084 $ 16,032
Accounts receivable, net 15,460 20,509
Receivables and notes from affiliates and employees 250 235
Prepaid expenses 0 0
Prepaid income taxes 2,920 4,391
Deferred income taxes 827 1,228
Prepaid expenses and other current assets 4,856 11,069
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Total current assets 50,397 53,464
Property and equipment, net 22,504 34,446
Goodwill, net 105,773 142,189
Notes receivable from employees 410 346
Other assets 1,045 1,039
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Total assets $180,129 $231,484
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LIABILITIES AND STOCKHOLDERS'
EQUITY
Current Liabilities:
Current maturities of long-term debt 257 264
Trade payables and accrued expenses 27,412 42,282
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Total current liabilities 27,669 42,546
Borrowings under line of credit -- 14,700
Long-term debt, net of current portion 2,888 2,623
Deferred income taxes 3,774 8,627
Other long-term liabilities 501 449
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Total liabilities 34,832 68,945
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Commitments and contingencies
Stockholders' Equity:
Preferred stock, $0.01 par value; 1,000,000 shares authorized;
none outstanding
Common stock, $0.01 par value; 50,000,000 shares authorized;
13,376,969 and 13,962,086 shares outstanding, respectively 134 140
Additional paid-in capital 129,623 139,504
Retained earnings 15,540 22,895
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Total stockholders' equity 145,297 162,539
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Total liabilities and stockholders' equity $180,129 $231,484
======== ========
</TABLE>
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<TABLE>
<CAPTION>
TRAVEL SERVICES INTERNATIONAL, INC.
SELECTED REPORTING SEGMENT FINANCIAL DATA
(IN THOUSANDS)
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THREE MONTHS ENDED TWELVE MONTHS ENDED
DECEMBER 31, DECEMBER 31,
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1998 1999 1998 1999
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(UNAUDITED)
<S> <C> <C> <C> <C>
OUTBOUND
Net revenues $ 6,006 $ 12,208 $ 45,560 $ 73,347
Gross profit 1,367 4,990 16,437 31,831
% of Net revenues 22.8% 40.9% 36.1% 43.4%
Income before income taxes (1) 129 3,438 11,456 24,501
% of Net revenues 2.2% 28.2% 25.1% 33.4%
CRUISE
Net revenues 15,274 12,337 58,673 60,325
Gross profit 8,023 2,210 31,877 17,844
% of Net revenues 52.5% 17.9% 54.3% 29.6%
Income before income taxes (1) 4,284 (2,085) 17,934 503
% of Net revenues 28.1% -16.9% 30.6% 0.8%
LODGING
Net revenues 6,705 9,321 12,430 25,717
Gross profit 3,569 5,221 5,955 11,750
% of Net revenues 53.2% 56.0% 47.9% 45.7%
Income before income taxes (1) 2,312 3,605 3,361 6,322
% of Net revenues 34.5% 38.7% 27.0% 24.6%
OTHER
Net revenues 4,322 6,497 13,192 27,653
Gross profit 1,687 2,276 4,666 10,415
% of Net revenues 39.0% 35.0% 35.4% 37.7%
Income before income taxes (1) 848 1,005 1,845 5,748
% of Net revenues 19.6% 15.5% 14.0% 20.8%
TOTAL
Net revenues 32,307 40,363 129,855 187,042
Gross profit $ 14,646 $ 14,697 $ 58,935 $ 71,840
% of Net revenues 45.3% 36.4% 45.4% 38.4%
</TABLE>
(1) Excludes goodwill amortization, software amortization and support
expenses, expenses of corporate headquarters, interest expense and
certain other expenses recorded at corporate headquarters
