Travelzoo is reporting financial results for the second quarter ended June 30, 2006, with revenue of $17.4 million, an increase of 42% year-over-year. Net income was $3.9 million, with diluted earnings per share (EPS) of $0.23, up from $0.12 in the prior-year period.

“Q2 2006 marks our 32nd consecutive quarter of growth in online advertising sales,” said Ralph Bartel, chairman and chief executive officer, Travelzoo. “With a large reach of more than 10 million subscribers in the U.S., Canada, and the U.K. and a robust business model, we believe that we are well positioned to take advantage of future growth opportunities.”

North America

North America business segment revenue grew 36% year-over-year to $16.7 million. North America reported an operating profit of $7.5 million, or 45% of revenue, up from an operating profit of $3.9 million, or 32% of revenue, in the prior-year period.

Europe

Europe business segment revenue was $743,000, up 32% from $565,000 in Q1 2006. Europe reported an operating loss of $494,000, compared to $460,000 in Q1 2006. Travelzoo began operations in Europe in May 2005.

Income Taxes

Travelzoo’s effective income tax rate increased to 47.3% from 43.6% in Q1 2006 and from 45.1% in the prior-year period.
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