As expected, CTIX reported huge earnings, 0.11 eps, revuenes increase 119% from the same quarter last year.
(COMTEX) B: CHEAP TICKETS REPORTS RECORD THIRD QUARTER RESULTS GROSS
B: CHEAP TICKETS REPORTS RECORD THIRD QUARTER RESULTS GROSS BOOKINGS INCREASE
97% AND INTERNET BOOKINGS ACCOUNT FOR 30% OF REVENUES
HONOLULU, Oct 26, 1999 /PRNewswire via COMTEX/ -- Cheap Tickets, Inc.
(Nasdaq: CTIX), leading seller of discount tickets for domestic leisure
travel, today reported net earnings of $2.6 million or $0.11 per share
(diluted) for the third fiscal quarter ended September 30, 1999. These
results compared to net earnings of $0.04 per share (diluted) in the
same period in 1998.
This quarter was the third consecutive quarter of record gross bookings
in the Company's history. Gross bookings in the third period increased
97% over the comparable quarter last year to $149.6 million. Net
revenues increased 118% to $110.2 million, compared to $50.4 million in
the third quarter of 1998. Net revenues include non-published fares at
retail value and commissions on published fares. The third quarter is
typically the highest quarter of the year on a seasonal basis. Last
year third quarter gross bookings exceeded second quarter gross
bookings by 8%. This year third quarter gross bookings exceeded the
second quarter by 11%.
For the nine months ended September 30, 1999, the Company reported
total net revenue of $273.3 million and $0.29 earnings per share
(diluted). This compares to net revenue of $131.0 million and $0.06
earnings per share in the same nine month period in 1998. Gross
bookings for the same period were $374.7 million in 1999 and $199.1
million in 1998. For the nine month period approximately 1,395,000
airline tickets were sold. Earnings per share in the first quarter of
1999 were reduced by $.04 to $.01 for a one-time non-operating charge
to retained earnings arising from early retirement of preferred stocks
on March 24, 1999.
On August 19, 1999, the Company completed its secondary offering,
selling 5,750,000 shares at a price to the public of $38.00. Of the
total shares sold, 2,500,000 were offered by the Company, and 3,250,000
were offered by certain existing stockholders.
Net proceeds to the Company of approximately $90 million are to be used
for advertising and brand development, international expansion,
possible acquisitions and for general corporate purposes.
"The results this quarter demonstrate our ability to drive top-line
growth while investing in our future to expand service offerings,
enhance Internet and Call Center technologies, explore acquisition
opportunities and promote the Cheap Tickets brand," said, Michael J.
Hartley, Chairman, President and CEO of Cheap Tickets, Inc. "We have
been investing in each of these areas to ensure that Cheap Tickets has
a sustainable advantage and we believe the financial results speak to
the success we experienced on every level of the business."
The Company believes that in this quarter, continued strong demand for
leisure travel, a high sales mix of non-published fares of 69% and the
positive effects of higher levels of advertising, all helped contribute
to the record gross bookings.
Internet Sales Reach a Record of 30% of Gross Bookings Internet gross
bookings were $45.1 million in the quarter and accounted for 30% of
total gross bookings. This was an increase of 17% over the second
quarter and a five-fold increase over the same quarter last year.
During the third quarter approximately 580,000 new registered users
were added, exceeding Cheap Tickets' internal expectations. The growth
in new users represents a more than 28% increase over the previous
quarter. In the third quarter the total user base increased 48% to
approximately 1.8 million registered users. Increased spending on
advertising in the quarter, including a television advertising campaign
begun in August drove record Internet gross bookings and a robust
increase in new registrations in the third quarter as compared to the
second quarter this year.
Strategic Growth Initiatives During the quarter, Cheap Tickets
continued to focus on a number of growth initiatives targeted toward
Internet and Call Center users designed to drive the growth of new and
repeat customers. In September, Cheap Tickets' announced a strategic
agreement with Hotel Reservation Network (HRN) to provide hotel
discounts to customers through an HRN powered booking tool found on the
Cheap Tickets home page. Also during the quarter, Cheap Tickets added
access to Hertz rental car services on its home page. With the addition
of discount hotel services and rental car services, Cheap Tickets
provides a one-stop-Internet-shop to serve all the travel needs of
value-conscious customers.
"By providing access to discount hotel rooms and rental car services on
our home page, we can provide complementary discounted products to our
airline customers," added Mr. Hartley. "We plan to continue adding to
our product offerings to provide greater value and variety to our
customers."
In October, Cheap Tickets announced the introduction of its new
customer help system to enhance online customer service. The new
service uses proprietary technology to prioritize customer emails based
on the type of question being asked, the Web pages the customer has
visited, and how long the customer has been waiting. The number of
daily e-mail inquiries averages between twenty-five hundred and three
thousand per day. Since implementing this system, 50% of all email
inquiries are answered automatically, freeing customer service
representatives to focus on more complex inquiries.
Also in the quarter, call center operations benefited from the
implementation of new Interactive Voice Recognition and Incoming Call
Routing technology. IVR technology allows callers to quickly access
information about airfares, departure and arrival times, payment
options, locations, hours of operation and other services. Callers
speak their travel plans and the system retrieves several airfare
options and recites them to the caller. The new ICR technology load
balances incoming calls between the four call centers, reducing hold
times and improving customer service.
"Both IVR and ICR technologies and our new online help technology
became fully operational during the quarter, providing Call Center and
Internet customers with more efficient access to our low fares,"
commented Mr. Hartley. "The implementation of the phone system
technology and online help technology are just two examples of our
commitment to provide what we believe is the best purchasing experience
for our customers."
Call Center Gross Bookings Exceed Same Quarter 1998 by 53% Double-digit
increases in agent productivity, higher average staffing levels, and
significantly more spending in advertising than in the third quarter
last year all contributed to the significant continuing increases in
Call Center sales. Implementation of Intelligent Call Routing (ICR) and
Interactive Voice Response (IVR) has enabled a higher percentage of
calls to be answered.
Gross profits were 19.5% of net revenues compared to 21.5% in the same
quarter last year. An anomaly of measuring gross profits against net
revenues is that commissions included in net revenue are also included
100% in gross profit so as non-published sales proportionately increase
the gross margin percentage decreases. As non-published dollar margins
are higher than commissions on published fares, gross profit dollar
amounts increase as non-published sales become a higher proportion of
total bookings as occurred this year. Gross profit as a percent of
gross bookings was 14.38% in the third quarter compared to 14.31% in
the same quarter last year.
About Cheap Tickets Founded in 1986, Cheap Tickets, Inc. is a leading
retail seller of discount tickets for leisure air travel. Offering more
than 400,000 non-published discount airfares on more than 35 air
carriers, Cheap Tickets sells directly to consumers through its
toll-free number, 1-800-OKCHEAP, its Internet site,
www.cheaptickets.com, and its 12 retail stores.
Statements in this news release regarding the business of Cheap
Tickets, Inc. which are not historical information, are
"forward-looking statements" that involve risks and uncertainties.
These forward-looking statements include statements regarding the third
quarter being a seasonably strong quarter for the Company and
statements concerning the Company's potential acquisitions, continued
demand for leisure travel, and continued increase in sales of
non-published fares. Actual results may differ materially due to
factors including, but not limited to: uncertainty regarding demand for
the Company's products in general; the dependence on airlines for
non-published fares; uncertainty regarding demand for leisure travel;
uncertainty regarding customer experience; uncertainty regarding
services provided on our home page; and the growth of our Internet and
Call Center business. For a discussion of such risks and uncertainties,
and other factors which could cause actual results to differ materially
from those contained in the forward-looking statements, see information
contained in the Company's recent Registration Statement on Form S-1 on
file with the Securities and Exchange Commission. Copies of form S-1
are available by calling the Company's Investor Relations Department at
808-945-7439.
Cheap Tickets, Inc.
Condensed Balance Sheets
(In thousands)
(unaudited)
September 30, September 30,
1999 1998
Current Assets:
Cash and Cash Equivalents $72,238 $9,232
Marketable Securities 90,261 --
Trade Accounts and
Other Receivables 4,899 1,793
Other Current Assets 1,270 990
Total Current Assets 168,668 12,015
Property and Equipment, Net 9,294 2,705
Other Assets 169 183
$178,131 $14,903
Liabilities and
Stockholders' Equity:
Accounts Payable $15,282 $6,133
Current Installments of
Long-Term Debt 222 191
Current Installments of
Capital Lease Obligations 1,335 171
Income Taxes Payable 739 --
Other Accrued Liabilities 3,000 1,273
Total Current Liabilities 20,578 7,768
Long-Term Debt and Capital Lease
Obligations, Excluding
Current Installments 4,006 1,098
Other Noncurrent Liabilities 1,376 132
Total Liabilities 25,960 8,998
Mandatorily Redeemable
Cumulative Preferred Stock -- 4,008
Stockholders' Equity:
Common Stock 24 10
Additional Paid-In Capital 145,654 551
Unearned Compensation (408) (25)
Retained Earnings 6,901 1,361
Total Stockholders' Equity 152,171 1,897
$178,131 $14,903
Cheap Tickets, Inc.
Condensed Statements of Operations
(In thousands)
(unaudited)
Three months ended Sept. 30, Nine months ended Sept. 30,
1999 1998 1999 1998
Results of Operations
Net Revenues
Non-published fares $103,764 $46,823 $257,143 $ 122,994
Commissions 6,391 3,614 16,112 8,054
110,155 50,437 273,255 131,048
Gross Profit 21,527 10,865 53,747 26,501
Selling, general and
administrative
expenses 18,393 9,535 44,289 24,093
Net Operating Income 3,134 1,330 9,458 2,408
Net Income $2,570 $803 $6,780 $1,473
Earnings per Share
(Diluted) $0.11 $0.04 $0.29 $0.06
Weighted Average
Shares Outstanding:
Basic 22,607,254 14,473,676 19,711,200 14,598,220
Diluted 23,256,528 17,584,434 21,309,877 17,625,286
Three months ended Sept. 30, Nine months ended Sept. 30,
1999 1998 1999 1998 Other
Operating Data:
Gross Bookings (in thousands):
Non-published fares $103,764 $46,823 $257,143 $ 122,994
Published Fares 45,882 29,107 117,540 76,121
Total Gross Bookings $149,646 $75,930 $374,683 $ 199,115
SOURCE Cheap Tickets, Inc.
(C) 1999 PR Newswire. All rights reserved.
prnewswire.com
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CONTACT: Dale Jorgenson, Vice President, Finance & CFO of Cheap Tickets,
Inc., 808-945-7439; general information, Traci McCarty,
analysts, Kate Rajeck,
or media inquiries, Scott Marx, all of The Financial Relations
Board,
415-986-1591
WEB PAGE: cheaptickets.com
GEOGRAPHY: Hawaii
INDUSTRY CODE: LEI
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