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To: freeus who wrote (13401)	5/1/2001 5:25:43 PM
From: jhg_in_kc	Read Replies (3) \| Respond to of 13572

Priceline.com Reports Strong Sequential Growth In 1st Quarter 2001, Re-Affirms Profitability Expectations For 2nd Quarter NORWALK, Conn.--(BUSINESS WIRE)--May 1, 2001--Priceline.com (Nasdaq: PCLN - news) today reported that revenue for the 1st quarter 2001 rose to $269.7 million, an increase of 18% over 4th quarter 2000 and comfortably within the Company's previously announced guidance. Gross margin for the 1st quarter 2001 was a record-high 16%, compared to 15.4% in the 4th quarter 2000. Gross profit rose to $43.1 million, a 23% increase over 4th quarter 2000. Pro forma net loss for the 1st quarter 2001 was $6.2 million, or $0.03 per share, which represents a 12 cent per share improvement over the 4th quarter 2000. Pro forma net loss is stated before restructuring and special charges, and excludes option payroll taxes, amortization of stock-based compensation charges and loss on sale of stock. Priceline.com added 891,490 new customers during the 1st quarter, with sequential increases in new customers through each month of the quarter. In total, priceline.com has built a base of nearly 10 million U.S. customers. Repeat business for the 1st quarter 2001 was a record 58%, defined as the number of unique purchase offers coming from repeat customers divided by the number of total unique purchase offers. Repeat and new customer demand accelerated through the 1st quarter 2001. Earlier this year, priceline.com said it expected 2nd quarter 2001 revenue to increase 10% to 15% over 1st quarter 2001 revenue. Based on 1st quarter 2001 performance and preliminary results in April, the Company re-affirmed those projections today and said that it expects to report its first pro forma operating profit for the 2nd quarter 2001. Pro forma operating profit excludes restructuring charges, option payroll taxes and amortization of stock-based compensation charges. Priceline.com also reported that, in the 1st quarter 2001, it sold a combined 2,115,775 units of travel products, which consist of airline tickets, hotel room nights and rental car days. By comparison, priceline.com sold 1,698,941 units of travel products in the 4th quarter 2000. ``Priceline.com was successful in achieving strong sequential improvements in key financial metrics,'' said priceline.com's President and CEO Daniel H. Schulman. ``We are also delighted that our brand continues to rebound, as evidenced by increasing numbers of new and repeat customers throughout the quarter. These achievements reflect a concentrated and ongoing company-wide effort to execute on what we have publicly referred to as our 6-point turnaround plan. In each area of the plan, we believe we have achieved tangible results and demonstrable improvements in the 1st quarter.'' Significant 1st quarter 2001 accomplishments include: Priceline.com continued to focus on its core businesses, particularly travel. An innovative new advertising campaign focusing on priceline.com's travel products and the benefits of using the Company's Name Your Own Price travel services was rolled out during the quarter. According to independent 3rd party measurements, priceline.com as a travel and e-commerce brand continues to be differentiated among consumers as being the best deal and a smarter way to buy. Priceline.com also launched an extension of its travel products for last-minute travelers. Now, priceline.com customers can purchase airline tickets up until 11:00 p.m. (EST) for travel the next day. They can purchase hotel rooms up until 6:00 p.m. for use that same night. They can purchase rental cars with as little as four hours advance notice. Priceline.com continued to improve its service performance and customer operations. During the 1st quarter, priceline.com launched a new graphics interface for its Web site. In addition to being more colorful and friendlier, the site makes it even easier and faster to make a purchase offer. Priceline continues generally to respond to purchase offers in 15 minutes or less, with an average response time of 4 minutes. Through improvements in Web site disclosure and IVR enhancements, the number of customer service contacts continues to decline. When customers do contact priceline.com customer service, approximately 80% of all incoming calls are answered within 30 seconds, while over 80% of all incoming e-mails are answered within three hours. Priceline.com continued to make progress toward profitability during the 1st quarter by further reducing administrative costs and leveraging operating efficiencies. The Company now believes that it will exceed its original target of $35 million in operating expense reductions. Total headcount has been reduced from a high of 538 employees in the 4th quarter 2000 to 344 employees at the end of the 1st quarter 2001. Revenue per employee on an annualized basis is now $3.13 million. Priceline.com continued to improve its balance sheet during the 1st quarter. In early February, the Company announced that Delta Air Lines had agreed to restructure its investment in priceline.com. The restructuring reduced priceline.com's outstanding preferred stock by $280 million and significantly reduced the Company's dividend requirement. Also in February, priceline.com announced that Hutchison Whampoa Limited and Cheung Kong (Holdings) Limited made a $50 million investment in priceline.com. The Company said that it ended the 1st quarter 2001 with approximately $142 million in cash. Looking forward, Mr. Schulman said, ``While we are still in a turnaround mode, we are encouraged by the fact that our key customer and financial metrics grew stronger as the 1st quarter went on. Based on our preliminary results in April, we are once again affirming that we expect our first pro forma operating profit in the 2nd quarter 2001. Priceline.com offers real value to our customers and suppliers. That is why we feel confident about our long-term role in the Internet space.''