Priceline.com Reports Profit For 2nd=1 , first call =3c
Business Editors
NORWALK, Conn.--(BUSINESS WIRE)--July 31, 2002--
-- GAAP and pro forma EPS is $0.03, compared to $0.01 in 2nd
quarter 2001
-- Customer base reaches 14.5 million with record 65.4% repeat
offer rate
-- 1 million-plus room nights sold in 2nd quarter, up 60% from Q2
2001
-- Priceline.com to expand travel products offered through
LowestFare.com brand
Priceline.com (Nasdaq: PCLN) today reported 2nd quarter 2002 GAAP
and pro forma net income of $6.3 million, or $0.03 per diluted share
on revenue of $304.5 million.
By comparison, in the 2nd quarter 2001, priceline.com had GAAP net
income of $2.8 million, or $0.01 per diluted share, on revenue of
$364.8 million. Compared to 1st quarter 2002, priceline.com's revenue
grew 16 percent, primarily as a result of stronger sequential unit
sales of its travel products.
Priceline.com reported pro forma EBITDA for the 2nd quarter 2002
of $9.9 million, compared to pro forma EBITDA of $13.9 million in the
2nd quarter 2001. Pro forma net income and pro forma EBITDA are stated
before restructuring, special and severance charges, stock-based
compensation and option payroll taxes. Gross profit for the 2nd
quarter 2002 was $48.1 million, compared to $60.1 million in the 2nd
quarter 2001. Priceline.com ended the quarter with more than $180
million in cash and short-term investments. Priceline.com has no
outstanding debt.
"The steady growth of priceline.com's consumer franchise and
non-airline travel businesses continued in the 2nd quarter," said
priceline.com President and Co-Chief Executive Officer Jeffery H.
Boyd. "We added nearly a million new customers in the quarter,
bringing our customer base to 14.5 million. Priceline.com's repeat
business for the quarter was a record 65.4 percent." Repeat business
is defined as the number of total unique purchase offers coming from
repeat customers divided by the number of total unique purchase
offers.
Mr. Boyd continued, "While the travel industry, particularly the
airline business, continues to face significant challenges,
priceline.com's unit sales of travel products increased 12 percent
over the previous quarter primarily on the strength of hotel room
nights sold. For the first time in a quarter, our hotel service sold
over 1 million room nights, which represents a 60 percent
year-over-year increase and a 20 percent sequential increase.
Priceline.com has utilized its hotel and airline relationships to
introduce a new Name Your Own Price(SM) vacation service. Our vacation
service has been well received by customers, with solid bookings
growth achieved since the May 2002 launch at a high average
transaction size and attractive margins."
Priceline.com also announced today that its Board of Directors
authorized the re-purchase of up to $40 million of priceline.com
common stock. In conjunction with priceline.com's purchase, Cheung
Kong (Holdings) Limited and Hutchison Whampoa Limited -
priceline.com's two largest stockholders - informed priceline.com that
they may purchase up to an additional $40 million of priceline.com
common stock. The combined purchases by priceline.com, Cheung Kong and
Hutchison Whampoa - the pricing, timing, initiation and completion of
which are at the discretion of each company's management - would have
an aggregate value of $80 million.
"At the current valuation, we believe that the best investment
priceline.com can make is in our own Company," said priceline.com
Chairman and Co-Chief Executive Officer Richard S. Braddock.
"Priceline.com is a growing, profitable business in one of the
Internet's most desirable industry sectors. Priceline.com has no debt
and $180 million in cash and short-term investments. In past years,
priceline.com also has recorded significant net operating losses which
will continue to have a favorable cash tax impact on the business for
many years."
Also today, priceline.com announced the re-launch of
Lowestfare.com and outlined plans for the future integration of
priceline.com and Lowestfare.com offerings. As part of that future
integration, priceline.com and Lowestfare.com customers will have
access to an even wider range of Name Your Own Pricesm and
published-price travel products, including a broad selection of
vacation package inventory.
"Priceline.com and Lowestfare.com already have significant
convertible consumer traffic," said Mr. Boyd. "We have been successful
in improving Lowestfare.com's conversion rates since we acquired the
URL in June. Priceline.com and Lowestfare.com have strong recognition
in the online travel space, thanks to early investments in
brand-building, and we believe that we can be successful moving
customers between opaque and published-fare products and closing the
sale."
Looking forward, Mr. Braddock said, "Priceline.com will continue
to evolve and expand its businesses through a series of ongoing
initiatives. Today, we announced a strategic re-alignment of our
senior management team to take full advantage of these important
initiatives. (See related release). We will leverage new growth areas
in online travel, such as hotels and vacation packages. We will
support our airline partners by implementing additional ways to sell
their products. We intend to continue to broaden our online reach by
working closely with major brands such as eBay, LowestFare.com and
LastMinute Travel. And we will support our brand through awareness-
and sales-building radio and TV advertising featuring our longtime
spokesperson, William Shatner. In fact, you can look for Mr. Shatner
to re-take the TV screen this fall on priceline.com's behalf."
Mr. Braddock continued, "Priceline.com is taking the initiatives
to leverage the strong brand recognition of priceline.com and
Lowestfare.com and to continue to build on our position as one of the
Internet's premier travel providers. We look forward to providing
additional information in the future as these initiatives come closer
to fruition. As for the 3rd quarter 2002, it is particularly
challenging to provide definitive revenue guidance given the continued
turbulence in the airline industry and the potential one-time impact
of consumer reluctance to travel in September around the anniversary
of the terrorist attacks. Priceline.com's July revenue will be
approximately $92 million to $93 million and we expect August revenue
to come in at or slightly below July revenue given historical
seasonality. For September, it is simply not possible to gauge the
impact of the 9/11 anniversary or the short-term benefit from
priceline.com's return to TV advertising. Despite this uncertainty, we
expect pro forma earnings per share to be between break-even and $0.02
per share."
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