Preview Travel Reports 35% Growth in Online Revenue For Second Quarter
PR Newswire - July 29, 1998 16:19
Gross Bookings Up 38 Percent Over Prior Quarter to $49.5 Million
SAN FRANCISCO, July 29 /PRNewswire/ -- Preview Travel, Inc. (Nasdaq: PTVL) today announced financial results for the quarter and six months ended June
30, 1998.
Online travel gross bookings for the second quarter were $49.5 million, up 38 percent from gross bookings of $35.9 million in the first quarter of 1998, and up 178
percent from the second quarter of the prior year. Revenues from online operations in the second quarter were $3.1 million, an increase of 35 percent, compared
with revenues from online operations of $2.3 million in the first quarter of 1998, and an increase of 168 percent compared to the second quarter of the prior year.
Total revenues in the second quarter of 1998 were $4.8 million, up 20 percent over revenues of $4.0 million in the prior quarter. Gross margin in the online business
increased to 54.1 percent, compared to 48.5 percent in the first quarter of 1998 and 27.3 percent in the second quarter of the prior year. Gross profit from online
operations in the second quarter was $1.7 million, an increase of 50.4 percent from the prior quarter, in which gross profit from online operations was $1.1 million,
and an increase of 430 percent compared to the second quarter of 1997. The net loss for the second quarter of 1998 was $5.0 million, or $0.39 per share, on
12,742,000 weighted average shares outstanding, compared with a net loss of $4.7 million, or $0.41 per share, on 11,353,000 weighted average shares outstanding
in the previous quarter.
"This was an extremely eventful and successful quarter for Preview Travel," said Ken Orton, president and CEO of Preview Travel. "Significant progress was made
in several strategic areas, providing the foundation for continued growth and revenue expansion. In particular, we signed exclusive distribution agreements with USA
Today Online and CNET's Snap! and gained distribution to the Prodigy Travel Channel via our existing relationship with Excite. We also secured strategic
partnerships with American Airlines Vacations and Royal Caribbean Cruises International to become the first online travel partner to offer real-time booking of their
vacation packages and cruises."
The total number of online transactions during the quarter exceeded 160,000, up 43 percent from the 112,000 transactions in the first quarter. Transactions are
defined as single purchases which may consist of multiple airline tickets, hotel bookings, car rentals, vacation packages and cruises. The average cost per transaction
in the second quarter of 1998 was approximately $8.50. The number of airline transactions which were fulfilled through e-ticketing increased to 44 percent in the
second quarter, up from 28 percent in the prior quarter.
The number of registered subscribers on Preview Travel's sites reached 4.4 million, up 30 percent from 3.4 million at the end of the first quarter of 1998 and up 171
percent from the 1.6 million registered subscribers at the end of the second quarter of 1997. Total traffic to Preview Travel's sites increased to 22.0 million visits
during the quarter, up 16 percent from 18.9 million visits in the first quarter of 1998. In the second quarter of the prior year, visits to the company's sites were 4.9
million, thus year-over-year growth was 346 percent.
Preview Travel continued to diversify its online revenue sources by increasing revenues from non-air bookings (which, on average, generate higher commissions than
air travel bookings) and also by increasing the percentage of revenue derived from advertising. During the quarter, non-air and advertising revenues increased to 37
percent of online revenues, as compared to 33 percent in the prior quarter. Revenues earned from airline tickets represented 63 percent of online revenues in the
second quarter, as compared to 67 percent in the previous quarter.
"Our balance sheet is strong," noted Ken Pelowski, EVP and CFO of Preview Travel. "At the close of the second quarter, our cash and marketable securities
totaled $70.5 million, with working capital at $73.6 million. These improvements were the result of our secondary offering of common stock, which raised
approximately $52 million in the quarter. Our financial resources will allow us to take advantage of our early entry into the online travel market, and we plan to invest
in building market share and brand awareness, as well as adding more features and services to our sites."
About Preview Travel
Preview Travel, Inc. is a leading provider of branded online travel services for leisure and small business travelers. It offers one-stop shopping for airline tickets, car
rentals, hotels, vacation packages and cruises, as well as integrated access to travel information, news and resources. The company operates its own award-winning
Web site at previewtravel.com, as well as the primary travel services on America Online, AOL.com, Excite, Lycos, SNAP! and USA Today. Preview
Travel's broadcast division, NTN, produces consumer-oriented travel television programming.
Except for the historical information contained herein, the matters discussed in this news release are forward-looking statements that involve risks and uncertainties
that could cause actual results to differ materially from those in such forward-looking statements. Potential risks and uncertainties include, without limitation, the
company's dependence on its ability to significantly increase its online revenues and sales volume, to maintain and develop relationships with travel suppliers and
strategic partners and to attract and retain customers, potential adverse changes in commission rates, unforeseen events affecting the travel industry, and the
company's dependence on its ability to establish its brand. These and other risk factors are described in detail in the company's Annual Report on Form 10-K for the
year ended December 31, 1997 and Quarterly Report on Form 10-Q for the quarter ended March 31, 1998, in the prospectus dated April 30, 1998 relating to the
company's secondary public offering, and in the company's other filings with the Securities and Exchange Commission.
Preview Travel, Inc.
Statements of Operations - Unaudited
(In thousands, except per share amounts)
Quarter Ended Six Months Ended
June 30 June 30
1997 1998 1997 1998
Revenues:
Online $1,174 $3,147 $2,670 $5,479
Television 2,033 1,667 4,056 3,350
Total revenues 3,207 4,814 6,726 8,829
Cost of revenues:
Online 853 1,446 1,763 2,647
Television 1,503 1,394 2,889 2,636
Total cost
of revenue 2,356 2,840 4,652 5,283
Gross profit:
Online 321 1,701 907 2,832
Television 530 273 1,167 714
Total gross profit 851 1,974 2,074 3,546
Operating expenses:
Marketing and sales 1,181 5,162 2,516 9,555
Research and development 296 844 701 1,582
General and administrative 914 1,566 1,923 2,966
Total operating expenses 2,391 7,572 5,140 14,103
Loss from operations (1,540) (5,598) (3,066) (10,557)
Interest income
(expense), net (1) 647 20 925
Taxes (1) (14) (1) (21)
Net Loss $(1,542) $(4,965) $(3,047) $(9,653)
Basic and diluted
net loss per share $(0.90) $(0.39) $(1.79) $(0.80)
Shares used in
computation of
net loss per share 1,712 12,742 1,707 12,047
Supplemental Information
Gross bookings $17,816 $49,512 $31,933 85,402
Preview Travel, Inc.
Balance Sheets
(In thousands)
December 31, June 30,
1997 1998
(unaudited)
Assets
Cash and cash equivalents $27,912 $40,004
Marketable securities 750 30,489
Accounts receivable, net 1,990 3,323
Other assets 6,087 5,618
Total current assets 36,739 79,434
Film library, net 2,402 2,159
Property & Equipment, net 3,644 4,237
Total assets $42,785 $85,830
Liabilities
Accounts payable $2,189 996
Accrued liabilities 2,480 3,469
Deferred revenue 255 234
Current portion of capital lease obligations 882 1,119
Total current liabilities 5,806 5,818
Capital lease obligations, less current portion 1,614 1,657
Total liabilities 7,420 7,475
Stockholders' equity:
Common stock, $.001 par value 11 13
Additional paid-in capital 61,676 114,328
Other (539) (549)
Accumulated deficit (25,783) (35,437)
Total stockholders' equity 35,365 78,355
Total liabilities and stockholders' equity $42,785 $85,830
SOURCE Preview Travel, Inc.
/CONTACT: Ken Pelowski, Executive Vice President & CFO, 415/439-1360, or
kpelowski@previewtravel.com, Melanie Mock, Vice President & Treasurer,
415/439-1382, mmock@previewtravel.com, or Ron Pernick, media contact, Director
of Communications, 415-439-1227, or rpernick@previewtravel.com, all of Preview
Travel; or Don Markley, general information, or Tara Cameron, analyst contact,
of The Financial Relations Board, 415-986-1591/
/Web site: previewtravel.com
(PTVL)
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