0000912057-01-537445.txt : 20011107
0000912057-01-537445.hdr.sgml : 20011107
ACCESSION NUMBER: 0000912057-01-537445
CONFORMED SUBMISSION TYPE: 8-K
PUBLIC DOCUMENT COUNT: 2
CONFORMED PERIOD OF REPORT: 20011101
ITEM INFORMATION:
FILED AS OF DATE: 20011102
FILER:
COMPANY DATA:
COMPANY CONFORMED NAME: PRICELINE COM INC
CENTRAL INDEX KEY: 0001075531
STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-COMPUTER INTEGRATED SYSTEMS DESIGN [7373]
IRS NUMBER: 061528493
STATE OF INCORPORATION: DE
FISCAL YEAR END: 1231
FILING VALUES:
FORM TYPE: 8-K
SEC ACT: 1934 Act
SEC FILE NUMBER: 000-25581
FILM NUMBER: 1773586
BUSINESS ADDRESS:
STREET 1: 800 CONNECTICUT AVE
CITY: NORWALK
STATE: CT
ZIP: 06854
BUSINESS PHONE: 2037053000
8-K
1
a2062406z8-k.txt
FORM 8-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) November 1, 2001
priceline.com Incorporated
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(Exact name of registrant as specified in its charter)
Delaware 0-25581 06-1528493
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(State or other (Commission File Number) (IRS Employer
Jurisdiction of Identification No.)
Incorporation)
800 Connecticut Avenue, Norwalk, Connecticut 06854
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(Address of principal office) (zip code)
N/A
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(Former name or former address, if changed since last report)
ITEM 9. REGISTRATION FD DISCLOSURE.
3RD QUARTER 2001 EARNINGS
On November 1, 2001, priceline.com Incorporated, a Delaware corporation,
announced its results for the 3rd quarter 2001 and announced that it had
recorded a pro forma (as defined) profit in the 3rd quarter 2001. The
information set forth above is qualified in its entirety by reference to the
press release (which includes a financial and statistical supplement and related
information issued by priceline.com on November 1, 2001), a copy of which is
attached hereto as Exhibit 99.1 and incorporated herein by reference.
The supplement and related information is unaudited and intended as a
supplement to, and should be read in conjunction with, the Company's audited
financial statements and the notes thereto filed with the SEC on Form 10-K and
quarterly financial statements filed with the SEC on Form 10-Q.
EXHIBITS.
99.1 Press Release (which includes a financial and statistical
supplement and related information) issued by priceline.com
Incorporated on November 1, 2001 relating to its 3rd quarter
2001 earnings.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
PRICELINE.COM INCORPORATED
By: /s/ Jeffery H. Boyd
--------------------------------------
Name: Jeffery H. Boyd
Title: President and Chief Operating
Officer
Date: November 2, 2001
EXHIBIT INDEX
Exhibit No. Description
----------- -----------
99.1 Press Release (which includes a financial and statistical
supplement and related information) issued by priceline.com
Incorporated on November 1, 2001 relating to its 3rd quarter
2001 earnings.
EX-99.1
3
a2062406zex-99_1.txt
EXHIBIT 99.1
EXHIBIT 99.1
Priceline.com Reports Pro Forma Earnings Per Share
Of $0.03 For 3rd Quarter 2001
o $302 MILLION IN REVENUES AND $50.4 MILLION IN GROSS PROFITS
o GAAP NET INCOME BEFORE PREFERRED STOCK DIVIDEND IS $5.0 MILLION
o 16.7% GROSS MARGIN IS PRICELINE.COM RECORD
o PRICELINE.COM CONSUMER FRANCHISE GROWS TO NEARLY 12 MILLION CUSTOMERS
WITH RECORD 63% REPEAT BUSINESS
NORWALK, Conn, November 1, 2001 . . . Priceline.com(R) (Nasdaq: PCLN) today
reported pro forma net income for the 3rd quarter 2001 of $6.3 million, or $0.03
per diluted share. Revenues for the 3rd quarter 2001 were $302 million, which
modestly exceeded the upper end of priceline.com's revised 3rd quarter guidance
and compared to 3rd quarter 2000 revenues of $341 million. Pro forma EBITDA for
the 3rd quarter 2001 was $8.4 million. In the 3rd quarter 2000, priceline.com
had a pro forma net loss of $2.2 million, or $0.01 per share. Pro forma EBITDA
and pro forma net income exclude option payroll taxes, amortization of
stock-based compensation charges and a non-cash preferred stock dividend.
Priceline.com reported GAAP net income for the 3rd quarter 2001 before preferred
stock dividend of $5.0 million and reported a GAAP net loss applicable to common
stockholders for the 3rd quarter 2001 of $3.6 million, or $0.02 per share,
compared to loss in the 3rd quarter 2000 of $199 million, or $1.19 per share.
Priceline.com's gross profit for the 3rd quarter 2001 was $50.4 million,
compared to a gross profit of $54.4 million in the 3rd quarter 2000.
Priceline.com's 3rd quarter gross margin was a record 16.7%, compared to a gross
margin of 15.9% in the 3rd quarter 2000.
Priceline.com reported continued growth of its long-term consumer franchise
during the quarter. The Company sold a combined 3.0 million units of travel
products during the quarter and added 927,000 new customers, bringing its total
customer base to 11.8 million. Repeat business for the 3rd quarter 2001 (defined
as the number of unique purchase offers coming from repeat customers divided by
the number of total unique purchase offers) was a record 63 percent, compared to
51 percent in the 3rd quarter 2000 and 61 percent in the 2nd quarter 2001.
Priceline.com said that, while demand for travel products has substantially
recovered following the September 11th terrorist attacks, unit sales and revenue
from sales of travel products in the quarter trailed that demand because of
refunds processed by priceline.com in the aftermath of the attacks and because
of pressure from deep discounting of published retail prices instituted by
airlines, hotel companies and rental car companies to spur near-term demand. The
recovery of airline ticket sales in the weeks following the attacks also was
slowed by disruptions in availability of inventory related to anticipated
schedule changes.
"The rapid recovery of consumer demand for priceline.com's travel products is a
tribute to the strength of our brand, the loyalty of our customers and the
compelling value we offer to consumers," said priceline.com President and Chief
Operating Officer Jeffery H. Boyd. "We are also pleased with the continuing
strength of our hotel and rental car businesses. These non-air categories
constituted 42 percent of our booked offers in the 3rd quarter 2001, compared to
28 percent a year ago. For the past two quarters, hotel and rental car unit
sales have exceeded sales of airline tickets."
Priceline.com also said that its "look to book" ratio (a prevailing metric in
the travel industry that measures the percentage of people who actually buy a
product after visiting or contacting the travel company) compared favorably with
other online travel companies for the quarter. Based on published 3rd quarter
reports, priceline.com had a 12.8 percent "look to book" ratio, compared to 8.0
percent for Travelocity and 5.5 percent for Expedia.com.
"With our steadily growing customer base, a strong look-to-book ratio and record
repeat business, priceline.com has developed a strong consumer franchise that
positions us well for the future," said priceline.com Chairman and Chief
Executive Officer Richard S. Braddock. "Our Name Your Own Price proposition is
now a preferred way of purchasing for millions of loyal customers, who come back
to priceline.com again and again for their travel and other purchases."
Mr. Braddock continued, "We are targeting 4th quarter revenues in the range of
$215 million to $235 million, which reflects today's travel industry conditions
as well as the usual seasonal weakness of our 4th quarter. However, this year we
are managing the 4th quarter to a goal of pro forma break-even earnings per
share. Results could range a penny or two on either side of that goal. This
compares to 4th quarter 2000 revenues of $228 million and a pro forma net loss
of $0.15 per diluted share. The improved earnings outlook is due to key
operating efficiencies we've instituted over the past year as part of our
turnaround plan. Despite current challenges in the travel sector, we believe
priceline.com will continue to be one of e-commerce's winning companies for
several reasons. We have seen a demand-driven recovery in our U.S. travel
business, which has developed a strong, loyal consumer franchise. Further,
priceline's scope has broadened to reduce its reliance on our air product, for
example, through the continued strength of the hotel and rental car products and
the progress achieved in building our mortgage business."
Significant 3rd quarter 2001 developments for priceline.com included:
o CUSTOMER CARE FOLLOWING THE SEPTEMBER 11TH CRISIS. Immediately
following the September 11th terrorist attacks, priceline.com
assembled a crisis team to provide service and support to customers,
implemented emergency change/cancellation policies and procedures,
brought the Company's customer service operations up to emergency
response levels, and trained customer service personnel to implement
the new emergency policies.
o A DEEPENING OF PRICELINE.COM'S STRATEGIC RELATIONSHIP WITH CHEUNG
KONG (HOLDINGS) LIMITED AND HUTCHISON WHAMPOA LIMITED. In September
2001, Cheung Kong and Hutchison Whampoa purchased more than 7
million additional shares of priceline.com on the open market and
raised their equity stake in the business to approximately 30
percent. Priceline.com's Board of Directors also approved a request
from the two companies to give them the ability to increase their
future ownership stake in priceline.com to 37.5 percent. In addition
to being strategic investors in priceline.com's US business, Cheung
Kong and Hutchison Whampoa are working with priceline.com on the
introduction of a similar service for Asian markets.
o EXPANSION OF PRICELINE.COM'S TRAVEL PRODUCTS. During the 3rd quarter
2001, priceline.com's hotel service expanded internationally to add
hotel properties in Mexico and the Bahamas/Caribbean. The hotel
service also began a beta test offering hotel rooms in 50 European
cities and towns. As a result of these expansions, priceline.com's
hotel service now includes over 7,000 hotel properties and sold
880,000 room nights in the 3rd quarter. Also during the quarter,
priceline.com launched an online test for a cruise product. The
cruise product is being managed for priceline.com by National
Leisure Group. Priceline.com also began software development for its
vacation package product, which is expected to launch in the first
quarter of 2002.
o ACQUISITION OF 49 PERCENT EQUITY STAKE IN PRICELINEMORTGAGE. Late in
the 3rd quarter, priceline.com exercised its option to take an
equity stake in PricelineMortgage. PricelineMortgage has been
profitable since February 2001 and is expected to be accretive to
priceline.com's financial results, beginning in the 4th quarter, but
not financially material at this time. PricelineMortgage offers
consumers unique advantages in obtaining a first mortgage or
refinancing through its fast approvals (as little as 30 minutes),
guaranteed closing costs, and float-down rate protection.
o BROADENING OF KEY SUPPLIER RELATIONSHIPS. During the 3rd quarter,
priceline.com expanded its strategic marketing relationship with
Visa USA. To date, priceline.com has processed millions of Visa card
payments for its customers. Under a new agreement, priceline.com
will implement advertising on its Web site and will integrate the
new Verified by Visa security system into the priceline.com Web
site. Priceline.com has also executed multi-year preferred supplier
agreements with several of its hotel and rental car partners.
ABOUT PRICELINE.COM
Priceline.com is the Name Your Own Pricesm Internet service that offers products
for sale in four categories: a travel service that offers leisure airline
tickets, hotel rooms and rental cars; a personal finance service that offers
home mortgages, refinancing and home equity loans through an independent
licensee; an automotive service that offers new cars; and a telecommunications
service that offers long distance calling services.
Priceline.com licenses its business model to independent licensees, including
pricelinemortgage and certain international licensees. In these arrangements,
priceline.com generally receives royalties for licensing its intellectual
property. Priceline.com also holds securities carrying the right to purchase a
significant equity stake in the licensees under certain conditions. Unless those
rights are exercised, the results of licensee operations will not be included in
priceline.com's financial statements.
###
For press information, contact:
Brian Ek 203-299-8167 (brian.ek@priceline.com)
INFORMATION ABOUT FORWARD-LOOKING STATEMENTS
This press release may contain forward-looking statements. These forward-looking
statements are not guarantees of future performance and are subject to certain
risks, uncertainties and assumptions that are difficult to predict; therefore,
actual results may differ materially from those expressed, implied or forecasted
in any such forward-looking statements. Expressions of future goals and similar
expressions including, without limitation, "may," "will," "should," "could,"
"expects," "does not currently expect," "plans," "anticipates," "believes,"
"estimates," "predicts," "potential," "targets," or "continue," reflecting
something other than historical fact are intended to identify forward-looking
statements. The following factors, among others, could cause the Company's
actual results to differ materially from those described in the forward-looking
statements: adverse changes in general market conditions for leisure and other
travel products as the result of recent terrorist attacks, hostilities or other
similar or related events; adverse changes in the Company's relationships with
airlines and other product and service providers; systems-related failures
and/or security breaches; the effects of increased competition; the Company's
ability to protect its intellectual property rights; losses by the Company and
its licensees; any adverse impact from negative publicity as a result of recent
events and negative customer reaction to such publicity; legal and regulatory
risks and the ability to attract and retain qualified personnel. For a detailed
discussion of these and other factors that could cause the Company's actual
results to differ materially from those described in the forward-looking
statements, please refer to the Company's most recent Form 10-Q, Form 10-K and
Form 8-K filings with the Securities and Exchange Commission. Unless required by
law, the Company undertakes no obligation to update publicly any forward-looking
statements, whether as a result of new information, future events or otherwise.
PRICELINE.COM INCORPORATED
CONDENSED BALANCE SHEETS
(IN THOUSANDS, UNAUDITED)
SEPTEMBER 30, DECEMBER 31,
2001 2000
------------- ------------
ASSETS
Current assets:
Cash and cash equivalents $ 99,013 $ 77,024
Restricted cash 7,013 13,568
Short-term investments 45,498 10,952
Accounts receivable, net of allowance for doubtful accounts of
$3,034 and $2,372 at September 30, 2001 and December 31, 2000, respectively 15,021 13,889
Note receivable 10,000 --
Prepaid expenses and other current assets 9,431 15,790
----------- -----------
Total current assets 185,976 131,223
Property and equipment, net 33,137 37,083
Related party receivable 11 3,503
Warrants to purchase common stock of licensees 3,250 3,250
Other assets 19,311 20,019
----------- -----------
Total assets $ 241,685 $ 195,078
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 34,931 $ 40,691
Accrued expenses 30,482 33,172
Other current liabilities 4,943 5,434
----------- -----------
Total current liabilities 70,356 79,297
Accrued expenses 3,369 5,108
----------- -----------
Total liabilities 73,725 84,405
----------- -----------
MANDATORILY REDEEMABLE CONVERTIBLE PREFERRED STOCK -- 359,580
MANDATORILY REDEEMABLE PREFERRED STOCK 25,345 --
Stockholders' equity/(deficiency)
Common stock 1,832 1,454
Treasury stock (326,633) (326,633)
Additional paid-in capital 2,013,974 1,618,956
Deferred compensation (3,539) (13,053)
Accumulated other comprehensive loss -- (1,156)
Accumulated deficit (1,543,019) (1,528,475)
----------- -----------
Total stockholders' equity/(deficiency) 142,615 (248,907)
----------- -----------
Total liabilities and stockholders' equity $ 241,685 $ 195,078
=========== ===========
PRICELINE.COM INCORPORATED
CONDENSED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts, unaudited)
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30, SEPTEMBER 30, SEPTEMBER 30,
----------------------------- -----------------------------
2001 2000 2001 2000
----------------------------- -----------------------------
Travel revenues $ 299,793 $ 335,699 $ 929,305 $ 994,128
Other revenues 2,196 5,635 7,144 13,099
----------------------------- -----------------------------
Total revenues 301,989 341,334 936,449 1,007,227
Cost of travel revenues 250,952 285,753 780,427 846,809
Cost of other revenues 605 1,146 2,369 1,780
Supplier warrant costs -- 381 -- 1,143
----------------------------- -----------------------------
Total costs of revenues 251,557 287,280 782,796 849,732
----------------------------- -----------------------------
Gross profit 50,432 54,054 153,653 157,495
----------------------------- -----------------------------
Operating expenses:
Write off of WebHouse Warrant -- 189,000 -- 189,000
Sales and marketing 30,010 35,569 93,451 113,635
General and administrative 6,069 11,934 22,950 39,860
Payroll tax on employee stock options 297 349 687 8,763
Stock based compensation 1,015 -- 9,312 --
Systems and business development 10,160 11,420 31,164 23,983
Restructuring charge -- -- 1,400 --
Severance charge -- -- 5,412 --
----------------------------- -----------------------------
Total operating expenses 47,551 248,272 164,376 375,241
----------------------------- -----------------------------
Operating income (loss) 2,881 (194,218) (10,723) (217,746)
Other income:
Gain/(loss) on sale of equity investments -- 32 (946) 32
Income from priceline Mortgage 34 -- 34 --
Interest income 2,062 2,264 5,654 7,704
----------------------------- -----------------------------
Total other income 2,096 2,296 4,742 7,736
----------------------------- -----------------------------
Net income (loss ) 4,977 (191,922) (5,981) (210,010)
Preferred stock dividend (8,563) (7,191) (8,563) (14,382)
----------------------------- -----------------------------
Net loss applicable to common stockholders $ (3,586) $ (199,113) $ (14,544) $ (224,392)
============================= =============================
Net loss applicable to common stockholders per
basic common share $ (0.02) $ (1.19) $ (0.07) $ (1.35)
============================= =============================
Weighted average number of basic common shares
outstanding 216,132 167,059 198,921 166,389
============================= =============================
PRICELINE.COM INCORPORATED
SUPPLEMENTAL PRO FORMA FINANCIAL INFORMATION
CONDENSED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS, UNAUDITED)
THREE MONTHS ENDED SEPTEMBER 30, 2001
------------------------------------------
PRO FORMA
REPORTED ADJUSTMENTS PRO FORMA
--------- ----------- ---------
Travel revenues $ 299,793 $ 299,793
Other revenues 2,196 2,196
--------- --------- ---------
Total revenues 301,989 301,989
Cost of travel revenues 250,952 250,952
Cost of other revenues 605 605
Supplier warrant costs -- --
--------- --------- ---------
Total costs of revenues 251,557 251,557
--------- --------- ---------
Gross profit 50,432 50,432
--------- --------- ---------
Operating expenses:
Sales and marketing 30,010 30,010
General and administrative 6,069 6,069
Payroll tax on employee stock options 297 (297)(a) --
Stock based compensation 1,015 (1,015)(b) --
Systems and business development 10,160 10,160
--------- --------- ---------
Total operating expenses 47,551 (1,312) 46,239
--------- --------- ---------
Operating income 2,881 1,312 4,193
Other income:
Income from priceline Mortgage 34 34
Interest income 2,062 2,062
--------- --------- ---------
Total other income 2,096 2,096
--------- --------- ---------
Net income 4,977 1,312 6,289
Preferred stock dividend (8,563) 8,563 (c) --
--------- --------- ---------
Net loss applicable to common stockholders $ (3,586) $ 9,875 $ 6,289
========= ========= =========
Net loss applicable to common stockholders
per basic common share $ (0.02) -- $ 0.03
========= ========= =========
Weighted average number of basic common
shares outstanding 216,132 20,035 236,167
========= ========= =========
----------
(a) Employer payroll taxes on employee exercises of non-qualified stock
options.
(b) Non-cash amortization of stock based compensation expense.
(c) Non-cash preferred stock dividend.
PRICELINE.COM - 2001 THIRD QUARTER FINANCIAL DATA SUPPLEMENT [GRAPHIC]
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PAGE NUMBER
PRICELINE.COM FINANCIALS
Pro Forma Condensed Statements of Operations 1
Condensed Balance Sheets 2
OFFER AND CUSTOMER ACTIVITY 3
PRODUCT DETAIL
Air 4
Hotels 5
Rental Cars 6
THIS SUPPLEMENT IS UNAUDITED AND INTENDED AS A SUPPLEMENT TO, AND SHOULD BE READ IN CONJUNCTION WITH, THE COMPANY'S AUDITED
FINANCIAL STATEMENTS AND THE NOTES THERETO FILED WITH THE SEC ON FORM 10-K AND QUARTERLY FINANCIAL STATEMENTS FILED WITH THE SEC ON
FORM 10-Q. CERTAIN DATA HAVE BEEN RECLASSIFIED IN ORDER TO CONFORM HISTORICAL INFORMATION IN A MANNER CONSISTENT WITH CURRENT
PRESENTATION AND HAS NOT BEEN AUDITED IN THIS FORM. CERTAIN PRESENTATIONS WITHIN THIS SUPPLEMENT ARE NOT CONSISTENT WITH GENERALLY
ACCEPTED ACCOUNTING PRINCIPLES.
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PRICELINE.COM INC.
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PRO FORMA CONDENSED STATEMENTS OF OPERATIONS
In thousands, except per share amounts
(UNAUDITED)
INCOME STATEMENT ANALYSIS 1Q00 2Q00 3Q00 4Q00 1Q01 2Q01 3Q01
------------------------- --------- --------- --------- --------- --------- --------- ---------
Travel revenues $ 311,607 $ 346,822 $ 335,699 $ 223,032 $ 267,020 $ 362,492 $ 299,793
Other revenues 2,191 5,273 5,635 5,137 2,684 2,264 2,196
--------- --------- --------- --------- --------- --------- ---------
Total revenues 313,798 352,095 341,334 228,169 269,704 364,756 301,989
Cost of travel revenues 264,670 296,386 285,753 191,973 225,496 303,979 250,952
Cost of other revenues 101 533 1,146 1,141 1,093 671 605
--------- --------- --------- --------- --------- --------- ---------
Total costs of revenues 264,771 296,919 286,899 193,114 226,589 304,650 251,557
--------- --------- --------- --------- --------- --------- ---------
Gross profit $ 49,027 $ 55,176 $ 54,435 $ 35,055 $ 43,115 $ 60,106 $ 50,432
--------- --------- --------- --------- --------- --------- ---------
Operating expenses:
Advertising 20,339 13,826 14,175 18,865 16,189 13,701 9,600
Sales and marketing 20,110 23,791 21,394 15,633 14,434 19,117 20,410
General and administrative 12,704 15,222 11,934 12,334 9,404 7,477 6,069
Systems and business development 5,868 6,695 11,420 15,209 11,112 9,892 10,160
--------- --------- --------- --------- --------- --------- ---------
Total operating expenses $ 59,021 $ 59,534 $ 58,923 $ 62,041 $ 51,139 $ 50,187 $ 46,239
Operating income (loss) ($ 9,994) ($ 4,358) ($ 4,488) ($ 26,986) ($ 8,024) $ 9,919 $ 4,193
Income from priceline Mortgage -- -- -- -- -- -- 34
Interest income 2,715 2,725 2,264 1,983 1,776 1,816 2,062
--------- --------- --------- --------- --------- --------- ---------
Pro forma net income (loss) ($ 7,279) ($ 1,633) ($ 2,224) ($ 25,003) ($ 6,248) $ 11,735 $ 6,289
========= ========= ========= ========= ========= ========= =========
Pro forma net income (loss) per
basic share ($ 0.04) ($ 0.01) ($ 0.01) ($ 0.15) ($ 0.03) $ 0.06 $ 0.03
========= ========= ========= ========= ========= ========= =========
Pro forma net income (loss) per
diluted share ($ 0.04) ($ 0.01) ($ 0.01) ($ 0.15) ($ 0.03) $ 0.05 $ 0.03
========= ========= ========= ========= ========= ========= =========
Recurring supplier warrant costs (381) (381) (381) (381) 0 0 0
One-time supplier warrant costs 0 0 0 (8,595) 0 0 0
Severance charge 0 0 0 0 0 (5,412) 0
Special charge 0 0 0 (34,824) 0 0 0
Restructuring charge 0 0 0 (32,006) (1,400) 0 0
Stock based compensation 0 0 0 (1,711) (5,157) (3,140) (1,015)
Option payroll taxes (5,907) (2,507) (349) (25) (23) (367) (297)
Preferred stock dividend 0 (7,191) (7,191) 0 0 0 (8,563)
WebHouse club warrants 0 0 (189,000) 0 0 0 0
Gain/(loss) on sale of stock 0 0 32 (2,590) (946) 0 0
--------- --------- --------- --------- --------- --------- ---------
Net income (loss) ($ 13,567) ($ 11,712) ($199,113) ($105,135) ($ 13,774) $ 2,816 ($ 3,586)
========= ========= ========= ========= ========= ========= =========
Net income (loss) applicable to common
stockholders per basic common share ($ 0.08) ($ 0.07) ($ 1.19) ($ 0.62) ($ 0.07) $ 0.01 ($ 0.02)
========= ========= ========= ========= ========= ========= =========
Net income (loss) applicable to common
stockholders per diluted common share ($ 0.08) ($ 0.07) ($ 1.19) ($ 0.62) ($ 0.07) $ 0.01 ($ 0.02)
========= ========= ========= ========= ========= ========= =========
Weighted average common shares:
Basic 166,467 165,399 167,059 168,662 188,589 196,581 216,132
Diluted n/a n/a n/a n/a n/a 220,021 236,167
Common shares outstanding, end of period 170,162 166,549 167,806 168,898 200,843 209,496 223,582
--------------------------------------------------- --------- --------- --------- --------- --------- ---------
GROSS MARGIN 15.6% 15.7% 15.9% 15.4% 16.0% 16.5% 16.7%
3Q01 VS. 9 MOS. 9 MOS. 9 MOS. 2001 VS.
INCOME STATEMENT ANALYSIS 3Q00 2001 2000 9 MOS. 2000
------------------------- ---------- ----------- ----------- -----------
Travel revenues -11% $ 929,305 $ 994,128 -7%
Other revenues -61% 7,144 13,099 -45%
----------- -----------
Total revenues -12% 936,449 1,007,227 -7%
Cost of travel revenues -12% 780,427 846,809 -8%
Cost of other revenues -47% 2,369 1,780 33%
----------- -----------
Total costs of revenues -12% 782,796 848,589 -8%
----------- -----------
Gross profit -7% 153,653 158,638 -3%
----------- -----------
Operating expenses:
Advertising -32% 39,490 48,340 -18%
Sales and marketing -5% 53,961 65,295 -17%
General and administrative -49% 22,950 39,860 -42%
Systems and business development -11% 31,164 23,983 30%
----------- -----------
Total operating expenses -22% $ 147,565 $ 177,478 -17%
Operating income (loss) -193% $ 6,088 ($ 18,840) -132%
Income from priceline Mortgage -- 34 0 --
Interest income -9% 5,654 7,704 -27%
----------- -----------
Pro forma net income (loss) -383% $ 11,776 ($ 11,136) -206%
=========== ===========
Pro forma net income (loss) per
basic share -319% $ 0.06 ($ 0.07) -188%
=========== ===========
Pro forma net income (loss) per
diluted share -300% $ 0.05 ($ 0.07) -182%
=========== ===========
Recurring supplier warrant costs -100% 0 (1,143) -100%
One-time supplier warrant costs -- 0 0 --
Severance charge -- (5,412) 0 --
Special charge -- 0 0 --
Restructuring charge -- (1,400) 0 --
Stock based compensation -- (9,312) 0 --
Option payroll taxes -15% (687) (8,763) -92%
Preferred stock dividend 19% (8,563) (14,382) -40%
WebHouse club warrants -100% 0 (189,000) -100%
Gain/(loss) on sale of stock -100% (946) 32 -3056%
----------- -----------
Net income (loss) -98% ($ 14,544) ($ 224,392) -94%
=========== ===========
Net income (loss) applicable to common
stockholders per basic common share -99% ($ 0.07) ($ 1.35) -95%
=========== ===========
Net income (loss) applicable to common
stockholders per diluted common share -99% ($ 0.07) ($ 1.35) -95%
=========== ===========
Weighted average common shares:
Basic 29% 198,921 166,389 20%
Diluted n/a 214,155 n/a n/a
Common shares outstanding, end of period 33% 223,582 167,806 33%
------------------------------------------------------- ----------- ----------- ------
GROSS MARGIN 16.4% 15.7%
Page 1
PRICELINE.COM INC.
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CONDENSED BALANCE SHEETS
In thousands
(UNAUDITED)
3/31/00 6/30/00 9/30/00 12/31/00
----------- ----------- ----------- -----------
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 118,528 $ 86,875 $ 92,751 $ 77,024
Restricted cash 7,327 8,559 11,750 13,568
Short-term investments 23,625 43,273 26,122 10,952
Accounts receivable, net of allowance for
doubtful accounts 52,751 38,993 24,199 13,889
Related party receivable 108 3,771 5,532 --
Note receivable -- -- -- --
Prepaid expenses and other current assets 15,782 27,182 20,755 15,790
----------- ----------- ----------- -----------
Total current assets 218,121 208,653 181,109 131,223
PROPERTY AND EQUIPMENT, net 37,130 41,592 46,257 37,083
RELATED PARTY RECEIVABLE 13,404 15,789 15,089 3,503
WARRANTS TO PURCHASE COMMON STOCK OF LICENSEES 189,000 192,250 3,250 3,250
OTHER ASSETS 25,062 34,554 39,868 20,019
----------- ----------- ----------- -----------
TOTAL ASSETS $ 482,717 $ 492,838 $ 285,573 $ 195,078
=========== =========== =========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $ 59,411 $ 73,292 $ 59,447 $ 40,691
Preferred stock dividends payable -- 7,191 14,382 --
Accrued expenses 13,766 15,998 17,324 33,172
Other current liabilities 4,280 4,454 3,739 5,434
----------- ----------- ----------- -----------
Total current liabilities 77,457 100,935 94,892 79,297
Accrued expenses -- -- -- 5,108
----------- ----------- ----------- -----------
Total liabilities 77,457 100,935 94,892 84,405
----------- ----------- ----------- -----------
MANDATORILY REDEEMABLE CONVERTIBLE PREFERRED STOCK -- 359,580 359,580 359,580
MANDATORILY REDEEMABLE PREFERRED STOCK -- -- -- --
----------- ----------- ----------- -----------
STOCKHOLDERS' EQUITY/(DEFICIENCY):
Common stock 1,361 1,380 1,390 1,454
Treasury stock -- (359,580) (359,580) (326,633)
Additional paid-in capital 1,591,880 1,593,961 1,595,228 1,618,956
Deferred compensation -- -- -- (13,053)
Accumulated other comprehensive income (loss) 5,969 2,224 (1,162) (1,156)
Accumulated deficit (1,193,950) (1,205,662) (1,404,775) (1,528,475)
----------- ----------- ----------- -----------
Total stockholders' equity/(deficiency) 405,260 32,323 (168,899) (248,907)
----------- ----------- ----------- -----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 482,717 $ 492,838 $ 285,573 $ 195,078
=========== =========== =========== ===========
3/31/01 6/30/01 9/30/01
----------- ----------- -----------
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 98,698 $ 124,284 $ 99,013
Restricted cash 17,514 11,015 7,013
Short-term investments 26,394 30,433 45,498
Accounts receivable, net of allowance for
doubtful accounts 20,706 25,839 15,021
Related party receivable -- -- --
Note receivable -- 8,500 10,000
Prepaid expenses and other current assets 15,187 10,908 9,431
----------- ----------- -----------
Total current assets 178,499 210,979 185,976
PROPERTY AND EQUIPMENT, net 35,861 34,870 33,137
RELATED PARTY RECEIVABLE 3,183 41 11
WARRANTS TO PURCHASE COMMON STOCK OF LICENSEES 3,250 3,250 3,250
OTHER ASSETS 19,769 19,521 19,311
----------- ----------- -----------
TOTAL ASSETS $ 240,562 $ 268,661 $ 241,685
=========== =========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $ 51,377 $ 69,531 $ 34,931
Preferred stock dividends payable -- -- --
Accrued expenses 26,630 32,210 30,482
Other current liabilities 4,978 5,161 4,943
----------- ----------- -----------
Total current liabilities 82,985 106,902 70,356
Accrued expenses 4,747 3,789 3,369
----------- ----------- -----------
Total liabilities 87,732 110,691 73,725
----------- ----------- -----------
MANDATORILY REDEEMABLE CONVERTIBLE PREFERRED STOCK -- -- --
MANDATORILY REDEEMABLE PREFERRED STOCK 80,000 55,032 25,345
----------- ----------- -----------
STOCKHOLDERS' EQUITY/(DEFICIENCY):
Common stock 1,650 1,720 1,832
Treasury stock (326,633) (326,633) (326,633)
Additional paid-in capital 1,948,533 1,971,588 2,013,974
Deferred compensation (8,471) (4,304) (3,539)
Accumulated other comprehensive income (loss) -- -- --
Accumulated deficit (1,542,249) (1,539,433) (1,543,019)
----------- ----------- -----------
Total stockholders' equity/(deficiency) 72,830 102,938 142,615
----------- ----------- -----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 240,562 $ 268,661 $ 241,685
=========== =========== ===========
Page 2
PRICELINE.COM INC.
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OFFER AND CUSTOMER ACTIVITY
3Q01 VS.
UNIQUE OFFERS: 1Q00 2Q00 3Q00 4Q00 1Q01 2Q01 3Q01 3Q00
-------------- ---------- --------- --------- --------- ---------- ---------- ---------- ---------
New Customer Offers 1,504,685 1,509,416 1,344,025 883,862 891,490 1,025,041 927,338 -31%
Repeat Customer Offers 833,388 964,350 1,417,840 1,057,738 1,217,217 1,620,157 1,559,727 10%
Total Unique Offers 2,338,073 2,473,766 2,761,865 1,941,600 2,108,707 2,645,198 2,487,065 -10%
Repeat customer offers/ 35.6% 39.0% 51.3% 54.5% 57.7% 61.2% 62.7%
total unique offers
CUSTOMERS
---------
New Customers 1,504,685 1,509,416 1,344,025 883,862 891,490 1,025,041 927,338 -31%
Cumulative Customers 5,257,357 6,766,773 8,110,798 8,994,660 9,886,150 10,911,191 11,838,529 46%
Page 3
PRICELINE.COM INC.
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AIR
3Q01 VS.
1Q00 2Q00 3Q00 4Q00 1Q01 2Q01 3Q01 3Q00
---------- ----------- ----------- ----------- ----------- ----------- ----------- ----------
Tickets Sold 1,250,416 1,288,592 1,290,096 809,327 1,075,555 1,435,936 1,183,981 -8%
Net Unique Offers 1,820,918 1,753,273 1,756,236 1,242,967 1,392,747 1,683,661 1,445,575 -18%
Offers Booked 801,204 869,408 886,135 590,088 709,576 963,167 779,319 -12%
Bind Rate 44.0% 49.6% 50.5% 47.5% 50.9% 57.2% 53.9%
BIND RATE = OFFERS BOOKED/NET UNIQUE OFFERS
AIR PRODUCT WAS LAUNCHED ON APRIL 6, 1998
Page 4
PRICELINE.COM INC.
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HOTELS
3Q01 VS.
1Q00 2Q00 3Q00 4Q00 1Q01 2Q01 3Q01 3Q00
--------- --------- --------- --------- ---------- ---------- ---------- ---------
Room Nights Sold 409,514 432,463 526,450 367,372 432,884 680,604 879,922 67%
Net Unique Offers 383,708 431,249 511,396 319,501 351,952 516,816 647,446 27%
Offers Booked 180,343 195,517 244,655 176,712 188,278 311,121 394,807 61%
Bind Rate 47.0% 45.3% 47.8% 55.3% 53.5% 60.2% 61.0%
BIND RATE = OFFERS BOOKED/NET UNIQUE OFFERS
HOTEL PRODUCT WAS LAUNCHED ON OCTOBER 28, 1998
Page 5
PRICELINE.COM INC.
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RENTAL CARS
3Q01 VS.
1Q00 2Q00 3Q00 4Q00 1Q01 2Q01 3Q01 3Q00
--------- --------- --------- --------- ---------- ---------- ---------- ---------
Days Sold 229,998 429,622 579,866 522,242 607,336 922,545 895,601 54%
Net Unique Offers 90,639 175,878 217,760 207,436 229,581 325,235 313,389 44%
Offers Booked 37,706 70,351 107,058 93,757 105,970 162,053 160,603 50%
Bind Rate 41.6% 40.0% 49.2% 45.2% 46.2% 49.8% 51.2%
BIND RATE = OFFERS BOOKED/NET UNIQUE OFFERS
RENTAL CAR PRODUCT WAS LAUNCHED ON FEBRUARY 3, 2000
Page 6