-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, BftYfHaZ1+tn/VM61FvdldqQHUK882XqW7WqlQio0f5MDKtT475bVzBjWaDftKMA /vEqvl5wRY37K+jDiErwjA== /in/edgar/work/20000726/0000950172-00-001297/0000950172-00-001297.txt : 20000921 0000950172-00-001297.hdr.sgml : 20000921 ACCESSION NUMBER: 0000950172-00-001297 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20000724 ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 20000726 FILER: COMPANY DATA: COMPANY CONFORMED NAME: PRICELINE COM INC CENTRAL INDEX KEY: 0001075531 STANDARD INDUSTRIAL CLASSIFICATION: [7373 ] IRS NUMBER: 061528493 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 000-25581 FILM NUMBER: 679157 BUSINESS ADDRESS: STREET 1: 800 CONNECTICUT AVE CITY: NORWALK STATE: CT ZIP: 06854 BUSINESS PHONE: 2037053000 8-K 1 0001.txt 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) July 24, 2000 priceline.com Incorporated ------------------------------------------------------ (Exact name of registrant as specified in its charter) Delaware 0-25581 06-1528493 - ------------------------------------------------------------------------------ (State or other Jurisdiction (Commission File Number) (IRS Employer of Incorporation) Identification No.) 800 Connecticut Avenue, Norwalk, Connecticut 06854 ------------------------------------------------------- (Address of principal office) (zip code) (203) 299-8000 -------------------------------------------------- Registrant's telephone number, including area code N/A ------------------------------------------------------------- (Former name or former address, if changed since last report) ITEM 5. OTHER EVENTS. Second Quarter Earnings On July 24, 2000, priceline.com Incorporated, a Delaware corporation ("priceline.com"), announced its second quarter financial results, including second quarter revenues of $352.1 million and net loss per share, excluding certain items, of $0.01 per share. The information set forth above is qualified in its entirety by reference to the press release issued by priceline.com on July 24, 2000, a copy of which is attached hereto as Exhibit 99.1 and incorporated herein by reference. ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS. (c) Exhibits. 99.1 Press Release issued by priceline.com on July 24, 2000. 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/ Heidi G. Miller ------------------------------ Name: Heidi G. Miller Title: Chief Financial Officer Date: July 26, 2000 EXHIBIT INDEX Exhibit No. Description - ----------- ----------- 99.1 Press Release issued by priceline.com on July 24, 2000. EX-99 2 0002.txt EXHIBIT 99.1 - PRESS RELEASE EXHIBIT 99.1 Priceline.com (ticker: pcln, exchange: NASDAQ) News Release - Monday, July 24, 2000 PRICELINE.COM REPORTS RECORD SECOND QUARTER 2000 FINANCIAL RESULTS NET LOSS PER SHARE EXCLUDING CERTAIN ITEMS IS $0.01 IN 2ND QUARTER 2000, COMPARED TO A NET LOSS PER SHARE OF $0.10 IN 2ND QUARTER 1999 2ND QUARTER 2000 REVENUES OF $352.1 MILLION ARE 216% BETTER THAN 2ND QUARTER 1999 REVENUES OF $111.6 MILLION 2ND QUARTER 2000 GROSS PROFIT OF $55.2 MILLION IS 406% BETTER THAN 2ND QUARTER 1999 GROSS PROFIT OF $10.9 MILLION PRICELINE.COM ADDS 1.5 MILLION NEW CUSTOMERS IN 2ND QUARTER 2000, BRINGING ITS TOTAL CUSTOMER BASE TO 6.8 MILLION REPEAT RATE JUMPS TO A RECORD HIGH OF 39% AS REPEAT CUSTOMERS GENERATED OVER 960,000 OFFERS IN 2ND QUARTER 2000, WITH NEW CUSTOMER ACQUISITION COSTS DROPPING TO A RECORD $10.81 PER CUSTOMER NORWALK, Conn.--(BUSINESS WIRE)--July 24, 2000-- Priceline.com (Nasdaq: PCLN), the Name Your Own Price(sm) Internet pricing system where customers set the price for travel, automotive, home finance, and telecommunications products, as well as groceries and gasoline products through a priceline.com licensee, today reported record second quarter 2000 financial results in which the Company improved its net loss per share excluding certain items to $0.01, compared to $0.10 in the second quarter 1999. Second quarter 2000 financial results were driven by new and repeat customers, sales from an expanding lineup of product categories, and marketing efficiencies achieved through priceline.com's position as one of the leading brands in e-commerce. Priceline.com reported that it added 1.5 million new customers during the second quarter, bringing its total customer base to 6.8 million. A record number of offers for various services came from repeat customers during the second quarter. Thirty-nine percent of priceline.com's unique offers in the second quarter came from repeat customers, up from 26% in the second quarter 1999. Priceline.com reported revenue of $352.1 million for the second quarter 2000, a 216% increase over revenues of $111.6 million in the second quarter 1999. Gross profit for the second quarter 2000 was $55.2 million, a 406% increase over a gross profit of $10.9 million in the second quarter 1999. Gross margin for the second quarter 2000 was 15.7%, a 590 basis point increase over gross margin of 9.8% in the second quarter 1999. Operating expenses in the quarter were $59.5 million, compared to $59.0 million in the first quarter. Operating loss in the second quarter 2000 was $4.4 million, compared to an operating loss of $15.8 million in the second quarter 1999. Net loss in the second quarter 2000 was $1.6 million, compared to a net loss of $13.9 million in the second quarter 1999. Net loss per share, net loss, operating loss, gross profit and gross margin in this release exclude all warrant costs, option payroll taxes and certain items as described in the notes to the table below. Priceline.com's acquisition costs for new customers continued to improve as the Company leverages its position as the #1 most-recognized e-commerce brand in America, tied with amazon.com, as measured by Opinion Research Corporation International of Princeton, NJ. Total marketing costs per new customer acquired improved to $10.81 per customer, the most efficient ratio in priceline.com's history, from $13.23 in the prior year quarter. Total advertising costs per new customer were even lower, at $9.16 per customer, and one of the best acquisition costs per new customers among e-commerce companies. Quarter Ended Quarter Ended June 30, 2000(a) June 30, 1999(b) ---------------- ---------------- Revenues $ 352.1 million $ 111.6 million Gross Profit $ 55.2 million $ 10.9 million Operating Loss $ 4.4 million $ 15.8 million Net Loss $ 1.6 million $ 13.9 million Net Loss Per Share $ 0.01 $ 0.10 (a) Gross profit excludes $381,000 in non-cash supplier warrant charges; operating and net loss per share also exclude $2.5 million in option payroll taxes. (b) Gross profit excludes $381,000 in non-cash supplier warrant charges. "We believe we are rounding the final turn and on the homestretch towards profitability," said Daniel H. Schulman, President and Chief Executive Officer. "We continue to attract record new customers, but even more importantly, our loyalty among existing customers is accelerating. Our repeat rate is up to 39%, up from 26% a year ago. Improving customer satisfaction is our number one priority, and we are focused on continually enhancing and expanding our products and services." Schulman continued, "Priceline.com also saw strong growth across our verticals during the second quarter 2000, demonstrating the extendability and scale of our business model. Our leisure airline tickets service sold 1.29 million airline tickets in the quarter and is one of the single largest sellers of leisure airline tickets in the U.S. Meanwhile, our hotel service sold 432,500 room nights during the quarter. Our rental car service sold over 429,600 rental car days in the second quarter, its first full quarter of operation. In the second quarter, we also took our new car service and mortgage business national with promising results. We are also enthusiastic about the roll out of our long distance service, which generated strong gross profits and averaged 240 minutes per offer during the quarter. We look for even stronger contributions from our non-airline verticals in the future." Business Highlights During the second quarter, priceline.com had several key enhancements to its lineup of Name Your Own Price(sm) products and services. In May, the Company launched Name Your Own Price long distance calling services for consumers and small businesses. The small business service was priceline.com's first entry into the B2B marketplace. Also at that time, priceline.com announced a strategic partnership with American Express through which Amex will promote priceline.com's services to its small business partners. Priceline.com's rental car service added major suppliers Hertz and Alamo, making four of the nation's largest rental car companies participants in priceline.com's rental car service. During the quarter, priceline.com and General Atlantic Partners announced the creation of Priceline.com Europe, with plans to launch its business in the Fall. The companies also announced that Dennis Malamatinas, CEO of Burger King, was hired to join Priceline.com Europe as CEO. Timothy Brier, former President of Priceline Travel Services, was named as Chairman of the new company. Priceline.com President Daniel H. Schulman took on the additional title of CEO while Richard S. Braddock continues to serve as Chairman of the Company. Priceline.com's second quarter results also included increased payments from Walker Digital Corporation and Priceline WebHouse Clubsm. Walker Digital contributed toward legal fees and expenses related to various patent litigations. WebHouse Club, a priceline.com independent licensee, paid priceline.com for information technology and other services rendered and the quarter also reflected the costs of providing those services. WebHouse Club continued to grow during the second quarter. More than three-quarters of a million households are now using WebHouse Club's services, which include groceries and the recently launched gasoline service. These customer counts are not included in priceline.com's total customer base of 6.8 million. About priceline.com Priceline.com is the patented Name Your Own Price(sm) Internet pricing system. Priceline.com provides services across four broad product 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 Priceline WebHouse Club, Inc., which offers a Name Your Own Price(sm) service for groceries and gasoline; PricelineMortgage , Priceline Perfect YardSale, Inc., a local-market, consumer-to-consumer selling service, and certain international licensees in Europe, Asia and Australia. 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. Additional information is available on the priceline.com Website (www.priceline.com), including a presentation reviewing 2nd quarter 2000 results and a quarterly statistical supplement. Information about forward looking statements This press release may contain 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," 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: inability to successfully expand the Company's business model both horizontally and geographically; management of the Company's rapid growth; adverse changes in the Company's relationships with airlines and other product and service providers; systems-related failures; the Company's ability to protect its intellectual property rights; the effects of increased competition; anticipated losses by the Company and its licensees; 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 and Form 10-K filings with the Securities and Exchange Commission. priceline.com Incorporated PRO FORMA CONDENSED STATEMENTS OF OPERATIONS (In thousands, except per share data) (UNAUDITED) Three Months Ended Six Months Ended June 30, June 30, June 30, June 30, 2000 1999 2000 1999 --------- --------- --------- --------- Revenues $ 352,095 $ 111,564 $ 665,893 $ 160,975 Cost of revenues (excl. sup. wrnts & divs.): Product costs 296,919 100,664 561,690 144,323 --------- --------- --------- --------- Total cost of revenues 296,919 100,664 561,690 144,323 Gross profit 55,176 10,900 104,203 16,651 --------- --------- --------- --------- Expenses: Advertising 13,826 8,980 34,164 20,776 Sales and marketing 23,792 8,753 43,902 14,095 General and administrative 15,222 5,503 27,926 9,170 Systems and business development 6,695 3,469 12,563 5,653 --------- --------- --------- --------- Total expenses 59,534 26,705 118,555 49,694 --------- --------- --------- --------- Operating loss (excl. sup. wrnts & divs.) (4,358) (15,805) (14,353) (33,043) Interest income, net 2,725 1,929 5,440 2,387 --------- --------- --------- --------- Net loss (excl. sup. wrnts & divs.) (1,633) (13,876) (8,912) (30,655) Net loss (excl. sup. wrnts & divs.) per basic and diluted common shares $ (0.01) $ (0.10) $ (0.05) $ (0.22) ========= ========= ========= ========= Supplier warrant costs (381) (381) (762) (762) Payroll expense on employee stock options (2,507) - (8,414) - Preferred stock dividend (7,191) - (7,191) - Accretion on preferred stock - - - (8,354) --------- --------- --------- --------- Net loss applicable to common shareholders $ (11,712) $ (14,257) $ (25,279) $ (39,771) ========= ========= ========= ========= Net loss applicable to common shareholders per basic and diluted common shares $ (0.07) $ (0.10) $ (0.15) $ (0.29) ========= ========= ========= ========= Weighted average number of basic and diluted common shares outstanding 165,399 142,320 166,051 137,436 ========= ========= ========= ========= This statement 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 Forms 10-Q. Certain presentations within this statement are not consistent with Generally Accepted Accounting Principles. priceline.com Incorporated CONDENSED STATEMENTS OF OPERATIONS (In thousands, except per share data) (UNAUDITED) Three Months Ended Six Months Ended June 30, June 30, June 30, June 30, 2000 1999 2000 1999 --------- --------- --------- --------- Revenues $ 352,095 $ 111,564 $ 665,893 $ 160,975 Cost of revenues: Product costs 296,919 100,664 561,690 144,323 Supplier warrant costs 381 381 762 762 --------- --------- --------- --------- Total cost of revenues 297,300 101,045 562,452 145,085 Gross profit 54,795 10,519 103,441 15,890 --------- --------- --------- --------- Expenses: Sales and marketing 37,617 17,733 78,066 34,871 General and administrative 15,222 5,503 27,926 9,170 Payroll expense on employee stock options 2,507 - 8,414 - Systems and business development 6,695 3,469 12,563 5,653 --------- --------- --------- --------- Total expenses 62,041 26,705 126,969 49,694 --------- --------- --------- --------- Operating loss (7,246) (16,186) (23,528) (33,804) Interest income, net 2,725 1,929 5,440 2,387 --------- --------- --------- --------- Net loss (4,521) (14,257) (18,088) (31,417) Preferred stock dividend (7,191) - (7,191) - Accretion on preferred stock - - - (8,354) --------- --------- --------- --------- Net loss applicable to common shareholders $ (11,712) $ (14,257) $ (25,279) $ (39,771) ========= ========= ========= ========= Net loss applicable to common shareholders per basic and diluted common shares $ (0.07) $ (.10) $ (0.15) $ (.29) ========= ========= ========= ========= Weighted average number of basic and diluted common shares outstanding 165,399 142,320 166,051 137,436 ========= ========= ========= ========= priceline.com Incorporated CONDENSED BALANCE SHEETS (In thousands) (UNAUDITED) June 30, December 31, ASSETS 2000 1999 ------------ ------------ CURRENT ASSETS: Cash and cash equivalents $ 95,434 $ 133,172 Short-term investments 43,273 38,771 Accounts receivable, net of allowance for doubtful accounts of $3,761 and $1,961 at June 30, 2000 and December 31, 1999, respectively 38,993 21,289 Related party receivables 3,771 508 Prepaid expenses and other current assets 27,182 17,999 ------------ ------------ Total current assets 208,653 211,739 PROPERTY AND EQUIPMENT, net 41,592 28,006 WARRANTS TO PURCHASE COMMON STOCK OF PRICELINE WEBHOUSE CLUB, INC. 189,000 189,000 OTHER ASSETS 53,593 13,141 ------------ ------------ TOTAL ASSETS $ 492,838 $ 441,886 ============ ============ LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES: Accounts payable $ 80,483 $ 24,302 Accrued expenses 15,998 13,695 Other current liabilities 4,455 1,253 ------------ ------------ Total current liabilities 100,936 39,250 ------------ ------------ Total liabilities 100,936 39,250 ------------ ------------ MANDATORILY REDEEMABLE CONVERTIBLE PREFERRED STOCK 359,580 - ------------ ------------ STOCKHOLDERS' EQUITY Common stock 1,380 1,311 Treasury stock (359,580) - Preferred stock dividends (7,192) - Additional paid-in capital 1,593,961 1,581,708 Accumulated other comprehensive income 2,224 - Accumulated deficit (1,198,471) (1,180,383) ------------ ------------ Total stockholders' equity 32,322 402,636 ------------ ------------ TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 492,838 $ 441,886 ============ ============ CONTACT: priceline.com Brian Ek(press information), 203/299-8167 brian.ek@priceline.com Mike Darcy(press information, 203/299-8168 mike.darcy@priceline.com Bill Pike (investor information), 203/299-8451 william.pike@priceline.com Allison McEnerney(investor information), 203/299-8678 allison.mcenerney@priceline.com -----END PRIVACY-ENHANCED MESSAGE-----