-----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, DI3f1WM6t1F9oD2p4ktGyTKQzKz7AakyGFZl1fPqSlOS7BQGRra3sMxqVUe37nxo 934+U15NYkdBqsHcffi0Yw== 0001005477-01-500266.txt : 20010802 0001005477-01-500266.hdr.sgml : 20010802 ACCESSION NUMBER: 0001005477-01-500266 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20010731 ITEM INFORMATION: FILED AS OF DATE: 20010801 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: SEC FILE NUMBER: 000-25581 FILM NUMBER: 1694598 BUSINESS ADDRESS: STREET 1: 800 CONNECTICUT AVE CITY: NORWALK STATE: CT ZIP: 06854 BUSINESS PHONE: 2037053000 8-K 1 form8-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) July 31, 2001 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) N/A - -------------------------------------------------------------------------------- (Former name or former address, if changed since last report) Item 9. Registration FD Disclosure. 2nd quarter 2001 earnings On July 31, 2001, priceline.com Incorporated, a Delaware corporation, announced its results for the 2nd quarter 2001 and announced that it had recorded its first profit in the 2nd 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 July 31, 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 July 31, 2001 relating to its 2nd 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: July 31, 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 July 31, 2001 relating to its 2nd quarter 2001 earnings. EX-99.1 3 ex99-1.txt PRESS RELEASE Exhibit 99.1 Priceline.com Reports Profitability and Record Revenue For 2nd Quarter 2001 o Revenues are $364.8 million o Pro forma net income is $11.7 million, or $0.06 per basic share o Pro forma EBITDA is $13.9 million o Cash balance increases to $165.7 million NORWALK, Conn, July 31, 2001 . . . Priceline.com (Nasdaq: PCLN) today reported record revenues and its first profit for the 2nd quarter 2001. Revenues for the 2nd quarter 2001 were $364.8 million, compared to revenues of $352.1 million in the 2nd quarter 2000 and $269.7 million in the 1st quarter 2001. Priceline.com reported pro forma EBITDA for the 2nd quarter 2001 of $13.9 million and pro forma net income of $11.7 million, or $0.06 per basic share, which beat analysts' First Call consensus estimates of $0.01 per basic share. On a diluted basis, pro format net income was $0.05 per share. Pro forma EBITDA and pro forma net income exclude certain severance expenses, option payroll taxes and amortization of stock-based compensation charges. Priceline.com reported GAAP net income for the 2nd quarter 2001 of $2.8 million, or $0.01 per basic and diluted share, compared to a GAAP net loss in the 2nd quarter 2000 of $11.7 million, or $0.07 per basic and diluted share, and a GAAP net loss of $13.8 million, or $0.07 per basic and diluted share in the 1st quarter 2001. Priceline.com's gross profit for the 2nd quarter 2001 also was a record $60.1 million, compared to a gross profit of $54.8 million in the 2nd quarter 2000 and $43.1 million in the 1st quarter 2001. Priceline.com's 2nd quarter gross margin was 16.5%. Priceline.com continued to reduce expenses and strengthen its balance sheet during the 2nd quarter 2001. Pro forma operating expenses for the 2nd quarter 2001 decreased to $50.2 million from $51.1 million in the 1st quarter 2001 and $62 million in the 4th quarter 2000 when the company began its cost reduction activities, and was down approximately 16% from the same quarter a year ago. Pro forma operating expenses exclude certain severance expenses, option payroll taxes, amortization of stock-based compensation charges, and restructuring charges, special charges and warrant charges. The Company's cash balance at the end of the 2nd quarter 2001 increased to $165.7 million, compared to $138.7 million at the end of the 2nd quarter 2000 and $142.6 million at March 31, 2001, driven primarily by the generation of $13.9 million pro forma EBITDA and related changes in working capital. The Company's outstanding preferred stock was also reduced from $80 million at the beginning of the quarter to approximately $55.0 million at the end of the quarter, and subsequently to approximately $25.0 million as of July 27, 2001, when Delta Air Lines exercised 10 million additional warrants. During the 2nd quarter 2001, priceline.com saw significant growth in its customer metrics. The Company added 1.025 million new customers in the 2nd quarter 2001, bringing its total customer base to 10.9 million. Repeat business for the 2nd 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 61%, compared to 39% in the 2nd quarter 2000, and 58% in the 1st quarter 2001. During the quarter, priceline.com sold a record 3 million units of travel products. Priceline.com sold 1.4 million airline tickets in the 2nd quarter, an increase of 11% over 2nd quarter 2000 and 34% over 1st quarter 2001. Priceline.com's hotel and rental car products experienced even stronger quarterly unit sales growth. Hotel room nights sold increased 57% over both the 2nd quarter 2000 and the 1st quarter 2001. Rental car days sold increased 115% and 52% over the same periods. "We are pleased that our airline ticket sales have substantially recovered, despite the difficult airline travel market and competition from heavy discounting by the major carriers," said Jeffery H. Boyd, priceline.com's President and Chief Operating Officer. "It is also encouraging to see the continued rapid growth of our hotel and rental car products, which we believe have a substantial inventory advantage over the competition and broad consumer appeal." Mr. Boyd added, "The hard work of priceline.com's employees in improving our products and service while making priceline.com more efficient has paid off with a recovery in top line growth and priceline.com's first profitable quarter." Significant 2nd quarter 2001 developments for priceline.com included: o The successful further leveraging of priceline.com's growing customer base through database marketing. During the 2nd quarter, priceline.com continued to refine e-mail and other strategies to reach out to customers and generate additional purchase offers, resulting in a record 61% repeat business for the quarter. o A phase-two rollout of priceline.com's successful TV and radio advertising campaign. The Company created and launched the second in a series of innovative "Let's Jet-Set" TV commercials combining illustrations and actors promoting priceline.com's unique money saving consumer proposition. Priceline.com's current "Orlando" spot features the voice of Quentin Tarantino, while future spots will feature the voices of Tony Randall and Billy Idol. Meanwhile, priceline.com's new radio campaign, which also began in the 2nd quarter, features longtime priceline.com celebrity spokesman William Shatner. The new campaigns have yielded a significant strengthening of priceline.com's brand along several key attributes, including best deal and smarter way to buy. o Further expansion of priceline.com's travel products. In May, priceline.com launched a new resort service that enables travelers to set their own price for stays at top resorts in the mainland U.S., Hawaii, Puerto Rico and the U.S. Virgin Islands. Also during the quarter, priceline.com enhanced its last-minute service by enabling travelers to book airline flights up until 11:00 p.m. (EST) the day before departure. In particular, the change makes it more convenient for priceline.com's West Coast customers to book next-day flights. Priceline.com's last-minute service also allows customers to book hotel rooms up until 6:00 p.m. for use that night, and allows customers to rent cars on as little as four hours advance notice. o The broadening of priceline.com's strategic relationship with Cheung Kong (Holdings) Limited and Hutchison-Whampoa Limited. In June, the two companies purchased approximately $110 million worth of priceline.com common stock, giving them an equity stake of approximately 30% in priceline.com. Hutchison is also a majority investor in Hutchison-Priceline Limited, a company formed to introduce priceline.com's business model to markets in Asia. Hutchison is a multi-national conglomerate with a market capitalization of approximately $46 billion. Hutchison operates five core businesses in 34 countries, including telecommunications and e-commerce, property and hotels, retail and manufacturing, energy and infrastructure, and ports and related services. Richard S. Braddock, priceline.com's Chairman and Chief Executive Officer, stated, "We expect priceline.com to continue the steady growth of customers extending beyond our current 11 million customers," he said. "That customer base has the potential to yield even more incremental growth as we develop even more efficient database marketing tools and continue to build on our repeat business ratio." Looking forward, Mr. Braddock said, "Online travel appears to be one of the few sweet spots in e-commerce. Based on 2nd quarter results and our performance in July, we are increasing the guidance we previously gave for 3rd quarter 2001 and now expect revenues to exceed 3rd quarter 2000 revenues of $341 million. We also would expect pro forma net income to range from $0.05 to $0.07 per basic share. With our renewed brand strengths, our product offerings robust and expanding, our customer base growing on both new and repeat bases, and our margins well above industry averages and sustainable, we believe priceline.com is now positioned to be one of the Internet's pre-eminent, profitable e-commerce brands." About Priceline.com Priceline.com is the Name Your Own Price(SM) Internet pricing system that provides services in four 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 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. 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 the Company's relationships with airlines and other product and service providers; adverse changes in general market conditions for leisure and other travel products; 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 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. For press information, contact: Brian Ek 203-299-8167 (brian.ek@priceline.com) priceline.com Incorporated CONDENSED BALANCE SHEETS (In thousands, unaudited)
June 30, December 31, 2001 2000 ----------- ------------ ASSETS Current assets: Cash and cash equivalents $ 124,284 $ 77,024 Restricted cash 11,015 13,568 Short-term investments 30,433 10,952 Accounts receivable, net of allowance for doubtful accounts of $2,108 and $2,372 at June 30, 2001 and December 31, 2000, respectively 25,839 13,889 Note receivable 8,500 -- Prepaid expenses and other current assets 10,908 15,790 ----------- ----------- Total current assets 210,979 131,223 Property and equipment, net 34,870 37,083 Related party receivable 41 3,503 Warrants to purchase common stock of licensees 3,250 3,250 Other assets 19,521 20,019 ----------- ----------- Total assets $ 268,661 $ 195,078 =========== =========== LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $ 69,531 $ 40,691 Accrued expenses 32,210 33,172 Other current liabilities 5,161 5,434 ----------- ----------- Total current liabilities 106,902 79,297 Accrued expenses 3,789 5,108 ----------- ----------- Total liabilities 110,691 84,405 ----------- ----------- MANDATORILY REDEEMABLE CONVERTIBLE PREFERRED STOCK -- 359,580 MANDATORILY REDEEMABLE PREFERRED STOCK 55,032 -- Stockholders' equity/(deficiency) Common stock 1,720 1,454 Treasury stock (326,633) (326,633) Additional paid-in capital 1,971,588 1,618,956 Deferred compensation (4,304) (13,053) Accumulated other comprehensive loss -- (1,156) Accumulated deficit (1,539,433) (1,528,475) ----------- ----------- Total stockholders' equity/(deficiency) 102,938 (248,907) ----------- ----------- Total liabilities and stockholders' equity $ 268,661 $ 195,078 =========== ===========
priceline.com Incorporated CONDENSED STATEMENTS OF OPERATIONS (In thousands, except per share amounts, unaudited)
Three Months Ended Six Months Ended June 30, June 30, June 30, June 30, 2001 2000 2001 2000 --------------------------- ----------------------------- Travel revenues $ 362,492 $ 346,822 $ 629,512 $ 658,429 Other revenues 2,264 5,273 4,948 7,464 --------------------------- ----------------------------- Total revenues 364,756 352,095 634,460 665,893 Cost of travel revenues 303,979 296,386 529,475 561,056 Cost of other revenues 671 533 1,764 634 Supplier warrant costs -- 381 -- 762 --------------------------- ----------------------------- Total costs of revenues 304,650 297,300 531,239 562,452 --------------------------- ----------------------------- Gross profit 60,106 54,795 103,221 103,441 --------------------------- ----------------------------- Operating expenses: Sales and marketing 32,818 37,617 63,441 78,066 General and administrative 7,477 15,222 16,881 27,926 Payroll tax on employee stock options 367 2,507 390 8,414 Stock based compensation 3,140 -- 8,297 -- Systems and business development 9,892 6,695 21,004 12,563 Restructuring charge -- -- 1,400 -- Severance charge 5,412 -- 5,412 -- --------------------------- ----------------------------- Total operating expenses 59,106 62,041 116,825 126,969 --------------------------- ----------------------------- Operating income (loss) 1,000 (7,246) (13,604) (23,528) Other income: Loss on sale of equity investment -- -- (946) -- Interest income 1,816 2,725 3,592 5,440 --------------------------- ----------------------------- Total other income 1,816 2,725 2,646 5,440 --------------------------- ----------------------------- Net income (loss) 2,816 (4,521) (10,958) (18,088) Preferred stock dividend -- (7,191) -- (7,191) --------------------------- ----------------------------- Net income (loss) applicable to common stockholders $ 2,816 $ (11,712) $ (10,958) $ (25,279) =========================== ============================= Net income (loss) applicable to common stockholders per basic common share $ 0.01 $ (0.07) $ (0.06) $ (0.15) =========================== ============================= Weighted average number of basic common shares outstanding 196,581 165,399 188,890 166,051 =========================== ============================= Net income (loss) applicable to common stockholders per diluted common share $ 0.01 $ (0.05) ========= ========== Weighted average number of diluted common shares outstanding 220,021 206,605 ========= ==========
priceline.com Incorporated SUPPLEMENTAL PRO FORMA FINANCIAL INFORMATION CONDENSED STATEMENTS OF OPERATIONS (In thousands, except per share amounts, unaudited)
Three Months Ended June 30, 2001 ---------------------------------------- Pro Forma Reported Adjustments Pro Forma --------- ----------- --------- Travel revenues $ 362,492 $ 362,492 Other revenues 2,264 2,264 --------- --------- --------- Total revenues 364,756 364,756 Cost of travel revenues 303,979 303,979 Cost of other revenues 671 671 Supplier warrant costs -- -- --------- --------- --------- Total costs of revenues 304,650 304,650 --------- --------- --------- Gross profit 60,106 60,106 --------- --------- --------- Operating expenses: Sales and marketing 32,818 32,818 General and administrative 7,477 7,477 Payroll tax on employee stock options 367 (367)(a) -- Stock based compensation 3,140 (3,140)(b) -- Systems and business development 9,892 9,892 Severance charge 5,412 (5,412)(c) -- --------- --------- --------- Total operating expenses 59,106 (8,919) 50,187 --------- --------- --------- Operating income 1,000 8,919 9,919 Other income: Interest income 1,816 1,816 --------- --------- --------- Total other income 1,816 1,816 --------- --------- --------- Net income 2,816 8,919 11,735 Preferred stock dividend -- -- --------- --------- --------- Net income applicable to common stockholders $ 2,816 $ 8,919 $ 11,735 ========= ========= ========= Net income applicable to common stockholders per basic common share $ 0.01 $ 0.05 $ 0.06 ========= ========= ========= Weighted average number of basic common shares outstanding 196,581 196,581 ========= ========= Net income applicable to common stockholders per diluted common share $ 0.01 $ 0.04 $ 0.05 ========= ========= ========= Weighted average number of diluted common shares outstanding 220,021 220,021 ========= =========
(a) Employer payroll taxes on employee exercises of non-qualified stock options. (b) Non-cash amortization of stock based compensation expense. (c) Severance expense related to the termination of employment of the Company's former chief executive. Of this, $3.9 million are non-cash charges, the remaining $1.5 million are cash. priceline.com Incorporated SUPPLEMENTAL PRO FORMA FINANCIAL INFORMATION CONDENSED STATEMENTS OF OPERATIONS (In thousands, except per share amounts, unaudited)
Three Months Ended June 30, 2000 -------------------------------------------- Pro Forma Reported Adjustments Pro Forma --------- ------------ --------- Travel revenues $ 346,822 $ 346,822 Other revenues 5,273 5,273 --------- --------- --------- Total revenues 352,095 352,095 Cost of travel revenues 296,386 296,386 Cost of other revenues 533 533 Supplier warrant costs 381 (381)(a) -- --------- --------- --------- Total costs of revenues 297,300 (381) 296,919 --------- --------- --------- Gross profit 54,795 381 55,176 --------- --------- --------- Operating expenses: Sales and marketing 37,617 37,617 General and administrative 15,222 15,222 Payroll tax on employee stock options 2,507 (2,507)(b) -- Stock based compensation -- -- -- Systems and business development 6,695 6,695 Severance charge -- -- -- --------- --------- --------- Total operating expenses 62,041 (2,507) 59,534 --------- --------- --------- Operating loss (7,246) 2,888 (4,358) Other income: Interest income 2,725 2,725 --------- --------- --------- Total other income 2,725 2,725 --------- --------- --------- Net loss (4,521) 2,888 (1,633) Preferred stock dividend (7,191) 7,191(c) -- --------- --------- --------- Net loss applicable to common stockholders $ (11,712) $ 10,079 $ (1,633) ========= ========= ========= Net loss applicable to common stockholders per basic common share $ (0.07) $ 0.06 $ (0.01) ========= ========= ========= Weighted average number of basic common shares outstanding 165,399 165,399 ========= =========
(a) Non-cash amortization of supplier warrant cost. (b) Employer payroll taxes on employee exercises of non-qualified stock options. (c) Non-cash preferred stock dividend. priceline.com - 2001 SECOND QUARTER FINANCIAL DATA SUPPLEMENT priceline.com - -------------------------------------------------------------------------------- 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. - -------------------------------------------------------------------------------- priceline.com Inc. - -------------------------------------------------------------------------------- Pro Forma Condensed Statements of Operations In thousands, except per share amounts (Unaudited)
Income Statement Analysis 1Q00 2Q00 3Q00 4Q00 1Q01 2Q01 - ------------------------ -------- -------- -------- -------- -------- -------- Travel revenues $311,607 $346,822 $335,699 $223,032 $267,020 $362,492 Other revenues 2,191 5,273 5,635 5,137 2,684 2,264 -------- -------- -------- -------- -------- -------- Total revenues 313,798 352,095 341,334 228,169 269,704 364,756 Cost of travel revenues 264,670 296,386 285,753 191,973 225,496 303,979 Cost of other revenues 101 533 1,146 1,141 1,093 671 -------- -------- -------- -------- -------- -------- Total costs of revenues 264,771 296,919 286,899 193,114 226,589 304,650 -------- -------- -------- -------- -------- -------- Gross profit $49,027 $55,176 $54,435 $35,055 $43,115 $60,106 -------- -------- -------- -------- -------- -------- Operating expenses: Advertising 20,339 13,826 14,175 18,865 16,189 13,701 Sales and marketing 20,110 23,791 21,394 15,633 14,434 19,117 General and administrative 12,704 15,222 11,934 12,334 9,404 7,477 Systems and business development 5,868 6,695 11,420 15,209 11,112 9,892 -------- -------- -------- -------- -------- -------- Total operating expenses $59,021 $59,534 $58,923 $62,041 $51,139 $50,187 Operating income (loss) ($9,994) ($4,358) ($4,488) ($26,986) ($8,024) $9,919 Interest income 2,715 2,725 2,264 1,983 1,776 1,816 -------- -------- -------- -------- -------- -------- Pro forma net income (loss) ($7,279) ($1,633) ($2,224) ($25,003) ($6,248) $11,735 ======== ======== ======== ======== ======== ======== Pro forma net income (loss) per basic share ($0.04) ($0.01) ($0.01) ($0.15) ($0.03) $0.06 ======== ======== ======== ======== ======== ======== Pro forma net income (loss) per diluted share ($0.04) ($0.01) ($0.01) ($0.15) ($0.03) $0.05 ======== ======== ======== ======== ======== ======== Recurring supplier warrant costs (381) (381) (381) (381) 0 0 One-time supplier warrant costs 0 0 0 (8,595) 0 0 Severance charge 0 0 0 0 0 (5,412) Special charge 0 0 0 (34,824) 0 0 Restructuring charge 0 0 0 (32,006) (1,400) 0 Stock based compensation 0 0 0 (1,711) (5,157) (3,140) Option payroll taxes (5,907) (2,507) (349) (25) (23) (367) Preferred stock dividend 0 (7,191) (7,191) 0 0 0 WebHouse club warrants 0 0 (189,000) 0 0 0 Gain/(loss) on sale of stock 0 0 32 (2,590) (946) 0 ======== ======== ======== ======== ======== ======== Net income (loss) ($13,567) ($11,712) ($199,113) ($105,135) ($13,774) $2,816 ======== ======== ======== ======== ======== ======== Net income (loss) applicable to common stockholders per basic common share ($0.08) ($0.07) ($1.19) ($0.62) ($0.07) $0.01 ======== ======== ======== ======== ======== ======== Net income (loss) applicable to common stockholders per diluted common share ($0.08) ($0.07) ($1.19) ($0.62) ($0.07) $0.01 ======== ======== ======== ======== ======== ======== Weighted average common shares: Basic 166,467 165,399 167,059 168,662 188,589 196,581 Diluted n/a n/a n/a n/a n/a 220,021 Common shares outstanding, end of period 170,162 166,549 167,806 168,898 200,843 209,496 - --------------------------------------------------------------- -------- -------- -------- -------- -------- -------- Gross margin 15.6% 15.7% 15.9% 15.4% 16.0% 16.5% 2Q01 vs. 6 mos. 6 mos. 6 mos. 2001 vs. Income Statement Analysis 2Q00 2001 2000 6 mos. 2000 - ------------------------- -------- -------- -------- --------------- Travel revenues 5% $629,512 $658,429 -4% Other revenues -57% 4,948 7,464 -34% -------- -------- Total revenues 4% 634,460 665,893 -5% Cost of travel revenues 3% 529,475 561,056 -6% Cost of other revenues 26% 1,764 634 178% -------- -------- Total costs of revenues 3% 531,239 561,690 -5% -------- -------- Gross profit 9% 103,221 104,203 -1% -------- -------- Operating expenses: Advertising -1% 29,890 34,165 -13% Sales and marketing -20% 33,551 43,901 -24% General and administrative -51% 16,881 27,926 -40% Systems and business development 48% 21,004 12,563 67% -------- -------- Total operating expenses -16% $101,326 $118,555 -15% Operating income (loss) -328% $1,895 ($14,352) -113% Interest income -33% 3,592 5,440 -34% -------- -------- Pro forma net income (loss) -819% $5,487 ($8,912) -162% ======== ======== Pro forma net income (loss) per basic share -705% $0.03 ($0.05) -154% ======== ======== Pro forma net income (loss) per diluted share -640% $0.03 ($0.05) -149% ======== ======== Recurring supplier warrant costs -100% 0 (762) -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 -- (8,297) 0 -- Option payroll taxes -85% (390) (8,414) -95% Preferred stock dividend -100% 0 (7,191) -100% WebHouse club warrants -- 0 0 -- Gain/(loss) on sale of stock -- (946) 0 -- -------- -------- Net income (loss) -124% ($10,958) ($25,279) -57% ======== ======== Net income (loss) applicable to common stockholders per basic common share -120% ($0.06) ($0.15) -62% ======== ======== Net income (loss) applicable to common stockholders per diluted common share -118% ($0.05) ($0.15) -65% ======== ======== Weighted average common shares: Basic 19% 188,890 166,051 14% Diluted n/a 206,605 n/a n/a Common shares outstanding, end of period 26% 209,496 166,549 26% - ---------------------------------------------------------------- -------- -------- -------- --------------- Gross margin 16.3% 15.6%
Page 1 priceline.com Inc. - -------------------------------------------------------------------------------- Condensed Balance Sheets In thousands (Unaudited)
3/31/2000 6/30/2000 9/30/2000 ----------- ----------- ----------- ASSETS CURRENT ASSETS: Cash and cash equivalents $118,528 $86,875 $92,751 Restricted cash 7,327 8,559 11,750 Short-term investments 23,625 43,273 26,122 Accounts receivable, net of allowance for doubtful accounts 52,751 38,993 24,199 Related party receivable 108 3,771 5,532 Note receivable -- -- -- Prepaid expenses and other current assets 15,782 27,182 20,755 ----------- ----------- ----------- Total current assets 218,121 208,653 181,109 PROPERTY AND EQUIPMENT, net 37,130 41,592 46,257 RELATED PARTY RECEIVABLE 13,404 15,789 15,089 WARRANTS TO PURCHASE COMMON STOCK OF LICENSEES 189,000 192,250 3,250 OTHER ASSETS 25,062 34,554 39,868 ----------- ----------- ----------- TOTAL ASSETS $ 482,717 $ 492,838 $ 285,573 =========== =========== =========== LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES: Accounts payable $59,411 $73,292 $59,447 Preferred stock dividends payable -- 7,191 14,382 Accrued expenses 13,766 15,998 17,324 Other current liabilities 4,280 4,454 3,739 ----------- ----------- ----------- Total current liabilities 77,457 100,935 94,892 Accrued expenses -- -- -- ----------- ----------- ----------- Total liabilities 77,457 100,935 94,892 ----------- ----------- ----------- MANDATORILY REDEEMABLE CONVERTIBLE PREFERRED STOCK -- 359,580 359,580 MANDATORILY REDEEMABLE PREFERRED STOCK -- -- -- ----------- ----------- ----------- STOCKHOLDERS' EQUITY/(DEFICIENCY): Common stock 1,361 1,380 1,390 Treasury stock -- (359,580) (359,580) Additional paid-in capital 1,591,880 1,593,961 1,595,228 Deferred compensation -- -- -- Accumulated other comprehensive income (loss) 5,969 2,224 (1,162) Accumulated deficit (1,193,950) (1,205,662) (1,404,775) ----------- ----------- ----------- Total stockholders' equity/(deficiency) 405,260 32,323 (168,899) ----------- ----------- ----------- TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 482,717 $ 492,838 $ 285,573 =========== =========== =========== 12/31/2000 3/31/2001 6/30/2001 ----------- ----------- ----------- ASSETS CURRENT ASSETS: Cash and cash equivalents $77,024 $98,698 $124,284 Restricted cash 13,568 17,514 11,015 Short-term investments 10,952 26,394 30,433 Accounts receivable, net of allowance for doubtful accounts 13,889 20,706 25,839 Related party receivable -- -- -- Note receivable -- -- 8,500 Prepaid expenses and other current assets 15,790 15,187 10,908 ----------- ----------- ----------- Total current assets 131,223 178,499 210,979 PROPERTY AND EQUIPMENT, net 37,083 35,861 34,870 RELATED PARTY RECEIVABLE 3,503 3,183 41 WARRANTS TO PURCHASE COMMON STOCK OF LICENSEES 3,250 3,250 3,250 OTHER ASSETS 20,019 19,769 19,521 ----------- ----------- ----------- TOTAL ASSETS $ 195,078 $ 240,562 $ 268,661 =========== =========== =========== LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES: Accounts payable $40,691 $51,377 $69,531 Preferred stock dividends payable -- -- -- Accrued expenses 33,172 26,630 32,210 Other current liabilities 5,434 4,978 5,161 ----------- ----------- ----------- Total current liabilities 79,297 82,985 106,902 Accrued expenses 5,108 4,747 3,789 ----------- ----------- ----------- Total liabilities 84,405 87,732 110,691 ----------- ----------- ----------- MANDATORILY REDEEMABLE CONVERTIBLE PREFERRED STOCK 359,580 -- -- MANDATORILY REDEEMABLE PREFERRED STOCK -- 80,000 55,032 ----------- ----------- ----------- STOCKHOLDERS' EQUITY/(DEFICIENCY): Common stock 1,454 1,650 1,720 Treasury stock (326,633) (326,633) (326,633) Additional paid-in capital 1,618,956 1,948,533 1,971,588 Deferred compensation (13,053) (8,471) (4,304) Accumulated other comprehensive income (loss) (1,156) -- -- Accumulated deficit (1,528,475) (1,542,249) (1,539,433) ----------- ----------- ----------- Total stockholders' equity/(deficiency) (248,907) 72,830 102,938 ----------- ----------- ----------- TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 195,078 $ 240,562 $ 268,661 =========== =========== ===========
Page 2 priceline.com Inc. - -------------------------------------------------------------------------------- Offer and Customer Activity
2Q01 vs. Unique Offers: 1Q00 2Q00 3Q00 4Q00 1Q01 2Q01 2Q00 - -------------- --------- --------- --------- --------- --------- ---------- -------- New Customer Offers 1,504,685 1,509,416 1,344,025 883,862 891,490 1,025,041 -32% Repeat Customer Offers 833,388 964,350 1,417,840 1,057,738 1,217,217 1,620,157 68% Total Unique Offers 2,338,073 2,473,766 2,761,865 1,941,600 2,108,707 2,645,198 7% Repeat customer offers/ 35.6% 39.0% 51.3% 54.5% 57.7% 61.2% total unique offers Customers New Customers 1,504,685 1,509,416 1,344,025 883,862 891,490 1,025,041 -32% Cumulative Customers 5,257,357 6,766,773 8,110,798 8,994,660 9,886,150 10,911,191 61%
Page 3 priceline.com Inc. - -------------------------------------------------------------------------------- Air
2Q01 vs. 1Q00 2Q00 3Q00 4Q00 1Q01 2Q01 2Q00 --------- --------- --------- ------- --------- --------- -------- Tickets Sold 1,250,416 1,288,592 1,290,096 809,327 1,075,555 1,435,936 11% Net Unique Offers 1,820,918 1,753,273 1,756,236 1,242,967 1,392,747 1,683,661 -4% Offers Booked 801,204 869,408 886,135 590,088 709,576 963,167 11% Bind Rate 44.0% 49.6% 50.5% 47.5% 50.9% 57.2%
bind rate = offers booked/net unique offers Air product was launched on April 6, 1998 Page 4 priceline.com Inc. - -------------------------------------------------------------------------------- Hotels
2Q01 vs. 1Q00 2Q00 3Q00 4Q00 1Q01 2Q01 2Q00 ------- ------- ------- ------- ------- ------- -------- Room Nights Sold 409,514 432,463 526,450 367,372 432,884 680,604 57% Net Unique Offers 383,708 431,249 511,396 319,501 351,952 516,816 20% Offers Booked 180,343 195,517 244,655 176,712 188,278 311,121 59% Bind Rate 47.0% 45.3% 47.8% 55.3% 53.5% 60.2%
bind rate = offers booked/net unique offers Hotel product was launched on October 28, 1998 Page 5 priceline.com Inc. - -------------------------------------------------------------------------------- Rental Cars
2Q01 vs. 1Q00 2Q00 3Q00 4Q00 1Q01 2Q01 2Q00 ------- ------- ------- ------- ------- ------- -------- Days Sold 229,998 429,622 579,866 522,242 607,336 922,545 115% Net Unique Offers 90,639 175,878 217,760 207,436 229,581 325,235 85% Offers Booked 37,706 70,351 107,058 93,757 105,970 162,053 130% Bind Rate 41.6% 40.0% 49.2% 45.2% 46.2% 49.8%
bind rate = offers booked/net unique offers Rental Car product was launched on February 3, 2000 Page 6 -----END PRIVACY-ENHANCED MESSAGE-----