-----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, Q6y4Khw9Kl3C06dW0Dvc7SMf1Nuo82FEh/SNZyOH/pji9ZxItcT8AvLWFxhTLcMj rOLJoKhU5+txC2/rTaS4IQ== 0001047469-03-004750.txt : 20030211 0001047469-03-004750.hdr.sgml : 20030211 20030211152116 ACCESSION NUMBER: 0001047469-03-004750 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20030210 ITEM INFORMATION: FILED AS OF DATE: 20030211 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: 03550063 BUSINESS ADDRESS: STREET 1: 800 CONNECTICUT AVE CITY: NORWALK STATE: CT ZIP: 06854 BUSINESS PHONE: 2037053000 8-K 1 a2103031z8-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) February 10, 2003 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. 4TH QUARTER ENDED DECEMBER 31, 2002 EARNINGS On February 10, 2003, priceline.com Incorporated, a Delaware corporation, announced its results for the 4th quarter ended December 31, 2002. The information is qualified in its entirety by reference to the press release (which includes a financial and statistical supplement issued by priceline.com on February 10, 2003), 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, priceline.com'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 February 10, 2003 relating to its 4th quarter ended December 31, 2002 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 Executive Officer Date: February 11, 2003 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 February 10, 2003 relating to its 4th quarter ended December 31, 2002 earnings. EX-99.1 3 a2103031zex-99_1.txt EXHIBIT 99.1 Exhibit 99.1 PRICELINE.COM REPORTS 4TH QUARTER AND FULL-YEAR 2002 RESULTS 2002 HOTEL ROOM NIGHTS SOLD INCREASE 47 PERCENT OVER 2001 NEW ADVERTISING CAMPAIGN HIGHLIGHTS VALUE AND QUALITY OF HOTEL PRODUCT NORWALK, Conn., February 10, 2003 -- Priceline.com (Nasdaq: PCLN) today reported a 4th quarter 2002 GAAP net loss of $7.4 million, or $0.03 per share, after giving effect to previously announced restructuring and other charges. On a pro forma basis, the Company reported a net loss of $2.5 million, or $0.01 per share, on revenues of $197.3 million for the 4th quarter, which was consistent with Company guidance provided in November. By comparison, in the 4th quarter 2001, priceline.com had a GAAP net loss of $1.3 million, or $0.01 per share, on revenue of $235.3 million, and pro forma net income of $3.4 million, or $0.01 per diluted share. Priceline.com reported pro forma EBITDA for the 4th quarter 2002 of $1.2 million compared with $6.2 million for the 4th quarter of 2001. Pro forma financial information is stated before restructuring, special and severance charges, stock-based compensation and option payroll tax, impairment of certain investments and preferred stock dividends. (The attached financial and statistical supplement reconciles pro forma financial information with the Company's financial results under GAAP). EBITDA is defined as earnings before interest, taxes, depreciation and amortization. Priceline.com ended 2002 with $149.6 million in cash and short-term investments. Priceline.com has no debt. Priceline.com reported growth in its key customer metrics. The Company's customer base grew to 16.1 million, with repeat business for the quarter registering 66.3 percent. (Repeat business is defined as the number of total unique purchase offers coming from repeat customers divided by the number of total unique purchase offers). For full-year 2002, priceline.com had revenue of $1 billion, compared with $1.2 billion during 2001. On a GAAP basis, priceline.com had a full-year 2002 net loss of $21.5 million, or $0.09 per share, which included a $24.2 million non-cash charge for the impairment of certain Company investments. During 2001, priceline had a GAAP net loss of $15.9 million, or $0.08 per share. On a pro forma basis, priceline.com had full-year 2002 net income of $9.5 million, or $0.04 per diluted share. This compares to pro forma net income of $15.1 million or $0.07 per diluted share during 2001. Full-year 2002 pro forma EBITDA was $24.5 million, compared to $24.4 million during 2001. "Priceline.com's 4th quarter results came in consistent with our November guidance despite continued deterioration in travel market conditions which we believe are generally tied to the potential for war in the Middle East, a weakened airline industry and economic uncertainty," said priceline.com President and Chief Executive Officer Jeffery H. Boyd. "Continued weakness in opaque airline ticket sales was partially offset by another strong quarter for our hotel business, which sold almost 1 million hotel room nights. In total, hotel room nights sold were up 47 percent in 2002 compared to the previous year. On a quarterly basis, hotel room nights sold grew 22 percent compared to 4th quarter 2001." Mr. Boyd continued, "In 2002, priceline.com made good progress in building its hotel, packages and retail travel businesses, thereby reducing its reliance on opaque airline ticket sales. In the fourth quarter of 2002, 63% of all booked customer offers were derived from services other than the Company's opaque airline product, up from 47% in the fourth quarter of 2001. We significantly increased our investment in the hotel business with a major TV campaign launched in January featuring the quality of our hotel inventory and our delivery of up to 40 percent savings compared to leading online sites. The early results are encouraging with quarter-to-date room night sales up over 30% compared to the same period last year." Today, priceline.com also reported specific progress on travel initiatives that included expansion of its hotel service and the integration of Name Your Own Pricesm and retail travel services: o HOTELS. Priceline.com reported that it now has more than 9,000 name-brand hotel properties participating in its hotel program, covering the U.S., Europe, Asia, Canada, Mexico and the Caribbean. All of the major chains work with priceline.com, enabling the Company to offer its customers top-of-the-line hotel rooms. o RETAIL OFFERINGS. During the 4th quarter, priceline.com began offering airline tickets, hotel rooms, rental cars and vacation packages at competitive, disclosed retail prices through Lowestfare.com. (Priceline.com acquired the Lowestfare.com domain name and trademarks in 2002). In addition to the major full-service airlines, Lowestfare.com sells seats on popular discount airlines. Priceline.com also began to offer unbound priceline.com customers the opportunity to purchase retail products from Lowestfare.com. In the 4th quarter, priceline.com achieved $10.4 million in total retail travel bookings. Gross retail bookings are not recognized as revenue because Priceline does not act as merchant in a retail transaction. Priceline's revenue recognition is limited to the fees and commissions it earns as an agent. o PACKAGES. During the 4th quarter, Lowestfare.com began selling fixed-price air/hotel packages provided by GOGO Worldwide Vacations. Priceline.com is scheduled to integrate a retail package product into its own service in 2003. "We believe that our hotel service is clearly a best-of-breed product that delivers high quality at lower prices than the other leading online hotel booking services," said Mr. Boyd. "We will market and advertise this message aggressively to consumers throughout 2003. Priceline.com and Lowestfare.com have also taken and will continue to take the steps necessary to furnish customers with one-stop solutions that save them time and money on their travel purchases. We expect airline industry conditions will continue to put pressure on our opaque airline ticket sales. However, we believe that total travel bookings and revenue in our other businesses - hotels, packages, rental cars and retail offerings - will continue to grow. We expect to reach an inflection point sometime in the second half of this year, at which point the year-over-year decreases in our opaque airline ticket sales will be overtaken by the size and corresponding growth rates of our collective other businesses. We believe that progress in these businesses position priceline.com for improved operating results and long-term growth." Looking forward, Mr. Boyd said, "Total revenue for the month of January was approximately $62 million, reflecting continued weakness in opaque airline ticket sales, offset partially by continued strong hotel performance. Excluding the effects of a potential war in the Middle East or terrorist events that might negatively impact the travel industry, we expect revenue in February and March will exceed that of January, and we expect pro forma results in the 1st quarter 2003 will range from break-even to a loss of $0.02 per share. Incorporated into that guidance is the Company's decision to continue to invest in advertising for our hotel service during the quarter. On the same assumptions, we continue to expect that priceline.com will return to profitability by the 2nd quarter of this year and we expect to have 2003 full-year pro forma EPS that will exceed that of 2002." ABOUT PRICELINE.COM Priceline.com offers products for sale in two categories: a travel service that offers leisure airline tickets, hotel rooms, rental cars, vacation packages and cruises; and a personal finance service that offers home mortgages, refinancing and home equity loans through an independent licensee. Priceline.com also owns the Internet domain names and trademarks of LowestFare.com, another Web-based travel site. Priceline.com licenses its business model to independent licensees, including pricelinemortgage and certain international licensees. 2 USE OF PRO FORMA RESULTS The Company believes that the presentation of pro forma results in this press release and the exhibits to this press release provides investors and analysts with useful supplementary information concerning the company's ongoing cash operating profits (or losses) and its cash operating margins. Furthermore, the Company has historically used pro forma results as an internal measure of the company's performance. Pro forma measures do not have standardized meanings and are therefore unlikely to be comparable to similar measures presented by other companies. Pro forma results are presented for informational purposes only and should not be considered as a substitute for the historical financial information presented in accordance with generally accepted accounting principles. A reconciliation of pro forma results to the Company's financial results under generally accepted accounting principles is provided in the attached financial and statistical supplement. ### For press information: Brian Ek at priceline.com 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, among other things, terrorist attacks or war in Iraq; adverse changes in the Company's relationships with airlines and other product and service providers including, without limitation, the withdrawal of suppliers from the priceline.com system; the bankruptcy or insolvency of another major domestic airline; the effects of increased competition; systems-related failures and/or security breaches; the Company's ability to protect its intellectual property rights; losses by the Company and its licensees; final adjustments made in closing the quarter; 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. 3 PRICELINE.COM INCORPORATED CONSOLIDATED BALANCE SHEETS (IN THOUSANDS, UNAUDITED)
DECEMBER 31, DECEMBER 31, 2002 2001 ------------ ------------ ASSETS Current assets: Cash and cash equivalents $ 67,182 $ 99,943 Restricted cash 18,248 15,396 Short-term investments 64,154 49,269 Accounts receivable, net of allowance for doubtful accounts of $1,262 and $4,170 at December 31, 2002 and 2001, respectively 13,636 15,665 Prepaid expenses and other current assets 6,348 5,038 ----------- ----------- Total current assets 169,568 185,311 Property and equipment, net 21,413 32,266 Goodwill 10,517 23,646 Other assets 9,664 20,967 ----------- ----------- Total assets $ 211,162 $ 262,190 =========== =========== LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $ 35,375 $ 45,941 Accrued expenses 27,889 36,240 Other current liabilities 2,063 5,115 ----------- ----------- Total current liabilities 65,327 87,296 Accrued expenses 715 2,838 ----------- ----------- Total liabilities 66,042 90,134 SERIES B MANDATORILY REDEEMABLE PREFERRED STOCK 13,470 25,345 Stockholders' equity: Common stock 1,884 1,836 Treasury stock (338,410) (326,633) Additional paid-in capital 2,033,944 2,015,849 Accumulated deficit (1,565,869) (1,544,341) Accumulated other comprehensive income: Cumulative currency translation adjustment 101 -- ----------- ----------- Total stockholders' equity 131,650 146,711 ----------- ----------- Total liabilities and stockholders' equity $ 211,162 $ 262,190 =========== ===========
4 PRICELINE.COM INCORPORATED CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except per share amounts, unaudited)
THREE MONTHS ENDED TWELVE MONTHS ENDED --------------------------- ----------------------------- DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, 2002 2001 2002 2001 ------------ ----------- ------------ ------------ Travel revenues $ 195,913 $ 232,918 $ 996,815 $ 1,162,223 Other revenues 1,388 2,386 6,791 9,530 --------- --------- ---------- ------------ Total revenues 197,301 235,304 1,003,606 1,171,753 Cost of travel revenues 166,710 195,608 844,142 976,035 Cost of other revenues 107 443 1,098 2,812 --------- --------- ---------- ----------- Total costs of revenues 166,817 196,051 845,240 978,847 --------- --------- ---------- ----------- Gross profit 30,484 39,253 158,366 192,906 Operating expenses: Sales and marketing 16,566 21,915 82,741 115,366 General and administrative 7,270 5,709 29,153 28,659 Payroll tax on employee stock options - 222 120 909 Stock based compensation 250 7,196 1,000 16,508 Systems and business development 9,773 10,129 40,964 41,293 Special charge (reversal) - (1,218) (200) (1,218) Restructuring charge (reversal) 4,654 (1,536) 3,738 (136) Severance charge (reversal) - - (55) 5,412 Impairments of investments in licensees - - 24,229 - --------- --------- ---------- ----------- Total operating expenses 38,513 42,417 181,690 206,793 --------- --------- ---------- ----------- Operating loss (8,029) (3,164) (23,324) (13,887) Other income: Loss on sale of equity investment - - - (946) Interest income 617 1,342 2,843 6,996 Equity in net income of pricelinemortgage - 517 1,131 551 Gain (loss) on property and equipment 1 (17) 165 (17) Other - - 1 - --------- --------- ---------- ----------- Total other income 618 1,842 4,140 6,584 --------- --------- ---------- ----------- Net loss (7,411) (1,322) (19,184) (7,303) Preferred stock dividend - - (2,344) (8,563) --------- --------- ---------- ----------- Net loss applicable to common stockholders $ (7,411) $ (1,322) $ (21,528) $ (15,866) ========= ========= ========== =========== Net loss applicable to common stockholders per basic and diluted common share $ (0.03) $ (0.01) $ (0.09) $ (0.08) ========= ========= ========== =========== Weighted average number of basic and diluted 224,709 223,042 227,283 205,000 common shares outstanding ========= ========= ========== ===========
5 PRICELINE.COM INCORPORATED SUPPLEMENTAL PRO FORMA FINANCIAL INFORMATION CONSOLIDATED STATEMENTS OF OPERATIONS (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS, UNAUDITED)
THREE MONTHS ENDED DECEMBER 31, 2002 --------------------------------------------------- PRO FORMA REPORTED ADJUSTMENTS PRO FORMA ---------- -------------- ---------- Travel revenues $ 195,913 $ 195,913 Other revenues 1,388 1,388 --------- ------------ --------- Total revenues 197,301 197,301 Cost of travel revenues 166,710 166,710 Cost of other revenues 107 107 --------- ------------ --------- Total costs of revenues 166,817 166,817 --------- ------------ --------- Gross profit 30,484 30,484 --------- ------------ --------- Operating expenses: Sales and marketing 16,566 16,566 General and administrative 7,270 7,270 Payroll tax on employee stock options - - Stock based compensation 250 (250)(a) - Systems and business development 9,773 9,773 Restructuring charge 4,654 (4,654) (b) - --------- ------------ --------- Total operating expenses 38,513 (4,904) 33,609 --------- ------------ --------- Operating loss (8,029) 4,904 (3,125) Other income: Interest income 617 617 Equity in net income of pricelinemortgage - - Gain on disposal of fixed assets 1 (1)(c) - --------- ------------ --------- Total other income 618 (1) 617 --------- ------------ --------- Net loss (7,411) 4,903 (2,508) Preferred stock dividend - - - --------- ------------ --------- Net loss applicable to common stockholders $ (7,411) $ 4,903 $ (2,508) ========= ============ ========= Net loss applicable to common stockholders per basic and diluted common share $ (0.03) $ 0.02 $ (0.01) ========= ============ ========= Weighted average number of basic and diluted common shares outstanding 224,709 224,709 ========= =========
(a) Amortization of stock based compensation expense. (b) Restructuring charges. (c) Gain on sale of property and equipment. 6 PRICELINE.COM INCORPORATED SUPPLEMENTAL PRO FORMA FINANCIAL INFORMATION CONSOLIDATED STATEMENTS OF OPERATIONS (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS, UNAUDITED)
THREE MONTHS ENDED DECEMBER 31, 2001 PRO FORMA REPORTED ADJUSTMENTS PRO FORMA ---------- ------------ ------------- Travel revenues $ 232,918 $ 232,918 Other revenues 2,386 2,386 --------- ---------- --------- Total revenues 235,304 235,304 Cost of travel revenues 195,608 195,608 Cost of other revenues 443 443 --------- ---------- --------- Total costs of revenues 196,051 196,051 --------- ---------- --------- Gross profit 39,253 39,253 --------- ---------- --------- Operating expenses: Sales and marketing 21,915 21,915 General and administrative 5,709 5,709 Payroll tax on employee stock options 222 (222)(a) - Stock based compensation 7,196 (7,196)(b) - Systems and business development 10,129 10,129 Special charge (1,218) 1,218 (c) - Restructuring charge (1,536) 1,536 (d) - --------- ---------- --------- Total operating expenses 42,417 (4,664) 37,753 --------- ---------- --------- Operating loss (3,164) 4,664 1,500 Other income: Loss on disposal of fixed assets (17) 17 (e) - Equity in net income of pricelinemortgage 517 517 Interest income 1,342 1,342 --------- ---------- --------- Total other income 1,842 17 1,859 --------- ---------- --------- Net loss (1,322) 4,681 3,359 --------- ---------- --------- Net loss applicable to common stockholders $ (1,322) $ 4,681 $ 3,359 ========= ========= ========= Net loss income applicable to common stockholders per basic common share $ (0.01) $ 0.02 $ 0.02 ========= ========= ========= Weighted average number of basic common shares outstanding 223,042 223,042 ========= ========= ========= Net loss income applicable to common stockholders per diluted common share n/a $ 0.02 $ 0.01 ========= ========= ========= Weighted average number of diluted common shares outstanding n/a 235,242 ========= =========
(a) Employer payroll taxes on employee exercises of non-qualified stock options. (b) Amortization of stock based compensation expense. (c) Recovery of special charges. (d) Recovery of restructuring charges. (e) Loss on sale of property and equipment. 7 PRICELINE.COM INCORPORATED SUPPLEMENTAL PRO FORMA FINANCIAL INFORMATION CONSOLIDATED STATEMENTS OF OPERATIONS (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS, UNAUDITED)
TWELVE MONTHS ENDED DECEMBER 31, 2002 ------------------------------------------------- PRO FORMA REPORTED ADJUSTMENTS PRO FORMA --------- ------------ --------- Travel revenues $ 996,815 $ 996,815 Other revenues 6,791 6,791 --------- ----------- --------- Total revenues 1,003,606 1,003,606 Cost of travel revenues 844,142 844,142 Cost of other revenues 1,098 1,098 --------- ----------- --------- Total costs of revenues 845,240 845,240 --------- ----------- --------- Gross profit 158,366 158,366 --------- ----------- --------- Operating expenses: Sales and marketing 82,741 82,741 General and administrative 29,153 29,153 Payroll tax on employee stock options 120 (120)(a) - Stock based compensation 1,000 (1,000)(b) - Systems and business development 40,964 40,964 Special charge (reversal) (200) 200 (c) - Restructuring charge (reversal) 3,738 (3,738)(d) - Severance charge (reversal) (55) 55 (e) - Impairments of investments in licensees 24,229 (24,229)(f) - --------- ----------- --------- Total operating expenses 181,690 (28,832) 152,858 --------- ----------- --------- Operating loss (23,324) 28,832 5,508 Other income: Interest income 2,843 2,843 Equity in net income of pricelinemortgage 1,131 1,131 Gain on disposal of fixed assets 165 (165)(g) - Other 1 1 --------- ----------- --------- Total other income 4,140 (165) 3,975 --------- ----------- --------- Net loss (19,184) 28,667 9,483 Preferred stock dividend (2,344) 2,344 - --------- ---------- --------- Net loss applicable to common stockholders $ (21,528) $ 31,011 $ 9,483 ========= ========== ========= Net loss income applicable to common stockholders per basic common share $ (0.09) $ 0.14 $ 0.04 ========= ========== ========= Weighted average number of basic common shares outstanding 227,283 227,283 ========= ========= Net loss income applicable to common stockholders per diluted common share n/a $ 0.13 $ 0.04 ========= ========== ========= Weighted average number of diluted common shares outstanding n/a 234,458 ========= =========
(a) Employer payroll taxes on employee exercises of non-qualified stock options. (b) Amortization of stock based compensation expense. (c) Recovery of special charges. (d) Restructuring charges. (e) Recovery of severance charges. (f) Impairment of priceline investments. (g) Gain on sale of property and equipment. 8 PRICELINE.COM INCORPORATED SUPPLEMENTAL PRO FORMA FINANCIAL INFORMATION CONSOLIDATED STATEMENTS OF OPERATIONS (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS, UNAUDITED)
TWELVE MONTHS ENDED DECEMBER 31, 2001 ---------------------------------------------- PRO FORMA REPORTED ADJUSTMENTS PRO FORMA ------------ ------------ ------------ Travel revenues $ 1,162,223 $ 1,162,223 Other revenues 9,530 9,530 ----------- ---------- ----------- Total revenues 1,171,753 1,171,753 Cost of travel revenues 976,035 976,035 Cost of other revenues 2,812 2,812 ----------- ---------- ----------- Total costs of revenues 978,847 978,847 Gross profit 192,906 192,906 ----------- ---------- ----------- Operating expenses: Sales and marketing 115,366 115,366 General and administrative 28,659 28,659 Payroll tax on employee stock options 909 (909)(a) - Stock based compensation 16,508 (16,508)(b) - Systems and business development 41,293 41,293 Special charge (reversal) (1,218) 1,218 (c) - Restructuring charge (reversal) (136) 136 (d) - Severance charge (reversal) 5,412 (5,412)(e) - ----------- ---------- ----------- Total operating expenses 206,793 (21,475) 185,318 ----------- ---------- ----------- Operating loss (13,887) 21,475 7,588 Other income: Loss on sale of equity investment (946) 946 (f) - Loss on disposal of fixed assets (17) 17 (g) - Equity in net income of pricelinemortgage 551 551 Interest income 6,996 6,996 ----------- ---------- ----------- Total other income 6,584 963 7,547 ----------- ---------- ----------- Net loss (7,303) 22,438 15,135 Preferred stock dividend (8,563) 8,563 (h) - ----------- ---------- ----------- Net loss applicable to common stockholders $ (15,866) $ 31,001 $ 15,135 =========== ========= =========== Net loss applicable to common stockholders per basic common share $ (0.08) $ 0.15 $ 0.07 ============ ========= =========== Weighted average number of basic common shares outstanding 205,000 205,000 ============ =========== Net loss applicable to common stockholders per diluted common share n/a $ 0.14 $ 0.07 ============ ========= =========== Weighted average number of diluted common shares outstanding n/a 217,667 ============ ===========
(a) Employer payroll taxes on employee exercises of non-qualified stock options. (b) Amortization of stock based compensation expense. (c) Recovery of special charges. (d) Recovery of restructuring charges. (e) Severance charge. (f) Loss on sale of equity investment. (g) Loss on sale of property and equipment. (h) Non-cash preferred stock dividend. 9 PRICELINE.COM INCORPORATED - 2002 FOURTH QUARTER FINANCIAL DATA SUPPLEMENT
PAGE NUMBER ----------- PRICELINE.COM FINANCIALS Pro Forma Consolidated Statements of Operations 1 Pro Forma priceline.com Europe Ltd. Statement of Operations 2 Consolidated Balance Sheets 3 OFFER AND CUSTOMER ACTIVITY 4 PRODUCT DETAIL Air 5 Hotels 6 Rental Cars 7
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 INCORPORATED - ------------------------------------------------------------------------------- PRO FORMA CONSOLIDATED STATEMENTS OF OPERATIONS In thousands, except per share amounts (UNAUDITED)
INCOME STATEMENT ANALYSIS 1Q01 2Q01 3Q01 4Q01 1Q02 2Q02 - ------------------------- ------------- ---------- -------------- ------------- ------------- ------------- Travel revenues $ 267,020 $ 362,492 $ 299,793 $ 232,918 $ 259,899 $ 302,882 Other revenues 2,684 2,264 2,196 2,386 1,986 1,574 -------- --------- --------- --------- --------- --------- Total revenues 269,704 364,756 301,989 235,304 261,885 304,456 Cost of travel revenues 225,496 303,979 250,952 195,608 219,511 255,972 Cost of other revenues 1,093 671 605 443 381 336 ------- ------- ------- ------- ------- ------- Total costs of revenues 226,589 304,650 251,557 196,051 219,892 256,308 ------- ------- ------- ------- ------- ------- Gross profit $ 43,115 $ 60,106 $ 50,432 $ 39,253 $ 41,993 $ 48,148 ------- ------- ------- ------- ------- ------- Operating expenses: Advertising 16,189 13,701 9,600 7,385 10,227 12,777 Sales and marketing 14,434 19,117 20,410 14,530 10,564 11,813 General and administrative 9,404 7,477 6,069 5,709 6,636 7,788 Systems and business development 11,112 9,892 10,160 10,129 10,533 10,520 ------- ------- ------- ------- ------- ------- Total operating expenses $ 51,139 $ 50,187 $ 46,239 $ 37,753 $ 37,960 $ 42,898 Pro-forma operating (loss) income ($ 8,024) $ 9,919 $ 4,193 $ 1,500 $ 4,033 $ 5,250 Other -- -- -- -- (36) 37 Equity in net income of pricelinemortgage -- -- 34 517 492 245 Interest income 1,776 1,816 2,062 1,342 782 788 Pro forma net (loss) income ($ 6,248) $ 11,735 $ 6,289 $ 3,359 $ 5,271 $ 6,320 ========= ========= ========= ========= ========= ========= Pro forma EBITDA ($ 3,986) $ 13,895 $ 8,352 $ 6,161 $ 8,849 $ 9,935 ========= ========= ========= ========= ========= ========= Pro forma net (loss) income per basic share ($ 0.03) $ 0.06 $ 0.03 $ 0.02 $ 0.02 $ 0.03 ========= ========= ========= ========= ========= ========= Pro forma net (loss) income per diluted share ($ 0.03) $ 0.05 $ 0.03 $ 0.01 $ 0.02 $ 0.03 ========= ========= ========= ========= ========= ========= Severance (charge)/reversal -- (5,412) -- -- -- 55 Special (charge)/reversal -- -- -- 1,218 -- 200 Restructuring (charge)/reversal (1,400) -- -- 1,536 824 -- Impairments of investments in licensees -- -- -- -- -- -- Stock based compensation (5,157) (3,140) (1,015) (7,196) (250) (250) Payroll tax on employee stock options (23) (367) (297) (222) (104) (16) Preferred stock dividend -- -- (8,563) -- (1,854) -- (Loss)/gain on property and equipment -- -- -- (17) -- -- Loss on sale of equity investment (946) -- -- -- -- -- ------- ------- ------- ------- ------- ------- Net (loss) income ($ 13,774) $ 2,816 ($ 3,586) ($ 1,322) $ 3,887 $ 6,309 ========= ========= ========= ========= ========= ========= Net (loss) income applicable to common stockholders ($0.07)ic comm$0.01are ($ 0.02) ($ 0.01) $ 0.02 $ 0.03 ========= ========= ========= ========= ========= ========= Net (loss) income applicable to common stockholders ($0.07)uted co$0.01share ($ 0.02) ($ 0.01) $ 0.02 $ 0.03 ========= ========= ========= ========= ========= ========= Weighted average common shares: Basic 188,589 196,581 216,132 223,042 227,503 229,679 Diluted 188,589 220,021 216,132 235,242 239,970 239,502 Common shares outstanding, end of period 200,843 209,496 223,583 224,038 229,544 229,789 - ---------------------------------------- ------- ------- ------- ------- ------- ------- GROSS MARGIN 16.0% 16.5% 16.7% 16.7% 16.0% 15.8% 4Q02 VS. 12 MONTHS 12 MONTHS 12 MOS. 2002 VS. INCOME STATEMENT ANALYSIS 3Q02 4Q02 4Q02 2002 2001 12 mos. 2001 - ------------------------- ---------- ----------- --------- --------- --------- --------------- Travel revenues $ 238,121 $ 195,913 -16% $ 996,815 $ 1,162,223 -14% Other revenues 1,843 1,388 -42% 6,791 9,530 -29% ---------- ---------- ----------- ------- Total revenues 239,964 197,301 -16% 1,003,606 1,171,753 -14% Cost of travel revenues 201,949 166,710 -15% 844,142 976,035 -14% Cost of other revenues 274 107 -76% 1,098 2,812 -61% ---------- ---------- ----------- ------- Total costs of revenues 202,223 166,817 -15% 845,240 978,847 -14% ---------- ---------- ----------- ------- Gross profit $ 37,741 $ 30,484 -22% $ 158,366 $ 192,906 -18% ---------- ---------- ----------- ------- Operating expenses: Advertising 11,649 10,011 36% 44,664 46,875 -5% Sales and marketing 9,145 6,555 -55% 38,077 68,491 -44% General and administrative 7,459 7,270 27% 29,153 28,659 2% Systems and business development 10,138 9,773 -4% 40,964 41,293 -1% ---------- ---------- ----------- ------- Total operating expenses $ 38,391 $ 33,609 -11% $ 152,858 $ 185,318 -18% Pro-forma operating (loss) income ($ 650) ($ 3,125) -308% $ 5,508 $ 7,588 -27% Other -- -- -- 1 -- -- Equity in net income of pricelinemortgage 394 -- -100% 1,131 551 -- Interest income 656 617 -54% 2,843 6,996 -59% ---------- ---------- ----------- ------- Pro forma net (loss) income $ 400 ($ 2,508) -175% $ 9,483 $ 15,135 -37% ========== ========== ========== ======== Pro forma EBITDA $ 4,498 $ 1,221 -80% $ 24,503 $ 24,422 0% ========== ========== ========== ======== Pro forma net (loss) income per basic share $ 0.00 ($ 0.01) -150% $ 0.04 $ 0.07 -43% ========== ========== ========== ======== Pro forma net (loss) income per diluted share $ 0.00 ($ 0.01) -150% $ 0.04 $ 0.07 -43% ========== ========== ========== ======== Severance (charge)/reversal -- -- -- 55 (5,412) -101% Special (charge)/reversal -- -- -100% 200 1,218 -- Restructuring (charge)/reversal 92 (4,654) -403% (3,738) 136 -2849% Impairments of investments in licensees (24,229) -- -- (24,229) -- -- Stock based compensation (250) (250) -97% (1,000) (16,508) -94% Payroll tax on employee stock options -- -- -100% (120) (909) -87% Preferred stock dividend (490) -- -- (2,344) (8,563) -- (Loss)/gain on property and equipment 164 1 -106% 165 (17) -- Loss on sale of equity investment -- -- -- -- (946) -100% ---------- ---------- ----------- ------- Net (loss) income ($ 24,313) ($ 7,411) 461% ($ 21,528) ($ 15,866) 36% ========== ========== ========== ======== Net (loss) income applicable to common stockholders ($ 0.11) ($ 0.03) 200% ($ 0.09) ($ 0.08) 13% ========== ========== ========== ======== Net (loss) income applicable to common stockholders ($ 0.11) ($ 0.03) 200% ($ 0.09) ($ 0.08) 13% ========== ========== ========== ======== Weighted average common shares: Basic 227,273 224,709 1% 227,283 205,000 11% Diluted 231,507 224,709 -4% 234,458 217,667 8% Common shares outstanding, end of period 224,705 224,711 0% 224,711 224,038 0% - ---------------------------------------- ------- ------- ------- -------- ------- ------ GROSS MARGIN 15.7% 15.5% 15.8% 16.5%
Page 1 PRICELINE.COM EUROPE LTD. - ------------------------------------------------------------------------------- PRO FORMA STATEMENTS OF OPERATIONS In thousands, except per share amounts (UNAUDITED)
12 MONTHS INCOME STATEMENT ANALYSIS 1Q02 2Q02 3Q02 4Q02 2002 - ------------------------- ------------ ---------- ---------- ---------- ----------- Travel revenues $ 3,090 $ 3,180 $ 2,909 $ 1,894 $ 11,073 Other revenues -- -- -- -- -- --------- --------- --------- --------- --------- Total revenues 3,090 3,180 2,909 1,894 11,073 Cost of travel revenues 2,647 2,882 2,574 1,644 9,747 Cost of other revenues -- -- -- -- -- --------- --------- --------- --------- --------- Total costs of revenues 2,647 2,882 2,574 1,644 9,747 --------- --------- --------- --------- --------- Gross profit $ 443 $ 298 $ 335 $ 250 $ 1,326 --------- --------- --------- --------- --------- Operating expenses: Advertising 36 301 245 272 854 Sales and marketing 317 298 324 300 1,239 General and administrative 1,146 963 1,398 1,133 4,640 Systems and business development 853 663 680 633 2,829 --------- --------- --------- --------- --------- Total operating expenses $ 2,352 $ 2,225 $ 2,647 $ 2,338 $ 9,562 Operating loss ($ 1,909) ($ 1,927) ($ 2,312) ($ 2,088) ($ 8,236) Other income -- -- 1 -- 1 Interest income 6 4 6 3 19 --------- --------- --------- --------- --------- Pro forma net loss ($ 1,903) ($ 1,923) ($ 2,305) ($ 2,085) ($ 8,216) ========= ========= ========= ========= ========= Pro forma EBITDA ($ 1,725) ($ 1,753) ($ 2,137) ($ 1,911) ($ 7,526) ========= ========= ========= ========= ========= Pro forma net loss per parent basic and diluted share ($ 0.01) ($ 0.01) ($ 0.01) ($ 0.01) ($ 0.04) ========= ========= ========= ========= ========= Restructuring charge -- -- -- (1,790) (1,790) --------- --------- --------- --------- --------- Net loss ($ 1,903) ($ 1,923) ($ 2,305) ($ 3,875) ($ 10,006) ========= ========= ========= ========= ========= Weighted average common shares: Basic 227,503 229,679 227,273 224,709 227,283 Diluted 239,970 239,502 231,507 224,709 234,458 - ----------------------------------------------------- --------- --------- --------- --------- --------- GROSS MARGIN 14.3% 9.4% 11.5% 13.2% 12.0%
Does not include certain intercompany consolidation adjustments. Page 2 priceline.com Incorporated - -------------------------------------------------------------------------------- Consolidated Balance Sheets In thousands (Unaudited)
3/31/01 6/30/01 9/30/01 12/31/01 ----------- ----------- ----------- ----------- ASSETS CURRENT ASSETS: Cash and cash equivalents $ 98,698 $ 124,284 $ 99,013 $ 99,943 Restricted cash 21,793 15,139 8,685 15,396 Short-term investments 26,394 30,433 45,498 49,269 Accounts receivable, net of allowance for doubtful accounts 20,706 25,839 15,021 15,665 Note receivable -- 8,500 10,000 -- Prepaid expenses and other current assets 10,908 6,784 7,759 5,038 ----------- ----------- ----------- ----------- Total current assets 178,499 210,979 185,976 185,311 PROPERTY AND EQUIPMENT, net 35,861 34,870 33,137 32,266 GOODWILL -- -- -- 23,646 WARRANTS TO PURCHASE COMMON STOCK OF LICENSEES 3,250 3,250 3,250 -- OTHER ASSETS 22,952 19,562 19,322 20,967 ----------- ----------- ----------- ----------- TOTAL ASSETS $ 240,562 $ 268,661 $ 241,685 $ 262,190 =========== =========== =========== =========== LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES: Accounts payable $ 51,377 $ 69,531 $ 34,931 $ 45,941 Accrued expenses 26,630 32,210 30,484 36,240 Other current liabilities 4,978 5,161 4,943 5,115 ----------- ----------- ----------- ----------- Total current liabilities 82,985 106,902 70,358 87,296 Accrued expenses 4,747 3,789 3,367 2,838 ----------- ----------- ----------- ----------- Total liabilities 87,732 110,691 73,725 90,134 ----------- ----------- ----------- ----------- SERIES B MANDATORILY REDEEMABLE PREFERRED STOCK 80,000 55,032 25,345 25,345 ----------- ----------- ----------- ----------- STOCKHOLDERS' EQUITY: Common stock 1,650 1,720 1,832 1,836 Treasury stock (326,633) (326,633) (326,633) (326,633) Additional paid-in capital 1,948,533 1,971,588 2,013,974 2,015,849 Deferred compensation (8,471) (4,304) (3,539) -- Accumulated deficit (1,542,249) (1,539,433) (1,543,019) (1,544,341) Accumulated other comprehensive income: Cumulative currency translation adjustment -- -- -- -- ----------- ----------- ----------- ----------- Total stockholders' equity 72,830 102,938 142,615 146,711 ----------- ----------- ----------- ----------- TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 240,562 $ 268,661 $ 241,685 $ 262,190 =========== =========== =========== =========== 3/31/02 6/30/02 9/30/02 12/31/02 ----------- ----------- ----------- ----------- ASSETS CURRENT ASSETS: Cash and cash equivalents $ 92,051 $ 98,140 $ 66,857 $ 67,182 Restricted cash 17,454 19,573 18,174 18,248 Short-term investments 68,327 62,458 67,478 64,154 Accounts receivable, net of allowance for doubtful accounts 20,218 21,977 16,654 13,636 Note receivable -- -- -- -- Prepaid expenses and other current assets 10,544 8,640 9,068 6,348 ----------- ----------- ----------- ----------- Total current assets 208,594 210,788 178,231 169,568 PROPERTY AND EQUIPMENT, net 31,291 28,205 25,279 21,413 GOODWILL 22,535 22,535 10,517 10,517 WARRANTS TO PURCHASE COMMON STOCK OF LICENSEES -- -- -- -- OTHER ASSETS 19,731 20,606 9,791 9,664 ----------- ----------- ----------- ----------- TOTAL ASSETS $ 282,151 $ 282,134 $ 223,818 $ 211,162 =========== =========== =========== =========== LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES: Accounts payable $ 62,177 $ 55,422 $ 40,972 $ 35,375 Accrued expenses 31,750 32,318 25,861 27,889 Other current liabilities 5,050 4,954 3,495 2,063 ----------- ----------- ----------- ----------- Total current liabilities 98,977 92,694 70,328 65,327 Accrued expenses 2,365 1,483 1,001 715 ----------- ----------- ----------- ----------- Total liabilities 101,342 94,177 71,329 66,042 ----------- ----------- ----------- ----------- SERIES B MANDATORILY REDEEMABLE PREFERRED STOCK 13,470 13,470 13,470 13,470 ----------- ----------- ----------- ----------- STOCKHOLDERS' EQUITY: Common stock 1,880 1,882 1,884 1,884 Treasury stock (326,633) (326,633) (338,410) (338,410) Additional paid-in capital 2,032,547 2,033,313 2,033,938 2,033,944 Deferred compensation -- -- -- -- Accumulated deficit (1,540,455) (1,534,145) (1,558,458) (1,565,869) Accumulated other comprehensive income: Cumulative currency translation adjustment -- 70 65 101 ----------- ----------- ----------- ----------- Total stockholders' equity 167,339 174,487 139,019 131,650 ----------- ----------- ----------- ----------- TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 282,151 $ 282,134 $ 223,818 $ 211,162 =========== =========== =========== ===========
Certain reclassifications have been made to conform to current year presentation. Page 3 priceline.com Incorporated - -------------------------------------------------------------------------------- Offer and Customer Activity
UNIQUE OFFERS: 1Q01 2Q01 3Q01 4Q01 --------- ---------- ---------- ---------- New Customer Offers 891,490 1,025,041 927,338 854,082 Repeat Customer Offers 1,217,217 1,620,157 1,559,727 1,491,942 Total Unique Offers 2,108,707 2,645,198 2,487,065 2,346,024 Repeat customer offers/ 57.7% 61.2% 62.7% 63.6% total unique offers CUSTOMERS - --------- New Customers 891,490 1,025,041 927,338 854,082 Cumulative Customers 9,886,150 10,911,191 11,838,529 12,692,611 4Q02 VS. UNIQUE OFFERS: 1Q02 2Q02 3Q02 4Q02 4Q01 ---------- ---------- ---------- ---------- ---------- New Customer Offers 874,792 964,464 825,026 759,465 -11% Repeat Customer Offers 1,530,745 1,819,872 1,707,494 1,496,970 0% Total Unique Offers 2,405,537 2,784,336 2,532,520 2,256,435 -4% Repeat customer offers/ 63.6% 65.4% 67.4% 66.3% total unique offers CUSTOMERS - --------- New Customers 874,792 964,464 825,026 759,465 -11% Cumulative Customers 13,567,403 14,531,867 15,356,893 16,116,358 27%
THE INFORMATION INCLUDED ABOVE IS FOR PRICELINE.COM ONLY. STATISTICS DO NOT INCLUDE PRICELINE.COM EUROPE LTD. Page 4 priceline.com Incorporated - -------------------------------------------------------------------------------- Air
4Q02 VS. 1Q01 2Q01 3Q01 4Q01 1Q02 2Q02 3Q02 4Q02 4Q01 --------- --------- --------- --------- --------- --------- --------- --------- --------- Tickets Sold 1,075,555 1,435,936 1,183,981 840,191 866,643 921,201 643,659 468,926 -44% Net Unique Offers 1,392,747 1,683,661 1,445,575 1,441,620 1,391,478 1,533,442 1,195,664 1,225,988 -15% Offers Booked 709,576 963,167 779,319 584,505 580,555 619,590 441,406 341,244 -42% Bind Rate 50.9% 57.2% 53.9% 40.5% 41.7% 40.4% 36.9% 27.8%
bind rate = offers booked/net unique offers AIR PRODUCT WAS LAUNCHED ON APRIL 6, 1998 THE INFORMATION INCLUDED ABOVE IS FOR PRICELINE.COM ONLY. STATISTICS DO NOT INCLUDE PRICELINE.COM EUROPE LTD. Page 5 priceline.com Incorporated - -------------------------------------------------------------------------------- Hotels
4Q02 VS. 1Q01 2Q01 3Q01 4Q01 1Q02 2Q02 3Q02 4Q02 4Q01 ------- ------- ------- ------- ------- ------- ------- ------- ------- Room Nights Sold 432,884 680,604 879,922 789,638 909,107 1,089,586 1,144,988 961,124 22% Net Unique Offers 351,952 516,816 647,446 554,523 629,145 812,285 931,323 748,200 35% Offers Booked 188,278 311,121 394,807 384,463 417,306 499,065 539,899 463,434 21% Bind Rate 53.5% 60.2% 61.0% 69.3% 66.3% 61.4% 58.0% 61.9%
bind rate = offers booked/net unique offers HOTEL PRODUCT WAS LAUNCHED ON OCTOBER 28, 1998 THE INFORMATION INCLUDED ABOVE IS FOR PRICELINE.COM ONLY. STATISTICS DO NOT INCLUDE PRICELINE.COM EUROPE LTD. Page 6 priceline.com Incorporated - -------------------------------------------------------------------------------- Rental Cars
4Q02 VS. 1Q01 2Q01 3Q01 4Q01 1Q02 2Q02 3Q02 4Q02 4Q01 ------- ------- ------- ------- ------- ------- ------- ------- ------- Days Sold 607,336 922,545 895,601 720,213 738,021 793,616 741,167 555,465 -23% Net Unique Offers 229,581 325,235 313,389 261,069 303,611 335,059 302,554 244,278 -6% Offers Booked 105,970 162,053 160,603 135,781 139,776 148,483 143,593 110,482 -19% Bind Rate 46.2% 49.8% 51.2% 52.0% 46.0% 44.3% 47.5% 45.2%
bind rate = offers booked/net unique offers RENTAL CAR PRODUCT WAS LAUNCHED ON FEBRUARY 3, 2000 THE INFORMATION INCLUDED ABOVE IS FOR PRICELINE.COM ONLY. STATISTICS DO NOT INCLUDE PRICELINE.COM EUROPE LTD. Page 7 -----END PRIVACY-ENHANCED MESSAGE-----