-----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, G945ouzEPb4QTUKlSJJXSF8A3IpfwymIdZNq4CLrbXogu1anIkRkukaGI8P2o61F 13Co+bJMWDFO3hOXGPi0oQ== 0001047469-03-025101.txt : 20030725 0001047469-03-025101.hdr.sgml : 20030725 20030725081616 ACCESSION NUMBER: 0001047469-03-025101 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20030724 ITEM INFORMATION: Other events ITEM INFORMATION: Financial statements and exhibits ITEM INFORMATION: Regulation FD Disclosure FILED AS OF DATE: 20030725 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: 03801993 BUSINESS ADDRESS: STREET 1: 800 CONNECTICUT AVE CITY: NORWALK STATE: CT ZIP: 06854 BUSINESS PHONE: 2037053000 8-K 1 a2115296z8-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 24, 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 5. OTHER EVENTS On July 24, 2003, priceline.com Incorporated announced its financial results for the fiscal quarter ended June 30, 2003. A copy of priceline.com's consolidated balance sheets at June 30, 2003 and December 31, 2002 and consolidated statements of operations for the three and six months ended June 30, 2003 and 2002 is attached as Exhibit 99.1 to this Current Report on Form 8-K. ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS (c) EXHIBITS 99.1 Priceline.com consolidated balance sheets at June 30, 2003 and December 31, 2002 and consolidated statements of operations for the three and six months ended June 30, 2003 and 2002. 99.2 Press release (which includes a financial and statistical supplement and related information) issued by priceline.com Incorporated on July 24, 2003 relating to its 2nd quarter ended June 30, 2003 earnings. ITEM 9. REGULATION FD DISCLOSURE FURNISHED PURSUANT TO ITEM 12 DISCLOSURE OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION. On July 24, 2003, priceline.com Incorporated announced its financial results for the fiscal quarter ended June 30, 2003. A copy of priceline.com's press release announcing these financial results and certain other information is attached as Exhibit 99.2 to this Current Report on Form 8-K. The attached press release contains forward-looking statements relating to priceline.com's performance during 2003. A more thorough discussion of certain factors which may affect priceline.com's operating results is included in priceline.com's Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2003, and will also be included in priceline.com's Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 2003 to be filed with the Securities and Exchange Commission in the third quarter of 2003. In accordance with the procedural guidance in Securities and Exchange Commission Release No. 33-8216, the information in this report is being furnished under "Item 9. Regulation FD Disclosure" rather than under "Item 12. Disclosure of Results of Operations and Financial Condition." The information in this report shall not be treated as "filed" for purposes of the Securities Exchange Act of 1934, as amended. 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: July 24, 2003 EXHIBIT INDEX
Exhibit No. Description ----------- ----------- 99.1 Priceline.com consolidated balance sheets at June 30, 2003 and December 31, 2002 and consolidated statements of operations for the three and six months ended June 30, 2003 and 2002. 99.2 Press release (which includes a financial and statistical supplement and related information) issued by priceline.com Incorporated on July 24, 2003 relating to its 2nd quarter ended June 30, 2003 earnings.
EX-99.1 3 a2115296zex-99_1.txt EXHIBIT 99.1 EXHIBIT 99.1 PRICELINE.COM INCORPORATED CONSOLIDATED BALANCE SHEETS (IN THOUSANDS, UNAUDITED)
JUNE 30, DECEMBER 31, ASSETS 2003 2002 ------------ ------------ Current assets: Cash and cash equivalents $ 69,292 $ 67,182 Restricted cash 16,869 18,248 Short-term investments 62,992 64,154 Accounts receivable, net of allowance for doubtful accounts of $1,256 and $1,262 at June 30, 2003 and December 31, 2002 23,565 13,636 Prepaid expenses and other current assets 8,158 6,348 ------------ ------------ Total current assets 180,876 169,568 Property and equipment, net 16,106 21,413 Goodwill 10,517 10,517 Other assets 21,507 9,664 ------------ ------------ Total assets $ 229,006 $ 211,162 ============ ============ LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $ 46,863 $ 35,375 Accrued expenses 23,296 27,889 Other current liabilities 2,134 2,063 ------------ ------------ Total current liabilities 72,293 65,327 Long-term accrued expenses 276 715 ------------ ------------ Total liabilities 72,569 66,042 ------------ ------------ SERIES B MANDATORILY REDEEMABLE PREFERRED STOCK 13,470 13,470 Stockholders' equity Common stock 303 1,884 Treasury stock (338,410) (338,410) Additional paid-in capital 2,048,785 2,033,944 Deferred compensation (1,619) - Accumulated deficit (1,566,208) (1,565,869) Accumulated other comprehensive income: Cumulative currency translation adjustment 116 101 ------------ ------------ Total stockholders' equity 142,967 131,650 ------------ ------------ Total liabilities and stockholders' equity $ 229,006 $ 211,162 ============ ============
PRICELINE.COM INCORPORATED CONSOLIDATED STATEMENTS OF OPERATIONS (IN THOUSANDS, EXCEPT PER SHARE DATA, UNAUDITED)
THREE MONTHS ENDED SIX MONTHS ENDED JUNE 30, JUNE 30, JUNE 30, JUNE 30, 2003 2002 2003 2002 ------------ ------------ ----------- ------------ Merchant revenues $ 236,943 $ 302,670 $ 435,551 $ 562,337 Agency revenues 1,476 211 2,481 429 Other revenues 1,147 1,575 2,021 3,575 ------------ ------------ ----------- ------------ Total revenues 239,566 304,456 440,053 566,341 Cost of merchant revenues 199,072 255,972 366,572 475,483 Cost of agency revenues - - - - Cost of other revenues - 336 - 717 ------------ ------------ ----------- ------------ Total costs of revenues 199,072 256,308 366,572 476,200 ------------ ------------ ----------- ------------ Gross profit 40,494 48,148 73,481 90,141 ------------ ------------ ----------- ------------ Operating expenses: Advertising 10,774 12,777 21,872 23,004 Sales and marketing 9,000 11,813 17,064 22,377 General and administrative, including option payroll taxes of $102 and $16 for the three months ended June 30, 2003 and 2002, respectively, and $102 and $120 for the six months ended June 30, 2003 and 2002, respectively 6,106 7,559 12,674 14,046 Stock based compensation 70 250 70 500 Systems and business development 5,578 6,275 10,508 12,603 Depreciation and amortization 2,787 4,490 6,699 8,948 Special charge (reversal) - (200) - (200) Restructuring charge (reversal) - - - (824) Severance charge (reversal) - (55) - (55) Warrant costs - - 6,638 - ------------ ------------ ----------- ------------ Total operating expenses 34,315 42,909 75,525 80,399 ------------ ------------ ----------- ------------ Operating income (loss) 6,179 5,239 (2,044) 9,742 Other income: Interest income 405 788 897 1,570 Equity in income of investees, net 1,105 245 1,105 737 Other - 37 - 1 ------------ ------------ ----------- ------------ Total other income 1,510 1,070 2,002 2,308 ------------ ------------ ----------- ------------ Net income (loss) 7,689 6,309 (42) 12,050 Preferred stock dividend - - (297) (1,854) ------------ ------------ ----------- ------------ Net income (loss) applicable to common stockholders $ 7,689 $ 6,309 $ (339) $ 10,196 ============ ============ =========== ============ Net income (loss) applicable to common stockholders per basic common share $ 0.20 $ 0.16 $ (0.01) $ 0.27 ============ ============ =========== ============ Weighted average number of basic common shares outstanding (1) 37,635 38,280 37,556 38,099 ============ ============ =========== ============ Net income (loss) applicable to common stockholders per diluted common share $ 0.20 $ 0.16 $ (0.01) $ 0.26 ============ ============ =========== ============ Weighted average number of diluted common shares outstanding (1) 39,284 39,917 37,556 39,924 ============ ============ =========== ============
(1) Reflects one-for-six reverse stock split. EX-99.2 4 a2115296zex-99_2.txt EXHIBIT 99.2 EXHIBIT 99.2 PRICELINE.COM REPORTS 2nd QUARTER 2003 FINANCIAL RESULTS 2nd QUARTER NET INCOME IS $7.7 MILLION, OR $0.20 PER SHARE Hotel service sells record 1.5 million room nights; room nights sold up 38% year over year NORWALK, Conn., July 24, 2003 . . . Priceline.com(R) (Nasdaq: PCLN) today reported 2nd quarter 2003 net income of $7.7 million, or $0.20 per share, on revenues of $239.6 million. Gross travel bookings, which refers to the total dollar value (inclusive of taxes and fees) of all travel products purchased by consumers, for the 2nd quarter were $297.1 million. Priceline.com's 2nd quarter EPS exceeded First Call analyst consensus of $0.14 per share, and came in ahead of priceline.com's previously announced target range of $0.12 to $0.18 per share. By comparison, in the 2nd quarter 2002, priceline.com had net income of $6.3 million, or $0.16 per share, on revenues of $304.5 million. Priceline.com's gross margin for the 2nd quarter 2003 was 16.9 percent, compared to 15.8 percent a year ago and 16.5 percent for the 1st quarter 2003. Priceline.com ended the 2nd quarter 2003 with $149.2 million in cash and short-term investments. The Company has no debt. During the 2nd quarter, priceline.com effected a 1-for-6 reverse stock split. By the end of the 2nd quarter, priceline.com's customer base grew to 17.8 million, which represents growth of approximately 22 percent over the past year. Repeat business for the quarter was 67.1 percent. (Repeat business is defined as the number of unique purchase offers coming from repeat customers divided by the number of total unique purchase offers). "Priceline.com's stronger than expected 2nd quarter results were attributable to several factors, including strong hotel, rental car and package results, a stabilization of our airline tickets business bolstered by improved leisure travel demand and growing sales of retail tickets, and contribution from our mortgage business," said priceline.com President and Chief Executive Officer Jeffery H. Boyd. During the 2nd quarter, priceline.com sold approximately 1.5 million hotel room nights, adding sequentially approximately 270,000 additional room nights from the 1st quarter. Hotel unit sales increased approximately 38 percent year over year, an increase over the 35 percent year-over-year growth rate experienced in the 1st quarter. "We believe the growing popularity of our hotel product is due to the success of our marketing campaign and the superior room inventory and pricing we receive from our hotel partners, which translates into savings that are better than those found on other leading travel sites, often by as much as 40 percent or more," said Mr. Boyd. Priceline.com's combined merchant and agency airline ticket gross bookings increased 16 percent sequentially in the 2nd quarter as the result of a slight sequential increase in opaque tickets sold and continued strong growth in retail ticket sales. The rental car business added over 192,000 rental car days sequentially in the 2nd quarter and unit sales were up 4 percent compared to 2nd quarter 2002. Package unit sales increased over 100 percent over last year's 2nd quarter. Finally, total agency (retail) bookings were $30 million in the 2nd quarter, up 44 percent sequentially and an increase of $26 million over 2nd quarter 2002. Priceline.com expects that growing retail bookings will be enhanced by its recent acquisition of Rentalcars.com and the offering of Travelweb LLC retail hotel inventory on Lowestfare.com, priceline.com's other retail site. "Retail bookings are growing as we add to our array of retail products and this trend, together with improved merchant margins, pushed priceline.com's total gross margins to a record 16.9 percent in the 2nd quarter," said Mr. Boyd. "Retail will continue to be an important part of our business, as it allows us to satisfy unbound Name Your Own Price(R) customers, offer a broad assortment of travel products when opaque inventories are constrained and appeal generally to a broader addressable consumer marketplace." The 2nd quarter 2003 benefited from $1.1 million of other income, which reflected a contribution from pricelinemortgage. That contribution was offset partially by early stage losses in Travelweb LLC, of which priceline.com is a part-owner. Pricelinemortgage had positive results in the quarter due to the continued attractive economic climate for refinancing, home equity loans and first-time mortgages. The mortgage business, which priceline.com jointly owns with First Alliance Bank, enables consumers to choose from sample rates or set their own terms, and guarantees that customers will get the best publicly available rate. Looking forward, Mr. Boyd said, "Priceline.com's 3rd quarter got off to a strong start in July, buoyed by strong seasonal leisure travel demand. Due to the accelerating growth experienced in our hotel and rental car businesses so far this month, we expect to achieve July revenues of approximately $93 to $95 million. We also expect year-over-year growth in hotel unit sales in the 3rd quarter at least equal to the 38 percent experienced in the 2nd quarter and we expect year-over-year growth in rental car unit sales to exceed that 38 percent rate. We now anticipate top-line revenue growth for the 3rd quarter of approximately 5 percent year-over-year, with targeted net income per share of $0.20 to $0.22. This target exceeds the current First Call analyst consensus of $0.15 per share. Net income applicable to common stockholders will be reduced by a non-cash preferred stock dividend of an estimated $0.03 per share in the 3rd quarter. For the 4th quarter, we are targeting a year-over-year revenue increase of approximately 5-10 percent and EPS of $0.08 to $0.12 per share, which also is above First Call analyst consensus of $0.07 per share." ABOUT PRICELINE.COM Priceline.com offers products for sale in two categories: a travel service that offers leisure airline tickets, hotel rooms, rental cars, packaged vacations and cruises; and a personal finance service that offers home mortgages, refinancing and home equity loans through an independent licensee. Priceline.com also owns travel Web sites Lowestfare.com and Rentalcars.com. Priceline.com is part-owner of Internet travel service Travelweb LLC. Priceline.com licenses its business model to independent licensees, including pricelinemortgage and certain international licensees. ### For press information, contact: Brian Ek 203-299-8167 (brian.ek@priceline.com) INFORMATION ABOUT FORWARD-LOOKING STATEMENTS This press release may contain forward-looking statements. These forward-looking statements are not guarantees of future performance and are subject to certain risks, uncertainties and assumptions that are difficult to predict; therefore, actual results may differ materially from those expressed, implied or forecasted in any such forward-looking statements. Expressions of future goals and similar expressions including, without limitation, "may," "will," "should," "could," "expects," "does not currently expect," "plans," "anticipates," "believes," "estimates," "predicts," "potential," "targets," or "continue," reflecting something other than historical fact are intended to identify forward-looking statements. The following factors, among others, could cause the Company's actual results to differ materially from those described in the forward-looking statements: adverse changes in general market conditions for leisure and other travel products as the result of, among other things, terrorist attacks; 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. 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 CONSOLIDATED BALANCE SHEETS (IN THOUSANDS, UNAUDITED)
JUNE 30, DECEMBER 31, ASSETS 2003 2002 ------------ ------------ Current assets: Cash and cash equivalents $ 69,292 $ 67,182 Restricted cash 16,869 18,248 Short-term investments 62,992 64,154 Accounts receivable, net of allowance for doubtful accounts of $1,256 and $1,262 at June 30, 2003 and December 31, 2002 23,565 13,636 Prepaid expenses and other current assets 8,158 6,348 ------------ ------------ Total current assets 180,876 169,568 Property and equipment, net 16,106 21,413 Goodwill 10,517 10,517 Other assets 21,507 9,664 ------------ ------------ Total assets $ 229,006 $ 211,162 ============ ============ LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $ 46,863 $ 35,375 Accrued expenses 23,296 27,889 Other current liabilities 2,134 2,063 ------------ ------------ Total current liabilities 72,293 65,327 Long-term accrued expenses 276 715 ------------ ------------ Total liabilities 72,569 66,042 ------------ ------------ SERIES B MANDATORILY REDEEMABLE PREFERRED STOCK 13,470 13,470 Stockholders' equity Common stock 303 1,884 Treasury stock (338,410) (338,410) Additional paid-in capital 2,048,785 2,033,944 Deferred compensation (1,619) - Accumulated deficit (1,566,208) (1,565,869) Accumulated other comprehensive income: Cumulative currency translation adjustment 116 101 ------------ ------------ Total stockholders' equity 142,967 131,650 ------------ ------------ Total liabilities and stockholders' equity $ 229,006 $ 211,162 ============ ============
PRICELINE.COM INCORPORATED CONSOLIDATED STATEMENTS OF OPERATIONS (IN THOUSANDS, EXCEPT PER SHARE DATA, UNAUDITED)
THREE MONTHS ENDED SIX MONTHS ENDED JUNE 30, JUNE 30, JUNE 30, JUNE 30, 2003 2002 2003 2002 ------------ ------------ ----------- ------------ Merchant revenues $ 236,943 $ 302,670 $ 435,551 $ 562,337 Agency revenues 1,476 211 2,481 429 Other revenues 1,147 1,575 2,021 3,575 ------------ ------------ ----------- ------------ Total revenues 239,566 304,456 440,053 566,341 Cost of merchant revenues 199,072 255,972 366,572 475,483 Cost of agency revenues - - - - Cost of other revenues - 336 - 717 ------------ ------------ ----------- ------------ Total costs of revenues 199,072 256,308 366,572 476,200 ------------ ------------ ----------- ------------ Gross profit 40,494 48,148 73,481 90,141 ------------ ------------ ----------- ------------ Operating expenses: Advertising 10,774 12,777 21,872 23,004 Sales and marketing 9,000 11,813 17,064 22,377 General and administrative, including option payroll taxes of $102 and $16 for the three months ended June 30, 2003 and 2002, respectively, and $102 and $120 for the six months ended June 30, 2003 and 2002, respectively 6,106 7,559 12,674 14,046 Stock based compensation 70 250 70 500 Systems and business development 5,578 6,275 10,508 12,603 Depreciation and amortization 2,787 4,490 6,699 8,948 Special charge (reversal) - (200) - (200) Restructuring charge (reversal) - - - (824) Severance charge (reversal) - (55) - (55) Warrant costs - - 6,638 - ------------ ------------ ----------- ------------ Total operating expenses 34,315 42,909 75,525 80,399 ------------ ------------ ----------- ------------ Operating income (loss) 6,179 5,239 (2,044) 9,742 Other income: Interest income 405 788 897 1,570 Equity in income of investees, net 1,105 245 1,105 737 Other - 37 - 1 ------------ ------------ ----------- ------------ Total other income 1,510 1,070 2,002 2,308 ------------ ------------ ----------- ------------ Net income (loss) 7,689 6,309 (42) 12,050 Preferred stock dividend - - (297) (1,854) ------------ ------------ ----------- ------------ Net income (loss) applicable to common stockholders $ 7,689 $ 6,309 $ (339) $ 10,196 ============ ============ =========== ============ Net income (loss) applicable to common stockholders per basic common share $ 0.20 $ 0.16 $ (0.01) $ 0.27 ============ ============ =========== ============ Weighted average number of basic common shares outstanding (1) 37,635 38,280 37,556 38,099 ============ ============ =========== ============ Net income (loss) applicable to common stockholders per diluted common share $ 0.20 $ 0.16 $ (0.01) $ 0.26 ============ ============ =========== ============ Weighted average number of diluted common shares outstanding (1) 39,284 39,917 37,556 39,924 ============ ============ =========== ============
(1) REFLECTS ONE-FOR-SIX REVERSE STOCK SPLIT [PRICELINE.COM LOGO] PRICELINE.COM INCORPORATED - 2003 SECOND QUARTER FINANCIAL DATA SUPPLEMENT
PAGE NUMBER ----------- PRICELINE.COM FINANCIALS Consolidated Statements of Operations 1 priceline.com Europe Ltd. Statement of Operations 2 Consolidated Balance Sheets 3 GROSS BOOKINGS 4 OFFER AND CUSTOMER ACTIVITY 5 PRODUCT DETAIL Air 6 Hotels 7 Rental Cars 8
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 CONSOLIDATED STATEMENTS OF OPERATIONS In thousands, except per share data (UNAUDITED)
INCOME STATEMENT ANALYSIS 1Q02 2Q02 3Q02 4Q02 1Q03 - ------------------------- ------------ ------------ ------------ ------------ ------------ Merchant revenues $ 259,667 $ 302,670 $ 237,961 $ 195,814 $ 198,608 Agency revenues 218 211 160 131 1,005 Other revenues 2,000 1,575 1,843 1,356 874 ------------ ------------ ------------ ------------ ------------ Total revenues 261,885 304,456 239,964 197,301 200,487 Cost of merchant revenues 219,511 255,972 201,949 166,710 167,500 Cost of agency revenues - - - - - Cost of other revenues 381 336 274 107 - ------------ ------------ ------------ ------------ ------------ Total costs of revenues 219,892 256,308 202,223 166,817 167,500 ------------ ------------ ------------ ------------ ------------ Gross profit $ 41,993 $ 48,148 $ 37,741 $ 30,484 $ 32,987 ------------ ------------ ------------ ------------ ------------ Operating expenses: Advertising 10,227 12,777 11,649 10,011 11,098 Sales and marketing 10,564 11,813 9,145 6,555 8,064 General and administrative 6,383 7,543 7,218 7,027 6,568 Option payroll taxes 104 16 - - - Stock based compensation 250 250 250 250 - Systems and business development 6,328 6,275 5,529 5,550 4,930 Depreciation and amortization 4,458 4,490 4,850 4,466 3,912 Special charge/(reversal) - (200) - - - Restructuring charge/(reversal) (824) - (92) 4,654 - Severance charge/(reversal) - (55) - - - Impairment charge - - 24,229 - - Warrant costs - - - - 6,638 ------------ ------------ ------------ ------------ ------------ Total operating expenses $ 37,490 $ 42,909 $ 62,778 $ 38,513 $ 41,210 Operating income (loss) $ 4,503 $ 5,239 $ (25,037) $ (8,029) $ (8,223) Other income (expenses): Interest income 782 788 656 617 492 Equity in income of investees, net 492 245 394 - - Other (36) 37 164 1 - ------------ ------------ ------------ ------------ ------------ Total other income $ 1,238 $ 1,070 $ 1,214 $ 618 $ 492 Net income (loss) $ 5,741 $ 6,309 $ (23,823) $ (7,411) $ (7,731) Preferred stock dividend (1,854) - (490) - (297) ------------ ------------ ------------ ------------ ------------ Net income (loss) applicable to common stockholders $ 3,887 $ 6,309 $ (24,313) $ (7,411) $ (8,028) ============ ============ ============ ============ ============ Net income (loss) applicable to common stockholders per basic common share $ 0.10 $ 0.16 $ (0.64) $ (0.20) $ (0.21) ============ ============ ============ ============ ============ Net income (loss) applicable to common stockholders per diluted common share $ 0.10 $ 0.16 $ (0.64) $ (0.20) $ (0.21) ============ ============ ============ ============ ============ (1) Weighted average common shares: Basic 37,917 38,280 37,879 37,452 37,477 Diluted 39,995 39,917 37,879 37,452 37,477 Common shares outstanding, end of period 38,257 38,298 37,451 37,452 37,495 GROSS MARGIN 16.0% 15.8% 15.7% 15.5% 16.5% 2Q03 VS. 6 MONTHS 6 MONTHS 6 MOS. 2003 VS. INCOME STATEMENT ANALYSIS 2Q03 2Q02 2003 2002 6 MOS. 2002 - ------------------------- ------------ ------------ ------------ ------------ --------------- Merchant revenues $ 236,943 -22% $ 435,551 $ 562,337 -23% Agency revenues 1,476 600% 2,481 429 478% Other revenues 1,147 -27% 2,021 3,575 -43% ------------ ------------ ------------ ------------ Total revenues 239,566 -21% 440,053 566,341 -22% Cost of merchant revenues 199,072 -22% 366,572 475,483 -23% Cost of agency revenues - - - - - Cost of other revenues - -100% - 717 -100% ------------ ------------ ------------ ------------ Total costs of revenues 199,072 -22% 366,572 476,200 -23% ------------ ------------ ------------ ------------ Gross profit $ 40,494 -16% $ 73,481 $ 90,141 -18% ------------ ------------ ------------ ------------ Operating expenses: Advertising 10,774 -16% 21,872 23,004 -5% Sales and marketing 9,000 -24% 17,064 22,377 -24% General and administrative 6,004 -20% 12,572 13,926 -10% Option payroll taxes 102 538% 102 120 -15% Stock based compensation 70 -72% 70 500 -86% Systems and business development 5,578 -11% 10,508 12,603 -17% Depreciation and amortization 2,787 -38% 6,699 8,948 -25% Special charge/(reversal) - -100% - (200) -100% Restructuring charge/(reversal) - - - (824) -100% Severance charge/(reversal) - -100% - (55) -100% Impairment charge - - - - - Warrant costs - - 6,638 - - ------------ ------------ ------------ ------------ Total operating expenses $ 34,315 -20% $ 75,525 $ 80,399 -6% Operating income (loss) $ 6,179 18% $ (2,044) $ 9,742 -121% Other income (expenses): Interest income 405 -49% 897 1,570 -43% Equity in income of investees, net 1,105 351% 1,105 737 50% Other - -100% - 1 -100% ------------ ------------ ------------ ------------ Total other income $ 1,510 41% $ 2,002 $ 2,308 -13% Net income (loss) $ 7,689 22% $ (42) $ 12,050 -100% Preferred stock dividend - - (297) (1,854) -84% ------------ ------------ ------------ ------------ Net income (loss) applicable to common stockholders $ 7,689 22% $ (339) $ 10,196 -103% ============ ============ ============ ============ Net income (loss) applicable to common stockholders per basic common share $ 0.20 25% $ (0.01) $ 0.27 104% ============ ============ ============ ============ Net income (loss) applicable to common stockholders per diluted common share $ 0.20 25% $ (0.01) $ 0.26 104% ============ ============ ============ ============ ============ (1) Weighted average common shares: Basic 37,635 -2% 37,556 38,099 -1% Diluted 39,284 -2% 37,556 39,924 -6% Common shares outstanding, end of period 37,925 -1% 37,925 38,298 -1% GROSS MARGIN 16.9% 16.7% 15.9%
(1) Reflects one-for-six reverse stock split. Page 1 PRICELINE.COM EUROPE LTD. STATEMENTS OF OPERATIONS (1) In thousands, except per share data (UNAUDITED)
INCOME STATEMENT ANALYSIS 1Q02 2Q02 3Q02 4Q02 1Q03 2Q03 - ------------------------- ---------- ---------- ---------- ---------- ---------- ---------- Merchant revenues $ 3,075 $ 3,180 $ 2,909 $ 1,894 $ 1,102 $ 957 Agency revenues 1 - - - 39 35 Other revenues 14 - - - - - ---------- ---------- ---------- ---------- ---------- ---------- Total revenues 3,090 3,180 2,909 1,894 1,141 992 Cost of merchant revenues 2,647 2,882 2,574 1,644 971 850 Cost of agency revenues - - - - - - Cost of other revenues - - - - - - ---------- ---------- ---------- ---------- ---------- ---------- Total costs of revenues 2,647 2,882 2,574 1,644 971 850 ---------- ---------- ---------- ---------- ---------- ---------- Gross profit $ 443 $ 298 $ 335 $ 250 $ 170 $ 142 ---------- ---------- ---------- ---------- ---------- ---------- Operating expenses: Advertising 36 301 245 272 63 22 Sales and marketing 317 298 324 300 117 99 General and administrative 1,140 957 1,393 1,129 640 552 Systems and business development 675 495 510 460 146 52 Depreciation and amortization 184 174 175 177 27 - Restructuring charge - - - 1,790 - - ---------- ---------- ---------- ---------- ---------- ---------- Total operating expenses $ 2,352 $ 2,225 $ 2,647 $ 4,128 $ 993 $ 725 Operating loss $ (1,909) $ (1,927) $ (2,312) $ (3,878) $ (823) $ (583) Other income: Interest income 6 4 6 3 1 2 Other - - 1 - - - ---------- ---------- ---------- ---------- ---------- ---------- Total other income $ 6 $ 4 $ 7 $ 3 $ 1 $ 2 Net loss $ (1,903) $ (1,923) $ (2,305) $ (3,875) $ (822) $ (581) ========== ========== ========== ========== ========== ========== Net loss per parent basic and diluted share $ (0.05) $ (0.05) $ (0.06) $ (0.10) $ (0.02) $ (0.02) ========== ========== ========== ========== ========== ========== (2) Weighted average common shares: Basic 37,917 38,280 37,879 37,452 37,477 37,635 Diluted 39,995 39,917 37,879 37,452 37,477 39,284 ---------- ---------- ---------- ---------- ---------- ---------- GROSS MARGIN 14.3% 9.4% 11.5% 13.2% 14.9% 14.3% 2Q03 VS. 6 MONTHS 6 MONTHS 6 MOS. 2003 VS. INCOME STATEMENT ANALYSIS 2Q02 2003 2002 6 MOS. 2002 - ------------------------- ---------- ---------- ---------- --------------- Merchant revenues -70% $ 2,059 $ 6,255 -67% Agency revenues - 74 1 7300% Other revenues - - 14 -100% ---------- ---------- Total revenues -69% 2,133 6,270 -66% Cost of merchant revenues -71% 1,821 5,529 -67% Cost of agency revenues - - - - Cost of other revenues - - - - ---------- ---------- Total costs of revenues -71% 1,821 5,529 -67% ---------- ---------- Gross profit -52% $ 312 $ 741 -58% ---------- ---------- Operating expenses: Advertising -93% 85 337 -75% Sales and marketing -67% 216 615 -65% General and administrative -42% 1,192 2,097 -43% Systems and business development -89% 198 1,170 -83% Depreciation and amortization -100% 27 358 -92% Restructuring charge - - - - ---------- ---------- Total operating expenses -67% $ 1,718 $ 4,577 -62% Operating loss -70% $ (1,406) $ (3,836) -63% Other income: Interest income -50% 3 10 -70% Other - - - - ---------- ---------- Total other income -50% $ 3 $ 10 -70% Net loss -70% $ (1,403) $ (3,826) -63% ========== ========== Net loss per parent basic and diluted share -60% $ (0.04) $ (0.10) -60% ========== ========== (2) Weighted average common shares: Basic -2% 37,556 38,099 -1% Diluted -2% 37,556 39,924 -6% ---------- ---------- GROSS MARGIN 14.6% 11.8%
(1) Does not include certain intercompany consolidation adjustments. (2) Reflects one-for-six reverse stock split. Page 2 PRICELINE.COM INCORPORATED CONSOLIDATED BALANCE SHEETS IN THOUSANDS (UNAUDITED)
ASSETS 3/31/2002 6/30/2002 9/30/2002 ----------- ----------- ----------- CURRENT ASSETS: Cash and cash equivalents $ 92,051 $ 98,140 $ 66,857 Restricted cash 17,454 19,573 18,174 Short-term investments 68,327 62,458 67,478 Accounts receivable, net of allowance for doubtful accounts 20,218 21,977 16,654 Prepaid expenses and other current assets 10,544 8,640 9,068 ----------- ----------- ----------- Total current assets 208,594 210,788 178,231 PROPERTY AND EQUIPMENT, net 31,291 28,205 25,279 GOODWILL 22,535 22,535 10,517 OTHER ASSETS 19,731 20,606 9,791 ----------- ----------- ----------- TOTAL ASSETS $ 282,151 $ 282,134 $ 223,818 =========== =========== =========== LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES: Accounts payable $ 62,177 $ 55,422 $ 40,972 Accrued expenses 31,750 32,318 25,861 Other current liabilities 5,050 4,954 3,495 ----------- ----------- ----------- Total current liabilities 98,977 92,694 70,328 Long-term accrued expenses 2,365 1,483 1,001 ----------- ----------- ----------- Total liabilities 101,342 94,177 71,329 ----------- ----------- ----------- SERIES B MANDATORILY REDEEMABLE PREFERRED STOCK 13,470 13,470 13,470 ----------- ----------- ----------- STOCKHOLDERS' EQUITY: Common stock 1,880 1,882 1,884 Treasury stock (326,633) (326,633) (338,410) Additional paid-in capital 2,032,547 2,033,313 2,033,938 Deferred compensation - - - Accumulated deficit (1,540,455) (1,534,145) (1,558,458) Accumulated other comprehensive income: Cumulative currency translation adjustment - 70 65 ----------- ----------- ----------- Total stockholders' equity 167,339 174,487 139,019 ----------- ----------- ----------- TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 282,151 $ 282,134 $ 223,818 =========== =========== =========== ASSETS 12/31/2002 3/31/2003 6/30/2003 ----------- ----------- ----------- CURRENT ASSETS: Cash and cash equivalents $ 67,182 $ 52,560 $ 69,292 Restricted cash 18,248 17,025 16,869 Short-term investments 64,154 70,194 62,992 Accounts receivable, net of allowance for doubtful accounts 13,636 16,106 23,565 Prepaid expenses and other current assets 6,348 6,243 8,158 ----------- ----------- ----------- Total current assets 169,568 162,128 180,876 PROPERTY AND EQUIPMENT, net 21,413 17,690 16,106 GOODWILL 10,517 10,517 10,517 OTHER ASSETS 9,664 17,923 21,507 ----------- ----------- ----------- TOTAL ASSETS $ 211,162 $ 208,258 $ 229,006 =========== =========== =========== LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES: Accounts payable $ 35,375 $ 36,020 $ 46,863 Accrued expenses 27,889 24,983 23,296 Other current liabilities 2,063 2,833 2,134 ----------- ----------- ----------- Total current liabilities 65,327 63,836 72,293 Long-term accrued expenses 715 422 276 ----------- ----------- ----------- Total liabilities 66,042 64,258 72,569 ----------- ----------- ----------- SERIES B MANDATORILY REDEEMABLE PREFERRED STOCK 13,470 13,470 13,470 ----------- ----------- ----------- STOCKHOLDERS' EQUITY: Common stock 1,884 1,886 303 Treasury stock (338,410) (338,410) (338,410) Additional paid-in capital 2,033,944 2,040,850 2,048,785 Deferred compensation - - (1,619) Accumulated deficit (1,565,869) (1,573,897) (1,566,208) Accumulated other comprehensive income: Cumulative currency translation adjustment 101 101 116 ----------- ----------- ----------- Total stockholders' equity 131,650 130,530 142,967 ----------- ----------- ----------- TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 211,162 $ 208,258 $ 229,006 =========== =========== ===========
Page 3 PRICELINE.COM INCORPORATED GROSS BOOKINGS
2Q03 VS. 1Q02 2Q02 3Q02 4Q02 1Q03 2Q03 2Q02 ------------- ------------- ------------- ------------- ------------- ------------- ------------- Merchant $ 302,563,553 $ 351,038,533 $ 271,921,795 $ 218,100,177 $ 226,738,785 $ 267,038,521 -24% Agency 4,250,791 3,744,496 3,385,312 10,227,969 20,777,964 30,022,691 702% ------------- ------------- ------------- ------------- ------------- ------------- ------------- Total $ 306,814,344 $ 354,783,029 $ 275,307,107 $ 228,328,146 $ 247,516,749 $ 297,061,212 -16%
GROSS BOOKINGS REPRESENT THE TOTAL VALUE OF TRAVEL BOOKED THROUGH THE PRICELINE.COM AND LOWESTFARE.COM SITES. THE INFORMATION INCLUDED ABOVE IS FOR U.S. OPERATIONS ONLY. Page 4 PRICELINE.COM INCORPORATED OFFER AND CUSTOMER ACTIVITY
2Q03 VS. UNIQUE OFFERS: 1Q02 2Q02 3Q02 4Q02 1Q03 2Q03 2Q02 - -------------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- New Customer Offers 874,792 964,464 825,026 759,465 749,009 902,013 -6% Repeat Customer Offers 1,530,745 1,819,872 1,707,494 1,496,970 1,488,906 1,842,387 1% Total Unique Offers 2,405,537 2,784,336 2,532,520 2,256,435 2,237,915 2,744,400 -1% Repeat customer offers/ total unique offers 63.6% 65.4% 67.4% 66.3% 66.5% 67.1% CUSTOMERS New Customers 874,792 964,464 825,026 759,465 749,009 902,013 -6% Cumulative Customers 13,567,403 14,531,867 15,356,893 16,116,358 16,865,367 17,767,380 22%
THE INFORMATION INCLUDED ABOVE IS FOR U.S. OPERATIONS, AND INCLUDES MERCHANT OPAQUE TRANSACTIONS ONLY. Page 5 PRICELINE.COM INCORPORATED AIR
2Q03 VS. 1Q02 2Q02 3Q02 4Q02 1Q03 2Q03 2Q02 ---------- ---------- ---------- ---------- ---------- ---------- ---------- Tickets Sold 866,643 921,201 643,659 468,926 439,270 446,143 -52% Net Unique Offers 1,391,478 1,533,442 1,195,664 1,225,988 1,107,329 1,274,139 -17% Offers Booked 580,555 619,590 441,406 341,244 302,306 303,668 -51% Bind Rate 41.7% 40.4% 36.9% 27.8% 27.3% 23.8%
BIND RATE = OFFERS BOOKED/NET UNIQUE OFFERS THE INFORMATION INCLUDED ABOVE IS FOR U.S. OPERATIONS, AND INCLUDES MERCHANT OPAQUE TRANSACTIONS ONLY. Page 6 PRICELINE.COM INCORPORATED HOTELS
2Q03 VS. 1Q02 2Q02 3Q02 4Q02 1Q03 2Q03 2Q02 ---------- ---------- ---------- ---------- ---------- ---------- ---------- Room Nights Sold 909,107 1,089,586 1,144,988 961,124 1,229,887 1,499,512 38% Net Unique Offers 629,145 812,285 931,323 748,200 878,619 1,143,870 41% Offers Booked 417,306 499,065 539,899 463,434 578,867 711,421 43% Bind Rate 66.3% 61.4% 58.0% 61.9% 65.9% 62.2%
BIND RATE = OFFERS BOOKED/NET UNIQUE OFFERS THE INFORMATION INCLUDED ABOVE IS FOR U.S. OPERATIONS, AND INCLUDES MERCHANT OPAQUE TRANSACTIONS ONLY. Page 7 PRICELINE.COM INCORPORATED RENTAL CARS
2Q03 VS. 1Q02 2Q02 3Q02 4Q02 1Q03 2Q03 2Q02 ---------- ---------- ---------- ---------- ---------- ---------- ---------- Days Sold 738,021 793,616 741,167 555,465 635,676 827,809 4% Net Unique Offers 303,611 335,059 302,554 244,278 251,967 326,391 -3% Offers Booked 139,776 148,483 143,593 110,482 127,147 163,150 10% Bind Rate 46.0% 44.3% 47.5% 45.2% 50.5% 50.0%
BIND RATE = OFFERS BOOKED/NET UNIQUE OFFERS THE INFORMATION INCLUDED ABOVE IS FOR U.S. OPERATIONS, AND INCLUDES MERCHANT OPAQUE TRANSACTIONS ONLY. Page 8 -----END PRIVACY-ENHANCED MESSAGE-----