Exhibit 99.1
Priceline.com Reports Strong Sequential Growth In 1st Quarter 2001, Re-
Affirms Profitability Expectations For 2nd Quarter
NORWALK, Conn., May 1, 2001 . . . Priceline.com (Nasdaq: PCLN) today
reported that revenue for the 1st quarter 2001 rose to $269.7 million, an
increase of 18% over 4th quarter 2000 and comfortably within the Company's
previously announced guidance. Gross margin for the 1st quarter 2001 was a
record-high 16%, compared to 15.4% in the 4th quarter 2000. Gross profit rose to
$43.1 million, a 23% increase over 4th quarter 2000. Pro forma net loss for the
1st quarter 2001 was $6.2 million, or $0.03 per share, which represents a 12
cent per share improvement over the 4th quarter 2000. Pro forma net loss is
stated before restructuring and special charges, and excludes option payroll
taxes, amortization of stock-based compensation charges and loss on sale of
stock.
Priceline.com added 891,490 new customers during the 1st quarter, with
sequential increases in new customers through each month of the quarter. In
total, priceline.com has built a base of nearly 10 million U.S. customers.
Repeat business for the 1st quarter 2001 was a record 58%, defined as the number
of unique purchase offers coming from repeat customers divided by the number of
total unique purchase offers. Repeat and new customer demand accelerated through
the 1st quarter 2001.
Earlier this year, priceline.com said it expected 2nd quarter 2001 revenue to
increase 10% to 15% over 1st quarter 2001 revenue. Based on 1st quarter 2001
performance and preliminary results in April, the Company re-affirmed those
projections today and said that it expects to report its first pro forma
operating profit for the 2nd quarter 2001. Pro forma operating profit excludes
restructuring charges, option payroll taxes and amortization of stock-based
compensation charges.
Priceline.com also reported that, in the 1st quarter 2001, it sold a combined
2,115,775 units of travel products, which consist of airline tickets, hotel room
nights and rental car days. By comparison, priceline.com sold 1,698,941 units of
travel products in the 4th quarter 2000.
"Priceline.com was successful in achieving strong sequential improvements in key
financial metrics," said priceline.com's President and CEO Daniel H. Schulman.
"We are also delighted that our brand continues to rebound, as evidenced by
increasing numbers of new and repeat customers throughout the quarter. These
achievements reflect a concentrated and ongoing company-wide effort to execute
on what we have publicly referred to as our 6-point turnaround plan. In each
area of the plan, we believe we have achieved tangible results and demonstrable
improvements in the 1st quarter."
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Significant 1st quarter 2001 accomplishments include:
o Priceline.com continued to focus on its core businesses,
particularly travel. An innovative new advertising campaign focusing
on priceline.com's travel products and the benefits of using the
Company's Name Your Own Price travel services was rolled out during
the quarter. According to independent 3rd party measurements,
priceline.com as a travel and e-commerce brand continues to be
differentiated among consumers as being the best deal and a smarter
way to buy.
Priceline.com also launched an extension of its travel products for
last-minute travelers. Now, priceline.com customers can purchase
airline tickets up until 11:00 p.m. (EST) for travel the next day.
They can purchase hotel rooms up until 6:00 p.m. for use that same
night. They can purchase rental cars with as little as four hours
advance notice.
o Priceline.com continued to improve its service performance and
customer operations. During the 1st quarter, priceline.com launched
a new graphics interface for its Web site. In addition to being more
colorful and friendlier, the site makes it even easier and faster to
make a purchase offer. Priceline continues generally to respond to
purchase offers in 15 minutes or less, with an average response time
of 4 minutes. Through improvements in Web site disclosure and IVR
enhancements, the number of customer service contacts continues to
decline. When customers do contact priceline.com customer service,
approximately 80% of all incoming calls are answered within 30
seconds, while over 80% of all incoming e-mails are answered within
three hours.
o Priceline.com continued to make progress toward profitability during
the 1st quarter by further reducing administrative costs and
leveraging operating efficiencies. The Company now believes that it
will exceed its original target of $35 million in operating expense
reductions. Total headcount has been reduced from a high of 538
employees in the 4th quarter 2000 to 344 employees at the end of the
1st quarter 2001. Revenue per employee on an annualized basis is now
$3.13 million.
o Priceline.com continued to improve its balance sheet during the 1st
quarter. In early February, the Company announced that Delta Air
Lines had agreed to restructure its investment in priceline.com. The
restructuring reduced priceline.com's outstanding preferred stock by
$280 million and significantly reduced the Company's dividend
requirement. Also in February, priceline.com announced that
Hutchison Whampoa Limited and Cheung Kong (Holdings) Limited made a
$50 million investment in priceline.com. The Company said that it
ended the 1st quarter 2001 with approximately $142 million in cash.
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Looking forward, Mr. Schulman said, "While we are still in a turnaround mode, we
are encouraged by the fact that our key customer and financial metrics grew
stronger as the 1st quarter went on. Based on our preliminary results in April,
we are once again affirming that we expect our first pro forma operating profit
in the 2nd quarter 2001. Priceline.com offers real value to our customers and
suppliers. That is why we feel confident about our long-term role in the
Internet space."
About priceline.com
Priceline.com is the Name Your Own Pricesm Internet pricing system that provides
services across 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.
# # #
For press information, contact:
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. 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; the Company's ability to
protect its intellectual property rights; the effects of increased competition;
losses by the Company and its licensees; any adverse impact from negative
publicity and negative customer reaction relating to recent announcements
concerning the Company; 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.
[LOGO] priceline.com
priceline.com - 2001 FIRST QUARTER FINANCIAL DATA SUPPLEMENT
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Page Number
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priceline.com Financials
Pro Forma Condensed Statement of Operations 1
Condensed Balance Sheet 2
Offer and Customer Activity 3
Product Detail
Air 4
Hotels 5
Rental Cars 6
This supplement is unaudited and intended as a supplement to, and should be read
in conjunction with, the Company's audited financial statements and the notes
thereto filed with the SEC on Form 10-K and quarterly financial statements filed
with the SEC on Form 10-Q. Certain data have been reclassified in order to
conform historical information in a manner consistent with current presentation
and has not been audited in this form. Certain presentations within this
supplement are not consistent with Generally Accepted Accounting Principles.
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priceline.com Inc.
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Pro Forma Condensed Statement of Operations
In thousands, except per share amounts
(Unaudited)
1Q01 vs.
Income Statement Analysis 1Q00 2Q00 3Q00 4Q00 1Q01 4Q00
- ------------------------- ---------- ---------- ---------- ---------- ---------- --------
Travel revenues $311,607 $346,822 $335,699 $223,032 $267,020 20%
Other revenues 2,191 5,273 5,635 5,137 2,684 -48%
---------- ---------- ---------- ---------- ----------
Total revenues 313,798 352,095 341,334 228,169 269,704 18%
Cost of travel revenues 264,670 296,386 285,753 191,973 225,496 17%
Cost of other revenues 101 533 1,146 1,141 1,093 -4%
---------- ---------- ---------- ---------- ----------
Total costs of revenues 264,771 296,919 286,899 193,114 226,589 17%
---------- ---------- ---------- ---------- ----------
Gross profit $49,027 $55,176 $54,435 $35,055 $43,115 23%
---------- ---------- ---------- ---------- ----------
Operating expenses:
Advertising 20,339 13,826 14,175 18,865 16,189 -14%
Sales and marketing 20,110 23,791 21,394 15,633 14,434 -8%
General and administrative 12,704 15,222 11,934 12,334 9,404 -24%
Systems and business development 5,868 6,695 11,420 15,209 11,112 -27%
---------- ---------- ---------- ---------- ----------
Total operating expenses $59,021 $59,534 $58,923 $62,041 $51,139 -18%
Operating loss ($9,994) ($4,358) ($4,488) ($26,986) ($8,024) -70%
Interest income 2,715 2,725 2,264 1,983 1,776 -10%
---------- ---------- ---------- ---------- ----------
Net loss ($7,279) ($1,633) ($2,224) ($25,003) ($6,248) -75%
=========================================================================
Pro forma net loss per share ($0.04) ($0.01) ($0.01) ($0.15) ($0.03) -78%
=========================================================================
Recurring supplier warrant costs (381) (381) (381) (381) 0 -100%
One-time supplier warrant costs 0 0 0 (8,595) 0 -100%
Special charge 0 0 0 (34,824) 0 -100%
Restructuring charge 0 0 0 (32,006) (1,400) -96%
Stock based compensation 0 0 0 (1,711) (5,157) 201%
Option payroll taxes (5,907) (2,507) (349) (25) (23) -8%
Preferred stock dividend 0 (7,191) (7,191) 0 0 -
WebHouse club warrants 0 0 (189,000) 0 0 -
Gain/(loss) on sale of stock 0 0 32 (2,590) (946) -63%
---------- ---------- ---------- ---------- ----------
Net loss ($13,567) ($11,712) ($199,113) ($105,135) ($13,774) -87%
========== ========== ========== ========== ==========
Net loss applicable to common shareholders ($0.08) ($0.07) ($1.19) ($0.62) ($0.07) -88%
========== ========== ========== ========== ==========
Weighted average common shares 166,467 165,399 167,059 168,662 188,589 12%
Common shares outstanding, end of period 170,162 166,549 167,806 168,898 200,843 19%
- ------------------------------------------------------------------------------------------------------------------------------------
Gross margin 15.6% 15.7% 15.9% 15.4% 16.0%
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Condensed Balance Sheet
In thousands
(Unaudited)
ASSETS 3/31/2000 6/30/2000 9/30/2000 12/31/2000 3/31/2001
----------- ----------- ----------- ----------- -----------
CURRENT ASSETS:
Cash and cash equivalents $ 118,528 $ 86,875 $ 92,751 $ 77,024 $ 98,698
Restricted cash 7,327 8,559 11,750 13,568 17,514
Short-term investments 23,625 43,273 26,122 10,952 26,394
Accounts receivable, net of allowance for doubtful accounts 52,751 38,993 24,199 13,889 20,706
Related party receivable 108 3,771 5,532 -- --
Prepaid expenses and other current assets 15,782 27,182 20,755 15,790 15,187
----------- ----------- ----------- ----------- -----------
Total current assets 218,121 208,653 181,109 131,223 178,499
PROPERTY AND EQUIPMENT, net 37,130 41,592 46,257 37,083 35,861
RELATED PARTY RECEIVABLE 13,404 15,789 15,089 3,503 3,183
WARRANTS TO PURCHASE COMMON STOCK OF LICENSEES 189,000 192,250 3,250 3,250 3,250
OTHER ASSETS 25,062 34,554 39,868 20,019 19,769
----------- ----------- ----------- ----------- -----------
TOTAL ASSETS $ 482,717 $ 492,838 $ 285,573 $ 195,078 $ 240,562
=========== =========== =========== =========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $ 59,411 $ 73,292 $ 59,447 $ 40,691 $ 51,377
Preferred stock dividends payable -- 7,191 14,382 -- --
Accrued expenses 13,766 15,998 17,324 33,172 26,630
Other current liabilities 4,280 4,454 3,739 5,434 4,978
----------- ----------- ----------- ----------- -----------
Total current liabilities 77,457 100,935 94,892 79,297 82,985
Accrued expenses -- -- -- 5,108 4,747
----------- ----------- ----------- ----------- -----------
Total liabilities 77,457 100,935 94,892 84,405 87,732
----------- ----------- ----------- ----------- -----------
MANDATORILY REDEEMABLE CONVERTIBLE PREFERRED STOCK -- 359,580 359,580 359,580 --
MANDATORILY REDEEMABLE PREFERRED STOCK -- -- -- -- 80,000
----------- ----------- ----------- ----------- -----------
STOCKHOLDERS' EQUITY:
Common stock 1,361 1,380 1,390 1,454 1,650
Treasury stock -- (359,580) (359,580) (326,633) (326,633)
Additional paid-in capital 1,591,880 1,593,961 1,595,228 1,618,956 1,948,533
Deferred compensation -- -- -- (13,053) (8,471)
Accumulated other comprehensive income 5,969 2,224 (1,162) (1,156) --
Accumulated deficit (1,193,950) (1,205,662) (1,404,775) (1,528,475) (1,542,249)
----------- ----------- ----------- ----------- -----------
Total stockholders' equity/(deficiency) 405,260 32,323 (168,899) (248,907) 72,830
----------- ----------- ----------- ----------- -----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 482,717 $ 492,838 $ 285,573 $ 195,078 $ 240,562
=========== =========== =========== =========== ===========
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Offer and Customer Activity
1Q01 vs.
Unique Offers: 1Q00 2Q00 3Q00 4Q00 1Q01 4Q00
- -------------- ----------- ----------- ----------- ----------- ----------- ----------
New Customer Offers 1,504,685 1,509,416 1,344,025 883,862 891,490 1%
Repeat Customer Offers 833,388 964,350 1,417,840 1,057,738 (1) 1,217,217 15%
Total Unique Offers 2,338,073 2,473,766 2,761,865 1,941,600 (1) 2,108,707 9%
Repeat customer offers/ 35.6% 39.0% 51.3% 54.5% (1) 57.7%
total unique offers
Customers
New Customers 1,504,685 1,509,416 1,344,025 883,862 891,490 1%
Cumulative Customers 5,257,357 6,766,773 8,110,798 8,994,660 9,886,150 10%
(1) - Repeat customer offers, total unique offers, and the repeat offer rate
for the fourth quarter for Hotel and Rental Car Services have been
restated from the fourth quarter financial data supplement to eliminate
certain duplicate offers.
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Air
1Q01 vs.
1Q00 2Q00 3Q00 4Q00 1Q01 4Q00
----------- ----------- ----------- ----------- ----------- ----------
Tickets Sold 1,250,416 1,288,592 1,290,096 809,327 1,075,555 33%
Net Unique Offers 1,820,918 1,753,273 1,756,236 1,242,967 1,392,747 12%
Offers Booked 801,204 869,408 886,135 590,088 709,576 20%
Bind Rate 44.0% 49.6% 50.5% 47.5% 50.9%
bind rate = offers booked/net unique offers
Air product was launched on April 6, 1998
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Hotels
1Q01 vs.
1Q00 2Q00 3Q00 4Q00 1Q01 4Q00
----------- ----------- ----------- ----------- ----------- ----------
Room Nights Sold 409,514 432,463 526,450 367,372 432,884 18%
Net Unique Offers 383,708 431,249 511,396 319,501 (2) 351,952 10%
Offers Booked 180,343 195,517 244,655 176,712 (2) 188,278 7%
Bind Rate 47.0% 45.3% 47.8% 55.3% (2) 53.5%
bind rate = offers booked/net unique offers
Hotel product was launched on October 28, 1998
(2) - Net unique offers, offers booked, and the bind rate for the fourth
quarter have been restated from the fourth quarter financial data
supplement to eliminate certain duplicate offers.
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Rental Cars
1Q01 vs.
1Q00 2Q00 3Q00 4Q00 1Q01 4Q00
----------- ----------- ----------- ----------- ----------- ----------
Days Sold 229,998 429,622 579,866 522,242 607,336 16%
Net Unique Offers 90,639 175,878 217,760 207,436 (3) 229,581 11%
Offers Booked 37,706 70,351 107,058 93,757 (3) 105,970 13%
Bind Rate 41.6% 40.0% 49.2% 45.2% (3) 46.2%
bind rate = offers booked/net unique offers
Rental Car product was launched on February 3, 2000
(3) - See note (2).
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