Exhibit 99.1
Priceline.com Reports
Second Quarter 1999 Financial Results
. . . Revenues increase to $111.6 million, a 126% increase over previous quarter
. . . Gross profit increases to $10.5 million, a 96% increase over previous
quarter
. . . Continental Airlines joins priceline.com's leisure airline ticket service
. . . Over 2,000,000 unique customers use priceline.com's travel, home finance
and automotive services in Company's first 15 months of operation
STAMFORD, Conn., July 19, 1999 . . . Priceline.com (Nasdaq: PCLN), the
patented Internet pricing system that enables consumers to save money by naming
their own price for a variety of travel, automotive and home finance products,
today reported revenue of $111.6 million for the second quarter ended June 30,
1999, a 126% increase over revenue of $49.4 million for the first quarter ended
March 31, 1999, and a 1,489% increase over revenue of $7.0 million for the same
period in 1998.
Gross profit for the second quarter of 1999 was $10.5 million, a 96% increase
over a gross profit of $5.4 million for first quarter 1999. In the second
quarter of 1998, the Company had a gross loss of $0.9 million.
Operating loss for the second quarter of 1999 was $16.2 million, compared to an
operating loss of $17.6 million for the first quarter of 1999. Net loss for the
second quarter of 1999 was $14.3 million, or $.10 per common share outstanding,
a 17% improvement from the net loss of $17.2 million for the first quarter of
1999. Excluding in both periods the effect of non-cash supplier warrant charges,
the net loss for the second quarter of 1999 was $13.9 million, compared to a net
loss of $16.8 million for the first quarter of 1999.
Quarter Ended Quarter Ended
June 30, 1999 March 31, 1999
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Revenues $111.6 million $49.4 million
Gross Profit $10.5 million $5.4 million
Operating Loss $(16.2) million $(17.6) million
Net Loss $(14.3) million $(17.2) million
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"This dramatic growth in the business further substantiates the appeal of the
priceline.com concept among consumers and brand-name companies across a number
of industries," said priceline.com Chairman and CEO Richard S. Braddock. "By
giving consumers the ability to leverage their brand flexibility for savings,
and giving businesses a new way to move inventory without disrupting retail
sales channels, priceline.com offers a powerful new form of commerce that
works."
Customer and Business Developments
In total, priceline.com collected approximately 1,030,000 guaranteed offers for
its various products and services in the second quarter, excluding offers
resubmitted for the same purchase. Approximately 852,000 new customers used
priceline.com during the second quarter of 1999 based upon the number of unique
credit card accounts submitted during the period. This represented a 60%
increase over the 531,000 unique credit card submissions during the first
quarter of 1999. In all, more than 2,000,000 unique customers have used one or
more of priceline.com's travel, financial or automotive services in the
Company's first 15 months of operation, based on the number of unique credit
card accounts submitted during the period.
During the second quarter, the Company continued to add depth and experience to
its management team. Daniel H. Schulman, formerly President of AT&T's $22
billion Consumer Markets Division, agreed to join the Company as its President
and Chief Operating Officer. Maryann Keller, widely recognized as one of the
country's premier automotive analysts and author of several books on the
industry, agreed to join the Company as President of its automotive services
unit.
Priceline.com experienced growth across all product offerings during the second
quarter. Travel services sold approximately 440,000 leisure airline tickets
during the second quarter, a 137% increase over the 186,000 leisure airline
tickets sold in the previous quarter, and a 1,366% increase over the 30,000
leisure airline tickets sold in the same quarter 1998. Priceline's hotel service
is now selling more than 10,000 room nights a week, roughly doubling its sales
volumes from the previous quarter.
The Company made a major addition to its leisure airline ticket service by
announcing today that Continental Airlines (NYSE:CALa) has agreed to join the
priceline.com service. With the addition of Continental, the Company expects its
domestic seat inventory to increase by more than 20%. Almost half of all the
empty seats flown by major U.S. carriers now will be available to priceline.com
customers on a name-your-price basis. The majority of the U.S.'s major
full-service airlines now participate in the program.
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"The addition of Continental Airlines plays a strategic role in helping
priceline.com leverage our rapidly growing market for name-your-price leisure
airline tickets," said priceline.com Chairman and CEO Richard S. Braddock. "Just
six months ago, priceline.com was selling an average of 5,000 to 7,000 tickets a
week. Today, we sell six times that amount, or approximately 40,000 tickets a
week. At peak times, we receive a ticket request every second. Demand continues
to increase strongly and we believe even a more significant portion of
reasonable ticket requests can be satisfied with more inventory. Continental
will enable us to add seats to existing routes, expand to offer new routes, and
fill more of our growing ticket demand."
As has been the case with all other major domestic airlines participating in the
priceline.com service, the Company has issued warrants to Continental to
purchase priceline.com stock at a future date at a purchase price equal to
priceline.com's closing stock price on July 16th. Continental will receive 1
million warrants representing 0.5% of priceline.com's fully diluted shares. As
required by GAAP accounting regulations, priceline.com will record a one-time,
non-cash charge of approximately $90 million in the third quarter 1999 to
reflect the accounting cost of Continental's warrants.
About priceline.com
Priceline.com is the patented Internet pricing system that enables consumers to
achieve significant savings by using their personal brand flexibility as a way
to get goods and services at well below publicly advertised prices.
Priceline.com takes consumers' price requests and then presents them to
participating sellers, who can fill as much of that guaranteed demand as they
wish at price points determined by the buyers.
Priceline.com's "virtual" business model allows for rapid scaling using the
Internet. Because the Company electronically collects consumer demand, it can
fill this demand directly with sellers or by using proprietary databases.
Priceline.com does not maintain or warehouse inventories in any of its product
lines.
Priceline.com is currently selling multiple services to its customers across
three distinct product categories: a travel service that offers leisure airline
tickets and hotel rooms, a personal finance service that offers home mortgages,
refinancing and home equity loans, and an automotive service that offers new
cars on a test basis in the New York metro area.
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For investor relations information, contact:
Raya Papp 203-705-3048 (investorrelations@priceline.com)
For press information, contact:
Brian Ek 203-705-3026 (brian.ek@priceline.com)
Mike Darcy 203-705-3331 (mike.darcy@priceline.com)
This press release may contain forward-looking statements which are made
pursuant to the safe-harbor provisions of the Private Securities Litigation
Reform Act of 1995. Expressions of future goals and similar expressions
including, without limitation, "may," "will," "believes," "should," "could,"
"hope," "expects," "expected," "does not currently expect," "anticipates,"
"predicts," "potential," and "forecast," reflecting something other than
historical fact are intended to identify forward-looking statements, but are not
the exclusive means of identifying such statements. These forward-looking
statements involve a number of risks and uncertainties, including the timely
development and market acceptance of products and technologies and other factors
described in the Company's filing with the Securities and Exchange Commission.
The actual results may differ materially from any forward-looking statements due
to such risks and uncertainties. The Company undertakes no obligations to revise
or update any forward-looking statements in order to reflect events or
circumstances that may arise after the date of this release.
priceline.com Incorporated
CONDENSED STATEMENTS OF OPERATIONS
(UNAUDITED)
Three Months Ended Six Months Ended
------------------ ----------------
June 30, June 30, June 30, June 30,
1998 1999 1998 1999
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Revenues $ 7,021,639 $ 111,563,849 $ 7,021,639 $ 160,974,391
Cost of Revenues:
Product costs 7,942,840 100,664,343 7,942,840 144,323,527
Supplier warrant costs -- 380,759 -- 761,518
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Total cost of revenues 7,942,840 101,045,102 7,942,840 145,085,045
Gross profit (921,201) 10,518,747 (921,201) 15,889,346
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Expenses:
Sales and marketing 6,635,069 17,732,941 7,764,477 34,871,086
General and administrative 3,101,635 5,503,254 4,798,876 9,169,878
Systems and business development 3,442,161 3,468,512 5,368,214 5,652,423
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Total expenses 13,178,865 26,704,707 17,931,567 49,693,387
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Operating loss (14,100,066) (16,185,960) (18,852,768) (33,804,041)
Interest income, net 112,690 1,929,332 162,331 2,387,104
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Net loss (13,987,376) (14,256,628) (18,690,437) (31,416,937)
------------- ------------- ------------- -------------
Accretion on preferred stock (8,353,973)
-------------
Net loss applicable to common shareholders $ (13,987,376) $ (14,256,628) $ (18,690,437) $ (39,770,910)
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Basic and diluted loss per common share $ (0.17) $ (0.10) $ (0.27) $ (0.29)
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Weighted average common shares outstanding 81,297,098 142,320,427 69,738,365 137,436,399
Priceline.com Incorporated
CONDENSED BALANCE SHEETS
(UNAUDITED)
December 31, June 30,
ASSETS 1998 1999
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CURRENT ASSETS:
Cash and cash equivalents $ 53,593,026 $ 142,803,134
Short term investments 9,307,474
Accounts receivable, net of allowance for
uncollectible
accounts of $290,823 and $1,173,243 at
December 31, 1998 and June 30, 1999, respectively 4,176,980 22,683,987
Related party receivable -- 1,383,592
Prepaid expenses and other current assets 2,433,542 7,338,897
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Total current assets 60,203,548 183,517,084
PROPERTY AND EQUIPMENT - net 5,926,877 15,311,214
OTHER ASSETS 442,060 5,966,594
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TOTAL ASSETS $ 66,572,485 $ 204,794,892
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LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $ 5,268,430 $ 26,933,608
Related party payable 32,447 --
Accrued expenses 4,258,641 6,403,716
Other current liabilities 722,030 136,109
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Total current liabilities 10,281,548 33,473,433
LONG-TERM DEBT - net 989,018 --
CAPITAL LEASE OBLIGATIONS 26,074 12,248
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Total liabilities 11,296,640 33,485,681
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COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY
Preferred stock 311,262 --
Common stock 745,802 1,138,564
Additional paid-in capital 171,158,186 326,880,953
Accumulated deficit (116,939,405) (156,710,306)
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Total stockholders' equity 55,275,845 171,309,211
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TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 66,572,485 $ 204,794,892
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