EXHIBIT 99.1
Expedia, Inc. Releases Preliminary Record Fiscal Fourth Quarter and Year Results
Company expects quarterly cash income of $0.24 to $0.29 per basic share
and announces extension of MSN agreement
BELLEVUE, Wash. - July 16, 2001 - Expedia, Inc. (NASDAQ: EXPE) today announced
it expects to report that, on a net basis, revenue for its fourth quarter of
fiscal 2001, ended June 30, more than doubled over the year-earlier quarter and
rose approximately 37% over the third quarter. Gross bookings rose to $802
million, up 78% year-over-year and up 19% from the third quarter.
The Company also expects to report income before non-cash items of $12
million to $14 million, or $0.24 to $0.29 per basic share and $0.20 to $0.23 per
diluted share, for the June quarter, which is substantially above earlier
guidance and analyst estimates. On a GAAP basis, the Company expects the net
loss to be $5.5 million to $7.5 million, or a loss of $0.11 to $0.15 per basic
share. The per share amounts are calculated using an average outstanding basic
share count for the quarter of 49 million and average diluted shares of 61
million.
In the year-ago quarter, the Company reported a net loss before non-cash
items of $13 million, or $0.30 per basic share, and a net loss on a GAAP basis
of $42 million, or $0.98 per basic share, with 43 million shares outstanding.
"Our tremendous momentum continued in the quarter, particularly in our
merchant business. Expedia(R) Bargain Fares, a discount airline product
introduced in the quarter, gained immediate traction, and Expedia(R) Special
Rate hotel bookings rose significantly," said Richard Barton, president and CEO
of Expedia. "Also, Expedia(R) Packages, which we introduced with the deployment
of our leading-edge Expert Searching and Pricing platform, grew rapidly. That
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platform lets consumers combine their choices of flights and hotels to create
their own Expedia Packages, enabling flexibility, immediacy and access to wide
choice."
Separately, USA Networks Inc. announced that it has signed an agreement by
which it will acquire up to 37.5 million shares of Expedia(R) common stock.
Microsoft Corp., the majority shareholder of Expedia, has agreed to exchange all
of its 33.7 million Expedia shares and warrants for the USA consideration,
subject to pro-ration with other shareholders.
In a separate contract, Expedia and Microsoft have extended the term of
Expedia's MSN distribution agreement. "This agreement, combined with Expedia's
ongoing .NET development efforts, is a clear sign of the value of the long term
relationship between Microsoft and Expedia," said Barton.
Revenue accounting change
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Also for this quarter, the Company will change the method of recognizing
revenue for its merchant business in its quarterly and fiscal year statements,
in accordance with its adoption of a new accounting standard for fiscal year
2001. As a result, the Company will report its merchant revenue on a net basis,
which represents the amount charged the customer less the amount paid to the
supplier. When comparing results with prior periods, the Company will adjust all
prior-period merchant revenues to reflect the new accounting method.
"This accounting change doesn't affect gross bookings, gross profits, net
earnings or earnings per share," said senior vice president and CFO, Gregory S.
Stanger. "This 'apples-to-apples' presentation of merchant and agency revenue
should help investors and analysts better track the Company's progress in
building its higher-profit merchant business."
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Reporting on a net basis, the Company expects revenue for the fourth
quarter ended June 30, 2001, to be about $78 million, compared with $37 million
in the fourth quarter 2000 and $57 million in the March quarter. If the Company
reported its merchant revenue on a gross basis, as it has in the past, revenue
for the fourth quarter would be approximately $178 million, compared with $70
million in the year-ago quarter and $110 million in the third quarter of this
fiscal year.
Selected Financial Data - Fiscal Year ended June 2001
(in millions)
Sept. 30, Dec. 31, March 31, June 30, Fiscal Year
2000 2000 2001 2001 2001
Gross bookings $ 467 $ 475 $ 674 $ 802 $2,418
Gross revenue $ 77 $ 80 $ 110 $ 178 $ 445
Net revenue $ 42 $ 44 $ 57 $ 78 $ 221
Gross profit $ 26 $ 28 $ 39 * *
* Reporting expected July 30, 2001
Preliminary fiscal year results
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For the fiscal year, the Company expects to report revenue for the fiscal
year 2001 to be about $221 million, compared with $114 million in fiscal 2000 on
a net basis. If the Company reported its merchant revenue on a gross basis,
revenue for the fiscal year would be about $445 million, compared with $208
million in fiscal 2000. Gross bookings are expected to be about $2.4 billion
compared with $1.3 billion in fiscal year 2000. Fiscal year 2000 numbers reflect
the results of the Company on a pro-forma basis, adjusted for the effects of its
acquisitions.
The Company also expects to report income before non-cash items of $12
million to $14 million, or $0.25 to $0.30 per basic share, and $0.21 to $0.25
per diluted share, for fiscal year 2001. On a GAAP basis, the Company expects
the net loss to be $79 million to $81 million, or a loss of $1.67 to $1.72 per
basic share. The per share amounts are calculated using an average
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outstanding basic share count for the fiscal year of 47 million and average
diluted shares of 56 million.
In fiscal year 2000, the Company reported a pro-forma (for acquisitions)
net loss before non-cash items of $62 million, or $1.51 per basic share, with 41
million shares outstanding, and a net loss on a GAAP basis of $118 million, or
$3.11 per basic share, with 38 million shares outstanding.
Expedia plans to release its fourth-quarter results Monday, July 30, 2001,
at 1:30 p.m. Pacific Time. The Company will conduct its fourth-quarter
conference call at 2:00 p.m. (PT) that same day, and will provide its regular
guidance for the upcoming quarters at that time.
A conference call to discuss the USA Networks announcement has been
scheduled for 9 a.m. (PT) today (July 16). The call is being webcast and can be
accessed at investor.expedia.com. In addition, USA Networks will be hosting a
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conference call to discuss the agreement. It has also been scheduled for 9 a.m.
(PT) today and will be webcast at www.usanetworks.com. Both conference calls
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will be available for replay about one hour after the end of the live events.
About Expedia:
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Expedia, Inc. (Nasdaq: EXPE) operates Expedia.com(R), an independent
leading online travel service in the United States with localized versions in
Canada, Germany and the United Kingdom. Expedia is the seventh largest travel
agent in the U.S. Expedia.com provides air, car and hotel booking, vacation
package and cruise offers, destination information and mapping. Expedia.com is
also available under Travel on the MSN(R) network of Internet services.
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This press release contains forward-looking statements relating to future
events or future financial performance that involve risks and uncertainties.
Such statements can be identified by terminology such as "may," "will,"
"should," "expects," "plans," "anticipates," "believes," "estimates,"
"predicts," "potential" or "continue" or the negative of such terms or
comparable terms. These statements are only predictions and actual results
could differ materially from those anticipated in these statements based upon a
number of factors including final adjustments made in closing the quarter and
those identified in the Company's filings with the SEC.
Expedia, Expedia.com and the Expedia logo are either registered trademarks or
trademarks of Expedia, Inc. in the U.S. and Canada. The names of actual
companies and products mentioned herein may be trademarks of their respective
owners.
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For more information:
Media:
Darcy Bretz, Edelman Public Relations (312) 240-2619
Darcy.bretz@edelman.com
Investor Relations:
Marj Charlier, Expedia, Inc., (425) 564-7666
http://investor.expedia.com
For online press information on Expedia.com:
http://expedia.com/daily/press/
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