-----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, QkQfPF8TgefzO+aa8mV1d6hzVS0Pv3RsoO9oTFSDRFz3gL60OK/aNxeC1qeb6gsW 4KxQ9/py8VysI4lWzdqYZg== 0001005477-01-002938.txt : 20010503 0001005477-01-002938.hdr.sgml : 20010503 ACCESSION NUMBER: 0001005477-01-002938 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20010501 ITEM INFORMATION: FILED AS OF DATE: 20010502 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: SEC FILE NUMBER: 000-25581 FILM NUMBER: 1619786 BUSINESS ADDRESS: STREET 1: 800 CONNECTICUT AVE CITY: NORWALK STATE: CT ZIP: 06854 BUSINESS PHONE: 2037053000 8-K 1 0001.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) May 1, 2001 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. 1st quarter 2001 earnings On May 1, 2001, priceline.com Incorporated, a Delaware corporation, announced its results for the 1st quarter 2001 and reaffirmed its profitability expectations for the 2nd quarter 2001. The information set forth above is qualified in its entirety by reference to the press release (which includes a financial and statistical supplement issued by priceline.com on May 1, 2001), a copy of which is attached hereto as Exhibit 99.1 and incorporated herein by reference. Exhibits. 99.1 Press Release issued by priceline.com Incorporated on May 1, 2001 relating to its 1st quarter 2001 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/ Daniel Schulman -------------------------------- Name: Daniel Schulman Title: Chief Executive Officer Date: May 2, 2001 EXHIBIT INDEX Exhibit No. Description ----------- ----------- 99.1 Press Release issued by priceline.com Incorporated on May 1, 2001 relating to its 1st quarter 2001 earnings. EX-99.1 2 0002.txt PRESS RELEASE 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." (more) -2- 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. (more) -3- 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 - -------------------------------------------------------------------------------- Page Number ----------- 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. - -------------------------------------------------------------------------------- priceline.com Inc. - -------------------------------------------------------------------------------- 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%
Page 1 priceline.com Inc. - -------------------------------------------------------------------------------- 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 =========== =========== =========== =========== ===========
Page 2 priceline.com Inc. - -------------------------------------------------------------------------------- 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. Page 3 priceline.com Inc. - -------------------------------------------------------------------------------- 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 Page 4 priceline.com Inc. - -------------------------------------------------------------------------------- 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. Page 5 priceline.com Inc. - -------------------------------------------------------------------------------- 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). Page 6 -----END PRIVACY-ENHANCED MESSAGE-----