Priceline gross bookings climb

Priceline has reported its gross travel bookings for the 1st quarter of 2007 rose 33.7% year-over-year
to $998 million.

  Priceline.com had GAAP revenues in the 1st quarter of $301.4
million, a 24.6% increase over a year ago. Priceline.com’s GAAP gross
profit for the 1st quarter was $119.7 million, up 65.7% from the prior
year. Priceline.com had a GAAP net loss for the 1st quarter 2007 of
$16.3 million or $0.44 per diluted share. The GAAP results include,
among other things, the impact of litigation settlement expenses and
an excise tax refund. Several days ago, priceline.com announced that
it had agreed to settle the securities class action litigation that
was filed against the Company in 2000 and pay the class plaintiffs $80
million, of which $30 million will be funded by priceline.com’s
insurance carriers. Priceline.com incurred a 1st quarter 2007 net
charge of approximately $55 million to settle the litigation and cover
expenses. Priceline.com also announced that in March and April it
received notices from the Internal Revenue Service that the Company’s
previously disclosed refund request for excise taxes paid on merchant
airline tickets had been approved for payment. As a result,
priceline.com recorded in the 1st quarter $15.9 million in revenue and
$2.8 million in interest income related to the March IRS notice and
expects to record approximately $3 million of additional income in the
2nd quarter 2007 related to the April notice, including estimated
accrued interest.


  Priceline had pro forma revenues in the 1st quarter of $285.5
million, an 18.0% increase over a year ago. Pro forma gross profit for
the 1st quarter 2007 was $103.8 million, an increase of 43.1% over the
same period in the prior year. Pro forma net income for the quarter
was $17.4 million, or $0.43 per diluted share, which compares to $7.6
million, or $0.19 per diluted share in the same period a year ago.
First Call analyst consensus for the 1st quarter 2007 was $0.27 per
diluted share. The section below entitled “Non-GAAP Financial
Measures” provides a definition and information about the use of pro
forma financial measures in this press release and the attached
financial and statistical supplement reconciles pro forma financial
information with priceline.com’s financial results under GAAP.


  “First quarter pro forma earnings growth exceeded our expectations
in both the United States and Europe,” said priceline.com President
and Chief Executive Officer Jeffery H. Boyd. “In Europe, Booking.com
benefited from 91% growth in gross travel bookings as we continued to
build the business across Europe. In the United States, pro forma
earnings growth was driven by 8% growth in merchant gross travel
bookings and greater efficiencies in marketing, which cost gross
travel bookings, but significantly decreased acquisition costs.”


  Looking towards the 2nd quarter 2007, Mr. Boyd said, “We expect to
see continued growth in our European operations from increased
penetration of larger markets, geographic expansion and integration
initiatives. In our domestic business, we believe the merchant
business and marketing efficiencies will continue to drive domestic
earnings growth; however, we believe that the impact of lower margins
on retail airline tickets and the higher return hurdles we have
imposed on marketing investment will continue to negatively impact the
retail airline ticket business and, consequently, domestic gross
travel bookings. As we approach the peak summer travel season, we
believe that priceline.com’s Name Your Own Price(R) travel services
can effectively meet the needs of consumers concerned with high fuel
prices and mixed economic signals and we expect to emphasize that
money-saving message as the Priceline Negotiator ad campaign featuring
William Shatner continues.”
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