Priceline.com has reported revenues for the 3rd quarter 2001 were $302 million, which modestly exceeded the upper end of priceline.com`s revised 3rd quarter guidance and compared to 3rd quarter 2000 revenues of $341 million.
Pro forma EBITDA for the 3rd quarter 2001 was $8.4 million. In the 3rd quarter 2000, priceline.com had a pro forma net loss of $2.2 million, or $0.01 per share. Pro forma EBITDA and pro forma net income exclude option payroll taxes, amortization of stock-based compensation charges and a non-cash preferred stock dividend.
Priceline.com reported GAAP net income for the 3rd quarter 2001 before preferred stock dividend of $5.0 million and reported a GAAP net loss applicable to common stockholders for the 3rd quarter 2001 of $3.6 million, or $0.02 per share, compared to loss in the 3rd quarter 2000 of $199 million, or $1.19 per share.
Priceline.com`s gross profit for the 3rd quarter 2001 was $50.4 million, compared to a gross profit of $54.4 million in the 3rd quarter 2000. Priceline.com`s 3rd quarter gross margin was a record 16.7%, compared to a gross margin of 15.9% in the 3rd quarter 2000.
Priceline.com reported continued growth of its long-term consumer franchise during the quarter. The Company sold a combined 3.0 million units of travel products during the quarter and added 927,000 new customers, bringing its total customer base to 11.8 million. Repeat business for the 3rd quarter 2001 (defined as the number of unique purchase offers coming from repeat customers divided by the number of total unique purchase offers) was a record 63 percent, compared to 51 percent in the 3rd quarter 2000 and 61 percent in the 2nd quarter 2001.
Priceline.com said that, while demand for travel products has substantially recovered following the September 11th terrorist attacks, unit sales and revenue from sales of travel products in the quarter trailed that demand because of refunds processed by priceline.com in the aftermath of the attacks and because of pressure from deep discounting of published retail prices instituted by airlines, hotel companies and rental car companies to spur near-term demand. The recovery of airline ticket sales in the weeks following the attacks also was slowed by disruptions in availability of inventory related to anticipated schedule changes.
“The rapid recovery of consumer demand for priceline.com`s travel products is a tribute to the strength of our brand, the loyalty of our customers and the compelling value we offer to consumers,” said priceline.com President and Chief Operating Officer Jeffery H. Boyd. “We are also pleased with the continuing strength of our hotel and rental car businesses. These non-air categories constituted 42 percent of our booked offers in the 3rd quarter 2001, compared to 28 percent a year ago. For the past two quarters, hotel and rental car unit sales have exceeded sales of airline tickets.” Priceline.com also said that its “look to book” ratio (a prevailing metric in the travel industry that measures the percentage of people who actually buy a product after visiting or contacting the travel company) compared favorably with other online travel companies for the quarter. Based on published 3rd quarter reports, priceline.com had a 12.8 percent “look to book” ratio, compared to 8.0 percent for Travelocity and 5.5 percent for Expedia.com.
“With our steadily growing customer base, a strong look-to-book ratio and record repeat business, priceline.com has developed a strong consumer franchise that positions us well for the future,” said priceline.com Chairman and Chief Executive Officer Richard S. Braddock. “Our Name Your Own Price proposition is now a preferred way of purchasing for millions of loyal customers, who come back to priceline.com again and again for their travel and other purchases.”
Mr. Braddock continued, “We are targeting 4th quarter revenues in the range of $215 million to $235 million, which reflects today`s travel industry conditions as well as the usual seasonal weakness of our 4th quarter. However, this year we are managing the 4th quarter to a goal of pro forma break-even earnings per share. Results could range a penny or two on either side of that goal. This compares to 4th quarter 2000 revenues of $228 million and a pro forma net loss of $0.15 per diluted share. The improved earnings outlook is due to key operating efficiencies we`ve instituted over the past year as part of our turnaround plan. Despite current challenges in the travel sector, we believe priceline.com will continue to be one of e-commerce`s winning companies for several reasons. We have seen a demand-driven recovery in our U.S. travel business, which has developed a strong, loyal consumer franchise. Further, priceline`s scope has broadened to reduce its reliance on our air product, for example, through the continued strength of the hotel and rental car products and the progress achieved in building our mortgage business.”