Reports 2Q 2003 Financial Results
today reported 2nd quarter 2003
net income of $7.7 million, or $0.20 per share, on revenues of $239.6
million. Gross travel bookings, which refers to the total dollar
value, inclusive of taxes and fees, of all travel products purchased
by consumers, for the 2nd quarter were $297.1 million.`s
2nd quarter EPS exceeded First Call analyst consensus of $0.14 per
share, and came in ahead of`s previously announced
target range of $0.12 to $0.18 per share.
By comparison, in the 2nd quarter 2002, had net
income of $6.3 million, or $0.16 per share, on revenues of $304.5
million.`s gross margin for the 2nd quarter 2003 was
16.9 percent, compared to 15.8 percent a year ago and 16.5 percent for
the 1st quarter 2003. ended the 2nd quarter 2003 with
$149.2 million in cash and short-term investments. The Company has no
debt. During the 2nd quarter, effected a 1-for-6 reverse
stock split.
By the end of the 2nd quarter,`s customer base grew
to 17.8 million, which represents growth of approximately 22 percent
over the past year. Repeat business for the quarter was 67.1 percent.
(Repeat business is defined as the number of unique purchase offers
coming from repeat customers divided by the number of total unique
purchase offers).
“`s stronger than expected 2nd quarter results were
attributable to several factors, including strong hotel, rental car
and package results, a stabilization of our airline tickets business
bolstered by improved leisure travel demand and growing sales of
retail tickets, and contribution from our mortgage business,” said President and Chief Executive Officer Jeffery H. Boyd
During the 2nd quarter, sold approximately 1.5
million hotel room nights, adding sequentially approximately 270,000
additional room nights from the 1st quarter. Hotel unit sales
increased approximately 38 percent year over year, an increase over
the 35 percent year-over-year growth rate experienced in the 1st
quarter. “We believe the growing popularity of our hotel product is
due to the success of our marketing campaign and the superior room
inventory and pricing we receive from our hotel partners, which
translates into savings that are better than those found on other
leading travel sites, often by as much as 40 percent or more,” said
Mr. Boyd.`s combined merchant and agency airline ticket gross
bookings increased 16 percent sequentially in the 2nd quarter as the
result of a slight sequential increase in opaque tickets sold and
continued strong growth in retail ticket sales. The rental car
business added over 192,000 rental car days sequentially in the 2nd
quarter and unit sales were up 4 percent compared to 2nd quarter 2002.
Package unit sales increased over 100 percent over last year`s 2nd
quarter. Finally, total agency (retail) bookings were $30 million in
the 2nd quarter, up 44 percent sequentially and an increase of $26
million over 2nd quarter 2002. expects that growing retail bookings will be
enhanced by its recent acquisition of and the offering
of Travelweb LLC retail hotel inventory on,`s other retail site. “Retail bookings are growing as we
add to our array of retail products and this trend, together with
improved merchant margins, pushed`s total gross margins
to a record 16.9 percent in the 2nd quarter,” said Mr. Boyd. “Retail
will continue to be an important part of our business, as it allows us
to satisfy unbound Name Your Own Price(R) customers, offer a broad
assortment of travel products when opaque inventories are constrained
and appeal generally to a broader addressable consumer marketplace.”
The 2nd quarter 2003 benefited from $1.1 million of other income,
which reflected a contribution from pricelinemortgage. That
contribution was offset partially by early stage losses in Travelweb
LLC, of which is a part-owner. Pricelinemortgage had
positive results in the quarter due to the continued attractive
economic climate for refinancing, home equity loans and first-time
mortgages. The mortgage business, which jointly owns
with First Alliance Bank, enables consumers to choose from sample
rates or set their own terms, and guarantees that customers will get
the best publicly available rate.
Looking forward, Mr. Boyd said, “`s 3rd quarter got
off to a strong start in July, buoyed by strong seasonal leisure
travel demand. Due to the accelerating growth experienced in our hotel
and rental car businesses so far this month, we expect to achieve July
revenues of approximately $93 to $95 million. We also expect
year-over-year growth in hotel unit sales in the 3rd quarter at least
equal to the 38 percent experienced in the 2nd quarter and we expect
year-over-year growth in rental car unit sales to exceed that 38
percent rate. We now anticipate top-line revenue growth for the 3rd
quarter of approximately 5 percent year-over-year, with targeted net
income per share of $0.20 to $0.22. This target exceeds the current
First Call analyst consensus of $0.15 per share. Net income applicable
to common stockholders will be reduced by a non-cash preferred stock
dividend of an estimated $0.03 per share in the 3rd quarter. For the
4th quarter, we are targeting a year-over-year revenue increase of
approximately 5-10 percent and EPS of $0.08 to $0.12 per share, which
also is above First Call analyst consensus of $0.07 per share.”