Hotel Reservations Network (HRN), the largest specialized provider of discount lodging worldwide, today announced record revenue, adjusted EBITDA, and adjusted EPS for the 1st quarter of 2002.

For the 1st quarter ended March 31, 2002, HRN increased its net
revenue by 57.4% to $165.7 million from $105.3 million a year earlier.
Adjusted EBITDA (defined as income from operations plus non-cash
marketing and distribution expense, amortization of goodwill, and
depreciation and other amortization) increased 63.0% to $25.8 million
from $15.8 million, while Adjusted Net Income (which excludes all
non-cash expenses including depreciation and amortization,
amortization of goodwill, non-cash marketing and distribution
expenses, and the related tax effects of these non-cash items)
increased 52.8% to $17.4 million from $11.4 million. Adjusted EPS,
diluted, increased by 48.0% to $0.30 from $0.20.
 
In 2002, HRN adopted Statement of Financial Accounting Standard
142, “Goodwill and Other Intangible Assets” (FAS 142), which precludes
amortization of goodwill. Therefore, the pretax income, net income and
earnings per share for 2001 are not directly comparable to 2002
because of the non-amortization of goodwill and the related tax
effect.

  “The 1st quarter of 2002 marked the beginning of a new era for
Hotel Reservations Network,” said David Litman, chairman and chief
executive officer of HRN. “On March 25th we launched our major new
brand and website, hotels.com. This is being supported by a
multi-million dollar national advertising and public relations
campaign. Based on the first 30 days of data, the results are quite
encouraging. Visits to hotels.com have surged in response to our
advertising and public relations campaign, and bookings are growing at
a healthy pace. Since the launch, hotels.com is already producing
7-10% of our total daily bookings. It appears that most of the
business coming from hotels.com is truly incremental business for
HRN.
 
“The launch of hotels.com
was not the only exciting event of the
quarter,” Mr. Litman continued. “On January 9th we set a new daily
booking record of over $2.5 million, and then topped that with over
$3.0 million on February 27th. Our 76% growth in room nights sold
during the quarter was very strong, and this broad-based increase came
both through our direct distribution channels and our affiliate
channels. While the overall lodging industry is still coming back
slowly from the effects of 9/11, it appears that the shift from
offline to online travel and lodging bookings is continuing at a
strong pace, and we are clearly seeing this in our numbers. We also
expect that our average daily rate will continue to increase steadily
throughout the year, which should have a positive impact on our
revenues and profits.”
 
He added, “We saw strong growth from many of our affiliates during
the quarter, including existing partners such as Cheap Tickets,
WorldRes and Travelocity. We continued to integrate more fully with
major portal partners such as AOL and Yahoo! Also, nearly 2,000 new
partners joined our affiliate program, including companies such as
Spirit Airlines, Worldspan, and Atlanta.com. Last, but certainly not
least, TravelNow turned in another outstanding quarter as it completed
its first full year as an HRN subsidiary.”
  Bob Diener, president of HRN, added, “Another highlight of the
first quarter was the dramatic increase in the number of hotel and
lodging partners that chose to work with HRN. During the quarter, we
entered into approximately 1,500 additional supply contracts with new
hotel and lodging suppliers worldwide. At the beginning of 2000 we had
only 1,500 properties under contract, so HRN added as many new hotels
in the past 90 days as in our first 9 years in business.
  “Furthermore,” he continued, “we continued to broaden the
geographic diversity of our product line. We now have lodging supply
agreements in 218 worldwide markets, including 146 U.S. markets and 72
international markets. In the first quarter we added 40 new markets,
including 17 new international markets - such as Calgary, Stockholm,
Oslo, Helsinki and the French Riviera - as well as 23 new domestic
markets, including Monterey, Laughlin, Newark, Des Moines, Little
Rock, and Greensboro.”
  Mr. Diener added, “We believe that these statistics underscore the
fact that thousands of hotel and lodging suppliers around the world
acknowledge that HRN is a very key, cost-effective and growing
distribution partner. They clearly value our ability to market to
millions of leisure travelers around the world through the incredible
power of the Internet. HRN has become a mainstream distribution
platform for the worldwide lodging industry.”

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(29/01/2001) Record Results From Hotel Reservations Network

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