10-QPeriod: Q3 FY2002

Booking Holdings Inc. Quarterly Report for Q3 Ended Sep 30, 2002

Filed November 14, 2002For Securities:BKNG

Summary

Priceline.com Incorporated (now Booking Holdings Inc.) reported its quarterly results for the period ending September 30, 2002. The company experienced a significant decline in total revenues, down 20.5% year-over-year for the quarter and 13.9% for the nine-month period, primarily driven by a substantial drop in travel revenues. This decline is attributed to challenging market conditions in the airline industry, including reduced capacity, increased supplier costs, and a lower 'bind rate' (the percentage of offers fulfilled). The company also reported a net loss for both the quarter and the nine-month period, contrasting with a profit in the prior year's comparable quarter. Despite revenue challenges, the company is actively managing its cost structure and has a stock repurchase program in place.

Key Highlights

  • 1Total revenues declined by 20.5% to $239.96 million for the three months ended September 30, 2002, compared to $301.99 million for the same period in 2001.
  • 2Travel revenues decreased by 20.6% year-over-year for the quarter, driven by a significant drop in airline ticket sales volume.
  • 3The company reported a net loss of $23.82 million for the three months ended September 30, 2002, compared to a net income of $4.98 million in the prior year.
  • 4Gross profit decreased by 25.2% to $37.74 million in the third quarter of 2002.
  • 5Operating expenses were reduced, with sales and marketing down 30.7% and general and administrative expenses seeing a net decrease after accounting for increases in certain areas.
  • 6The company recorded significant impairment charges related to investments in licensees, totaling $24.2 million for the nine months ended September 30, 2002.
  • 7As of September 30, 2002, the company had $66.86 million in cash and cash equivalents, and a stock repurchase program of up to $40 million was authorized.

Frequently Asked Questions

The primary reason for the revenue decline is attributed to challenging conditions in the airline industry. This includes reduced airline capacity, an increase in the cost of airline tickets for the company, and a lower 'bind rate' (the percentage of customer offers that the company is able to fulfill). The company also noted that the anniversary of the September 11th attacks may have contributed to lower airline ticket sales in September 2002.

For the third quarter of 2002, Priceline.com reported a net loss of $23.82 million, a significant change from the net income of $4.98 million reported in the same quarter of 2001. The nine-month period also resulted in a net loss of $11.77 million compared to a loss of $5.98 million in the prior year. The company has an accumulated deficit of $1.6 billion as of September 30, 2002.

During the third quarter of 2002, the company recorded impairment charges totaling $24.2 million related to its investments in licensees. Specifically, $12 million related to goodwill for its European licensee due to competitive conditions and declining market value, and an additional amount related to the carrying value of a convertible note for its Asian licensee.

The company is actively managing its operating expenses, as seen in the reductions in sales and marketing and general and administrative expenses. Additionally, the company announced a repositioning of its non-travel businesses and a reduction in headcount, which is expected to reduce expenses. A stock repurchase program of up to $40 million was also authorized.