Priceline.com Settles 2000 Securities Class Action.Provides Estimate of 1(st) Quarter 2007 Results and Announces Favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. Ruling on Federal Excise Tax Excise Tax 1. An indirect tax charged on the sale of a particular good. 2. A penalty tax applied to ineligible transactions in retirement accounts. This penalty is assessed by and paid to the IRS. Notes: 1. Refund Request NORWALK, Conn. -- Priceline.com Incorporated (Nasdaq: PCLN PCLN Priceline.com (stock abbreviation, AMEX) ) (the "Company") announced today that it had agreed to settle the securities class action litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called litigation. that was filed against the Company in 2000. Under the terms of the settlement agreement, the class will receive $80 million in return for a release, with prejudice, of all claims against the Company and the individual defendants that are related to the purchase of the Company's securities by class members during the class period. The Company's insurance carriers will fund $30 million of the settlement. The settlement is subject to approval by the Court after notice to the class. In connection with the settlement announced today, the Company expects to incur a net charge of approximately $55 million in the 1st quarter of 2007, representing the settlement amount and estimated legal expenses relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc the settlement. The Company also provided an estimate of operating results for its recently completed 1st quarter. The Company said that it expects to report 1st quarter 2007 year-over-year gross travel bookings growth of approximately 34%, which was driven primarily by an approximately 91% year-over-year increase in gross travel bookings from its European operations. The consolidated year-over-year gross travel bookings growth compares to the Company's prior guidance of between 25% and 30%. Gross travel bookings refer to the total dollar value, inclusive of inclusive of prep. Taking into consideration or account; including. all taxes and fees, of all travel services purchased by consumers. The Company said that pro forma As a matter of form or for the sake of form. Used to describe accounting, financial, and other statements or conclusions based upon assumed or anticipated facts. The phrase pro forma net income per share was favorably fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. impacted by the strong gross travel bookings performance in Europe, continued growth in domestic merchant gross travel bookings and good expense management. The Company now expects to report pro forma net income (which excludes, among other things, the impact of the litigation settlement expenses and the excise tax refund referred to below) of $0.43 per diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share in the 1st quarter 2007. This compares to the Company's prior range of pro forma net income guidance of between $0.22 and $0.28 per diluted share. The Company expects to report a GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). net loss (which includes, among other things, the impact of the litigation settlement expenses and the excise tax refund referred to below) of $0.44 per diluted share in the 1st quarter 2007. In addition, the company announced that it was increasing full-year 2007 pro forma financial guidance and is now targeting full-year 2007 pro forma net income of approximately $2.90 to $3.10 per diluted share. This compares to the Company's prior range of full-year 2007 pro forma net income guidance of between $2.60 and $2.90 per diluted share. The revised full-year 2007 pro forma net income per share estimate is based upon an estimated pro forma fully diluted share count of 42.2 million shares. The estimate of pro forma fully diluted share count uses actual year-to-date stock price data as well as future stock prices based on the closing price of the Company's stock as of May 3, 2007 to calculate the potential dilutive impact of stock options and convertible debt. Any material increases or decreases in priceline.com's stock price will impact the number of fully diluted shares outstanding, which in turn would impact the company's net income per diluted share results. The Company intends to provide more details on its 1st quarter 2007 financial results and full-year 2007 financial guidance when it announces its 1st quarter 2007 results on May 8th. The section below entitled en·ti·tle tr.v. en·ti·tled, en·ti·tling, en·ti·tles 1. To give a name or title to. 2. To furnish with a right or claim to something: "Non-GAAP Financial Measures" provides information about the use of pro forma financial measures used in this press release and a reconciliation of pro forma and GAAP results is attached to this press release. The Company also announced that in March and April it had received definitive notice from the Internal Revenue Service that the Company's previously disclosed refund request for excise taxes excise taxes, governmental levies on specific goods produced and consumed inside a country. They differ from tariffs, which usually apply only to foreign-made goods, and from sales taxes, which typically apply to all commodities other than those specifically exempted. paid on merchant airline tickets had been approved for payment. As a result, the Company expects to record approximately $18.7 million of income in the 1st quarter 2007 related to the March notice and approximately $3 million of income in the 2nd quarter 2007 related to the April notice associated with the tax refund Tax refund Money back from the government when too much tax has been paid or withheld from a salary. , including estimated accrued interest Accrued Interest The interest that has accumulated on a bond since the last interest payment up to but not including the settlement date. There are two methods for calculating accrued interest: 1) 360-day year method, used for corporate and municipal bonds. . The Company expects the refund to positively impact 1st and 2nd quarter 2007 GAAP results but intends to exclude the amounts from pro forma results because of its non-recurring nature. The estimate of 1st quarter 2007 pro forma net income per diluted share: * excludes cash expenses associated with the settlement of the 2000 securities litigation, * excludes the cash benefit associated with the refund of excise taxes (and related accrued interest) paid on merchant airline tickets, * excludes non-cash amortization expense of acquisition-related intangibles, * excludes non-cash stock-based compensation expense, * excludes option payroll tax Payroll Tax Tax an employer withholds and/or pays on behalf of their employees based on the wage or salary of the employee. In most countries, including the U.S., both state and federal authorities collect some form of payroll tax. expense, * excludes non-cash income tax expense and reflects the impact on income taxes of the pro forma adjustments, * excludes non-cash preferred stock Stock shares that have preferential rights to dividends or to amounts distributable on liquidation, or to both, ahead of common shareholders. Preferred stock is given preference over common stock. Holders of preferred stock receive dividends at a fixed annual rate. dividends, * includes the additional impact on minority interest expense of the pro forma adjustments described above, * includes the anti-dilutive impact of the "Conversion Spread Hedges" (see below) on outstanding diluted common shares outstanding, and * includes the dilutive impact of additional warrants and shares of unvested restricted stock and restricted stock units Restricted stock units Similar to restricted stock. However, the unit represents a promise that employees will receive stock in the future. The units do not pay dividends until the stock is vested. . When aggregated, the foregoing adjustments are expected to increase pro forma net income over GAAP net income by approximately $34 million in the 1st quarter 2007. Information About Forward-Looking Statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. This press release contains forward-looking statements. These forward-looking statements are not guarantees of future performance and are subject to certain risks, uncertainties and assumptions that are difficult to predict; therefore, actual results may differ materially from those expressed, implied or forecasted in any such forward-looking statements. Expressions of future goals and similar expressions including, without limitation, "goal," "believe(s)," "intend," "expect(s)," "will," "may," "should," "could," "plan(s)," "anticipate(s)," "estimate(s)," "predict(s)," "potential," "target(s)," or "continue," reflecting something other than historical fact are intended to identify forward-looking statements. The following factors, among others, could cause the Company's actual results to differ materially from those described in the forward-looking statements: * adverse changes in general market conditions for leisure and other travel services as a result of, among other things, terrorist attacks, natural disasters, or the outbreak of an epidemic or pandemic pandemic /pan·dem·ic/ (pan-dem´ik) 1. a widespread epidemic of a disease. 2. widely epidemic. pan·dem·ic adj. Epidemic over a wide geographic area. n. disease; * adverse changes in the Company's relationships with airlines and other service providers which could include, without limitation, the withdrawal of suppliers from the priceline.com system (either priceline.com's "retail" or "opaque" services, or both); * the loss or reduction of global distribution fees; * the bankruptcy or insolvency insolvency Condition in which liabilities exceed assets so that creditors cannot be paid. It is a financial condition that often precedes bankruptcy. In the context of equity, insolvency is the inability to pay debts as they become due; insolvency under the balance-sheet of another major domestic airline; * the effects of increased competition; * systems-related failures and/or security breaches, including without limitation, any security breach that results in the theft, transfer or unauthorized disclosure of customer information, or the failure to comply with various state laws applicable to the Company's obligations in the event of such a breach; * difficulties integrating recent acquisitions, such as Booking.com. and Booking.com B.V., including ensuring the effectiveness of the design and operation of internal controls and disclosure controls of acquired businesses; * a change by a major search engine to its search engine algorithms that negatively affects the search engine ranking Search engine ranking is a measure of the online promotional success of a web page or website. Most search engines default to ten organic or natural listings per page. Many include sponsor links before or to the right of the results. of the Company or its 3rd party distribution partners; * legal and regulatory risks; * final adjustments made in closing the 1st quarter 2007; and * the ability to attract and retain qualified personnel. For a detailed discussion of these and other factors that could cause the Company's actual results to differ materially from those described in the forward-looking statements, please refer to the Company's most recent Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. and Form 8-K Form 8-K The form required by the SEC when a publicly held company incurs any event that might affect its financial situation or the share value of its stock. Form 8-K See 8-K. filings with the Securities and Exchange Commission. Unless required by law, the Company undertakes no obligation to update publicly any forward-looking statements, whether as a result of new information, future events or otherwise. Non-GAAP Financial Measures Pro forma net income and pro forma net income per share are "non-GAAP financial measures," as such term is defined by the Securities and Exchange Commission, and may differ from non-GAAP financial measures used by other companies. Priceline.com believes that pro forma net income per share that exclude certain non-cash or non-recurring income or expense items are useful for investors to evaluate priceline.com's future on-going performance because they enable a more meaningful comparison of priceline.com's projected cash earnings and performance with its historical results from prior periods. Pro forma financial information is adjusted for the following items: * Cash expenses associated with the settlement of the 2000 securities litigation are excluded because of the non-recurring nature of the settlement. * Cash benefit associated with the refund of excise taxes paid on merchant airline tickets that was approved for payment by the Internal Revenue Service is excluded because of its non-recurring nature. * Amortization expense of acquisition-related intangibles is excluded from pro forma net income because it does not impact cash earnings. * Stock-based compensation expense and the non-cash expense Noun 1. non-cash expense - an expense (such as depreciation) that is not paid for in cash disbursal, disbursement, expense - amounts paid for goods and services that may be currently tax deductible (as opposed to capital expenditures) associated with the payment of preferred stock dividends are excluded from pro forma net income because they do not impact cash earnings and are reflected in earnings per share through increased share counts. * Option payroll tax expense is excluded because the expense is driven primarily by stock option exercise activity and the market price of priceline.com's common stock and often shows volatility unrelated to operating results. * The restructuring charge restructuring charge The expense of reorganizing a company's operations. A restructuring charge is an infrequent expense that generally results from asset writedowns or facility closings. , net is excluded because it can impact comparability of earnings with historical results from prior periods. * Income tax (expense) benefit is adjusted for the tax impact of certain of the pro forma adjustments described above and to exclude tax expense recorded where no actual tax payments are owed because of available net operating loss carryforwards Net operating loss carryforwards Application of losses to offset earnings in future years. . * Minority interest is adjusted for the impact of certain of the pro forma adjustments described above. * Finally, for calculating pro forma net income per share:
-- net income is adjusted for the impact of the pro forma
adjustments described above.
-- The Company entered into hedge transactions (the
"Conversion Spread Hedges") that increase the effective
conversion price of the Convertible Senior Notes due
September 30, 2011 and the Convertible Senior Notes due
September 30, 2013 from their stated $40.38 conversion
price to an effective conversion price of $50.47 per share.
Under GAAP, the anti-dilutive impact of the Conversion
Spread Hedges is not reflected on the outstanding diluted
share count until the end of the hedge when shares are
delivered. The Company uses the effective conversion price
of $50.47 per share in its calculation of pro forma net
income per share because, as a result of the Conversion
Spread Hedges, the Convertible Senior Notes will not cause
any actual economic dilution to either the Company's
outstanding diluted shares or its net income per share
unless and until the Company's average common stock price
for the period in question is above the effective
conversion price of $50.47 per share.
-- All common stock warrants and shares of restricted common
stock are included in the calculation of pro forma net
income per share because pro forma net income has been
adjusted to exclude our preferred stock dividend and
stock-based compensation expense.
The presentation of this financial information should not be considered in isolation or as a substitute for the financial information prepared and presented in accordance Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with generally accepted accounting principles The standard accounting rules, regulations, and procedures used by companies in maintaining their financial records. Generally accepted accounting principles (GAAP) provide companies and accountants with a consistent set of guidelines that cover both broad accounting in the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. . [TABLE OMITTED] |
|
||||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion