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Strong bookings
lift Cheap Tickets
income137%

The stock closes at a 52-week
low of $9.69 before reporting
better-than-expected earnings

By Russ Lynch
Star-Bulletin

Cheap Tickets Inc. today reported a 137 percent increase in first-quarter earnings, showing a profit of $2.3 million compared with $970,000 in the same period last year.

Per-share earnings of 10 cents were up tenfold from a year-earlier 1 cent and well above the estimates of three analysts who follow the company. The estimates averaged 6 cents a share but ranged from 4 cents to 8 cents. The company had some 23 million shares outstanding compared with about 15 million a year earlier.

The earnings announcement was made after the stock market closed. Cheap Tickets shares closed today at a 52-week low of $9.69 on the Nasdaq today, down 621/2 cents.

The company reported first-quarter gross bookings of $158 million, up 77 percent from $89.7 million in the year-earlier quarter.

"The $158 million gross bookings total was a new quarterly record for Cheap Tickets, despite the fact that the first quarter is typically our lowest volume quarter in the year," said Mike Hartley, founder and chief executive officer.

The gross bookings figure is the total value of orders placed with Cheap Tickets. However, more than one-third of that is for fares on which Cheap Tickets keeps only travel agency commissions.

Net revenues, counting only those commissions and the amount Cheap Tickets gets from the resales of the tickets it bought from the airlines, were $100.1 million in the latest quarter, up 65 percent from $60.5 million in the 1999 quarter.

Founded in 1986 by Hartley, a former airline executive, Cheap Tickets went public in March 1999. The company buys blocks of unsold airline tickets and sells then at discount prices through the Internet and through its retail offices in Hawaii and on the mainland. Nearly 60 percent of its bookings in the recent quarter were in those nonpublished fares.

It also operates as a travel agency and sells hotel bookings, cruises, rental cars and other travel services.

Internet bookings were particularly strong in the latest quarter.

Hartley said Cheap Tickets had gross bookings of $60 million worth of travel from its www.cheaptickets.com Web site in the three months through March 31. That was a 196 percent increase in gross Internet bookings from the 1999 quarter.

The company signed up about 812,000 new users on its Web site in the latest quarter, bringing its total to about 4.2 million registered users. The Internet now accounts for about 38 percent of the company's total gross bookings, up from 33 percent a year ago.

Gross bookings by telephone through the company's call centers were $98.6 million in the latest quarter, up 42 percent from the year-earlier quarter.