| Preview Travel, Inc. | |||
| Proposed Ticker: | PTVL | 747 Front Street | |
| Exchange: | NASDAQ-National Market | San Francisco, CA 94111 | |
| Industry: | Transportation (SIC Code 4724) | (415) 439-1200 | |
| # of Employees: | 146 | ||
| Type of Shares: | Common Shares | Filing Date: | 10/3/97 | |
| U.S. Shares Filed: | 2,500,000 | Filing Price: | $11.00 | |
| Non-U.S. Shares Filed: | 0 | Offering Amount: | $27,500,000 | |
| Primary Shares: | 2,500,000 | Expenses: | $850,000 | |
| Secondary Shares: | 0 | Shares Out After: | 11,616,973 |
| Manager | Tier | Phone |
| Hambrecht & Quist Incorporated | Lead Manager | (415) 439-3626 |
| Nationsbanc Montgomery Securities, Inc. | Co-manager | (415) 627-2100 |
| Issuer's Law Firm: | Venture Law Group |
| Bank's Law Firm: | Wilson, Sonsini, Goodrich & Rosati |
| Auditor: | Coopers & Lybrand |
| Registrar/Transfer Agent: | U. S. Stock Transfer Corporation |
Dollar amounts in U.S. millions except for per share data | |||||
| 3 Month Ending Financials | |||||
| Full Year Audited Income | Latest Unaudited Income | Prior Unaudited Income | Balance Sheet | ||
| 12/31/96 | 6/30/97 | 6/30/96 | 6/30/97 | ||
| Revenue: | $12.37 | $3.21 | $3.30 | Assets: | $8.47 |
| Net Income: | -$5.59 | -$1.54 | -$0.65 | Curr Assets: | $3.11 |
| EPS: | -$0.65 | -$0.17 | -$0.08 | Liabilities: | $6.95 |
| Prior EPS: | -$0.70 | -$2.92 | -$0.28 | Curr Liabilities: | $5.51 |
| Cash Flow/Oper: | -$1.28 | -$1.05 | $8.21 | Equity: | $1.52 |
| Cash Flow/Fin: | $7.21 | -$0.92 | -$0.77 | Cash: | $1.14 |
| Cash Flow/Inv: | -$0.98 | -$0.92 | Working Cap: | -$2.39 | |
| Business Description |
| The company is a leading provider of branded online travel services for leisure and small business travelers. The company operates its own web sites, the primary travel service on America Online, Inc. and a co-branded travel Web site with Excite, Inc. The Company offers one-stop travel shopping and reservation services, providing reliable, real-time access to schedule, pricing and availability information for over 500 airlines, 13,000 hotels and all major car rental companies. The Company's proprietary technology and user-friendly interface enable customers to easilyand quickly access travel information 24 hours a day, seven days a week, to make informed choices about their travel purchases. In addition to its reservation and ticketing service, the Company offers vacation packages, discounted and promotional fares, travel news and destination content. The Company complements its compelling content and user-friendly interface with a high level of customer service. |
| Competition |
| The online travel services market is new, rapidly evolving and intensely competitive, and the Company expects such competition to intensify in the future. The Company competes primarily with traditional travel agency reservation methods and online travel reservation services. In the online travel services market, the Company competes with other entities that maintain similar commercial Web sites, such as Expedia (operated by Microsoft Corporation), Travelocity (operated by SABREGroup Holdings Inc., a majority- owned subsidiary of American Airlines), CUC International, Inc., TravelWeb (operated by Pegasus) and Internet Travel Network, among others. Several traditional travel agencies, including larger travel agencies such as American Express Travel Related Services Co. Inc., Uniglobe Travel and Carlson Wagonlit Travel, have established, or may establish in the future, commercial Web sites offering online travel services. In addition to the traditional travel agency channel, most travel suppliers also sell their services directly to customers, typically by telephone. As the market for online travel services grows, the Company believes that the range of companies involved in the online travel services industry, including travel suppliers, traditional travel agencies and travel industry information providers, will increase their efforts to develop services that compete with the Company's services. Many airlines and hotels offer travel services directly through their own Web sites, eliminating the need to pay commissions to third parties such as the Company. The Company is unable to anticipate which other companies are likely to offer competitive services in the future. There can be no assurance that the Company's online operations will compete successfully with any current or future competitors. In the television and in-flight programming markets, the Company's News Travel Network division competes for airtime for its programs with news and entertainment programming produced by local stations, broadcast and cable networks, infomercial producers and third party syndicators. NTN competes for national advertising sales with networks, national advertising representation firms and syndicators. Many of the Company's current and potential competitors have longer operating histories, larger customer bases, greater brand recognition and significantly greater financial, marketing and other resources than the Company and may enter into strategic or commercial relationships with larger, more established and well-financed companies. Certain of the Company's competitors may be able to secure services and products from travel suppliers on more favorable terms, devote greater resources to marketing and promotional campaigns and devote substantially more resources to Web site and systems development than the Company. In addition, new technologies and the expansion of existing technologies may increase competitive pressures on the Company. In particular, Microsoft Corporation has publicly announced its intent to invest heavily in the area of travel technology and services. Increased competition may result in reduced operating margins, loss of market share and brand recognition. There can be no assurance that the Company will be able to compete successfully against current and future competitors, and competitive pressures faced by the Company may have a material adverse effect on the Company's business, operating results and financial condition. |
| Business Plan |
| Preview Travel's objective is to be the leading provider of branded online travel services for leisure and small business travelers. The Company plans to attain this goal through the following key strategies: (I) Deliver Compelling Value to Customers, (ii) Build Customer Loyalty and Brand Recognition, (iii) Enhance and Expand Strategic Relationships, (iv) Broaden Existing Offerings and Pursue Incremental Revenue Opportunities, (v) Leverage Travel Programming and Television Relationships, (vi) Continue Investment in Technology and (vii) Expand into International Markets. |
| Use of Proceeds |
| The proceeds from the proposed offering will be used for working capital, payment of obligations and general corporate purposes. |
| Name of Shareholder | % Owned Before | % Owned After |
| Theodore J. Leonsis | 15.40% | 11.90% |
| America Online, Inc. | 15.40% | 11.90% |
| William R. Hearst, III | 15.10% | 11.60% |
| Entities affiliated with Kleiner Perkins and Caufield & Byers | 15.10% | 11.60% |
| Douglas J. Mackenzie | 15.10% | 11.60% |
| James J. Hornthal | 13.20% | 10.10% |
| U S WEST Interactive Services, Inc. | 11.80% | 8.90% |
| Thomas A. Cullen | 11.80% | 8.90% |
| General Electric Capital Corporation | 8.10% | 6.20% |
| KLAS, Inc. | 8.00% | 6.10% |
| Officer Name | Title | Age |
| James J. Hornthal | Chairman and Director | 43 |
| David E. Lambert | Executive Vice President and President of Preview Travel Online, Inc. | 45 |
| Kenneth R. Pelowski | Executive Vice President Finance and Administration, Chief Financial Officer and Secretary | 38 |
| Roy F. Walkenhorst | President of News Travel Network, Inc. | 54 |
| Kenneth J. Orton | President, Chief Executive Officer and Director | 46 |
| Christopher Lee McAndrews | Senior Vice President of Online Media Sales | 33 |
| Barrie Seidenberg | Senior Vice President of Online Services | 32 |
| John M. Petrone | Senior Vice President of Technology Services | 35 |