EX-99.1 3 dex991.htm PRESS RELEASE Press Release

EXHIBIT 99.1

 

LOGO

 

www.bankrate.com

For more information contact:

 

Robert J. DeFranco

Senior Vice President

Chief Financial Officer

www.bankrate.com

bdefranco@bankrate.com

561.630.1230

 

Reminder — Conference Call Today at 11:00 a.m. Eastern Standard Time

                    Interactive Dial-In: 1-800-580-9496 (10 minutes before the call)

 

FOR IMMEDIATE RELEASE

 

BANKRATE, INC. REPORTS RECORD 2002

 

TOTAL REVENUE INCREASED 46% OVER 2001 RESULTING IN NET INCOME

OF $6.7 MILLION OR $0.46 PER SHARE

 

Continued Strong Demand Produces Highest Revenue Ever in 4th Quarter

 

NORTH PALM BEACH, FL—February 5, 2003—Bankrate, Inc. (NASDAQ: RATE), the Internet’s leading consumer banking marketplace, today reported a 46% increase in total revenue for the year ended December 31, 2002 to $26.6 million from $18.3 million in 2001. The Company reported its first profitable year with net income of $6.7 million, or $0.46 per share on a diluted basis, compared to a net loss of $936,000, or $0.07 per share on a diluted basis, reported for 2001. Excluding the non-cash gain on early extinguishment of debt of $2.0 million, or $0.14 per share, in the quarter ended March 31, 2002, the Company would have reported net income of $4.7 million, or $0.32 per share on a diluted basis, for 2002.These results exceed the earlier guidance for the year that the Company provided last November.

 

Commenting on Bankrate’s record year performance, President and CEO Elisabeth DeMarse said, “The substantial revenue and earnings increases generated throughout 2002 reflect our ability to execute a highly disciplined long-term growth strategy. We ended 2002 with robust traffic and advertising demand, producing record fourth quarter

 

4

revenue. These patterns have continued into this year’s first quarter, which is seasonally our strongest quarter. In fact, our traffic during January 2003 broke all previous records with an average of over 1.1 million page views per day and over 34.5 million page views for the month.”

 

For the fourth quarter of 2002, total revenues rose 46% to $7.5 million from $5.1 million in the fourth quarter of 2001. The Company reported a substantial increase in net income in the fourth quarter to $1.3 million, or $0.09 per share on a diluted basis, from $317,000, or $0.02 per share on a diluted basis, in the fourth quarter one year earlier. These results reflect Bankrate’s fifth consecutive profitable quarter as a result of strong advertiser demand and traffic patterns.

 

“Over the past two years, we have established the Bankrate brand as the gold standard for consumers seeking objective data and education for their most important banking needs and, at the same time, built a solid financial foundation for our Company,” Ms. DeMarse continued.

 

Fourth Quarter Highlights

 

Bankrate continued to experience unprecedented strength in revenue in all categories, resulting in higher year-over-year and consecutive quarter revenue for the three-month period:

 

  •   Total revenue of $7.5 million was 46% higher than the fourth quarter a year earlier, and 3% higher than the third quarter of 2002.

 

  •   Online publishing revenue of $6.4 million was up $2.1 million, or 50%, over the 2001 fourth quarter, and 2% over the third quarter of 2002.

 

  •   Hyperlink (rate table listings) revenue increased $482,000, or 34%, over the same quarter of 2001.

 

  •   Graphic ad revenue was up $1.2 million, or 57%, over the fourth quarter of 2001.

 

  •   Print publishing and licensing revenue of $1.1 million was up $223,000, or 26%, over 2001 and was 11% above the $978,000 reported in the third quarter of 2002.

 

  •   Page views for the fourth quarter of 2002 of 79.3 million were up 19% over the 66.5 million reported in the same quarter in 2001 while revenue per thousand page views increased 37% over the same period.

 

For the seventh consecutive quarter, the Company generated cash from operations. Cash increased to $11.0 million at December 31, 2002 from $9.8 million at December 31, 2001. “We paid off our $4.35 million subordinated debt for $3.4 million in February 2002 with available cash, leaving the Company virtually debt free, while generating over $4.6 million in cash flow for the year,” explained Bob DeFranco, Senior Vice President-Chief Financial Officer. “We remain sharply focused on maintaining a lean and highly profitable operation. At the same time, we are making important investments in the growth of our business both in terms of people and technology to remain efficient and cutting edge,” said DeFranco.

 

5

Online publishing revenue for the three months ended December 31, 2002 and 2001 included barter revenue of $509,000 and $643,000, representing approximately 7% and 13% of total revenue, respectively. Excluding barter revenue, gross margin improved to 71% for the three months ended December 31, 2002 from 68% for the same period in 2001. Barter expense was $532,000 and $636,000 for the three months ended December 31, 2002 and 2001, respectively.

 

2002 Full Year Highlights

 

  •   Total revenue for the 12 months ended December 31, 2002 of $26.6 million was $8.3 million, or 46%, higher than the $18.3 million reported for the same period in 2001.

 

  •   Online publishing revenue of $22.7 million was $7.7 million, or 51%, above the $15.0 million reported for the 12 months of 2001.

 

  •   Hyperlink revenue of $8.8 million increased $4.1 million, or 86%, over the same period in 2001.

 

  •   Graphic ad revenue was up $3.3 million, or 44%, over 2001.

 

  •   Print publishing and licensing revenue of $3.9 million was $649,000, or 20%, higher than the $3.3 million reported in the same period in 2001.

 

  •   Page views were up 31.1 million, or 13%, to 267.7 million from 2001 and revenue per thousand pages increased 40% over 2001.

 

Online publishing revenue for 2002 and 2001 included barter revenue of $2.9 million and $2.6 million, representing approximately 11% and 14% of total revenue, respectively. Excluding barter revenue, gross margin improved to 70% in 2002 from 65% in 2001. Excluding barter expense, operating expenses for the year ended December 31, 2002 of $12.0 million were within 10% of the comparable amount reported for 2001. Barter expense was $2.9 million and $2.8 million in 2002 and 2001, respectively.

 

NASDAQ

 

On January 9, 2003, Bankrate’s common stock began trading on the Nasdaq SmallCap Market under the stock symbol RATE. “This is a milestone achievement for our Company. We are committed to increasing shareholder value and we believe the move back to Nasdaq will provide high visibility for our performance,” concluded Ms. DeMarse.

 

Class Action Suit Dismissed

 

On January 28, 2003, the United States Court of Appeals for the Second Circuit affirmed the dismissal of a shareholders’ class action suit in its entirety.

 

As previously disclosed, a shareholder class action lawsuit was filed against the Company and certain of its officers and directors, its auditor and its underwriters in the United States District Court for the Southern District of

 

6

New York on March 28, 2000. On March 29, 2001, the United States District Court of the Southern District of New York dismissed the shareholders class action suit in its entirety with prejudice. On April 25, 2001, plaintiffs appealed the decision to dismiss the suit to the United States Court of Appeals for the Second Circuit.

 

February 5, 2003 Conference Call Information

 

The Company has scheduled a teleconference on its 2002 results today at 11:00 am Eastern Standard Time. Please dial in 1-800-580-9496 10 minutes prior to the start time.

 

A replay of the teleconference will be available through February 26 by calling 1-888-843-8996 (domestic) or 1-630-652-3044 (international) and entering the pass code 6715886#.

 

About Bankrate, Inc.

 

Bankrate, Inc. (NASDAQ:RATE) owns and operates Bankrate.com, the Internet’s leading consumer banking marketplace. Bankrate.com averages 4 million unique visitors per month, according to comScore Media Metrix, which ranks Bankrate.com first in unique visitors in the “Financial information and advice” category. Bankrate.com reviews more than 4,800 financial institutions in 173 markets in 50 states. Bankrate.com is a destination site of personal finance channels, including banking, investing, taxes and small business finance. It is the leading aggregator of over 100 financial products, including mortgages, credit cards, new and used auto loans, money market accounts and CDs, checking and ATM fees, home equity loans and online banking fees. Bankrate.com provides financial applications and information to a network of more than 80 partners, including MSN (NASDAQ: MSFT), Yahoo! (NASDAQ: YHOO), America Online (NYSE: AOL), CNN and Smart Money. Bankrate.com’s information is also distributed through more than 100 national and state publications.

 

Certain matters discussed in this press release are or may be considered to be “forward-looking statements” within the meaning of the Securities Act of 1933 and the Securities Exchange Act of 1934, as amended by the Private Securities Litigation Reform Act of 1995. Those statements include statements regarding the intent, belief or current expectations of the Company and members of our management team. Such forward-looking statements include without limitation statements made with respect to future revenue, revenue growth, market acceptance of our products, and profitability. Investors and prospective investors are cautioned that any such forward-looking statements are not guarantees of future performance and involve risks and uncertainties, and that actual results may differ materially from those contemplated by such forward-looking statements. Important factors currently known to management that could cause actual results to differ materially from those in forward-looking statements include the following: we have a history of losses and could run out of cash; we use barter transactions that do not generate cash; our success depends on Internet advertising revenue, interest rate volatility, establishing and maintaining distribution arrangements, and increasing brand awareness of our Web site; our markets are highly competitive; our Web site may encounter technical problems and service interruptions; we rely on the protection of our intellectual property; we may face liability for information on our Web site; future government regulation of the Internet is uncertain and subject to change; our ownership is heavily concentrated; our success may depend on management and key employees; we may encounter difficulties with future acquisitions; our results of operation may fluctuate significantly; and our stock price may be volatile in the future. These and additional important factors to be considered are set forth under “Item 1. Business—Risk Factors,” “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” and in the other sections of our Annual Report on Form 10-K for the year ended December 31, 2001, and in our other filings with the Securities and Exchange Commission. We undertake no obligation to update or revise forward-looking statements to reflect changed assumptions, the occurrence of unanticipated events or changes to future operating results or expectations.

 

Financial Statements Follow

 

7

 

Bankrate, Inc.

Balance Sheets

 

    

December 31,

2002

     

December 31,

2001

  
       

                                                                 Assets

                  

Cash and cash equivalents

   

$

11,000,561

 

   

$

9,755,032

 

Accounts receivable, net of allowance for doubtful accounts of $200,000

                  

and $140,000 at December 31, 2002 and 2001, respectively

   

 

2,378,535

 

   

 

1,259,256

 

Other current assets

   

 

370,886

 

   

 

231,134

 

    
  

Total current assets

   

 

13,749,982

 

   

 

11,245,422

 

Furniture, fixtures and equipment, net

   

 

912,651

 

   

 

1,076,508

 

Intangible assets, net

   

 

206,915

 

   

 

69,622

 

Other assets

   

 

303,547

 

   

 

134,460

 

    
  

Total assets

   

$

15,173,095

 

   

$

12,526,012

 

    
  

                                         Liabilities and Stockholders’ Equity

                  

Liabilities:

                  

Accounts payable

   

$

809,068

 

   

$

699,054

 

Other accrued expenses

   

 

3,072,771

 

   

 

1,871,492

 

Accrued interest

   

 

—  

 

   

 

217,500

 

Deferred revenue

   

 

255,081

 

   

 

347,869

 

Current portion of obligations under capital leases

   

 

1,254

 

   

 

36,406

 

Other current liabilities

   

 

242,637

 

   

 

207,952

 

    
  

Total current liabilities

   

 

4,380,811

 

   

 

3,380,273

 

10% convertible subordinated note payable

   

 

—  

 

   

 

4,350,000

 

Accrued interest

   

 

—  

 

   

 

810,363

 

Other liabilities

   

 

142,226

 

   

 

3,264

 

    
  

Total liabilities

   

 

4,523,037

 

   

 

8,543,900

 

    
  

Stockholders’ equity:

                  

Preferred stock, 10,000,000 shares authorized and undesignated

   

 

—  

 

   

 

—  

 

Common stock, par value $.01 per share—100,000,000 shares authorized; 13,998,168 and 13,996,950 shares issued and outstanding at December 31, 2002 and 2001, respectively

   

 

139,982

 

   

 

139,969

 

Additional paid in capital

   

 

63,932,578

 

   

 

63,931,555

 

Accumulated deficit

   

 

(53,422,502

)

   

 

(60,089,412

)

    
  

Total stockholders’ equity

   

 

10,650,058

 

   

 

3,982,112

 

    
  

Total liabilities and stockholders’ equity

   

$

15,173,095

 

   

$

12,526,012

 

    
  

 

8

 

Bankrate, Inc.

Statements of Operations

 

    

Year Ended December 31,

  
    

2002

     

2001

     

2000

  

Revenue:

                           

Online publishing

   

$

22,651,216

 

   

$

14,985,903

 

   

$

12,282,795

 

Print publishing and licensing

   

 

3,919,815

 

   

 

3,271,223

 

   

 

2,921,970

 

    
  
  

Total revenue

   

 

26,571,031

 

   

 

18,257,126

 

   

 

15,204,765

 

    
  
  

Cost of revenue:

                           

Online publishing

   

 

4,226,624

 

   

 

3,268,528

 

   

 

7,114,258

 

Print publishing and licensing

   

 

2,862,338

 

   

 

2,173,529

 

   

 

1,982,885

 

    
  
  

Total cost of revenue

   

 

7,088,962

 

   

 

5,442,057

 

   

 

9,097,143

 

    
  
  

Gross margin

   

 

19,482,069

 

   

 

12,815,069

 

   

 

6,107,622

 

    
  
  
    

 

73

%

   

 

70

%

   

 

40

%

Operating expenses:

                           

Sales

   

 

3,861,967

 

   

 

3,096,401

 

   

 

3,234,148

 

Marketing

   

 

3,477,379

 

   

 

2,922,867

 

   

 

3,873,796

 

Product development

   

 

1,422,206

 

   

 

1,385,672

 

   

 

1,949,933

 

General and administrative

   

 

5,536,774

 

   

 

5,511,572

 

   

 

8,467,279

 

Restructuring charge

   

 

—  

 

   

 

—  

 

   

 

2,285,422

 

Depreciation and amortization

   

 

621,458

 

   

 

700,497

 

   

 

873,484

 

Goodwill amortization

   

 

—  

 

   

 

—  

 

   

 

231,214

 

    
  
  
    

 

14,919,784

 

   

 

13,617,010

 

   

 

20,915,276

 

    
  
  

Income (loss) from operations

   

 

4,562,285

 

   

 

(801,940

)

   

 

(14,807,654

)

Interest income (expense), net

   

 

82,833

 

   

 

(133,836

)

   

 

230,459

 

Gain on early extinguishment of debt

   

 

2,021,792

 

   

 

—  

 

   

 

—  

 

    
  
  

Income (loss) before income taxes and discontinued operations

   

 

6,666,910

 

   

 

(935,776

)

   

 

(14,577,195

)

Income taxes from continuing operations

   

 

—  

 

   

 

—  

 

   

 

—  

 

    
  
  

Income (loss) before discontinued operations

   

 

6,666,910

 

   

 

(935,776

)

   

 

(14,577,195

)

    
  
  

Discontinued operations:

                           

Loss from discontinued operations

   

 

—  

 

   

 

—  

 

   

 

(3,214,577

)

Gain on disposal of discontinued operations

   

 

—  

 

   

 

—  

 

   

 

871,212

 

    
  
  
    

 

—  

 

   

 

—  

 

   

 

(2,343,365

)

    
  
  

Net income (loss)

   

$

6,666,910

 

   

$

(935,776

)

   

$

(16,920,560

)

    
  
  

Basic and diluted net income (loss) per share:

                           

Income (loss) before discontinued operations—

                           

Basic

   

$

0.48

 

   

$

(0.07

)

   

$

(1.05

)

Diluted

   

$

0.46

 

   

$

(0.07

)

   

$

(1.05

)

Discontinued operations—

                           

Basic

   

$

—  

 

   

$

—  

 

   

$

(0.17

)

Diluted

   

$

—  

 

   

$

—  

 

   

$

(0.17

)

Net income (loss)—

                           

Basic

   

$

0.48

 

   

$

(0.07

)

   

$

(1.22

)

Diluted

   

$

0.46

 

   

$

(0.07

)

   

$

(1.22

)

Weighted average common shares outstanding:

                           

Basic

   

 

13,997,168

 

   

 

13,996,950

 

   

 

13,872,788

 

Diluted

   

 

14,609,359

 

   

 

13,996,950

 

   

 

13,872,788

 

 

9