Bankrate, Inc. Reports Record 2002; Total Revenue Increased 46% Over 2001 Resulting in Net Income of $6.7 Million or $0.46 Per Share.Business Editors NORTH PALM BEACH, Fla.--(BUSINESS WIRE)--Feb. 5, 2003 Continued Strong Demand Produces Highest Revenue Ever in 4th Quarter Bankrate, Inc. (Nasdaq:RATE), the Internet's leading consumer banking marketplace, today reported a 46% increase in total revenue for the year ended December December: see month. 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 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. 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 The destruction or cancellation of a right, a power, a contract, or an estate. Extinguishment is sometimes confused with merger, though there is a clear distinction between them. 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 November: see month. . Commenting on Bankrate's record year performance, President and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. Elisabeth Elisabeth. For persons thus named, use Elizabeth. DeMarse said, "The substantial revenue and earnings increases generated throughout 2002 reflect our ability to execute a highly disciplined long-term Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. growth strategy. We ended 2002 with robust traffic and advertising demand, producing record fourth quarter revenue. These patterns have continued into this year's first quarter, which is seasonally our strongest quarter. In fact, our traffic during January January: see month. 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 ad·ver·tise v. ad·ver·tised, ad·ver·tis·ing, ad·ver·tis·es v.tr. 1. To make public announcement of, especially to proclaim the qualities or advantages of (a product or business) so as to increase 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 Subordinated Debt A loan (or security) that ranks below other loans (or securities) with regard to claims on assets or earnings. Also known as "junior security" or "subordinated loan". for $3.4 million in February February: see month. 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. Online publishing revenue for the three months ended December 31, 2002 and 2001 included barter barter: see exchange. barter Direct exchange of goods or services without the use of money or any other intervening medium of exchange. Barter is conducted either according to established rates of exchange or by bargaining. 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 A predefined linkage between one object and another. See hypertext. hyperlink - anchor 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 Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. 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 dis·miss tr.v. dis·missed, dis·miss·ing, dis·miss·es 1. To end the employment or service of; discharge. 2. On January 28, 2003, the United States Court of Appeals for the Second Circuit The United States Court of Appeals for the Second Circuit is one of the thirteen United States Courts of Appeals. It has appellate jurisdiction over the district courts in the following districts:
v. af·firmed, af·firm·ing, af·firms v.tr. 1. To declare positively or firmly; maintain to be true. 2. To support or uphold the validity of; confirm. v.intr. the dismissal A discharge of an individual or corporation from employment. The disposition of a civil or criminal proceeding or a claim or charge made therein by a court order without a trial or prior to its completion which, in effect, is a denial of the relief sought by the commencement of the of a shareholders' class action suit in its entirety The whole, in contradistinction to a moiety or part only. When land is conveyed to Husband and Wife, they do not take by moieties, but both are seised of the entirety. . As previously disclosed, a shareholder class action lawsuit class action lawsuit A lawsuit in which one party or a limited number of parties sue on behalf of a larger group to which the parties belong. For example, investors may bring a class action lawsuit against a brokerage firm that has actively promoted a tax was filed against the Company and certain of its officers and directors, its auditor auditor n. an accountant who conducts an audit to verify the accuracy of the financial records and accounting practices of a business or government. A proper audit will point out deficiencies in accounting and other financial operations. and its underwriters in the United States District Court United States District Court In the U.S., any of the 94 trial courts of general jurisdiction in the federal judicial system. Each state, as well as the District of Columbia and the Commonwealth of Puerto Rico, has at least one federal district court. for the Southern District of New York New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of 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 dismiss v. the ruling by a judge that all or a portion (one or more of the causes of action) of the plaintiff's lawsuit is terminated (thrown out) at that point without further evidence or testimony. 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 A count of how many different people access a Web site. For example, if a user leaves and comes back to the site five times during the measurement period, that person is counted as one unique visitor, but would count as five "user sessions. per month, according to according to prep. 1. As stated or indicated by; on the authority of: according to historians. 2. In keeping with: according to instructions. 3. comScore comScore is an internet marketing research company that provides marketing data and services to many of the internet's largest businesses [1]. comScore tracks all internet data on its surveyed computers in order to study online behavior. 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 (1) (MicroSoft Network) A family of Internet-based services from Microsoft, which includes a search engine, e-mail (Hotmail), instant messaging (Windows Live Messaging) and a general-purpose portal with news, information and shopping (MSN Directory). (Nasdaq:MSFT MSFT Microsoft (stock symbol) MSFT Movimento Sociale Fiamma Tricolore (Italy) MSFT Multi-Stage Fitness Test MSFT Master of Science in Family Therapy MSFT Macalester Students for Fair Trade ), Yahoo! (Nasdaq:YHOO YHOO Yahoo! Inc. (NASDAQ symbol) ), America Online See AOL. (NYSE NYSE See: New York Stock Exchange :AOL (A division of Time Warner, Inc., New York, NY, www.aol.com) The world's largest online information service with access to the Internet, e-mail, chat rooms and a variety of databases and services. ), CNN CNN or Cable News Network Subsidiary company of Turner Broadcasting Systems. It was created by Ted Turner in 1980 to present 24-hour live news broadcasts, using satellites to transmit reports from news bureaus around the world. 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 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. " within the meaning of the Securities Act of 1933 and the Securities Exchange Act of 1934, as amended a·mend v. a·mend·ed, a·mend·ing, a·mends v.tr. 1. To change for the better; improve: amended the earlier proposal so as to make it more comprehensive. 2. by the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and 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 Delivering ads to Internet users via Web sites, e-mail, ad-supported software and Internet-enabled cellphones. Also called an "ad network," Internet advertising organizations act as a middleman between the advertiser and the Web sites and software publishers that display the ads. 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 Internet Publicly accessible computer network connecting many smaller networks from around the world. It grew out of a U.S. Defense Department program called ARPANET (Advanced Research Projects Agency Network), established in 1969 with connections between computers at the 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 Management's discussion and analysis (MD&A) A report from management to shareholders that accompanies the firm's financial statements in the annual report. It explains the period's financial results and enables management to discuss topics that may not be apparent in the financial of Financial Condition and Results of Operations'' and in the other sections of our Annual Report on 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. 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. Reminder -- Conference Call Today at 11:00 a.m. Eastern Standard Time; Interactive Dial-In: 1-800-580-9496 (10 minutes before the call) Financial Statements Follow
Bankrate, Inc.
Balance Sheets
December 31, December 31,
2002 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
=========== ===========
Bankrate, Inc.
Statements of Operations
Year Ended December 31,
Revenue: 2002 2001 2000
------------ ------------ -------------
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
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