Bankrate Reports Record 3rd Quarter As Earnings Surge On A 73% Revenue Increase; Nine-Month Revenue Exceeds All of 2001, Reflecting a Robust Core Business.Business Editors NORTH PALM BEACH, Fla.--(BUSINESS WIRE)--Nov. 6, 2002 Bankrate, Inc. (OTCBB OTCBB See OTC Bulletin Board (OTCBB). :RATE), the Internet's leading consumer banking marketplace, today reported a sharp net income increase to a record $1,628,000, or $0.11 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, for the third quarter ended September September: see month. 30, 2002, from a loss of $379,000, or $0.03 per share, in the third quarter a year earlier. These results reflect Bankrate's fourth 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. Total revenue for the third quarter rose 73% to $7,243,000 from $4,189,000 in the third quarter of 2001. The Company reported net income of $5,341,000, or $0.38 per share on a diluted basis, for the nine months ended September 30, 2002 compared to a net loss of $1,253,000, or $0.09 per share, for the comparable period in 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 $2,022,000, or $0.14 per share, in the quarter ended March 31, 2002, the Company would have reported net income of $3,319,000, or $0.23 per share on a diluted basis, for the nine months ended September 30, 2002. Total revenue for the nine months ended September 30, 2002 rose 45% to $19,082,000 from $13,136,000 in the same period in 2001 and $18,257,000 for the year ended December December: see month. 31, 2001. Third 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 $7,243,000 was 73% higher than the third quarter a year earlier, and 17% higher than the second quarter of 2002. - Online publishing revenue of $6,265,000 was up $2,894,000, or 86%, over the 2001 third quarter, and 19% over the second quarter of 2002. - Hyperlink A predefined linkage between one object and another. See hypertext. hyperlink - anchor (rate table listings) revenue increased $1,082,000, or 85%, over the same quarter of 2001 and 7% over the second quarter of 2002. - Print publishing and licensing revenue of $978,000 was up $161,000, or 20%, over 2001 and was 5% above the $934,000 in the second quarter of 2002. Commenting on Bankrate's record third quarter and nine month results, 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: "Our very robust core business continued to generate impressive results in the third quarter and year to date. We have benefited from increasing strength in demand for our services - both on and off line - which resulted in nine-month revenue exceeding total revenue for all of 2001. Our focus on profits has produced substantial earnings gains and the first profitable nine-month period in our history. As the brand leader in the online consumer banking marketplace, Bankrate.com continues to build extraordinary value for consumers, advertisers and our more than 80 online partners." For the sixth consecutive quarter, the Company generated cash from operations. Cash increased from $6,510,000 at March 31, 2002 to $8,378,000 at September 30, 2002, and the Company remains virtually debt-free. "Our strong balance sheet and cash flow have put us in the enviable en·vi·a·ble adj. So desirable as to arouse envy: "the enviable English quality of being able to be mute without unrest" Henry James. position of being able to take advantage of opportunities that may present themselves to extend our product lines either through internal growth or by acquisition," explained Bob DeFranco, Senior Vice President-Chief Financial Officer. Additional third quarter highlights include new distribution agreements with The Wall Street Journal, The 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 Times (NYSE NYSE See: New York Stock Exchange :NYT NYT New York Times NYT National Youth Theatre (UK) NYT New York Transit (New York, USA) NYT New York Tribune ) on the Web, and The New York Post The New York Post is the 13th-oldest newspaper published in the United States and the oldest to have been published continually as a daily.[3] Since 1976, it has been owned by Australian-born billionaire Rupert Murdoch's News Corporation and is one of the 10 . In addition, Bankrate renewed re·new v. re·newed, re·new·ing, re·news v.tr. 1. To make new or as if new again; restore: renewed the antique chair. 2. its partnership agreement with America Online See AOL. . This relationship is one of Bankrate's oldest, dating back to 1997. Online publishing revenue for the three months ended September 30, 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 $641,000 and $450,000, and represented approximately 9% and 11% of total revenue, respectively. Hyperlink revenue accounted for 42% of online publishing revenue, excluding barter revenue, for the three months ended September 30, 2002, compared to 44% for the comparable period in 2001 and 51% for the three months ended June June: see month. 30, 2002. Excluding barter revenue, gross margin improved from 65% for the three months ended September 30, 2001 to 71% for the same period in 2002. Barter expense was $619,000 and $450,000 for the three months ended September 30, 2002 and 2001, respectively. Nine Month Highlights - Total revenue for the nine months ended September 30, 2002 of $19,082,000 was 45% higher than the $13,136,000 reported for the same period in 2001 and 5% higher than total revenue for the 12 months of 2001. - Online publishing revenue of $16,246,000 was $5,521,000, or 51%, above the first nine months of 2001. - Hyperlink revenue of $6,294,000 increased $3,002,000, or 91%, over the same period in 2001. - Print publishing and licensing revenue of $2,837,000 was $426,000, or 18%, higher than the $2,411,000 reported for the 2001 nine-month period. Online publishing revenue for the nine months ended September 30, 2002 and 2001 included barter revenue of $2,403,000 and $1,915,000, and represented approximately 13% and 15% of total revenue, respectively. Hyperlink revenue accounted for 45% of online publishing revenue, excluding barter revenue, in the 2002 period compared to 37% in the 2001 period. Excluding barter revenue, gross margin improved from 64% for the nine months ended September 30, 2001 to 70% for the same period in 2002. 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 nine months ended September 30, 2002 of $8,375,000 were within $192,000, or 2%, of the comparable amount reported for the same period in 2001. Barter expense was $2,388,000 and $2,115,000 for the nine months ended September 30, 2002 and 2001, respectively. Strong Advertising Demand and Traffic Patterns "Historically, our first calendar quarter has been our highest in terms of page views, and we have typically experienced a slowdown For articles with similar titles, see Slow Down (disambiguation). A slowdown is an industrial action in which employees perform their duties but seek to reduce productivity or efficiency in their performance of these duties. in traffic during our third and fourth quarters. So far this year, certain traffic initiatives and expanded commitments from our distribution partners, as well as the favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. activity in mortgage lending, has caused increases in traffic inconsistent Reciprocally contradictory or repugnant. Things are said to be inconsistent when they are contrary to each other to the extent that one implies the negation of the other. with our historical trends. Fortunately, the Company was positioned to monetize Monetize 1. To convert into money. 2. To convert from securities into currency that can be used to purchase goods and services. Notes: For example, you'll often hear Internet marketers talk about "monetizing website visitors. and drive those increases straight to the bottom line," said DeMarse. November November: see month. 6 Conference Call Information The Company has scheduled a teleconference on its third quarter results today at 11:00 am Eastern time. Please dial in (800) 886-4674 10 minutes prior to the start time. A replay of the teleconference will be available through November 27 by calling 888-843-8996 (domestic) or 630-652-3044 (international) and entering the pass code 6343830. About Bankrate, Inc. Bankrate Inc. (OTCBB:RATE) owns and operates Bankrate.com, the Internet's leading consumer banking marketplace. Averaging 3.3 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, 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 ranked 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 (NYSE: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 Interactive Dial-In: 1-800-886-4674 (10 minutes before the call)
Bankrate, Inc.
Condensed Balance Sheets
(Unaudited)
September 30, December 31,
2002 2001
------------ ------------
Assets
Cash and cash equivalents $8,378,337 $9,755,032
Accounts receivable, net of allowance for
doubtful accounts of $200,000
at September 30, 2002 and $140,000 at
December 31, 2001 2,933,078 1,259,256
Other current assets 381,745 231,134
------------ ------------
Total current assets 11,693,160 11,245,422
Furniture, fixtures and equipment, net 999,460 1,076,508
Intangible assets, net 241,147 69,622
Other assets 317,085 134,460
------------ ------------
Total assets $13,250,852 $12,526,012
============ ============
Liabilities and Stockholders' Equity
Liabilities:
Accounts payable $654,859 $699,054
Other accrued expenses 2,666,396 1,871,492
Accrued interest - 217,500
Deferred revenue 278,933 347,869
Current portion of obligations under
capital leases 8,550 36,406
Other current liabilities 225,329 207,952
------------ ------------
Total current liabilities 3,834,067 3,380,273
10% convertible subordinated note payable - 4,350,000
Accrued interest - 810,363
Other liabilities 93,381 3,264
------------ ------------
Total liabilities 3,927,448 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; 13,996,950
shares issued and outstanding 139,969 139,969
Additional paid in capital 63,931,555 63,931,555
Accumulated deficit (54,748,120) (60,089,412)
------------ ------------
Total stockholders' equity 9,323,404 3,982,112
------------ ------------
Total liabilities and stockholders'
equity $13,250,852 $12,526,012
============ ============
Bankrate, Inc.
Condensed Statements of Operations
(Unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
Revenue: 2002 2001 2002 2001
----------- ----------- ------------ ------------
Online publishing $6,264,936 $3,370,657 $16,245,680 $10,725,010
Print publishing
and licensing 978,447 817,926 2,836,670 2,410,639
----------- ----------- ------------ ------------
Total revenue 7,243,383 4,188,583 19,082,350 13,135,649
----------- ----------- ------------ ------------
Cost of revenue:
Online publishing 1,148,031 750,252 2,965,233 2,426,520
Print publishing
and licensing 746,788 552,370 2,085,843 1,595,880
----------- ----------- ------------ ------------
Total cost of
revenue 1,894,819 1,302,622 5,051,076 4,022,400
----------- ----------- ------------ ------------
Gross margin 5,348,564 2,885,961 14,031,274 9,113,249
----------- ----------- ------------ ------------
Operating expenses:
Sales 1,026,862 680,227 2,822,331 2,253,226
Marketing 839,979 475,552 2,730,266 2,273,417
Product
development 365,599 360,211 1,046,441 1,046,768
General and
administrative 1,345,637 1,546,282 3,722,542 4,176,849
Depreciation and
amortization 174,283 165,454 441,276 547,024
----------- ----------- ------------ ------------
3,752,360 3,227,726 10,762,856 10,297,284
----------- ----------- ------------ ------------
Income (loss)
from
operations 1,596,204 (341,765) 3,268,418 (1,184,035)
Interest income
(expense), net 31,423 (37,712) 51,082 (68,653)
Gain on early
extinguishment of
debt - - 2,021,792 -
----------- ----------- ------------ ------------
Income (loss)
before income
taxes 1,627,627 (379,477) 5,341,292 (1,252,688)
Income taxes - - - -
----------- ----------- ------------ ------------
Net income
(loss) $1,627,627 $(379,477) $5,341,292 $(1,252,688)
=========== =========== ============ ============
Basic and diluted net income (loss) per share:
Basic $0.12 $(0.03) $0.38 $(0.09)
=========== =========== ============ ============
Diluted $0.11 $(0.03) $0.38 $(0.09)
=========== =========== ============ ============
Weighted average common shares outstanding:
Basic 13,996,950 13,996,950 13,996,950 13,996,950
Diluted 14,566,248 13,996,950 14,151,085 13,996,950
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