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NORTH PALM BEACH, FLA. -- November 7, 2000 -- Bankrate
Inc. (NASDAQ: RATE; formerly ilife.com, Inc.) today announced that online
publishing revenue for the nine months ended Sept. 30, 2000, increased
59 percent, or $3,360,000, to $9,073,000 over $5,712,000 in the same period
in 1999. Total revenue of $11,276,000 for the nine-month period in 2000
was $2,941,000, or 35 percent, higher than the $8,335,000 in the same
period in 1999. Online publishing revenue for the quarter ended Sept.
30, 2000, of $3,012,000 was $596,000, or 25 percent, higher than the $2,417,000
in the comparable quarter in 1999. Total third quarter revenue of $3,724,000
was $427,000, or 13 percent, higher than the $3,297,000 in the same quarter
in 1999.
Revenue lines hold solid
"Online revenues, in addition to growing year-over-year, have held
solid during the third quarter," said Elisabeth DeMarse, president
and CEO. "There is no doubt that this was a challenging quarter for
advertising supported Web sites, both because of the slowdown in banner
advertising from dot-coms and the impact of seasonality on Web usage.
However, we saw our online advertising revenues and our traffic weather
the storm."
"Moreover, during the third quarter,
as in previous quarters, approximately 30 percent of our advertisers were
pureplay Internet companies. This is the inverse of the industry average
of 70 percent. Finally, our business model is to serve as the primary
distribution channel for consumer banks to reach their customers over
the Internet. As such, we support all of a bank’s customer access
points, including addresses for brick and mortar locations, inbound toll
free numbers, as well as web site addresses. This brick and click support
is why banks prefer Bankrate."
Benefits of restructuring on the expense
side
DeMarse added, "I am pleased to report
strong improvement in our business fundamentals. Revenue per employee
doubled from approximately $5,000/month in the first quarter of 2000 to
approximately $10,000/month in the third quarter. We experienced a net
loss per share excluding restructuring and impairment charges, and the
net gain on disposal of discontinued operations, of $0.19 for the quarter.
Furthermore, we expect our fourth quarter loss to continue to narrow as
a result of our restructuring efforts."
Gross margins show continued improvement
since the restructuring effort began in June of 2000. Gross margins were
47 percent in September, versus 25 percent in January. Gross margins for
the quarter were 42 percent, versus 36 percent for the second quarter
and 25 percent for the first quarter.
During the nine months ended Sept. 30, 2000,
the Company recorded restructuring and goodwill impairment charges of
$2,141,000 related to the June 2000 reduction of staff levels, the write-off
of certain assets and the shut-down of Consejero.com, the Company’s
Spanish language personal finance Web site. On July 14, 2000, the Company
sold its online insurance business, Professional Direct Agency Inc. ("Pivot"),
to a subsidiary of First Union Corporation for $4,350,000 in cash resulting
in a gain of approximately $871,000. The net operating losses of Pivot
for the three and nine months ended Sept. 30, 2000, were $248,000 and
$3,215,000, respectively. The net operating losses and the gain on the
sale are presented as discontinued operations in the Company’s condensed
consolidated statements of operations.
Excluding the restructuring and goodwill
impairment charges described above, total operating expenses for the quarter
ended Sept. 30, 2000, decreased $5,282,000, or 55 percent, to $4,331,000
compared to $9,613,000 in the comparable quarter in 1999. Total operating
expenses for the nine months ended Sept. 30, 2000, were down $3,601,000,
or 19 percent, to $15,355,000 compared to $18,956,000 in the same period
in 1999, excluding the restructuring and goodwill impairment charges.
Excluding the restructuring and goodwill
impairment charges and the net gain from discontinued operations described
above, the net loss for the quarter ended Sept. 30, 2000, was $2,720,000,
or $0.19 per share, compared to a net loss of $7,958,000, or $0.59 per
share, for the comparable period in 1999. The net loss for the nine-month
period ended Sept. 30, 2000, (excluding the restructuring and goodwill
impairment charges and the net loss from discontinued operations), was
$11,516,000, or $0.83 per share compared to $20,190,000, or $2.25 for
the same period in 1999.
The Company reported a net loss applicable
to common stock of $2,940,000, or $0.21 per share, for the quarter ended
Sept. 30, 2000, compared to a net loss applicable to common stock of $8,500,000,
or $0.63 per share, for the same quarter in 1999, representing a $0.42,
or 67 percent improvement. The net loss applicable to common stock for
the nine months ended Sept. 30, 2000, was $16,000,000, or $1.16 per share,
compared to a net loss applicable to common stock of $20,733,000, or $2.31
per share, in the comparable period in 1999.
Growth metrics:
Bankrate experienced positive usage metrics versus a year ago: Ad Views
for the nine-month period ended Sept. 30, 2000, increased 82 million,
or 38 percent, to 296 million compared to 214 million during the same
period in 1999. Gross margin grew from 25 percent in January 2000 to 47
percent in September 2000. Page views for the nine-month period ended
Sept. 30, 2000, grew from 65.2 million in the 1999 period to 101.7 million
in the 2000 period, a 56 percent increase.
Third quarter business initiatives:
Management Team Expanded: Ned Newhouse, founding
member of 24/7 Media, joined Bankrate in September as Chief Revenue Officer
and Senior Vice President of Sales and Business Development. Newhouse
brings a demonstrated track record of deep dot.com expertise and advertising
revenue development needed to grow Bankrate. Ned’s proven leadership
abilities at 24/7 Media, as well as his extensive network of corporate
relationships, will be a significant benefit to Bankrate’s business
model moving forward.
G. Cotter Cunningham, formerly Senior Vice President - Marketing
& Product Development, was promoted to Senior Vice President - Chief
Operating Officer in September. Robert J. DeFranco, formerly Vice President
- Finance and Chief Accounting Officer, was promoted to Senior Vice President
- Chief Financial Officer in September as well. Cunningham also served
as interim CEO in the months prior to hiring current CEO, Elisabeth DeMarse.
"Both Bob and Cotter have been with the Company since
March 1999 and have demonstrated the leadership required to help guide
us on our path to profitability," explained DeMarse. "These
experienced senior management appointments will lead our business through
a period of rapid expansion. Our objective research on consumer banking
and money markets, along with the development and proliferation of the
Bankrate brand, are the core of our vision. Both Cotter and Bob are committed
to our sustained focus on our core brand, Bankrate.com."
Affiliate Program Launched: Bankrate’s new Affiliate
Program offers any Web site access to selected Bankrate news, research,
tools and content at no charge, while allowing Bankrate to expand the
reach of its advertising network. Since launching the Affiliate Program
on Aug. 8, Bankrate has signed up over 180 affiliates.
Wireless Delivery: In August
2000, Bankrate began delivering personalized Bankrate.com content and
services to mobile devices via the AvantGo mobile Internet service. Using
a wireless, real-time connection or via desktop synchronization, AvantGo
users can now access Bankrate.com information, including banking rates
and editorial content on their handheld devices and Internet-enabled phones.
Bankrate.com is a channel on AvantGo, with a menu of updated mortgage
rates, auto loan rates and CD rates.
Financial Management Tools Added:
eBalance, Inc., a leading provider of consolidated online financial management
and market intelligence tools, is now offering eBalance's personal financial
management service under Bankrate.com's My Money Manager(TM) brand. The
eBalance service provides Bankrate users with a free personal financial
manager, capturing financial data from banks, brokerages, mutual funds
and other online accounts, aggregating it into a single, easy-to-use interface,
and providing management tools.
AOL Partnership: In August
2000, Bankrate extended its alliance with America Online Inc. (NYSE: AOL)
under which Bankrate.com's personal finance research and tools will be
available to AOL members through AOL's Personal Finance Channel. Under
the new agreement, AOL members have access to a co-branded site featuring
a suite of Bankrate.com content, including information on taxes, investing,
living and small business, as well as a comprehensive detailing of rates,
surveys and research studies. The co-branded site is available through
AOL Personal Finance, ranked by Media Metrix as the number one financial
destination in cyberspace. This agreement expands on a prior alliance
between the companies under which Bankrate.com provides interest rate
information to AOL Personal Finance.
"We have successfully completed phase
one and two of our refocusing plan to bring this company to profitability,"
explained Jeff Cunningham, Chairman of the Board for Bankrate Inc. "Phase
one -- divestiture of our non-core assets -- has yielded a significant
savings of over $600,000 a month. This strategic move not only reduced
our cash burn rate, but allowed greater focus on our flagship site and
brand, Bankrate.com."
"The phase two focus on reduction of
expenses has successfully returned Bankrate to below IPO staffing levels,
while continuing to improve our bottom line compared to recent quarters.
Bankrate is committed to using our capital in the most advantageous way
to build long-term value for our investors. Our strategy is to leverage
our brand and experience to be a leader in the personal finance sector
and enhance our product. 2000 has been a pivotal year for Bankrate. We
have been focused on advancing the company to the next level with significant
re-structuring in our infrastructure, technology and core product."
"We have aggressively rebuilt our balance
sheet," stated Elisabeth DeMarse. "We have sold or closed non-core
sites, eliminated overhead, reduced marketing, and refocused our attention
to our core product. These steps are the milestones in our successful
third quarter."
"The improvement in our bottom line
is hard evidence that our core product is a front-runner in the Internet
personal finance arena," continued DeMarse. "The strategic reinvestment
in our core products --- research, editorial and advertising revenue,
positioned Bankrate for future growth. We are confident that this momentum
will continue in 2001.
"Bankrate’s path to profitability
is clear and focused. With over 300 finance and e-commerce advertisers,
59 percent growth year-over-year, strong advertising renewal base and
a CPM that is up to four times greater than the industry average, we have
enhanced our revenue drivers. As the 7th largest finance news
site, according to PC Data, coupled with our 1.6 million unique users
per month who are accessing an average of 4.7 page views per visit, Bankrate
is the one of the Internet’s leading consumer banking marketplaces.
Over half of our traffic is driven from our strong partnership base, which
includes AOL, Yahoo!, SmartMoney, AT&T and MSN."
About Bankrate.com
Bankrate.com is owned and operated by Bankrate Inc. (NASDAQ: RATE). Bankrate.com
is the Internet's leading consumer banking marketplace, with an average
of 1.6 million unique visitors per month connecting with over 4,000 financial
institutions in 126 markets in 50 states. Bankrate operates a portfolio
of personal finance channels, including banking, investing, taxes and
small business finance. It is the leading aggregator of 100 financial
products, including mortgages, credit cards, new and used auto loans,
money market accounts and CD's, checking and ATM fees, home equity loans
and online banking fees.
Bankrate provides financial applications
and information to a network of over 130 partners including NBCi (NASDAQ:
NBCI), Yahoo (NASDAQ: YHOO), America Online (NYSE: AOL), CNN and Smart
Money. The company's information is also distributed through more than
100 national and state publications.
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