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NORTH PALM BEACH, FLA.
(Jan. 29, 2001) -- Bankrate Inc. (OTCBB: RATE) today
announced that online publishing revenue for the year ended Dec. 31, 2000,
increased 45 percent, or $3,786,000, to $12,283,000 over the $8,497,000
reported in the same period in 1999. Total revenue of $15,205,000 for
the year ended Dec. 31, 2000, was $3,235,000, or 27 percent, higher than
the $11,970,000 reported in comparable period in 1999. Online publishing
revenue for the three months ended Dec. 31, 2000, of $3,210,000 was $425,000,
or 15 percent, higher than the $2,784,000 reported in the same three-month
period in 1999. Total revenue for the three months ending Dec. 31, 2000,
was $3,929,000 or 8 percent, higher than the comparable period in 1999.
Online publishing revenue for the three months and year ended Dec. 31,
2000, included barter revenue of $670,000 and $757,000, representing 17
percent and 5 percent of total revenue, respectively.
Record traffic
"Bankrate.com experienced tremendous traffic growth of more than
40 percent year-to-year in 2000," stated Elisabeth DeMarse, Bankrate's
president and CEO. Both PC Data OnLine and Media Metrix have recognized
Bankrate.com as a leading destination in our category. This strong growth
in traffic is directly attributable to our award-winning research and
content," continued DeMarse. "The marriage of our core product
with our flourishing sales efforts, partnership programs and site re-designs,
has created a tour-de-force in personal finance Web sites. Bankrate.com
is the Internet's leading consumer finance marketplace and our users recognize
that fact. As the objective source for personal finance information, Bankrate
consistently leads the pack with original and timely news and information
to assist users in making educated decisions about their finances."
Revenues Showing Year Over Year Growth
"In a turbulent year in online advertising, we have shown 27
percent yearly revenue growth," DeMarse said. "All advertising
supported sites have battled the doldrums of decreased banner advertising
and seasonal ebbs and tides. Our strong advertising partnerships and top-notch
sales teams will weather this storm and we are confident that our quarter-to-quarter
growth will show momentum. In particular, we identified weakness in the
graphic ad market early in the fourth quarter. Through extraordinary effort,
we were able to compensate with new advertisers, stellar campaign fulfillment
and boosts in our other revenue streams. Despite a challenging quarter,
we were able to meet our forecasts.
"Looking forward, a minority of our advertisers
-- fewer than 30 percent -- are Internet-only lenders and financial institutions,
making us less susceptible than most to the recent downturn in Internet
economy. By comparison, industry-wide, pure-play Internet companies have
made up the majority of advertisers, composing approximately 70 percent
of their total ad base.
"In addition, I am pleased to report strong improvement
in our business fundamentals. Revenue per employee more than doubled from
approximately $5,000 per month in the first quarter of 2000 to approximately
$11,000 per month in the fourth quarter.
Renewed focus
"Changing our name back to Bankrate reflects our renewed commitment
to our core product, Bankrate.com," DeMarse continued. "While
primarily a symbolic gesture, it drives home the point that this is what
we are: Bankrate.com is the primary online distribution channel for the
customer aquisition and retention efforts of banks and other lenders.
The Bankrate Inc. board's decision to return to our core brand was unanimous.
This decision to reach profitability as quickly as possible by shedding
the ambitions of the recent past and focusing on our core -- a product
that had been in business for more than 15 years -- was both smart and
timely."
New management and board members:
During 2000, three new members joined the board of directors. Jeff Cunningham,
formerly with Forbes and CMGI, joined as chairman of the board. Bill Martin,
one of the founders of Raging Bull, joined in April. In addition, Elisabeth
DeMarse joined as president and CEO and as a member of the board.
"We were pleased to attract someone as gifted and experienced
as Elisabeth and this excitement has been borne out by the strong showing
the company has made to date. While we haven't yet achieved our primary
goal of being cash-flow positive, we are well on our way," Cunningham
said.
In addition, Bankrate made sound and fundamental management
team decisions in 2000. G. Cotter Cunningham was promoted from senior
vice president of marketing and product development to senior vice president
and chief operating officer. Robert J. DeFranco was promoted from vice
president of finance and chief accounting officer to senior vice president
and chief financial officer. In addition, Ned Newhouse joined Bankrate
as senior vice president of sales and business development and chief revenue
officer. Newhouse was a founding member of 24/7 Media and brings a demonstrated
track record of dot-com expertise and advertising revenue development
needed to grow Bankrate.
"These three appointments have been beneficial to Bankrate's
business model," DeMarse said. "Our senior management team has
the experience and leadership necessary to keep Bankrate on the path to
profitability. They will continue to lead Bankrate through the dot-com
fray and help us expand our brand."
Site Redesign
"Bankrate is enjoying excellent traffic and usage metrics. We
are seeing increases in pages viewed per unique visitor while maintaining
a high ROI for the advertiser," said Jeff Cunningham. "These
users have recognized Bankrate as a valuable tool and information source.
Our site redesign, which has dramatically improved the users' experience,
along with our research, content and objective information, have led to
these increases in traffic. This new look and feel is a prelude to what's
coming from Bankrate."
"Bankrate will continue to innovate and re-establish
our standing as the Internet's leading consumer finance marketplace,"
Cunningham said. "The year 2000 has been a dynamic one for Bankrate
and it has been exhilarating to watch the rapid growth and ensuing successes."
Reduced Expenses
Gross margin continued to improve since the restructuring effort began
in June of 2000. Gross margin was 63 percent in December vs. 25 percent
in January. Gross margins for the quarters steadily improved from 25 percent
in the first quarter and 36 percent in the second quarter to 42 percent
and 63 percent in the third and fourth quarters, respectively.
During the year that ended Dec. 31, 2000, the company recorded
restructuring and goodwill impairment charges of $2,214,000 related to
the June 2000 reductions in staff levels, the write-off of certain assets,
the shutdown of Consejero.com, the company's Spanish-language personal
finance Web site, and the shutdown of greenmagazine.com. On July 14, 2000,
the company sold its online insurance business, Professional Direct Agency
Inc. ("Pivot"), to a subsidiary of First Union Corp. for $4,350,000
in cash, resulting in a gain of approximately $871,000. The net operating
losses of Pivot and the gain on the sale for the year ended Dec. 31, 2000,
were $3,215,000 and $871,000, respectively, and are presented as discontinued
operations in the company's consolidated statements of operations.
Excluding the restructuring and goodwill impairment charges
described above, total operating expenses for the quarter ended Dec. 31,
2000, decreased $9,223,000, or 73 percent, to $3,346,000, compared to
$12,568,000 in the comparable quarter in 1999. Total operating expenses
for the year ended Dec. 31, 2000, of $18,701,000 were down $12,824,000,
or 41 percent, compared to $31,525,000 in the same period in 1999, excluding
the restructuring and goodwill impairment charges.
Excluding the restructuring and goodwill impairment charges
and the net gain (loss in 1999) from discontinued operations described
above, the net loss for the quarter ended Dec. 31, 2000, was $847,000,
or $0.06 per share, compared to a net loss of $11,444,000, or $0.85 per
share, for the comparable period in 1999. The net loss for the year ended
Dec. 31, 2000, (excluding the restructuring and goodwill impairment charges
and the net loss from discontinued operations), was $12,363,000, or $0.89
per share, compared to $31,634,000, or $2.25 for the same period in 1999.
The company reported a net loss applicable to common stock
of $920,000, or $0.07 per share, for the quarter ended Dec. 31, 2000,
compared to a net loss applicable to common stock of $13,037,000, or $0.96
per share, for the same quarter in 1999, representing a $12,117,000, or
93 percent improvement. The net loss applicable to common stock for the
year ended Dec. 31, 2000, was $16,921,000, or $1.22 per share, compared
to a net loss applicable to common stock of $33,769,000, or $3.34 per
share, in the comparable period in 1999, representing a $16,849,000, or
50 percent, improvement.
Summary of 2000 Business Initiatives And Key Metrics:
Partnerships: A year ago, Bankrate could boast of "Best of Breed"
partners, but we did not enjoy a strong presence on their sites. By the
middle of the year we not only had premium placement on these top Internet
sites, but had developed solid relationships with them as well. These
efforts have yielded significant traffic increases and have more than
doubled impressions in less then six months.
Affiliate program launched: The success of our partnership
program led us to the newly launched affiliate program. As an affiliate,
Web sites have access to Bankrate news, research, tools and content for
free. In return, Bankrate's reach in the advertising network is extended.
The program was launched in August 2000 and has more than 260 partners.
Aggressive growth strategies are in place for this program and record
participant levels are anticipated in 2001.
Wireless delivery: Utilizing AvantGo mobile Internet
services, Bankrate began delivering Bankrate.com content and tools to
mobile device users. As a channel on AvantGo, Bankrate offers a menu of
updated mortgage rates, auto loan rates and CD rates. This very successful
program has shown significant traffic since its launch in August 2000.
This program allows financial professionals to receive updated rates on
the go.
Key metrics: Bankrate Inc. experienced positive usage metrics
vs. a year ago: Ad views for the year ended Dec. 31, 2000, increased 115.1
million, or 40 percent, to 404.1 million compared to 288.9 million during
1999. Page views for the year ended Dec. 31, 2000, grew from 93.2 million
in 1999 to 134.5 million -- a 44 percent increase. Gross margin grew from
25 percent in January 2000 to 63 percent in December 2000.
Nasdaq: Bankrate's common stock, previously traded on the
Nasdaq national market, commenced trading on the OTC bulletin board on
Jan. 29, 2001. Nasdaq's decision to delist the company's common stock
is based on the company's net tangible assets, as defined, falling below
the required $4 million minimum amount.
Bankrate awards and recognitions
"A Forbes Favorite," Forbes "Best of the Web" special
issue, 1999 and 2000
"Top 50 Financial Sites," Money, October
2000
"4 Dot Award," PC magazine, July 2000
"Best of the Web for Personal Finance,"
U.S. News & World Report, December 2000
"100 Best Sites for 2001," Yahoo! Internet
Life, for Bankrate.com's investment channel, January 2001
"Notable Web site" for banking and insurance,
Fortune technology special issue, 2000
No. 8 Overall Financial Site, Media Metrix
No. 7 site for Finance News, PC Data Online, May 2000
"50 Businesses to Watch," LocalBusiness.com,
December 2000
About Bankrate.com
Bankrate.com is owned and operated by Bankrate Inc. (OTCBB: RATE). Bankrate.com
is the Internet's leading consumer finance marketplace, with an average
of 1.4 million unique visitors per month connecting with more than 4,000
financial institutions in 123 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 CDs, checking and ATM fees, home equity
loans and online banking fees.
Bankrate provides financial applications and information
to a network of more than 130 partners including MSN (NASDAQ: MSFT), 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.
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 its management.
Such forward-looking statements include without limitation statements
made with respect to future revenue, revenue growth, market acceptance
of the company's 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 -- our success depends on
Internet advertising revenue, interest-rate activity and mortgage refinancing,
establishing and maintaining distribution agreements 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; future government regulation
of the Internet is uncertain and subject to change; our success depends
on retaining management and key employees; 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 that could
impact future operating results,'' "Item 7. Management's discussion
and analysis of financial condition and results of operations'' and in
the other sections of the company's annual report on Form 10-K, as amended,
for the year ended Dec. 31, 1999, and in the company's other filings with
the Securities and Exchange Commission. The company undertakes 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.
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