Bankrate Inc. reports record results

Cash flow positive quarter achieved
Reporting a record low net loss for the quarter of $0.02 per share vs. a net loss of $0.43 per share in 2000
Excluding noncash charges, reporting net income of $0.02 per share

"Despite a weak advertising market and an environment in which other Internet businesses are failing, we are continuing to grow, and with this quarter we have become cash-flow positive ahead of schedule," said Elisabeth DeMarse, president and CEO. "This is an exciting milestone for us, and reaching it is a testimony to our loyal base of 300-plus advertisers, our dedicated and talented staff and the fabulous product we produce together -- Bankrate.com. When I joined this company last April, we promptly developed a plan that would allow us to reach profitability as quickly as possible. This is a significant validation of that plan."

"To put this into perspective," continued DeMarse, "we have gone from No. 10 on Barron's infamous 'Burn Victims' list to cash-flow positive in four quarters. Nonetheless, we have significant work ahead of us -- to maintain and grow this great business."

The company reported a net loss of $249,000, or $0.02 per share, for the quarter ending June 30, 2001, compared to a net loss of $5,948,000, or $0.43 per share, for the same period in 2000, and a net loss of $625,000, or $0.04 per share, for the quarter ending March 31, 2001. The net loss of $873,000 for the six months ending June 30, 2001, or $0.06 per share, was $12,188,000, or 93 percent, lower than the $13,061,000 net loss for the comparable period in 2000. Excluding noncash charges of $527,000 and $1,110,000, the company would have reported net income of $279,000, or $0.02 per share, and $237,000, or $0.02 per share, for the quarter and six months ending June 30, 2001, respectively. Noncash charges consist of depreciation and amortization, interest, stock compensation expense and barter expenses net of barter revenue. During the quarter ending June 30, 2001, the company generated cash of $257,000 as cash increased to $8,356,000 at June 30, 2001, from $8,099,000 at March 31, 2001.

Operating expenses 57 percent lower
Excluding barter expenses of $679,000 in the quarter ending June 30, 2001, total operating expenses of $2,502,000 were $3,345,000, or 57 percent, lower than the $5,847,000 reported in the comparable quarter in 2000. Total operating expenses of $5,405,000 (excluding barter expenses of $1,665,000) for the six-month period ending June 30, 2001, were $6,907,000, or 56 percent, lower than the $12,312,000 reported for the six months ending June 30, 2000.

Gross margin more than doubled
Bankrate's gross margin more than doubled from 27 percent for the first six months in 2000 to 70 percent for the same period this year. "We continue to be mindful of our expense base and continue to focus on cost containment. We have succeeded in eliminating unprofitable customers and partners. Thus, we have been able to improve our gross margin and our bottom line significantly," said Bob DeFranco, chief financial officer.

Other key business metrics:
Bankrate continued to exhibit strong metrics, further demonstrating its leadership position among consumer finance Web sites.

Traffic up 69 percent
Traffic levels continue to improve following the record levels achieved in the first quarter. Total page views for the six months ending June 30, 2001, grew 50.1 million, or 69 percent, to 122.8 million, compared to the 72.7 million page views in the comparable period in 2000. Second quarter page views of 52.3 million were 16.7 million, or 47 percent, higher than the 35.6 million page views reported for the second quarter in 2000.

Unique visitors
During July 2001, Bankrate.com had more than 5 million unique visitors, up more than 300 percent from the previous year.

Graphic ad revenue flat; lead-based revenue up significantly
Bankrate's second quarter graphic ad revenue remained flat compared to the first quarter and declined 25 percent compared to the same period of 2000. However, hyperlink revenue, which generates leads for banks to acquire new customers, grew 44 percent over the same quarter in 2000. "Last year we made a concerted effort to reduce our dependence on the volatile graphic ad market and diversify by growing our high-CPM, lead-generation advertising, and we have succeeded in that plan," commented Ned Newhouse, chief revenue officer.

Other business highlights
"Results for the second quarter were solid across a number of our business areas," explained G. Cotter Cunningham, senior vice president and chief operating officer, "including new products, content syndication and newsletters. We realized a number of significant high points, including launching our calculator syndication program and achieving record traffic from our sweepstakes efforts. The sluggish economy has not slowed our business; in fact, increased focus on the economy has bolstered interest in our site and our value to consumers."

New products
Bankrate covers 103 products -- including mortgages, credit cards, CDs, auto loans and more -- for more than 4,500 financial institutions in 173 markets across the United States. This quarter approximately 30 new markets were added.

Increased content distribution
Bankrate's network of distribution partners represents approximately 30 percent of the company's ad views, as we continue to leverage existing co-branded relationships with AOL, Netscape, Nasdaq, USA Today and approximately 100 others, while increasing content distribution programs with Screaming Media, Isyndicate and others.

Successful sweepstakes
Our sweepstakes program continues to drive significant increases in readership, page views and newsletter subscriptions. This program, while initially launched to thank our loyal users, has grown significantly in the last quarter.

Newsletters
With more than 13 newsletters and hundreds of thousands of subscriptions, e-mail marketing will continue to be a focus in the second half of the year. Bankrate's newsletter program provides our users with a more personalized service, but drives increased traffic and presents advertisers with yet another targeted medium.

"We are delighted with the continued strength of our core product -- Bankrate.com," continued Cunningham. "Our newsletter program is proving to be a strong complement to our business model. It has allowed us to offer our users information in a very controlled medium. We look forward to introducing new products to our newsletter repertoire, and consider this business segment well positioned for potential growth." DeMarse added, "We will continue to manage our business for the long term by focusing on execution, developing new revenue initiatives, preserving our cash and tightly controlling our expense base at all times. We are well positioned to overcome what we believe will be a continued slowdown in advertising spending by consolidating our revenue gains, retaining our current customer base, developing new products for our clients and monetizing the quality audience growth we continue to experience."

About Bankrate.com
Bankrate.com is owned and operated by Bankrate Inc. (OTCBB:RATE). Bankrate.com is the Internet's leading consumer banking marketplace, with an average of 3 million unique visitors per month connecting with more than 4,500 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 more than 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 over 100 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 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 December 31, 2000, 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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