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NEW YORK, N.Y. -- March 25, 2002 -- Bankrate, Inc. (OTCBB:RATE),
the Internet's leading source of consumer financial news and information,
today reported net income of $317,000, or $0.02 per share, for the quarter
ended Dec. 31, 2001 compared to a net loss of $919,000, or $0.07 per share,
in the comparable quarter in 2000. For the year ended Dec. 31, 2001, the
company reported a net loss of $936,000, or $.07 per share, compared to
a net loss of $16,921,000, or $1.22 per share, for the year ended Dec.r
31, 2000. Excluding non-cash charges of $2,208,000 and $2,408,000, respectively,
the company would have reported net income of $1,272,000, or $0.09 per
share for the year ended Dec. 31, 2001 compared to a net loss of $14,513,000,
or $1.05 per share, in 2000. Non-cash charges in both periods consisted
of depreciation and amortization, interest, stock compensation expense,
barter mismatch income/expense, and a one-time charge of $481,000 in the
quarter ended Sept. 30, 2001 related to the company's stock option exchange
program.
"I am very pleased that we were able to deliver net
income in the fourth quarter of 2001 -- ahead of the plan we promised
to our investors more than a year ago. We accomplished this goal -- in
spite of the economic recession and an absolute depression in Internet
ad spending -- by delivering a great product and a ready-to-transact audience
to our advertisers," said Elisabeth DeMarse, president and CEO.
Cash flow positive quarters Achieved
For the third consecutive quaraer, the company generated cash, significantly
increasing cash balances from $8,099,000 on March 31, 2001 to $8,356,000
on June 30, 2001, $8,459,000 on Sept. 30, 2001, and $9,755,000 on Dec.
31, 2001.
"I am also delighted to deliver three consecutive quarters
of positive cash flow. Our focus for 2001 has been to manage Bankrate
to profitability. Now that we have met that goal, we have our sights set
on achieving consecutive quarters of profitability, as well as continued
revenue growth, and adding to our cash balance. I am optimistic about
further improvements in 2002," added DeMarse.
Early payoff negotiated on subordinated debt
In February 2002, the company successfully completed the early repayment
of its $4,350,000 10 percent convertible subordinated note payable, including
principal and accrued interest, for $3,400,000. An accounting gain of
approximately $2,022,000 will be recorded in the first quarter of 2002
as a result of this transaction.
"This is a monumental achievement for our company.
We paid off this debt using our own cash, we negotiated the deal internally
without using expensive investment bankers or consultants, and we continue
to maintain a healthy cash balance. Looking ahead, we've eliminated significant
interest charges and a big cash drain. Most importantly, we are now a
substantially debt-free company," continued DeMarse.
Revenue significantly improves; continues to show strong
year over year and consecutive quarter growth
Online revenue for the year ended Dec. 31, 2001 of $14,986,000 was $2,703,000,
or 22 percent, higher than the $12,283,000 reported in 2000. Online revenue
for the quarter ended Dec. 31, 2001 of $4,261,000 was $1,051,000, or 33
percent, higher than the $3,210,000 reported for the same quarter in 2000.
Print publishing and licensing revenue for the year ended Dec. 31,
2001 of $3,271,000 was $349,000, or 12 percent, higher than the $2,922,000
reported in 2000. For the quarter ended Dec. 31, 2001, print publishing
and licensing revenue of $861,000 was $142,000, or 20 percent, higher
than the $719,000 reported in the fourth quarter of 2000. Total revenue
for the year ended Dec. 31, 2001 of $18,257,000 was $3,052,000, or 20
percent, higher than the $15,205,000 reported for 2000. Total revenue
for the quarter ended Dec. 31, 2001 of $5,121,000 was $1,192,000, or 30
percent, higher than the $3,929,000 reported in the comparable quarter
in 2000. Online revenue for the three months and year ended Dec. 31, 2001
included barter revenue of $643,000 and $2,558,000, representing approximately
13 percent and 14 percent of total revenue, respectively. Revenue from
hyperlinks increased 52 percent over 2000 and constitutes 26 percent of
total revenue for the year ended Dec. 31, 2001.
"In 2001, we developed several new products that proved
to be popular with our advertisers. These included our "Special Event"
marketing vehicle, which is designed to wrap an advertiser around traffic
spikes; Island advertising -- large format ads within our award-winning
content; and email newsletters. These features heighten the selling power
of Bankrate and allowed us to meet and exceed our revenue goals. Furthermore,
we added over 100 new advertisers this year, which strengthens our sales
visibility and diversifies our revenues further. In 2002, we will continue
to invest in sales and marketing to extend our category leadership,"
said Ned Newhouse, chief revenue officer.
Gross margin continues improvement
Excluding barter revenue of $2,558,000 and $757,000, respectively, Bankrate's
gross margin improved from 37 percent for the year ended Dec. 31, 2000
to 65 percent for the year ended Dec. 31, 2001.
Other operating expenses drop by 49 percent
Excluding barter expense and the one-time charge related to the company's
stock option exchange program, other operating expenses for the year ended
Dec. 31, 2001 of $10,385,000 were $9,973,000, or 49 percent, lower than
the $20,358,000 reported for the year ended Dec. 31, 2000. Expenses for
the year ended Dec. 31, 2000 included restructuring and goodwill impairment
charges of $2,285,000.
"In 2001, we removed more than $10 million from our
expense base. Business focus and prudent cost management helped us deliver
these results, which is significant financial progress," said Bob
DeFranco, Chief Financial Officer. "It shows the operating leverage
of our business model and the financial discipline of the entire organization."
Traffic levels reach record highs
The company maintains leading traffic metrics for its destination site,
Bankrate.com. Bankrate.com is the #5 most trafficked site in the Business
and Financial News/Research category and the #2 Financial Information
and Advice site, according to Jupiter Media Metrix. Page views increased
74 percent, from 136.0 million for the year ended Dec. 31, 2000 to 236.6
million for the year ended Dec. 31, 2001. Ad views increased almost 300
percent; from 404 million for the year ended Dec. 31, 2000 to 1.6 billion
for the year ended Dec. 31, 2001. For the 12-month period between Sept.
2000 and Sept. 2001, unique visitors grew 152 percent, vs. the Web's growth
of 25 percent. (Due to a change in audience methodology, it is not possible
to accurately compare the Jupiter Media Metrix unique visitors for Dec.
2000 to Dec. 2001.)
Cotter Cunningham, Bankrate's chief operating officer, said
"It is a testament to the Bankrate brand that our growth rate in
unique visitors exceeded the growth rate of the Web by over 125 percent.
We grew user metrics in such areas as site visitors, pages viewed, and
time spent, despite a challenging economic backdrop. This achievement
speaks to the commitment of every Bankrate employee toward improving our
product. In addition, our co-branded partnerships with AOL, Yahoo, MSN
and 70 other best-of-breed sites contributed traffic at a pace that almost
matched our own internal growth rate to our destination site, Bankrate.com,
allowing us to reach new users everyday."
Year-end recap
"To put 2001 in perspective, we feel we reached
a major milestone in demonstrating that the Bankrate business model is
viable. Not only did we prove that Bankrate can be profitable, but we
grew revenue and achieved profitability under extremely adverse business
conditions. Finally, we grew revenue in all of our diverse product lines
including auto, mortgage, home equity, and CDs, and won significant gains
as a result. Going forward, we plan to further leverage our operating
model, continue to diversify revenue and focus on our net income targets.
In the past year our partners continued to expand their use of Bankrate.com's
unique content and our advertisers renewed their buys with us, while the
customer benefited from our objective, bias-free rate data and analysis.
While we anticipate another tough year with higher targets to reach and
tougher goals to meet, our management team and employees have found a
formula that works for us as well as our consumers, partners and advertisers,"
concluded DeMarse.
About Bankrate Inc.
Bankrate Inc. (OTCBB:RATE) owns and operates Bankrate.com, the Internet's
leading consumer banking marketplace. Averaging 4 million unique visitors
a month, Jupiter Media Metrix ranked Bankrate.com first in unique visitors
in the Financial Information and Advice category in February, 2002. 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 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, information
and "financial literacy" editorial 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.
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