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NORTH PALM BEACH, Fla., Nov. 6, 2002
-- Bankrate Inc. (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 basis, for the third quarter ended Sept.
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 demand and traffic patterns.
Total revenue for the third quarter rose 73 percent 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 Sept. 30, 2002
compared to a net loss of $1,253,000, or $0.09 per share, for the comparable
period in 2001. Excluding the noncash gain on early extinguishment 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 Sept. 30, 2002.
Total revenue for the nine months ended Sept. 30, 2002 rose 45 percent
to $19,082,000 from $13,136,000 in the same period in 2001 and $18,257,000
for the year ended Dec. 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 percent higher
than the third quarter a year earlier and 17 percent higher than the
second quarter of 2002.
- Online publishing revenue of $6,265,000 was up $2,894,000,
or 86 percent, over the 2001 third quarter and 19 percent over the second
quarter of 2002.
- Hyperlink (rate table listings) revenue increased $1,082,000,
or 85 percent, over the same quarter of 2001 and 7 percent over the second quarter
of 2002.
- Print publishing and licensing revenue of $978,000 was
up $161,000, or 20 percent, over 2001 and was 5 percent above the $934,000 in the
second quarter of 2002.
Commenting on Bankrate's record third quarter and nine month
results, President and CEO Elisabeth 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 Sept. 30, 2002, and the company remains virtually debt-free.
"Our strong balance sheet and cash flow have put us in the enviable
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 Times on the Web,
and The New York Post. In addition, Bankrate renewed its partnership agreement
with America Online. This relationship is one of Bankrate's oldest, dating
back to 1997.
Online publishing revenue for the three months ended Sept. 30, 2002 and 2001 included barter revenue of $641,000 and $450,000, and
represented approximately 9 percent and 11 percent of total revenue, respectively. Hyperlink
revenue accounted for 42 percent of online publishing revenue, excluding barter
revenue, for the three months ended Sept. 30, 2002, compared to 44 percent
for the comparable period in 2001 and 51 percent for the three months ended June
30, 2002.
Excluding barter revenue, gross margin improved from 65 percent
for the three months ended Sept. 30, 2001 to 71 percent for the same period
in 2002. Barter expense was $619,000 and $450,000 for the three months
ended Sept. 30, 2002 and 2001, respectively.
Nine month highlights
- Total revenue for the nine months ended Sept. 30,
2002 of $19,082,000 was 45 percent higher than the $13,136,000 reported for
the same period in 2001 and 5 percent higher than total revenue for the 12
months of 2001.
- Online publishing revenue of $16,246,000 was $5,521,000,
or 51 percent, above the first nine months of 2001.
- Hyperlink revenue of $6,294,000 increased $3,002,000,
or 91 percent, over the same period in 2001.
- Print publishing and licensing revenue of $2,837,000
was $426,000, or 18 percent, higher than the $2,411,000 reported for the 2001
nine-month period.
Online publishing revenue for the nine months ended Sept. 30, 2002 and 2001 included barter revenue of $2,403,000 and $1,915,000,
and represented approximately 13 percent and 15 percent of total revenue, respectively.
Hyperlink revenue accounted for 45 percent of online publishing revenue, excluding
barter revenue, in the 2002 period compared to 37 percent in the 2001 period.
Excluding barter revenue, gross margin improved from 64 percent
for the nine months ended Sept. 30, 2001 to 70 percent for the same period
in 2002. Excluding barter expense, operating expenses for the nine months
ended Sept. 30, 2002 of $8,375,000 were within $192,000, or 2 percent, 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 Sept. 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 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 activity in mortgage lending has caused
increases in traffic inconsistent with our historical trends. Fortunately,
the company was positioned to monetize and drive those increases straight
to the bottom line," DeMarse said.
Nov. 6 conference call information
The company conducted a teleconference on its third
quarter results on Nov. 6. 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 -- News) owns and operates Bankrate.com,
the Internet's leading consumer banking marketplace. Averaging 3.3 million
unique visitors per month, comScore Media Metrix ranks 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 (Nasdaq:MSFT
- News), Yahoo! (NASDAQ:YHOO -- News), America Online (NYSE:AOL -- News),
and Smart Money. Bankrate.com's information is also distributed through
more than 100 national and state publications.
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