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It is a pleasure to report that 2002
was a banner year for Bankrate, Inc. on all fronts. Our focus on
executing a highly disciplined growth strategy produced substantial
quarterly revenue and earnings increases and the first profitable
year in our history.
For the year ended December 31, 2002, total revenue rose 46% to
$26.6 million from $18.3 million in 2001. Net income reached $6.7
million, or $0.46 per share on a diluted basis, compared to a net
loss of $936,000, or $0.07 per share on a diluted basis, reported
for 2001. Excluding the non-cash gain on early extinguishment of
debt of $2.0 million, or $0.14 per share, in the first quarter,
the Company would have reported net income of $4.7 million, or $0.32
per share on a diluted basis, for 2002. We ended the year with virtually
no debt and a cash position of $11 million.
The value of the Bankrate
brand was substantially enhanced in 2002 as more individuals than
ever before consulted Bankrate.com, which has become the leading
consumer banking site on the Internet. Our rate data and editorial
content provides consumers with important information that they
use when selecting which lender to use for their mortgages, auto
loans or home equity loans, as well as many other consumer banking
products. There is a very high level of trust in the Bankrate brand
because we offer a completely neutral marketplace for consumers
to compare rate offerings and get the education they need in order
to make an informed decision.
Our advertisers, mostly traditional
banks and other financial institutions across the country, steadily
increased their advertising spends, a clear indication of the value
Bankrate offers in reaching new customers via the Internet. With
more than 80 online partners, Bankrate.com has become the preferred
channel of distribution for consumer banks and other financial institutions
on the Web.
More than 100 newspapers,
including eight of the nation's top 10 also distribute our rate
information. Our print customers include The Wall Street Journal,
The New York Times, USA Today and numerous other national and regional
publications. Also in 2002, Bankrate signed significant new distribution
agreements with The Wall Street Journal, The New York Times and
the New York Post. In addition, the Company renewed its partnership
agreement with AOL, a relationship that dates back to 1997.
Our strong financial foundation and cash flow have enabled us to
fund initiatives taken in 2002 to make our site faster for the user
and more efficient to operate. Site speed is increasingly important
as Bankrate.com continues to grow traffic, attract more advertisers
and expand its commitments with existing advertisers.
We are pleased that our 2002 results have established a profitable
course for growth in the year ahead. Our Nasdaq listing in January
2003 has started the current year on a very positive note. In addition,
the move reflects our success over the past three years in strengthening
and building our business model. Most importantly, we are continuing
on a course of profitable growth backed by a virtually debt-free
balance sheet.
In 2003 we are building on the solid foundation we have established
over the past three years, maintaining a sharp focus on
profitable growth. We are especially pleased with the build up of
traffic and advertising on our site that was already very strong
in the fourth quarter, providing us with an encouraging start in the
first quarter of 2003.
We remain deeply committed to making Bankrate a far larger company
than it is today and building shareholder value in 2003
and beyond. Our progress to date is in large measure due to the
talent and enthusiasm of the entire Bankrate team and the wise
counsel of our board of directors. We wish to thank them and our
shareholders for their continuing support.
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Sincerely,
Elisabeth DeMarse
President and Chief Executive Officer
Peter C. Morse
Chairman of the Board of Directors
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