www.bankrate.com
For more information contact:
Edward J. DiMaria
SVP, Chief Financial Officer
edimaria@bankrate.com
(917) 368-8608
Bruce J. Zanca
SVP, Chief Communications/Marketing Officer
bzanca@bankrate.com
(917) 368-8648
FOR IMMEDIATE RELEASE
Reminder -- Conference Call and Webcast Today at 4:30 P.M. Eastern Time
Interactive Dial-In: (877) 545-1490 International Callers (719) 325-4930
(10 minutes before the call)
Webcast: http://investor.bankrate.com/
BANKRATE ANNOUNCES FOURTH QUARTER AND FULL YEAR 2007 FINANCIAL RESULTS
Company Reports Record Q4 Revenue of $25.2 Million, up 22% Over Q4 2006
Net Income Increased 100% for the Full Year 2007 Over 2006
Q4 and Full Year 2007 GAAP EPS of $0.21 and $1.04; NON-GAAP EPS of $0.33 and $1.39
Company Raises 2008 Guidance
NEW YORK, NY - February 5, 2008 - Bankrate, Inc. (NASDAQ: RATE), today reported financial results for the fourth quarter and fiscal year ended December 31, 2007. Total revenue for the fourth quarter increased by 22% to $25.2 million over the $20.7 million reported in the fourth quarter of 2006. Net income increased by 5% to $4.1 million, or $0.21 per fully diluted share in the fourth quarter of 2007, compared to $3.9 million, or $0.21 per fully diluted share in the fourth quarter of 2006. Earnings per fully diluted share (“EPS”), excluding stock compensation expense, increased by 22% to $0.33 for the fourth quarter 2007, compared to the adjusted EPS of $0.27 for the fourth quarter 2006.
Earnings before interest, taxes, depreciation and amortization (“EBITDA”), excluding stock compensation expense, were $9.8 million, an increase of 21% over the adjusted $8.1 million reported in the fourth quarter 2006. EBITDA for the fourth quarter were $6.4 million, an increase of 5% over the $6.1 million reported in the fourth quarter 2006.
- more -
“It was an unusual quarter in that we had two record months followed by a soft December, when several display advertisers cancelled booked business in that month as a result of anxiety in the mortgage and financial sectors,” said Thomas R. Evans, President and Chief Executive Officer at Bankrate, Inc. “However, January’s activity generated record traffic and click volume and 2008 is off to a great start,” Mr. Evans added.
Total revenue for the year ended December 31, 2007 was $95.6 million, an increase of $16.0 million, or 20%, over the $79.6 million reported for the year ended December 31, 2006. Net income increased by 100% to $20.1 million, or $1.04 per fully diluted share, in the year ended December 31, 2007, compared to $10.0 million, or $0.56 per fully diluted share, in the same period in 2006. Earnings per fully diluted share, excluding stock compensation expense, increased by 51% to $1.39 for the year ended December 31, 2007, compared to $0.92 for the same period in 2006. The $0.92 in adjusted EPS for the year ended December 31, 2006 excludes a $3.0 million legal settlement charge recorded in the third quarter of 2006.
EBITDA for the year ended December 31, 2007, excluding stock compensation expense, were $41.6 million, an increase of 48% over the adjusted $28.1 million reported in same period in 2006. The adjusted $28.1 million EBITDA, excluding stock compensation expense, excludes the $3.0 million legal settlement charge.
Additionally, Bankrate announced earlier today that the company acquired the assets of InsureMe, Inc. (“InsureMe”)based in Englewood, CO, and Lower Fees, Inc, (“Fee Disclosure”), which operates feedisclosure.com and is located in Westlake Village, CA, in separate transactions. The purchase price for the assets of InsureMe was $65 million in cash with an additional $20 million in cash in potential earn-out based on achieving specific financial performance metrics over the next two years. The assets of Fee Disclosure were acquired for $2.85 million in cash and a cash earn-out based on the net revenue achieved over the next five years.
Increase in 2008 Guidance
Bankrate is revising and increasing its 2008 guidance, which was previously announced during the company’s December 10, 2007 conference call. As a result of the acquisitions of InsureMe and Fee Disclosure, along with the strength of the company’s core business, Bankrate is now forecasting revenues of between $167 and $172 million dollars, and EBITDA of between $64 and $68 million dollars. The low end of the guidance represents a 75% increase in revenue and a 54% increase in EBITDA in 2008 over 2007.
- more -
“With the new acquisitions and the expectation that our core business will grow in excess of 25% in 2008, we have raised our guidance to reflect those positive developments,” said Mr. Evans.
2007 Company Highlights
Acquisitions
| · | The Nationwide Card Services, Inc. (“NCS”) asset acquisition was completed on December 7, 2007. NCS, based in Memphis, Tennessee, markets a comprehensive line of consumer and business credit cards via the Internet. NCS was purchased for $27.4 million in cash, which includes $1.0 million in working capital, with an additional $7.0 million in potential earn-out based on achieving specific financial performance metrics over the next two years. |
| · | The Savingforcollege.com, LLC (“SFC”) asset acquisition was completed on December 5, 2007. SFC, based in Rochester, New York, is the premier Internet destination for objective information about 529 college savings plans, helping consumers and financial professionals learn more about options for college financing. SFC was purchased for $2.3 million in cash and an earn-out of $2.0 million for the achievement of certain performance metrics over the next two years. |
Financial Highlights-Fourth Quarter 2007
| · | Total revenue for the quarter was $25.2 million, an increase of 22%, or $4.5 million, over the $20.7 million reported in the same period last year. |
| · | Online revenue for the fourth quarter increased by 33% to $22.8 million, an increase of $5.7 million over the $17.1 million reported in the fourth quarter of 2006. |
| · | Graphic advertising revenue increased 29% to $12.5 million in the fourth quarter of 2007, compared to $9.7 million reported in the fourth quarter of 2006. |
| · | Hyperlink revenue increased 39% to $10.3 million in the fourth quarter of 2007 compared to $7.4 million reported for the same quarter last year. |
| · | Print publishing and licensing revenue for the fourth quarter was $2.5 million, a decrease of $1.1 million, or 32%, compared to the $3.6 million reported in the fourth quarter of 2006. |
- more -
| · | The EBITDA margin, adjusted to exclude stock compensation expense, was 39% for the fourth quarter of both 2007 and 2006. |
| · | Page views for the fourth quarter of 2007 increased by 9% to 131.0 million, compared to the 120.6 million reported in the fourth quarter of 2006. |
Financial Highlights-Full Year 2007
| · | Total revenue for the year was $95.6 million, an increase of 20%, or $16.0 million, over the $79.6 million reported in 2006. |
| · | Online revenue for the year increased by 31% to $83.7 million, an increase of $19.7 million over the $64.0 million reported in 2006. |
| · | Graphic advertising revenue increased 26% to $46.8 million in 2007, compared to $37.3 million reported in 2006. |
| · | Hyperlink revenue increased 38% to $36.9 million in 2007, compared to $26.7 million reported last year. |
| · | Print publishing and licensing revenue for the year was $11.9 million, a decrease of $3.8 million or 24%, compared to the $15.7 million reported in 2006. |
| · | The EBITDA margin, adjusted to exclude stock compensation expense, and the legal settlement charge in 2006, was 44% in 2007 compared to 35% in 2006. |
| · | Page views in 2007 increased by 14% to 554.5 million, compared to the 487.4 million reported in 2006. |
February 5, 2008 Conference Call Interactive Dial-In and Webcast Information:
To participate in the teleconference please call: (877) 545-1490. International participants may dial: (719) 325-4930. Please access at least 10 minutes prior to the time the conference is set to begin. A Webcast of this call can be accessed at Bankrate’s Web site: http://investor.bankrate.com/events.cfm.
- more -
Replay Information:
A replay of the conference call will be available beginning February 5, 2008, 7:30 p.m. ET/ 4:30 p.m. PT through February 19, 2008. To listen to the replay, call (888)203-1112 and use the passcode: 2487475. International callers should dial (719) 457-0820 and use the passcode: 2487475.
Non-GAAP Measures
To supplement Bankrate’s financial statements presented in accordance with generally accepted accounting principles (“GAAP”), Bankrate uses non-GAAP measures of certain components of financial performance, including EBITDA, income from operations, earnings per diluted share and net income, which are adjusted from results based on GAAP to exclude certain expenses, gains and losses, which might not be calculated in the same manner as, and thus might not be comparable to, similarly titled measures reported by other companies. These non-GAAP measures are provided to enhance investors’ overall understanding of Bankrate’s current financial performance and its prospects for the future. Specifically, Bankrate believes the non-GAAP results provide useful information to both management and investors by excluding certain expenses, gains and losses that may not be indicative of its core operating results. In addition, because Bankrate has historically reported certain non-GAAP results to investors, the Company believes the inclusion of non-GAAP measures provides consistency in its financial reporting. These measures should be considered in addition to results prepared in accordance with GAAP, but should not be considered a substitute for, or superior to, GAAP results. The non-GAAP measures included in this press release have been reconciled to the nearest GAAP measure within the accompanying financial statement tables.
About Bankrate, Inc.
Bankrate, Inc. (Nasdaq: RATE) ("Bankrate") owns and operates Bankrate.com, a leading Internet consumer banking marketplace. Bankrate.com is a destination site of personal finance channels, including banking, investing, taxes, debt management and college finance. Bankrate.com is the leading aggregator of more than 300 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 reviews more than 4,800 financial institutions in 575 markets in 50 states. In 2007, Bankrate.com had nearly 60 million unique visitors. Bankrate.com provides financial applications and information to a network of more than 75 partners, including Yahoo! (Nasdaq: YHOO), America Online (NYSE: TWX), The Wall Street Journal and The New York Times (NYSE: NYT). Bankrate.com's information is also distributed through more than 450 national and state publications. In addition to Bankrate.com, Bankrate also owns and operates Bankrate Select, an Internet lead aggregator and Mortgage Market Information Services, Inc. and Interest.com, Inc., each of which publishes mortgage guides and financial rates and information; Nationwide Card Services, which markets a comprehensive line of consumer and business credit cards via the Internet; and Savingforcollege.com, the premier Internet destination for objective information about 529 college savings plans.
- more -
Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995:
Certain matters included in the discussion above 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 our management team. Such forward-looking statements include, without limitation, statements made with respect to future revenue, revenue growth, market acceptance of our 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 the following: the willingness of our advertisers to advertise on our Web site, interest rate volatility, our ability to establish and maintain distribution arrangements, our ability to integrate the operations and realize the expected benefits of businesses that we have acquired and may acquire in the future, our need and ability to obtain additional equity or debt financing, consumers’ increasing acceptance of the Internet as a medium for obtaining financial product information, the ability of consumers to access our online network through non-PC devices, our ability to maintain the confidence of our advertisers by detecting click-through fraud or unscrupulous advertisers, the effect of unexpected liabilities we assume from our acquisitions, the impact of resolution of lawsuits to which we are a party, our ability to manage traffic on our web sites and service interruptions, the effects of facing liability for content on our web sites, changes in, or interpretations of, accounting rules and regulations, changes in, monetary and fiscal policies of the United States government, the effect of changes in the stock markets and other capital markets, increased competition and its effect on traffic, advertising rates, margins and market share, our ability to protect our intellectual property, legislative and regulatory changes in Internet regulation, technological changes, changes in consumer spending and saving habits, the concentration of ownership of our common stock, the effect of provisions in our Articles of Incorporation, Bylaws and certain laws on change-in-control transactions, fluctuating results of operations , and the accuracy of our financial statement estimates and assumptions. These and additional important factors to be considered are set forth under “Introductory Note”, "Item 1A. Risk Factors,'' "Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations'' and in the other sections of our Annual Report on Form 10-K for the year ended December 31, 2006, and in our other filings with the Securities and Exchange Commission. We undertake 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.
-Financial Statements Follow-
###
