Bankrate Announces Second Quarter Fiscal 2009 Results

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NEW YORK, July 30 /PRNewswire-FirstCall/ -- Bankrate, Inc. (NASDAQ:RATE) today announced financial results for the second quarter of fiscal 2009 ended June 30, 2009. (Logo: http://www.newscom.com/cgi-bin/prnh/20040122/FLTHLOGO ) Total revenue for the second quarter was $31.0 million compared to $40.2 million reported in the second quarter of 2008, a decrease of 23%. Net income was $1.9 million or $0.10 per fully diluted share in the second quarter of 2009, compared to $4.1 million, or $0.21 per fully diluted share in the second quarter of 2008. Earnings per fully diluted share, excluding share-based compensation expense ("Adjusted EPS"), was $0.19 for the second quarter of 2009, compared to Adjusted EPS of $0.33 for the second quarter of 2008. Earnings before interest, taxes, depreciation, and amortization, excluding share-based compensation expense ("Adjusted EBITDA"), were $9.4 million in the second quarter of 2009 compared to $12.8 million in the second quarter of 2008, a decline of 26%. Earnings before interest, taxes, depreciation and amortization ("EBITDA") for the second quarter of 2009, including share-based compensation expense were $6.7 million compared to the $9.0 million reported in the second quarter of 2008. "Macroeconomic conditions have continued to impact financial advertising, particularly in our banking, mortgage and credit card channels," said Thomas R. Evans, President and CEO of Bankrate, Inc. "The difficult environment in the financial service advertising sector has been a major contributor to our recent results," Mr. Evans added. Total revenue for the six months ended June 30, 2009 was $69.4 million compared to $82.7 million in the comparable period in 2008, representing a $13.3 million, or 16%, decline. Net income was $6.6 million, or $0.34 per fully diluted share, in the first half of 2009 compared to $10.9 million, or $0.55 per fully diluted share, in the first half of 2008. Adjusted EPS was $0.50 for the six months ended June 30, 2009 compared to the Adjusted EPS of $0.78 for the same period in 2008. Adjusted EBITDA were $22.5 million for the first half of 2009 compared to $28.9 million in the first half of 2008, a decline of 22%. EBITDA for the first half of 2009, including share-based compensation expense were $17.8 million compared to the $21.7 million reported in the first half of 2008. As previously announced, on July 22, 2009, the Company entered into a definitive agreement to be acquired by funds advised by Apax Partners for $28.50 per share in cash, in part pursuant to the terms of a tender offer that commenced on July 28, 2009 Second Quarter 2009 Highlights -- Total revenue for the quarter was $31.0 million, a decrease of $9.2 million, or 23%, from the $40.2 million reported in the same quarter in 2008. -- Adjusted EBITDA for the second quarter was $9.4 million, a decrease of $3.4 million, or 26%, from the $12.8 million reported in the second quarter of 2008. -- Online revenue was $29.0 million in the second quarter, a decrease of $8.8 million, or 23%, from the $37.8 million reported in the same period in 2008. -- Graphic advertising and lead generation revenue was $20.9 million, a decrease of $6.2 million, or 23%, from the $27.1 million reported in the second quarter of 2008. -- Hyperlink revenue for the quarter was $8.1 million, a decrease of $2.6 million, or 24%, from the $10.7 million reported in the second quarter of 2008. -- Print publishing and licensing revenue for the second quarter was $2.0 million, a decrease of $375,000, or 16%, from the $2.4 million reported in the second quarter of 2008. July 30, 2009 Conference Call Interactive Dial-In and Webcast Information: To participate in the teleconference please call: (877) 440-5791. International participants should dial: (719) 325-4864. 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/. Replay Information: A replay of the conference call will be available beginning July 30, 2009 at 7:30 p.m. ET/ 4:30 p.m. PT through August 6, 2009. To listen to the replay, call (888) 203-1112 and use the passcode: 4658504. International callers should dial (719) 457-0820 and use the passcode: 4658504. 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, Adjusted EBITDA, and Adjusted EPS, which are adjusted from results based on GAAP to exclude certain expenses, gains and losses. 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, Bankrate 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. 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 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 effects of expanding our operations internationally, the ability of consumers to access our Online Network through non-PC devices, our ability to manage traffic on our Online Network and service interruptions, increased competition and its effect on traffic, advertising rates, margins and market share, our ability to protect our intellectual property, the effects of facing liability for content on our Online Network, the concentration of ownership of our common stock, the fluctuations of our results of operations from period to period, the accuracy of our financial statement estimates and assumptions, our ability to adapt to technological changes, the impact of legislative or regulatory changes affecting our business, changes in consumer spending and saving habits, changes in accounting principles, policies, practices or guidelines, effects of changes in the stock market and other capital markets, the strength of the United States economy in general, and risks to the consummation of Bankrate's pending acquisition by affiliates of Apax Partners, L.P., including the risk that a condition to closing of such transaction may not be satisfied. 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, 2008, 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. Additional information and where to find it The statements in this press release regarding the tender offer initiated on July 28, 2009 is for informational purposes only and does not constitute an offer to purchase or a solicitation of an offer to sell Bankrate's common stock. Investors and stockholders are urged to read both the tender offer statement and the solicitation/recommendation statement regarding the tender offer, each filed with the SEC on July 28, 2009, and, if applicable and when it is filed with the SEC, the proxy statement regarding the merger, because they will contain important information. Investors and stockholders can obtain a free copy of these materials (when available) and other documents filed by Ben Merger Sub Inc. or Bankrate with the SEC at the website maintained by the SEC at http://www.sec.gov/. You may also read and copy any reports, statements and other information filed by Ben Merger Sub Inc. or Bankrate with the SEC at the SEC public reference room at 100 F Street N.E., Room 1580, Washington, D.C. 20549. Please call the SEC at (800) 732-0330 or visit the SEC's website for further information on its public reference room. About Bankrate, Inc. The Bankrate network of companies includes Bankrate.com, Interest.com, Mortgage-calc.com, Nationwide Card Services, Savingforcollege.com, Fee Disclosure, InsureMe, CreditCardGuide.com and Bankaholic.com. Each of these businesses helps consumers make informed decisions about their personal finance matters. The company's flagship brand, 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 rates and other information on 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 2008, Bankrate.com had nearly 72 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 500 newspapers. Reminder -- Conference Call and Webcast Today at 4:30 P.M. Eastern Time Interactive Dial-In: (877) 440-5791. International Callers (719) 325-4864 (10 minutes before the call) Webcast: http://investor.bankrate.com/ - Financial Statements Follow - Bankrate, Inc. Condensed Consolidated Balance Sheets (Unaudited) (In thousands, except share and per share data) June 30, December 31, 2009 2008 ---- ---- Assets Cash and cash equivalents $55,089 $46,055 Accounts receivable, net of allowance for doubtful accounts of approximately $964 and $1,566 at June 30, 2009 and December 31, 2008, respectively 15,181 22,567 Deferred income taxes, current portion 816 816 Prepaid expenses and other current assets 1,614 1,608 ----- ----- Total current assets 72,700 71,046 Furniture, fixtures and equipment, net 6,939 2,521 Deferred income taxes 7,413 7,413 Intangible assets, net 78,077 83,347 Goodwill 101,886 101,856 Other assets 712 4,567 --- ----- Total assets $267,727 $270,750 ======== ======== Liabilities and Stockholders' Equity Liabilities: Accounts payable $2,993 $3,723 Accrued expenses 4,371 5,665 Acquisition earn-out liability - 11,750 Deferred revenue 953 1,018 Other current liabilities 5 16 --- ----- Total current liabilities 8,322 22,172 Other liabilities 153 148 --- --- Total liabilities 8,475 22,320 ----- ------ Stockholders' equity: Preferred stock, 10,000,000 shares authorized and undesignated - - Common stock, par value $.01 per share-- 100,000,000 shares authorized; 18,885,504 and 18,816,986 shares issued and outstanding at June 30, 2009 and December 31, 2008, respectively 189 188 Additional-paid in capital 224,122 219,294 Retained earnings 34,941 28,948 ------ ------ Total stockholders' equity 259,252 248,430 ------- ------- Total liabilities and stockholders' equity $267,727 $270,750 ======== ======== Bankrate, Inc. Condensed Consolidated Statements of Income (Unaudited) (In thousands, except share and per share data) Three Months Ended Six Months Ended June 30, June 30, 2009 2008 2009 2008 ---- ---- ---- ---- Revenue $31,027 $40,193 $69,364 $82,656 Cost of revenue (1) 12,907 17,359 27,902 33,766 ------ ------ ------ ------ Gross margin 18,120 22,834 41,462 48,890 ------ ------ ------ ------ Operating expenses (1): Sales 2,187 2,207 4,621 4,285 Marketing 2,170 3,115 4,647 5,943 Product development 1,837 1,890 3,654 3,591 General and administrative 5,259 6,580 10,772 13,370 Depreciation and amortization 3,344 2,246 6,327 4,043 ----- ----- ----- ----- 14,797 16,038 30,021 31,232 ------ ------ ------ ------ Income from operations 3,323 6,796 11,441 17,658 Interest income 16 360 26 1,206 -- --- -- ----- Income before income taxes 3,339 7,156 11,467 18,864 Income tax expense 1,409 3,077 4,822 7,951 ----- ----- ----- ----- Net income $1,930 $4,079 $6,645 $10,913 ====== ====== ====== ======= Basic and diluted net income per share: Basic $0.10 $0.22 $0.35 $0.58 ===== ===== ===== ===== Diluted $0.10 $0.21 $0.34 $0.55 ===== ===== ===== ===== Shares used in computing basic net income per share 18,824,428 18,907,321 18,816,667 18,893,682 Shares used in computing diluted net income per share 19,379,325 19,557,759 19,296,985 19,678,146 (1) Includes share-based compensation expense as follows: Cost of revenue $352 $618 $724 $1,221 Other expenses: Sales 533 525 1,112 1,020 Marketing 152 204 330 401 Product development 175 287 408 554 General and administrative 1,547 2,105 2,196 3,959 ----- ----- ----- ----- $2,759 $3,739 $4,770 $7,155 ====== ====== ====== ====== Bankrate, Inc. Non-GAAP Condensed Consolidated Statements of Income (Unaudited) (In thousands, except share and per share data) Three Months Ended Six Months Ended June 30, June 30, 2009 2008 2009 2008 ---- ---- ---- ---- Revenue $31,027 $40,193 $69,364 $82,656 Cost of revenue 12,555 16,741 27,178 32,545 ------ ------ ------ ------ 18,472 23,452 42,186 50,111 ------ ------ ------ ------ Operating expenses: Sales 1,654 1,682 3,509 3,265 Marketing 2,018 2,911 4,317 5,542 Product development 1,662 1,603 3,246 3,037 General and administrative 3,712 4,475 8,576 9,411 Share-based compensation expense (1) 2,759 3,739 4,770 7,155 Depreciation and amortization 3,344 2,246 6,327 4,043 ----- ----- ----- ----- 15,149 16,656 30,745 32,453 ------ ------ ------ ------ Income from operations 3,323 6,796 11,441 17,658 Interest income 16 360 26 1,206 -- --- -- ----- Income before income taxes 3,339 7,156 11,467 18,864 Income tax expense 1,409 3,077 4,822 7,951 ----- ----- ----- ----- Net income $1,930 $4,079 $6,645 $10,913 ====== ====== ====== ======= Basic and diluted net income per share: Basic $0.10 $0.22 $0.35 $0.58 ===== ===== ===== ===== Diluted $0.10 $0.21 $0.34 $0.55 ===== ===== ===== ===== $0.19 $0.33 $0.50 $0.78 ===== ===== ===== ===== Shares used in computing basic net income per share, GAAP basis 18,824,428 18,907,321 18,816,667 18,893,682 Shares used in computing diluted net income per share, GAAP basis 19,379,325 19,557,759 19,296,985 19,678,146 Shares used in computing diluted net income per share, Non-GAAP basis 19,658,662 19,909,843 19,623,275 19,898,715 (1)See reconciliation of GAAP to Non-GAAP Condensed Consolidated Statements of Income. Bankrate, Inc. Non-GAAP Measures Reconciliation (In thousands, except share and per share amounts) (Unaudited) Three Months Ended Six Months Ended June 30, June 30, 2009 2008 2009 2008 ---- ---- ---- ---- EBITDA- Income from operations, GAAP basis $3,323 $6,796 $11,441 $17,658 Depreciation and amortization 3,344 2,246 6,327 4,043 ----- ----- ----- ----- EBITDA $6,667 $9,042 $17,768 $21,701 ====== ====== ======= ======= Adjusted EBITDA- Income from operations, GAAP basis $3,323 $6,796 $11,441 $17,658 Share-based compensation expense 2,759 3,739 4,770 7,155 Depreciation and amortization 3,344 2,246 6,327 4,043 ----- ----- ----- ----- Adjusted EBITDA $9,426 $12,781 $22,538 $28,856 ====== ======= ======= ======= Adjusted EPS- Net income, GAAP basis $1,930 $4,079 $6,645 $10,913 Share-based compensation expense, net of tax 1,729 2,458 3,097 4,698 ----- ----- ----- ----- Net income excluding share-based compensation expense- $3,659 $6,537 $9,742 $15,611 ====== ====== ====== ======= Adjusted EPS $0.19 $0.33 $0.50 $0.78 ===== ===== ===== ===== Operating EPS- Net income, GAAP basis $1,930 $4,079 $6,645 $10,913 Share-based compensation expense, net of tax 1,729 2,458 3,097 4,698 Intangibles amortization, net of tax 1,571 1,173 3,163 2,045 Interest income, net of tax (10) (216) (16) (724) --- ---- --- ---- Net income excluding share-based compensation expense, intangibles amortization and interest income $5,221 $7,494 $12,890 $16,933 ====== ====== ======= ======= Operating EPS $0.27 $0.38 $0.66 $0.85 ===== ===== ===== ===== Shares used in computing basic net income per share, GAAP basis 18,824,428 18,907,321 18,816,667 18,893,682 ========== ========== ========== ========== Shares used in computing diluted net income per share, GAAP basis 19,379,325 19,557,759 19,296,985 19,678,146 Impact of applying SFAS No. 123R 279,337 352,084 326,290 220,569 ------- ------- ------- ------- Shares used in computing diluted net income per share, excluding the impact of applying SFAS No. 123R 19,658,662 19,909,843 19,623,275 19,898,715 ========== ========== ========== ========== Bankrate, Inc. Condensed Consolidated Statements of Income Reconciliation of GAAP to Non-GAAP Condensed Consolidated Statements of Income (Unaudited) (In thousands, except share and per share data) Three Months Ended June 30, 2009 GAAP Adjustments (1) Non-GAAP ---- --------------- -------- Revenue $31,027 $- $31,027 Cost of revenue: 12,907 (352) 12,555 ------ ---- ------ Gross margin 18,120 352 18,472 ------ --- ------ Operating expenses: Sales 2,187 (533) 1,654 Marketing 2,170 (152) 2,018 Product development 1,837 (175) 1,662 General and administrative 5,259 (1,547) 3,712 Share-based compensation expense - 2,759 2,759 Depreciation and amortization 3,344 - 3,344 ----- --- ----- 14,797 352 15,149 ------ --- ------ Income from operations 3,323 - 3,323 Interest income, net 16 - 16 -- - -- Income before income taxes 3,339 - 3,339 Provision for income taxes 1,409 - 1,409 ----- --- ----- Net income $1,930 $- $1,930 ====== == ====== Basic and diluted net income per share: Basic $0.10 $- $0.10 ===== == ===== Diluted $0.10 $- $0.10 ===== == ===== Shares used in computing basic net income per share 18,824,428 - 18,824,428 Shares used in computing diluted net income per share 19,379,325 279,337 19,658,662 Three Months Ended June 30, 2008 GAAP Adjustments (1) Non-GAAP ---- --------------- -------- Revenue $40,193 $- $40,193 Cost of revenue: 17,359 (618) 16,741 ------ ---- ------ Gross margin 22,834 618 23,452 ------ --- ------ Operating expenses: Sales 2,207 (525) 1,682 Marketing 3,115 (204) 2,911 Product development 1,890 (287) 1,603 General and administrative 6,580 (2,105) 4,475 Share-based compensation expense - 3,739 3,739 Depreciation and amortization 2,246 - 2,246 ----- --- ----- 16,038 618 16,656 ------ --- ------ Income from operations 6,796 - 6,796 Interest income, net 360 - 360 --- --- --- Income before income taxes 7,156 - 7,156 Provision for income taxes 3,077 - 3,077 ----- --- ----- Net income $4,079 $- $4,079 ====== == ====== Basic and diluted net income per share: Basic $0.22 $- $0.22 ===== == ===== Diluted $0.21 $- $0.21 ===== == ===== Shares used in computing basic net income per share 18,907,321 - 18,907,321 Shares used in computing diluted net income per share 19,557,759 352,084 19,909,843 Six Months Ended June 30, 2009 GAAP Adjustments (1) Non-GAAP ---- --------------- -------- Revenue $69,364 $- $69,364 Cost of revenue: 27,902 (724) 27,178 ------ ---- ------ Gross margin 41,462 724 42,186 ------ --- ------ Operating expenses: Sales 4,621 (1,112) 3,509 Marketing 4,647 (330) 4,317 Product development 3,654 (408) 3,246 General and administrative 10,772 (2,196) 8,576 Share-based compensation expense - 4,770 4,770 Depreciation and amortization 6,327 - 6,327 ----- --- ----- 30,021 724 30,745 ------ --- ------ Income from operations 11,441 - 11,441 Interest income, net 26 - 26 -- --- --- Income before income taxes 11,467 - 11,467 Provision for income taxes 4,822 - 4,822 ----- --- ----- Net income $6,645 $- $6,645 ====== == ====== Basic and diluted net income per share: Basic $0.35 $- $0.35 ===== == ===== Diluted $0.34 $- $0.34 ===== == ===== Shares used in computing basic net income per share 18,816,667 - 18,816,667 Shares used in computing diluted net income per share 19,296,985 326,290 19,623,275 Six Months Ended June 30, 2008 GAAP Adjustments (1) Non-GAAP ---- --------------- -------- Revenue $82,656 $- $82,656 Cost of revenue: 33,766 (1,221) 32,545 ------ ------ ------ Gross margin 48,890 1,221 50,111 ------ ----- ------ Operating expenses: Sales 4,285 (1,020) 3,265 Marketing 5,943 (401) 5,542 Product development 3,591 (554) 3,037 General and administrative 13,370 (3,959) 9,411 Share-based compensation expense - 7,155 7,155 Depreciation and amortization 4,043 - 4,043 ----- --- ----- 31,232 1,221 32,453 ------ ----- ------ Income from operations 17,658 - 17,658 Interest income, net 1,206 - 1,206 ----- --- ----- Income before income taxes 18,864 - 18,864 Provision for income taxes 7,951 - 7,951 ----- --- ----- Net income $10,913 $- $10,913 ======= == ======= Basic and diluted net income per share: Basic $0.58 $- $0.58 ===== == ===== Diluted $0.55 $- $0.55 ===== == ===== Shares used in computing basic net income per share 18,893,682 - 18,893,682 Shares used in computing diluted net income per share 19,678,146 220,569 19,898,715 (1) Adjustments for the impact of applying SFAS No. 123R For more information contact: Edward J. DiMaria SVP, Chief Financial Officer (917) 368-8608 Bruce J. Zanca SVP, Chief Communications/Marketing Officer (917) 368-8648 http://www.newscom.com/cgi-bin/prnh/20040122/FLTHLOGODATASOURCE: Bankrate, Inc. CONTACT: Edward J. DiMaria, SVP, Chief Financial Officer, , +1-917-368-8608; or Bruce J. Zanca, SVP, Chief Communications/Marketing Officer, +1-917-368-8648, Web Site: http://www.bankrate.com/

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