Bankrate Announces Second Quarter 2013 Financial Results

           Bankrate Announces Second Quarter 2013 Financial Results

Reminder -- Conference Call and Webcast Today at 4:30 P.M. Eastern Time

Interactive Dial-In: (866) 318-8617, Passcode 98060266. International Callers
Dial-In: (617) 399-5136, Passcode 98060266 (10 minutes before the call).
Webcast: http://investor.bankrate.com/

PR Newswire

NEW YORK, July 29, 2013

NEW YORK, July 29, 2013 /PRNewswire/ --



($ in millions, except per share amounts)                  Six months Ended
                                          Q2-13    Q2-12   2013      2012
Revenue                                   $105.5   $122.1  $214.0    $247.1
Net Income
GAAP                                      (0.9)    16.3    1.3       26.4
Adjusted                                  10.3     18.2    22.5      36.9
Diluted Earnings per Share (EPS)
GAAP                                      ($0.01)  $0.16   $0.01     $0.26
Adjusted                                  $0.10    $0.18   $0.22     $0.36
Adjusted EBITDA                           26.2     37.5    54.6      75.4

Bankrate, Inc. (NYSE: RATE) today reported financial results for the second
quarter ended June 30, 2013. Total revenue for the second quarter was $105.5
million compared to $122.1 million in the second quarter of 2012, a decrease
of 14%. Net loss for the quarter was $0.9 million or a loss of approximately
$0.01 per fully diluted share, compared to net income of $16.3 million, or
$0.16 per fully diluted share in the second quarter of 2012.

(Logo: http://photos.prnewswire.com/prnh/20040122/FLTHLOGO )

Adjusted EPS, as outlined in the attached reconciliation, were $0.10 for the
second quarter of 2013, compared to $0.18 for the second quarter of 2012,
representing a decrease of 44%. Adjusted EBITDA, as outlined in the attached
reconciliation, were $26.2 million, with a margin of 25%, in the second
quarter of 2013 compared to $37.5 million, with a margin of 31%, in the second
quarter of 2012, a decrease of 30%.

Results for Six Months Ended June 30, 2013
Total revenue for the six months ended June 30, 2013 was $214.0 million
compared to $247.1 million in the comparable period in 2012, representing a
$33.2 million or 13% decrease.

Net income was $1.3 million or $0.01 per fully diluted share for the period in
2013, compared to $26.4 million, or $0.26 per fully diluted share in the
comparable period in 2012. Adjusted EPS were $0.22 for the period in 2013,
compared to $0.36 for the same period in 2012, representing a decrease of 39%.

Adjusted EBITDA for the period were $54.6 million in 2013, compared to $75.4
million in the comparable period in 2012, a decrease of 28%.

"We have made significant progress with our strategic initiatives in our
insurance business during the first half of 2013 and are now seeing a clear
inflection point," stated Thomas R. Evans, President and CEO of Bankrate, Inc.
"Sharply higher conversion rates, higher monetization and increased demand for
our high quality leads are fueling the growth we are now seeing in insurance
in Q3, which we expect to accelerate in the second half. Going forward, we're
also expecting increased activity in our credit card business and expect that
our core banking business will be solid," Mr. Evans added.

2013 Annual Guidance
For the second half of 2013, Bankrate expects to show an overall revenue
increase of 10% to 20%, resulting in relatively flat revenue for the full year
compared to 2012. The Company now expects the Adjusted EBITDA margin to be in
the mid to high 20% range for the full year 2013 vs. previous guidance of the
low to mid 20% range.

"We are reaffirming our previous position on guidance of double-digit, second
half revenue growth and are increasing our earnings guidance as we expect to
see our insurance initiatives and growth in our credit card business to pay
off with higher profit margins," Mr. Evans stated.

Second Quarter and Year to Date 2013 Financial Highlights

  oThe Company has made significant progress implementing strategic quality
    initiatives within the insurance unit during the first half of 2013, which
    it expects to result in an acceleration of revenues and higher margins for
    the second half of the year.
  oThe Company improved insurance lead conversion rates by over 60% when
    comparing June 2013 to June 2012, which has resulted in higher lead
    monetization during the first half and an expected acceleration for the
    second half of the year following price increases which became effective
    in July 2013.
  oThe Company has experienced growing demand for its insurance leads during
    the first half of the year from carriers and agents with an increase in
    the number of insurance agents purchasing leads on the Company's platform
    as well as an increase in the volume of leads purchased entering the
    second half of the year.
  oDisplay advertising, or CPM revenue, in the second quarter increased 1%
    compared to the same period last year and increased 6% in the first half
    of 2013 compared to the first half of 2012 despite fewer ad units due to
    streamlined channel funnels.
  oCPA revenues, primarily attributed to credit card products, increased year
    over year for the quarter by over 25% on strong credit card issuer
    marketing activities on our sites while CPL revenues, primarily attributed
    to insurance products, decreased by over 40%. The decline in CPL revenue
    is attributed to the Company's strategic quality initiative in insurance
    whereby over the course of 2012, lower converting volume and lead sources
    were permanently reduced to improve our quality and conversion rates.
    Overall lead generation revenue (CPA plus CPL revenue) declined 15% for
    the quarter and 17% for the first six months as a result of the decline in
    CPL revenue as stated above.
  oHyperlink, or CPC revenue, for the quarter decreased 15% compared to the
    same period last year, with the overall decline driven by a decrease in
    the Company's insurance CPC product revenue as a result of the Company's
    strategic quality initiative whereby lower converting click sources were
    reduced during 2012 to improve our quality and conversion rates. For the
    six months ended June 30, 2013 hyperlink revenue declined by 10% compared
    to the same period in 2012.
  oMobile traffic on Bankrate.com has increased by over 70% over the first
    six months of the year compared to the same time period last year.
  oAt the end of the second quarter, the Company's leverage ratio to trailing
    twelve months Adjusted EBITDA was 0.8x on a net debt basis.

Refinancing
Bankrate intends in the near future to amend or replace its existing credit
facility, in each case, to extend its maturity. Bankrate may also choose to
eliminate one of the tranches or lower the maximum committed amount available
under the facility. Bankrate currently anticipates that the terms of the new
credit facility, in the aggregate, will be no less favorable to the Company in
any material respect than the existing credit facility, and does not intend to
increase the amount of indebtedness that can be incurred under the new credit
facility above that which can be incurred under the existing credit facility.
Any amendment or replacement may be subject to lender consent and market
conditions, and there can be no assurance that any amendment or replacement
will occur in the manner described or at all.

In a separate release today, the Company announced that, subject to market
conditions, it plans to privately offer up to $300 million of senior unsecured
notes due 2018 to fund the conditional redemption of the Company's outstanding
senior secured notes due 2015. This press release does not constitute an
offer to sell the new notes, a solicitation of an offer to purchase the new
notes, an offer to purchase the existing notes or a solicitation of an offer
to sell the existing notes.

July 29, 2013 Conference Call Interactive Dial-In and Webcast Information:
To participate in the teleconference please call: (866) 318-8617, passcode
98060266. International participants should dial: (617) 399-5136, passcode
98060266. 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
website: http://investor.bankrate.com/.

Replay Information:
A replay of the conference call will be available beginning July 29, 2013 at
6:30 p.m. ET / 3:30 p.m. PT through August 5, 2013 at 11:59 p.m. ET / 8:59
p.m. PT. To listen to the replay, call (888) 286-8010 and enter the passcode:
53141411. International callers should dial (617) 801-6888 and enter the
passcode: 53141411.

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, Adjusted EPS, and Gross Margin excluding stock based
compensation, 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 in the financial
tables below.

About Bankrate, Inc.
Bankrate is a leading publisher, aggregator and distributor of personal
finance content on the Internet. Bankrate provides consumers with
proprietary, fully researched, comprehensive, independent and objective
personal finance editorial content across multiple vertical categories
including mortgages, deposits, insurance, credit cards, and other categories,
such as retirement, automobile loans, and taxes. The Bankrate network includes
Bankrate.com, our flagship website, and other owned and operated personal
finance websites, including, but not limited to, CreditCards.com,
Interest.com, Bankaholic.com, Mortgage-calc.com, CreditCardGuide.com,
InsuranceQuotes.com, CarInsuranceQuotes.com, AutoInsuranceQuotes.com,
InsureMe.com, and NetQuote.com. Bankrate aggregates rate information from
over 4,800 institutions on more than 300 financial products. With coverage of
approximately 600 local markets in all 50 U.S. states, Bankrate generates over
172,000 distinct rate tables capturing, on average, over three million pieces
of information weekly. Bankrate develops and provides web services to over 75
co-branded websites with online partners, including some of the most trusted
and frequently visited personal finance sites on the Internet such as Yahoo!,
CNN Money, CNBC and Comcast. In addition, Bankrate licenses editorial content
to over 100 newspapers on a daily basis including The Wall Street Journal, USA
Today, The New York Times, The Los Angeles Times and The Boston Globe.

Safe Harbor Statement Under the Private Securities Litigation Reform Act of
1995:
Certain matters included in this press release may be "forward-looking
statements" within the meaning of 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,
our strategy 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. We derive many of our forward-looking statements from our
operating budgets and forecasts, which are based upon many detailed
assumptions. While we believe that our assumptions are reasonable, we caution
that it is very difficult to predict the impact of known or unknown factors,
and it is impossible for us to anticipate all factors that could affect our
actual results. 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 sites; increased competition and its effect on our
website traffic, advertising rates, margins and market share; our dependence
on internet search engines to attract a significant portion of the visitors to
our websites; the number of consumers seeking information on the financial
products we have on our websites; interest rate volatility; technological
changes; our ability to manage traffic on our websites and service
interruptions; our ability to maintain and develop our brands and content; the
fluctuations of our results of operations from period to period; our
indebtedness and the effect such indebtedness may have on our business; our
need and our ability to incur additional debt or equity financing, or to amend
or replace our existing credit facility on terms no less favorable than our
existing facility; our ability to integrate the operations and realize the
expected benefits of businesses that we have acquired and may acquire in the
future; the effect of unexpected liabilities we assume from our acquisitions;
changes in application approval rates by our credit card issuer customers; our
ability to successfully execute on our strategy, including without limitation
our insurance quality initiative, and the effectiveness of our strategy; our
ability to attract and retain executive officers and personnel; the impact of
resolution of lawsuits to which we are a party; our ability to protect our
intellectual property; the effects of facing liability for content on our
websites; our ability to establish and maintain distribution arrangements; our
ability to maintain good working relationships with our customers and
third-party providers and to continue to attract new customers; the effect of
our expansion of operations in the United Kingdom and China and possible
expansion to other international markets, in which we may have limited
experience; the willingness of consumers to accept the Internet and our online
network as a medium for obtaining financial product information; the strength
of the U.S. economy in general and the financial services industry in
particular; changes in monetary and fiscal policies of the U.S. Government;
changes in consumer spending and saving habits; changes in the legal and
regulatory environment; changes in accounting principles, policies, practices
or guidelines; and our ability to manage the risks involved in the foregoing.
For more information about factors that could cause actual results to differ
materially from our expectations, refer to our reports filed with the
Securities and Exchange Commission, including the discussion under "Risk
Factors" in our Annual Report on Form 10-K for the year ended December 31,
2012. These documents are available on the SEC's website at www.sec.gov. Any
factor described above or in our SEC reports could, by itself or together with
one or more other factors, adversely affect our financial results and
condition. We undertake no obligation to update or revise forward-looking
statements as a result of new information, future events or otherwise, except
as otherwise required by law.

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



-Financial Statements Follow-





Bankrate, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
($ In thousands, except per share data)
                                       June 30,            December 31,
                                       2013                2012
 Assets
Cash and cash equivalents             $     111,961   $      83,590
Accounts receivable, net of allowance
for doubtful accounts of
 $770 and $658 at June 30, 2013 and    58,215              52,598
 December 31, 2012
Deferred income taxes                  3,763               3,763
Prepaid expenses and other current     12,633              13,691
assets
 Total current assets                  186,572             153,642
Furniture, fixtures and equipment, net
of accumulated depreciation of
 $16,189 and $12,851 at June 30, 2013  11,989              10,024
 and December 31, 2012
Intangible assets, net of accumulated
amortization of
 $154,328 and $128,366 at June 30,     368,574             382,732
 2013 and December 31, 2012
Goodwill                               602,399             602,173
Other assets                           10,087              11,579
 Total assets                          $   1,179,621    $   1,160,150
 Liabilities and Stockholders' Equity
 Liabilities
Accounts payable                       $       7,470 $       8,227
Accrued expenses                       23,948              22,033
Deferred revenue and customer deposits 4,030               3,861
Accrued interest                       10,591              10,588
Other current liabilities              19,950              6,399
 Total current liabilities             65,989              51,108
Deferred income taxes                  64,482              64,482
Senior secured notes, net of           194,125             193,943
unamortized discount
Other liabilities                      20,637              22,466
 Total liabilities                     345,233             331,999
Commitments and contingencies
 Stockholders' equity
Common stock, par value $.01 per share
-
 300,000,000 shares authorized at June
 30, 2013 and December 31, 2012;
 101,388,339 shares and 100,097,969
 shares issued at June 30, 2013 and
 December 31, 2012;
 101,337,811 shares and 100,047,441
 shares outstanding at June 30, 2013   1,013               1,000
 and December 31, 2012
Additional paid-in capital             848,604             843,393
Accumulated deficit                    (13,973)            (15,264)
Less: Treasury stock, at cost - 50,528
shares at June 30, 2013 and December   (591)               (591)
31, 2012
Accumulated other comprehensive loss   (665)               (387)
 Total stockholders' equity            834,388             828,151
 Total liabilities and stockholders'   $   1,179,621    $   1,160,150
 equity





Bankrate, Inc. and Subsidiaries
Condensed Consolidated Statements of Comprehensive Income
($ In thousands, except per share data)
                       (Unaudited)               (Unaudited)
                       Three months ended        Six months ended
                       June 30,      June 30,      June 30,      June 30,
                       2013          2012          2013          2012
Revenue                $         $         $         $    
                       105,546       122,125       213,994       247,145
Cost of revenue
(excludes depreciation 37,472        37,609        73,511        77,887
and amortization)
Gross margin           68,074        84,516        140,483       169,258
                       64%           69%           66%           68%
Operating expenses:
 Sales                3,761         4,015         7,548         7,954
 Marketing             24,787        31,551        51,019        62,801
 Product development   4,633         4,146         9,125         8,570
 General and           11,609        9,185         23,309        19,167
 administrative
 Legal settlements     -             3             -             65
 Acquisition, offering
 and related expenses  20            682           20            879
 and related party
 fees
 Depreciation and      14,844        12,587        29,355        24,356
 amortization
                       59,654        62,169        120,376       123,792
 Income from           8,420         22,347        20,107        45,466
 operations
Interest and other     6,529         6,475         13,059        12,912
expenses, net
Change in fair value
of contingent          2,949         355           4,098         398
acquisition
consideration
 (Loss) income before  (1,058)       15,517        2,950         32,156
 income taxes
Income tax (benefit)   (166)         (759)         1,659         5,729
expense
 Net (loss) income     $       $        $       $     
                       (892)        16,276        1,291         26,427
Basic and diluted net
(loss) income per
share:
 Basic                 $       $       $       $      
                       (0.01)         0.16         0.01         0.26
 Diluted               (0.01)        0.16          0.01          0.26
Weighted average
common shares
outstanding:
 Basic                 100,050,989   99,896,608    100,049,225   99,888,236
 Diluted               100,050,989   101,088,756   100,922,480   101,361,678
Comprehensive (loss)   $       $        $       $     
income                 (874)        16,307        1,013         26,610





Bankrate, Inc. and Subsidiaries
Non-GAAP Measures (unaudited)
($ in thousands, except per share data)
                         (Unaudited)               (Unaudited)
                         Three months ended        Six months ended
                         June 30,      June 30,      June 30,      June 30,
                         2013          2012          2013          2012
Revenue                  $         $         $         $    
                         105,546       122,125       213,994       247,145
Gross margin excluding   $        $        $         $    
stock-based compensation 68,264        84,655        140,801       169,606
(1)
Gross margin excluding
stock-based compensation 64.7%         69.3%         65.8%         68.6%
%
Adjusted EBITDA (2)      $        $        $        $     
                         26,164        37,518        54,603        75,363
Adjusted EBITDA margin   24.8%         30.7%         25.5%         30.5%
Adjusted net income (3)  $        $        $        $     
                         10,316        18,215        22,474        36,929
Adjusted EPS             $       $       $       $     
                          0.10         0.18         0.22          0.36
Weighted average common
shares outstanding       100,050,989   101,088,756   100,922,480   101,361,678
(diluted):
(1) Gross margin excluding stock-based compensation represents gross margin
    plus stock-based compensation classified as cost of revenue.
    Reconciliation of
    gross margin
    excluding
    stock-based
    compensation
    Gross margin         $        $        $         $    
                         68,074        84,516        140,483       169,258
    Stock-based          190           139           318           348
    compensation
    Gross margin
    excluding            $        $        $         $    
    stock-based          68,264        84,655        140,801       169,606
    compensation
(2) Adjusted net income adds back change in fair value of contingent
    acquisition consideration due to change in estimate; legal settlements;
    acquisition, offering and related expenses and related party fees;
    stock-based compensation; and amortization, net of tax.
    Reconciliation of
    adjusted EBITDA
    Income from          $       $        $        $     
    operations           8,420         22,347        20,107        45,466
    Legal settlements    -             3             -             65
    Acquisition,
    offering and related 20            682           20            879
    expenses and related
    party fees
    Stock-based          2,880         1,899         5,121         4,597
    compensation (5)
    Depreciation and     14,844        12,587        29,355        24,356
    amortization
    Adjusted EBITDA      $        $        $        $     
                         26,164        37,518        54,603        75,363
(3) Adjusted net income adds back non-recurring change in fair value of
    contingent acquisition consideration; legal settlements; acquisition,
    offering and related expenses and related party fees; stock-based
    compensation; and amortization, net of tax.
    Reconciliation of
    adjusted net income
    (Loss) income before $        $        $       $     
    income taxes         (1,058)       15,517        2,950         32,156
    Change in fair value
    of contingent
    acquisition          1,261         -             1,393         -
    consideration due to
    change in estimate
    (4)
    Legal settlements    -             3             -             65
    Acquisition,
    offering and related 20            682           20            879
    expenses and related
    party fees
    Stock-based          2,880         1,899         5,121         4,597
    compensation (5)
    Amortization         13,808        11,760        27,358        22,842
    Adjusted income      16,911        29,861        36,842        60,539
    before tax
    Income tax (6)       6,595         11,646        14,368        23,610
    Adjusted net income  $        $        $        $     
                         10,316        18,215        22,474        36,929
(4) Change in fair value of contingent acquisition consideration due to change
    in estimate represents changes in fair value attributable to changes in
    expected earnings of acquired businesses.
    Reconciliation of
    change in fair value
    of contingent
    acquisition
    consideration
    Change in fair value
    of contingent        $       $       $       $     
    acquisition          2,949          355        4,098           398
    consideration
    Less: Change in fair
    value due to passage 1,688         355           2,705         398
    of time
    Change in fair value
    of contingent        $       $       $       $     
    acquisition          1,261            -       1,393             -
    consideration due to
    change in estimate
    Stock-based
    compensation is
(5) recorded in the
    following line
    items:
    Cost of revenue      $       $       $       $     
                          190         139         318          348
    Sales               433           277           777           691
    Marketing            313           190           577           476
    Product development  389           325           714           813
    General and          1,555         968           2,735         2,269
    administrative
    Total stock-based    $       $       $       $     
    compensation expense 2,880         1,899         5,121          4,597
(6) Assumes 39% income
    tax rate.



SOURCE Bankrate, Inc.

Website: http://www.bankrate.com
 
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