BANKRATE INC NEW YORK, Aug. 7, 2014 /PRNewswire/ --
($ in millions,
except per share
amounts) Three months ended Six months ended
June 30, June 30, June 30, June 30,
2014 2013 2014 2013
---- ---- ---- ----
Revenue
GAAP $130.7 $105.5 $267.1 $214.0
Adjusted 130.9 105.5 267.4 214.0
Net Income
GAAP (2.2) (0.9) 2.6 1.3
Adjusted 14.9 10.3 32.4 22.5
Diluted Earnings
per Share (EPS)
GAAP $(0.02) $(0.01) $0.03 $0.01
Adjusted 0.15 0.10 0.31 0.22
Adjusted EBITDA 31.9 26.2 67.9 54.6
Bankrate, Inc. (NYSE: RATE) today reported financial results for the second quarter ended June 30, 2014. Total GAAP revenue for the second quarter of 2014 was $130.7 million compared to $105.5 million in the second quarter of 2013, an increase of 24%. GAAP net loss for the quarter was $2.2 million or $0.02 per fully diluted share, compared to a loss of $0.9 million or $0.01 per fully diluted share in the second quarter of 2013.
On an Adjusted basis (Non-GAAP), total revenue for the second quarter was $130.9 million, an increase of 24% compared to the same period the prior year. Non-GAAP adjusted net income for the second quarter of 2014, as outlined in the attached reconciliation, was $14.9 million, representing Adjusted EPS of $0.15 compared to $10.3 million or Adjusted EPS of $0.10 in the second quarter of 2013, a 50% increase in Adjusted EPS. Adjusted EBITDA was $31.9 million in the second quarter of 2014 compared to $26.2 million in the second quarter of 2013, an increase of 22%.
"With our third consecutive quarter of strong EBITDA growth versus prior year, Bankrate's strategy is working," said Kenneth S. Esterow, President and CEO of Bankrate, Inc. "We continued to drive higher revenue for the quarter versus prior year across all of our verticals, with credit cards and insurance revenue growing close to 30%. We are particularly pleased to have delivered these results, while also making important long-term investments in our new senior care vertical and in Bankrate's personalization, optimization and mobile capabilities," Mr. Esterow added.
2014 Guidance
The Company is increasing its full year 2014 adjusted revenue guidance to a range of $545 to $555 million from $540 to $550 million previously and is revising its Adjusted EBITDA guidance for 2014 to between $141 and $145 million from between $145 and $150 million previously.
In addition, the Company expects adjusted revenues for the third quarter of 2014 to be between $140 and $145 million and Adjusted EBITDA between $33 and $36 million.
"We've taken into consideration a number of factors; Bankrate's strong performance in the first half of 2014, an increased partner mix in banking, and a more modest outlook for insurance volume growth in the second half, as we remain laser-focused to not sacrifice lead quality for volume. Even with the onboarding of Caring, we are tracking to deliver record annual EBITDA, while still making important investments that support long-term growth," stated Mr. Esterow.
Second Quarter 2014 Financial Highlights
-- CPA revenue (which primarily consists of credit cards and senior care)
in Q2 2014 increased 34% on an adjusted basis compared to the prior
year. Excluding the impact of the Caring.com acquisition, CPA revenue
increased 29% on strong visit growth, strong affiliate traffic, higher
credit card issuer marketing activities, higher approval rates and
higher CPAs.
-- CPL revenue increased approximately 20%, primarily as a result of the
Company's continued progress on its insurance quality initiative
resulting in increased carrier & agent demand and improved monetization,
with revenue per lead up approximately 20% versus Q2 2013. Overall
insurance lead and click revenue combined increased by 28%.
-- CPC revenue for the quarter increased 20% compared to the same period in
2013, attributable to a 52% growth in our insurance CPC business and 62%
growth in deposit CPC revenue, partially offset by a 27% decline in
mortgage CPC revenue, given the lower overall consumer interest for
refinancing.
-- Caring.com generated $2.3 million in revenues, on an adjusted basis, and
posted an Adjusted EBITDA loss of $0.8 million during May and June.
-- The Company repurchased approximately $5.3 million of stock during Q2,
and as of quarter end, the Company had $64.7 million remaining under the
current authorization.
Second Quarter 2014 Business Highlights
Credit Cards
-- Launched WalletUp(TM) (walletup.creditcards.com), a free tool that
analyzes consumer transactional spend and preferences and recommends the
best cards for maximizing rewards, points or cash back.
-- Launched a responsive web design for editorial and content pages on our
mobile site, m.creditcards.com.
Insurance
-- The share of leads from the Company's owned and operated sites increased
by approximately 15% year over year.
-- Successful ramp of mobile click-to-call drove $0.8 million in revenue
during Q2 2014, which was up 100% sequentially.
Banking
-- Entered into a new strategic partnership with Homes.com, one of the
leading real estate destinations, which features more than 3 million
property listings and generates over 12 million monthly visitors.
Bankrate will be the exclusive provider to Homes.com for comparison
mortgage rate listings and tools across platforms. The partnership
further solidifies our position as a leader in the online third-party
mortgage space.
Senior Care
-- Grew organic traffic to Caring.com by 52% in Q2 2014, while qualified
inquiries grew 75% compared to the prior year.
-- Expanded participating communities within the Caring.com network by 40%
versus the prior year.
August 7, 2014 at 4:30 P.M. ET Conference Call Interactive Dial-In and Webcast Information:
To participate in the teleconference please call: (866) 202-3048, passcode 10570992. International participants should dial: (617) 213-8843, passcode 10570992. 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 August 7, 2014 at 8:30 p.m. ET / 5:30 p.m. PT through August 14, 2014 at 11:59 p.m. ET / 8:59 p.m. PT. To listen to the replay, call (888) 286-8010 and enter the passcode: 76102365. International callers should dial (617) 801-6888 and enter the passcode: 76102365.
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, Adjusted revenue, 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 websites or mobile applications; 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 or mobile applications; interest rate volatility; technological changes; our ability to manage traffic on our websites or mobile applications, 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; 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 strategies, including without limitation our insurance quality initiative, our mobile strategy and the other initiatives mentioned in this release, and the effectiveness of our strategies, including without limitation whether they result in increased revenue or profitability; our ability to attract and retain executive officers and personnel; the impact of defense of and resolution of lawsuits to which we are a party; the failure to obtain preliminary or final Court approval of the proposed settlement of the securities litigation we announced on June 9, 2014 (or a delay in obtaining such approval), risks related to decisions by stockholders to opt out of or object to the proposed settlement, and resolution of insurance claims related to the litigation; our ability to protect our intellectual property; the effects of facing liability for content on our websites or mobile applications; 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, and our ability to successfully execute on our business strategies in international markets; 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; review of our business and operations by regulatory authorities; 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 without limitation under "Risk Factors" in our Annual Report on Form 10-K for the year ended December 31, 2013 along with any modifications or updates to those "Risk Factors" in our Quarterly Reports on Form 10-Q. 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 caution you that the foregoing list of important factors may not contain all of the material factors that are important to you. 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.
-Financial Statements Follow-
Bankrate, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
($ in thousands, except per share data)
(Unaudited)
June 30, December 31,
2014 2013
---- ----
Assets
Cash and cash equivalents $175,779 $230,071
Short-term investments 500 -
Accounts receivable, net of allowance for
doubtful accounts of $546 and $451 at
June 30, 2014 and December 31, 2013 77,154 61,962
Deferred income taxes 17,155 7,155
Prepaid expenses and other current assets 31,368 9,736
------ -----
Total current assets 301,956 308,924
Furniture, fixtures and equipment, net of
accumulated depreciation of $24,004 and
$19,690 at 13,609 12,930
June 30, 2014 and December 31, 2013
Intangible assets, net of accumulated
amortization of $207,317 and $181,721 at
June 30, 2014 and December 31, 2013 353,977 350,206
Goodwill 638,010 611,975
Other assets 12,456 12,776
------ ------
Total assets $1,320,008 $1,296,811
========== ==========
Liabilities and Stockholders' Equity
Liabilities
Accounts payable $8,247 $7,149
Accrued expenses 27,367 40,546
Deferred revenue and customer deposits 4,705 3,792
Accrued interest 6,891 7,379
Other current liabilities 30,787 24,595
------ ------
Total current liabilities 77,997 83,461
Deferred income taxes 63,199 51,699
Long-term debt, net of unamortized
discount 297,305 297,021
Other liabilities 15,581 25,668
------ ------
Total liabilities 454,082 457,849
------- -------
Commitments and contingencies
Stockholders' equity
Common stock, par value $.01 per share -
300,000,000 shares authorized at June 30,
2014 and December 31, 2013; 104,910,543
shares and 101,749,513 shares issued at
June 30, 2014 and December 31, 2013;
104,434,271 shares and 101,698,985 shares
outstanding at June 30, 2014 and December
31, 2013 1,044 1,017
Additional paid-in capital 895,285 864,152
Accumulated deficit (22,680) (25,266)
Less: Treasury stock, at cost -476,272
shares and 50,528 shares at June 30, 2014
and December 31, 2013 (7,516) (591)
Accumulated other comprehensive loss (207) (350)
---- ----
Total stockholders' equity 865,926 838,962
------- -------
Total liabilities and stockholders' equity $1,320,008 $1,296,811
========== ==========
Bankrate, Inc. and Subsidiaries
Condensed Consolidated Statements of Comprehensive Income
($ in thousands, except per share data)
(Unaudited) (Unaudited)
Three months ended Six months ended
------------------ ----------------
June 30, June 30, June 30, June 30,
2014 2013 2014 2013
---- ---- ---- ----
Revenue $130,662 $105,546 $267,137 $213,994
Cost of revenue (excludes
depreciation and amortization) 46,494 37,542 92,789 73,650
------ ------ ------ ------
Gross margin 84,168 68,004 174,348 140,344
------ ------ ------- -------
Operating expenses:
Sales 3,674 3,751 7,334 7,528
Marketing 33,180 24,873 66,581 51,206
Product development 5,907 4,840 11,645 9,491
General and administrative 14,169 11,246 29,426 22,622
Legal settlements 9,190 - 9,191 -
Acquisition, offering and related
expenses 158 20 2,561 20
Changes in fair value of contingent
acquisition consideration 744 2,949 2,150 4,098
Depreciation and amortization 15,195 14,844 29,656 29,355
------ ------ ------ ------
82,217 62,523 158,544 124,320
------ ------ ------- -------
Income from operations 1,951 5,481 15,804 16,024
Interest and other expenses, net 5,159 6,539 10,351 13,074
----- ----- ------ ------
(Loss) income before income taxes (3,208) (1,058) 5,453 2,950
Income tax (benefit) expense (962) (166) 2,867 1,659
---- ---- ----- -----
Net (loss) income $(2,246) $(892) $2,586 $1,291
======= ===== ====== ======
Basic and diluted net (loss) income
per share:
Basic $(0.02) $(0.01) $0.03 $0.01
Diluted (0.02) (0.01) 0.03 0.01
Weighted average common shares
outstanding:
Basic 101,894,188 100,050,989 101,389,630 100,049,225
Diluted 101,894,188 100,050,989 103,415,647 100,922,480
Comprehensive (loss)
income $(2,122) $(874) $2,729 $1,013
======= ===== ====== ======
Bankrate, Inc. and Subsidiaries
Non-GAAP Measures (unaudited)
($ in thousands, except per share data)
(Unaudited) (Unaudited)
Three months ended Six months ended
------------------ ----------------
June 30, June 30, June 30, June 30,
2014 2013 2014 2013
---- ---- ---- ----
Revenue $130,662 $105,546 $267,137 $213,994
Adjusted revenue (1) 130,882 105,546 267,357 213,994
Gross margin excluding stock-
based compensation (2) $84,556 $68,194 $175,046 $140,662
======= ======= ======== ========
Gross margin excluding stock-based
compensation % 64.7% 64.6% 65.5% 65.7%
Adjusted EBITDA (3) $31,873 $26,174 $67,920 $54,618
======= ======= ======= =======
Adjusted EBITDA margin 24.4% 24.8% 25.4% 25.5%
Adjusted net income (4) $14,925 $10,316 $32,354 $22,474
======= ======= ======= =======
Adjusted EPS $0.15 $0.10 $0.31 $0.22
===== ===== ===== =====
Weighted average common shares outstanding
(diluted): 101,894,188 100,050,989 103,415,647 100,922,480
(1) Adjusted revenue represents revenue plus the impact of purchase accounting on deferred revenue.
(2) 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 $84,168 $68,004 $174,348 $140,344
Stock-based compensation 388 190 698 318
--- --- --- ---
Gross margin excluding stock-
based compensation $84,556 $68,194 $175,046 $140,662
======= ======= ======== ========
(3) Adjusted EBITDA adds back interest and other expense; income tax expense; depreciation and amortization; changes in fair value of contingent acquisition consideration; legal settlements; acquisition, offering and related expenses; and stock-based compensation.
Reconciliation of adjusted EBITDA
Net (loss) income $(2,246) $(892) $2,586 $1,291
Interest and other expenses, net 5,159 6,539 10,351 13,074
Income tax (benefit) expense (962) (166) 2,867 1,659
Depreciation and amortization 15,195 14,844 29,656 29,355
------ ------ ------ ------
Earnings before interest, taxes,
depreciation and amortization (EBITDA) 17,146 20,325 45,460 45,379
Changes in fair value of contingent
acquisition consideration 744 2,949 2,150 4,098
Legal settlements 9,190 - 9,191 -
Acquisition, offering and related expenses 158 20 2,561 20
Impact of purchase accounting 220 - 220 -
Stock-based compensation (6) 4,415 2,880 8,338 5,121
----- ----- ----- -----
Adjusted EBITDA $31,873 $26,174 $67,920 $54,618
======= ======= ======= =======
(4) Adjusted net income adds back income tax expense; non-recurring change in fair value of contingent acquisition consideration; legal settlements; acquisition, offering and related expenses; stock-based compensation; and amortization, net of tax.
Reconciliation of adjusted net income
Net (loss) income $(2,246) $(892) $2,586 $1,291
Income tax (benefit) expense (962) (166) 2,867 1,659
Change in fair value of contingent
acquisition consideration due to change in
estimate (5) 42 1,261 543 1,393
Legal settlements 9,190 - 9,191 -
Acquisition, offering and related expenses 158 20 2,561 20
Impact of purchase accounting 220 - 220 -
Stock-based compensation (6) 4,415 2,880 8,338 5,121
Amortization 13,651 13,808 26,734 27,358
------ ------ ------ ------
Adjusted income before tax 24,468 16,911 53,040 36,842
Income tax (7) 9,543 6,595 20,686 14,368
----- ----- ------ ------
Adjusted net income $14,925 $10,316 $32,354 $22,474
======= ======= ======= =======
(5) 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
consideration $744 $2,949 $2,150 $4,098
Less: Change in fair value due to passage
of time 702 1,688 1,607 2,705
--- ----- ----- -----
Change in fair value of
contingent acquisition
consideration due to change in
estimate $42 $1,261 $543 $1,393
=== ====== ==== ======
(6) Stock-based compensation is recorded in the following line items:
Cost of revenue $388 $190 $698 $318
Sales 399 433 732 777
Marketing 264 314 494 577
Product development 707 388 1,214 714
General and administrative 2,657 1,555 5,200 2,735
----- ----- ----- -----
Total stock-based compensation
expense $4,415 $2,880 $8,338 $5,121
====== ====== ====== ======
(7) Assumes 39% income tax rate.
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
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SOURCE Bankrate, Inc.
