Bankrate, Inc. Announces Record Results; Cash Flow Positive Quarter Achieved

Business Wire, July 30, 2001

Business Editors

NORTH PALM BEACH, Fla.--(BUSINESS WIRE)--July 30, 2001

Reporting a Record Low Net Loss for the Quarter

of $0.02 per Share vs. a Net Loss of $0.43 per Share in 2000;

Excluding Non-Cash Charges, Reporting Net Income of $0.02 Per Share

Bankrate, Inc. (OTCBB:RATE), the Internet's leading source of consumer financial news and information, today reported online revenue of $7,354,000 for the six months ended June 30, 2001, a 21% increase, or $1,293,000, over the $6,061,000 reported for the same period in 2000. Total revenue for the six months ended June 30, 2001 of $8,947,000 was $1,395,000, or 18%, higher than the $7,552,000 reported for the comparable period in 2000. Online revenue for the quarter ended June 30, 2001 of $3,393,000 was $347,000, or 11% higher than the $3,046,000 reported for the same quarter in 2000. Total revenue of $4,201,000 for the quarter ended June 30, 2001 was $405,000, or 11%, higher than the $3,796,000 reported for the comparable quarter in 2000.

"Despite a weak advertising market and an environment in which other Internet businesses are failing, we are continuing to grow, and with this quarter we have become cash-flow positive ahead of schedule," said Elisabeth DeMarse, President and CEO. "This is an exciting milestone for us, and reaching it is a testimony to our loyal base of 300 plus advertisers, our dedicated and talented staff and the fabulous product we produce together -- Bankrate.com. When I joined this Company last April, we promptly developed a plan that would allow us to reach profitability as quickly as possible -- this is a significant validation of that plan."

"To put this into perspective," continued DeMarse, "we have gone from No. 10 on Barron's infamous `Burn Victims' list to cash-flow positive in four quarters. Nonetheless, we have significant work ahead of us -- to maintain and grow this great business."

The Company reported a net loss of $249,000, or $0.02 per share, for the quarter ended June 30, 2001 compared to a net loss of $5,948,000, or $0.43 per share, for the same period in 2000, and a net loss of $625,000, or $0.04 per share, for the quarter ended March 31, 2001. The net loss for the six months ended June 30, 2001 of $873,000, or $0.06 per share, was $12,188,000, or 93%, lower than the $13,061,000 net loss for the comparable period in 2000. Excluding non-cash charges of $527,000 and $1,110,000, the Company would have reported net income of $279,000, or $0.02 per share, and $237,000, or $0.02 per share, for the quarter and six months ended June 30, 2001, respectively. Non-cash charges consist of depreciation and amortization, interest, stock compensation expense and barter expenses net of barter revenue. During the quarter ended June 30, 2001 the Company generated cash of $257,000 as cash increased to $8,356,000 at June 30, 2001 from $8,099,000 at March 31, 2001.

Operating Expenses 57% Lower

Excluding barter expenses of $679,000 in the quarter ended June 30, 2001, total operating expenses of $2,502,000 were $3,345,000, or 57%, lower than the $5,847,000 reported in the comparable quarter in 2000. Total operating expenses of $5,405,000 (excluding barter expenses of $1,665,000) for the six-month period ended June 30, 2001 were $6,907,000, or 56%, lower than the $12,312,000 reported for the six months ended June 30, 2000.

Gross Margin More Than Doubled

Bankrate's gross margin more than doubled from 27% for the first six months in 2000 to 70% for the same period this year. "We continue to be mindful of our expense base, and continue to focus on cost containment. We have succeeded in eliminating unprofitable customers and partners. Thus, we have been able to improve our gross margin and our bottom line significantly," said Bob DeFranco, Chief Financial Officer.

Other Key Business Metrics:

Bankrate continued to exhibit strong metrics, further demonstrating its leadership position among consumer finance web sites.

Traffic Up 69%

Traffic levels continue to improve following the record levels achieved in the first quarter. Total page views for the six months ended June 30, 2001 grew 50.1 million, or 69%, to 122.8 million compared to the 72.7 million page views in the comparable period in 2000. Second quarter page views of 52.3 million were 16.7 million, or 47%, higher than the 35.6 million page views reported for the second quarter in 2000.

Unique Visitors

During July 2001, Bankrate.com had over 5 million unique visitors, up more than 300% from the previous year.

Graphic Ad Revenue Flat; Lead Based Revenue Up Significantly

Bankrate's second quarter graphic ad revenue remained flat compared to the first quarter and declined 25% compared to the same period of 2000. However, hyperlink revenue, which generates leads for banks to acquire new customers, grew 44% over the same quarter in 2000. "Last year we made a concerted effort to reduce our dependence on the volatile graphic ad market and diversify by growing our high CPM, lead generation advertising, and we have succeeded in that plan," commented Ned Newhouse, Chief Revenue Officer.