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Oct 21, 2017 3:42 am EDT

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Bankrate Produces Record Full-Year Results Despite Impact Of Google Compare Q4 Testing And Lower Deposit Advertising Revenue
CEO Highlights 2016 Investments Positioning Company For Future Growth

      
  • Fourth quarter revenue of $93.4 million, up 2% versus  prior year; full-year 2015 revenue of $370.5 million, up 6% compared to  full-year 2014. 
  •  
  • Fourth quarter Net Income (which includes Insurance) of  $4.8 million; full-year 2015 Net Loss (which includes Insurance) of $(13.3)  million.
  •  
  • Fourth quarter Adjusted EBITDA of $28.5 million, down 8%  versus the prior year quarter; full-year 2015 Adjusted EBITDA of $127.1  million, up 8% versus the prior year.
  •  
  • On December 28, 2015, the Company completed the  previously announced sale of its Insurance business, InsuranceQuotes.com, to All Web Leads, Inc.
  •  
  • In the quarter, Google’s testing of more prominent placement  of its soon-to-be terminated Compare Credit Cards service adversely affected Credit  Cards segment growth and profitability.  
  •  
  • Banking segment consumer inquiry revenue decreased by 15%  over the prior year quarter due to lower deposit advertising revenue.
  •  
  • The Bankrate Board of Directors authorized an  additional $50 million share repurchase program.
  • Note: References above exclude the Company's sold Insurance business, unless otherwise noted.

NEW YORK, NY – February 24, 2016  - Bankrate, Inc. (NYSE: RATE) today reported financial results for the quarter and full year ended December 31, 2015.

“Bankrate generated another quarter  of record revenue and strong Adjusted EBITDA. However, we fell short of our updated  earnings guidance. The momentum we carried into the fourth quarter was impacted  by two factors: First, during the quarter, Google tested placement of a version  of its Compare service that took up more of the display on credit card-related search  results. Second, deposit advertisers significantly reduced their ad budgets far  beyond the anticipated seasonal slowdown.   On February 22, 2016, Google announced it was terminating its Compare  services, including Compare Credit Cards, by March 23, 2016. We believe  Google’s announcement is a positive  development for Bankrate.  However, we  are still assessing the impact of this announcement along with other recent changes we are seeing, including Google  displaying additional paid ads on the top of many search results,” said Kenneth S. Esterow, President and  CEO of Bankrate, Inc.

“In 2016, RATE will step up product, technology and  marketing investments.  In a continuously  evolving landscape, we believe these investments will keep CreditCards.com growing as the ‘go-to’ marketplace for both  consumers and credit card issuers, well-beyond its leading position in organic  search; reinforce Bankrate.com as a  top consumer destination for personal finance information by redesigning the  site and improving personalization; and enable Caring to continue adding to  their network of senior living communities.   We are confident these investments are the key to return Bankrate to the  level of growth that we all expect, in 2017 and beyond,” Mr. Esterow continued. 

Fourth Quarter 2015 Business Highlights

Credit Cards

  • Mobile represented 49% of CreditCards.com's total consumer inquiries in the quarter and 22% of CreditCards.com's total consumer inquiry revenue.
  • The number of consumers using CreditCards.com's personalized services, including WalletUp and My.CreditCards grew to 180,000, up over 70% compared to 2014.  

Banking

  • Mortgage consumer inquiry volume increased 30% over the prior year quarter, as we extended our value-based pricing efforts.
  • Across the Company, 2.2 million users have access to Bankrate's personalized credit tools and offers. Fifty-two percent of myBankrate users revisit to access the tools.

Senior Care

  • The number of participating senior living communities under referral contracts increased 51% over the prior year quarter.
  • The number of consumer reviews available on Caring.com increased 45% over the prior year quarter.

Selected Financial Metrics































In millions unless stated otherwise



4Q-15



4Q-14

YoY Growth %



FY 2015



FY 2014

YoY Growth %
















Revenue















Banking


$

23.8


$

28.5

-16.7%


$

105.9


$

118.5

-10.6%

Credit Cards



63.6



60.2

5.8%



241.9



226.9

6.6%

Senior Care



6.3



4.0

57.8%



23.9



10.3

131.6%

Other



(0.4)



(1.4)

NM



(1.1)



(5.3)

NM

Total Revenue


$

93.4


$

91.3

2.2%


$

370.5


$

350.3

5.8%
















Net Income















GAAP


$

4.8


$

10.3

-53.7%


$

(13.3)


$

5.2

NM

Adjusted



13.8



15.0

-7.9%



61.9



56.5

9.5%
















Adjusted EBITDA















Banking


$

5.7


$

10.6

-46.4%


$

32.9


$

44.9

-26.7%

Margin %



23.9%



37.1%




31.0%



37.9%


Credit Cards


$

29.0


$

26.4

9.8%


$

113.6


$

92.2

23.2%

Margin %



45.5%



43.9%




47.0%



40.7%


Senior Care


$

(0.0)


$

(1.3)

NM


$

0.4


$

(2.6)

NM

Margin %



-0.6%



-32.3%




1.6%



-25.1%


Other


$

(6.1)


$

(4.8)

NM


$

(19.8)


$

(16.7)

NM

Total Adjusted EBITDA


$

28.5


$

30.9

-7.9%


$

127.1


$

117.8

7.9%

Margin %



30.5%



33.9%




34.3%



33.6%

















 

Fourth Quarter 2015 Financial Highlights

  • In our Banking segment, mortgage revenue increased for the second consecutive quarter through our value-based pricing initiatives.
  • Credit Card segment consumer inquiry revenue in the fourth quarter grew 42% year-over-year.
  • Within the Senior Care segment, consumer inquiry revenue increased 62% compared to the prior year quarter; subsequent to the quarter, a large chain of senior living communities did not renew its contract with Caring.com.

A reconciliation of non-GAAP measures can be found lower in this press release and supplemental information can be found in the "Q4-15 Earnings Call Presentation" located in the "Investor Overview" section on http://investor.bankrate.com/.

First Quarter and Full Year 2016 Guidance

Given the recent and uncertain nature of the Google developments mentioned above, our forward visibility is limited.  Hence, our guidance is less specific and does not reflect any change in the Google search environment for the balance of the quarter. Any net benefit from changes in search would represent upside to this quarterly guidance.  For the first quarter of 2016, the Company expects revenue greater than $80 million, with Adjusted EBITDA greater than $20 million.

We plan to provide full-year 2016 guidance when we announce our first quarter 2016 results, at which point we should have better visibility into the impact of these recent changes.

Share Repurchase Program

In the fourth quarter the Company completed the $75 million share repurchase program announced in September 2015.

Bankrate's Board of Directors has authorized an additional $50 million share repurchase program. Under the terms of the program, the Company may repurchase up to $50 million of its outstanding common stock.  Stock repurchases under this program may be made through open market and privately negotiated transactions. The timing and amount of specific repurchases are subject to the requirements of the Securities and Exchange Commission, market conditions, alternative uses of capital and other factors.  The stock repurchase program does not obligate Bankrate to acquire any particular amount of shares and the program may be limited or terminated at any time without prior notice. The program is effective immediately and will expire on December 31, 2017.

February 24, 2016 Conference Call Interactive Dial-In and Webcast Information:

To participate in the teleconference please dial: (877) 809-9810 and enter the passcode 47035402.  International callers should dial: (330) 863-3286 and enter the passcode 47035402.  Please access the call 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 February 24, 2016 at 8:00 p.m. ET / 5:00 p.m. PT through March 2, 2016 at 8:00 p.m. ET / 5:00 p.m. PT.  To listen to the replay, call (855) 859-2056 and enter the passcode: 47035402.  International callers should dial (404) 537-3406 and enter the passcode: 47035402.

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 in the financial tables below.

About Bankrate, Inc.

Bankrate is a leading online publisher,  aggregator, and distributor of personal finance content.  Bankrate aggregates large scale audiences of  in-market consumers by providing them with proprietary, fully researched,  comprehensive, independent and objective personal finance and related editorial  content across multiple vertical categories including mortgages, deposits,  credit cards, senior care and other categories, such as retirement, automobile  loans, and taxes.  Our flagship sites Bankrate.com, CreditCards.com, and Caring.com are leading destinations in each of their respective verticals and connect our  audience with financial service and senior care providers and other  contextually relevant advertisers. Bankrate also develops and provides content,  tools, web services and co-branded websites to over 100 online partners,  including some of the most trusted and frequently visited personal finance  sites such as Yahoo!, CNBC, AARP and Bloomberg. In addition, Bankrate licenses  editorial content to leading news organizations such as The Wall Street  Journal, USA Today, and The New York Times.

 

Cautionary Statement Regarding Forward Looking Statements

Certain  matters included in this press release may be “forward-looking statements”  which involve risks and uncertainties.   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 or interest of banks,  lenders, brokers, credit card issuers, senior care providers and other  advertisers in the business verticals in which we operate to advertise on our  websites or mobile applications, or purchase our leads, clicks, calls and referrals;  changes in application approval rates by our credit card issuer customers;  increased competition and its effect on our website traffic, click-through  rates, advertising rates, margins, and market share; our dependence on internet  search engines to attract a significant portion of the visitors to our websites  and our ability to diversify the sources from which we obtain visitor traffic  to our websites and mobile applications, including without limitation through  use of social media channels; the timing of Google’s termination of its Google  Compare services or any change to its decision to terminate such services;  changes by Google in the way it displays organic or paid search results; our  dependence on traffic from our partners to produce a significant portion of the  company’s revenue and our ability to establish and maintain distribution  arrangements; the willingness of consumers to accept the Internet and our  online network as a medium for obtaining information on financial products or  senior care; shift of visitors from desktop to mobile and mobile app  environments; the rate of conversion of consumers’ visits to our websites or  mobile applications into senior care referrals and the rate at which those  referrals result in move-ins with our senior care customers; the number of  consumers seeking information about the financial and senior care products we  have on our websites or mobile applications; our ability to successfully  execute on our strategies, and the effectiveness of our strategies and investments  in our business, including without limitation whether they result in increased  revenue or profitability; our ability to maintain good working relationships  with our customers and third-party providers and to continue to attract new  customers; risks relating to the defense or litigation of lawsuits, including  the putative securities class action lawsuit currently pending and described in  our SEC filings; the timing and outcome of, including potential expense  associated with, and the potential impact on our business and stock price of  any announcements regarding, the United States Department of Justice  investigation relating to our financial reporting during 2012; the timing and  outcome of, including potential expense associated with, and the potential impact  on our business and stock price of any announcements regarding, the Consumer  Financial Protection Bureau investigation; any delay, or failure to pay, or  contractually required reduction in the deferred portion of the purchase price  in connection with the sale of the Company’s Insurance business in December  2015; our ability to anticipate and manage cybersecurity risk and data security  risk and to mitigate or resolve issues that may arise; the effects of any  security breach, data breach or cyberattack on our systems, websites or mobile  applications, or on our reputation, and the impact of any notification costs or  other liability arising from any security breach, data breach or cyberattack on  our business; technological changes and our ability to adapt to new or evolving  technologies that affect our business environment or operations; our ability to  maintain effective disclosure controls and procedures and internal control over  financial reporting; our ability to manage traffic on our websites or mobile applications,  and service interruptions; our ability to maintain and develop our brands and  content; our indebtedness and the effect such indebtedness may have on our  business; our need and our ability to obtain 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 (whether intentional or not) from  our acquisitions; the effect of programmatic advertising platforms on display  revenue; our ability to attract and retain executive officers and personnel;  any failure or refusal by our insurance providers to provide coverage under our  insurance policies; our ability to protect our intellectual property; the  effects of potential liability for content on our websites or mobile  applications; the effect of our operations in the United Kingdom 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 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 and interest rate volatility; changes in  consumer spending and saving habits; review of our business and operations by  regulatory or other governmental authorities; changes in laws and regulations  or interpretations of laws and regulations, other changes in the legal and regulatory  environment, and the impact of such changes on the operation of our business;  any impairment to our goodwill and/or intangible assets; 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, 2015 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 publicly update or revise any 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 Sheet

(Unaudited)

(In thousands, except share and per share data)









December 31,


December 31,



2015


2014

Assets







Cash and cash equivalents


$

236,866


$

119,028

Accounts receivable, net of allowance for doubtful accounts of







$147 and $312, respectively



56,148



48,307

Prepaid expenses and other current assets



27,660



34,188

Assets held for sale



1,157



248,045

Total current assets



321,831



473,766

Furniture, fixtures and equipment, net of accumulated depreciation of







$14,245 and $12,297, respectively



9,608



6,203

Intangible assets, net of accumulated amortization of







$168,613 and $132,270, respectively



205,758



222,769

Goodwill



567,544



545,772

Other assets



28,055



9,919

Total assets


$

1,132,796


$

1,258,429

Liabilities and Stockholders' Equity







Liabilities







Accounts payable


$

10,082


$

1,281

Accrued expenses



25,574



43,646

Deferred revenue and customer deposits



1,367



1,589

Accrued interest payable



6,890



6,980

Other current liabilities



14,660



13,622

Liabilities subject to sale



1,393



37,159

Total current liabilities



59,966



104,277

Deferred income taxes



7,552



22,435

Long term debt, net of unamortized discount



298,212



297,598

Other liabilities



5,871



10,833

Total liabilities



371,601



435,143

Commitments and contingencies







Stockholders' equity







Common stock, par value $.01 per share -







300,000,000 shares authorized







103,396,314 shares and 102,286,646 shares issued,







respectively; 92,619,245 shares and 98,296,110 shares outstanding, respectively



1,039



1,023

Additional paid-in capital



886,261



904,740

Accumulated deficit



(36,985)



(23,639)

Less: Treasury stock, at cost - 10,777,069 shares and 3,990,536 shares, respectively



(88,616)



(58,472)

Accumulated other comprehensive loss



(504)



(366)

Total stockholders' equity



761,195



823,286

Total liabilities and stockholders' equity


$

1,132,796


$

1,258,429

 

 

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        

Bankrate, Inc. and Subsidiaries

Condensed Consolidated Statements of Income

(Unaudited)

(In thousands, except share and per share data)

















Three months ended



Year ended



December 31,


December 31,


December 31,


December 31,



2015


2014


2015


2014

Revenue


$

93,354


$

91,300


$

370,534


$

350,304














Costs and expenses:


























Cost of revenue



44,535



46,676



171,794



179,490

Sales and marketing



4,228



3,864



16,663



15,373

Product development and technology



6,577



4,487



23,488



16,428

General and administrative



11,265



12,980



62,350



59,226

Legal settlements



-



(56)



3



1,403

Acquisition, disposition, offering and related expenses



(562)



780



569



3,590

Restructuring charges



5,523



-



5,616



-

Changes in fair value of contingent acquisition consideration



(1,157)



801



(421)



3,633

Depreciation and amortization



11,464



9,108



40,466



34,141

Total costs and expenses



81,773



78,640



320,528



313,284

Income from continuing operations



11,581



12,660



50,006



37,020














Interest and other expenses, net



4,998



5,246



22,238



20,820














Income before taxes



6,583



7,414



27,768



16,200

Income tax expense (benefit)



1,704



(3,182)



10,115



8,260

Net income from continuing operations



4,879*



10,596*



17,653*



7,940*














Net income (loss) from discontinued operations


$

(107)*


$

(293)*



(30,999)*



(2,768)*

Net income (loss)


$

4,772


$

10,303


$

(13,346)


$

5,172














Basic net (loss) income per share:



 



 



 



 

Continuing operations


$

0.05


$

0.11


$

0.18


$

0.08

Discontinued operations


 

(0.00)


$

(0.00)



(0.32)



(0.03)

Basic net (loss) income per share:


$

0.05


$

0.10


$

(0.14)


$

0.05














Diluted net (loss) income per share:



 



 



 



 

Continuing operations


$

0.05


$

0.11


$

0.18


$

0.08

Discontinued operations


 

(0.00)


$

(0.00)



(0.31)



(0.03)

Diluted net (loss) income per share:


$

0.05


$

0.10


$

(0.14)


$

0.05














Diluted net (loss) income per share:













Continuing operations



94,537,126



98,242,986



97,637,936



100,399,458

Discontinued operations



96,995,000



100,595,995



99,723,532



102,417,273














Net income (loss)


$

4,773



10,303



(13,346)



5,172

Other comprehensive (loss) income, net of tax



(42)



(127)



(138)



(173)

Comprehensive income (loss)


$

4,731


$

10,176


$

(13,484)


$

4,999

* Updated as reported in the  Company’s Current Report on Form 8-K/A filed with the SEC on March 10, 2016.

 

Bankrate, Inc. and Subsidiaries

Non-GAAP Measures (Unaudited)

(In thousands, except per share data)





(Unaudited)



(Unaudited)










Three months ended


Year ended



December 31,


December 31,


December 31,


December 31,



2015


2014


2015


2014

Revenue


$

93,354


$

91,300


$

370,534


$

350,304














Adjusted EBITDA (1)


$

28,501


$

30,929


$

127,123


$

117,799

Adjusted EBITDA margin



30.5%



33.9%



34.3%



33.6%














Adjusted net income (2)


$

13,832


$

15,014


$

61,858


$

56,496














(1) Adjusted EBITDA adds back interest and other expense; income tax (benefit) expense; depreciation and amortization; net income (loss) from discontinued operations; changes in fair value of contingent acquisition consideration; acquisition, disposition, offering and related expenses; restructuring charges, any impairment charge, restatement-related expenses; purchase accounting adjustments; stock-based compensation; and legal settlements.





Reconciliation of adjusted EBITDA













Net income (loss)


$

4,772


$

10,303


$

(13,346)


$

5,172

Interest and other expenses, net



4,998



5,246



22,238



20,820

Income tax expense (benefit)



1,704



(3,182)



10,115



8,260

Depreciation and amortization



11,464



9,108



40,466



34,141

Earnings before interest, taxes, depreciation and amortization (EBITDA)



22,938



21,475



59,473



68,393

Net (income) loss from discontinued operations



107



293



30,999



2,768

Changes in fair value of contingent acquisition consideration



(1,157)



801



(421)



3,633

Acquisition, disposition, offering and related expenses



(562)



780



569



3,590

Restatement-related expenses



785



3,986



11,432



23,586

Impact of purchase accounting



-



143



35



556

Stock-based compensation (4)



867



3,507



19,417



13,870

Legal settlements



-



(56)



3



1,403

Restructuring charge



5,523



-



5,616



-

Adjusted EBITDA


$

28,501


$

30,929


$

127,123


$

117,799














(2) Adjusted net income adds back net income (loss) from discontinued operations; income tax (benefit) expense; non-recurring change in fair value of contingent acquisition consideration; acquisition, disposition, offering and related expenses; restructuring charges, any impairment charge, restatement-related expenses; purchase accounting adjustments; stock-based compensation; legal settlements; and amortization, net of tax.





Reconciliation of adjusted net income













Net income (loss)


$

4,772


$

10,303


$

(13,346)


$

5,172

Net income (loss) from discontinued operations



107



293



30,999



2,768

Income tax expense (benefit)



1,704



(3,182)



10,115



8,260

Change in fair value of contingent acquisition consideration due to change in estimate (3)



(1,509)



(1)



(2,455)



529

Acquisition, disposition, offering and related expenses



(562)



780



569



3,590

Restatement-related expenses



785



3,986



11,432



23,586

Impact of purchase accounting



-



143



35



556

Stock-based compensation (4)



867



3,507



19,417



13,870

Legal settlements



-



(56)



3



1,403

Amortization



10,989



8,841



39,022



32,882

Restructuring charge



5,523



-



5,616



-

Adjusted income before tax



22,676



24,614



101,406



92,616

Income tax



8,844



9,599



39,548



36,120

Adjusted net income


$

13,832


$

15,014


$

61,858


$

56,496














(3) 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


$

(1,157)


$

801


$

(421)


$

3,633

Less: Change in fair value due to passage of time



353



802



2,034



3,104

Change in fair value of contingent acquisition consideration due to change in estimate


$

(1,509)


$

(1)


$

(2,455)


$

529














(4) Stock-based compensation is recorded in the following line items:














Cost of revenue


$

218


$

370


$

1,392


$

1,275

Sales and marketing



512



442



2,427



1,558

Product development and technology



818



664



3,503



2,203

General and administrative



(681)



2,030



12,095



8,834

Total stock-based compensation expense


$

867


$

3,506


$

19,417


$

13,870



























 

Bankrate, Inc. logo. (PRNewsFoto/Bankrate, Inc.)

www.bankrate.com

For more information contact:  
Steven D. Barnhart
SVP, Chief Financial Officer                                                                             
steve.barnhart@bankrate.com 
(917) 438-9558

Logo - http://photos.prnewswire.com/prnh/20040122/FLTHLOGO

To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/bankrate-produces-record-full-year-results-despite-impact-of-google-compare-q4-testing-and-lower-deposit-advertising-revenue-300225749.html

SOURCE Bankrate, Inc.

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