Investor Relations
NYSE: RATE
$13.850.00

Investor Overview

Press Releases

Printer Friendly Version View printer-friendly version
<< Back
Bankrate Reports Second Quarter 2016 Financial Results
Download PDF Download PDF
Raises Full Year Outlook with Addition of NextAdvisor

NEW YORK, Aug. 4, 2016 /PRNewswire/ -- Bankrate, Inc. (NYSE: RATE) today reported financial results for the quarter ended June 30, 2016.

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

Summary Financial Results:



















In millions, except per share data



Q2 2016



Q2 2015

Growth











Total Revenue


$

98.3


$

89.3

10%











Net Income









GAAP (1)



(41.0)



0.3

NM


Adjusted (2)



9.7



14.6

-34%











Diluted earnings (loss) per share (EPS)









GAAP



(0.47)



0.00

NM


Adjusted



0.11



0.15

-27%











Total Adjusted EBITDA (2)



22.6



31.3

-28%





















(1)

Non-cash impairment charge of $25 million and $20 million charge to reserve for a previously announced pending legal settlement result in GAAP Net Loss.


(2)

See reconciliation of GAAP to non-GAAP measures at the end of this press release; supplemental information can be found in the "Q2-16 Earnings Call Presentation" located in the "Investor Overview" section on http://investor.bankrate.com/.


 

Management Commentary:

"In our Credit Cards segment we accomplished much of what we set out to do in the second quarter of 2016, setting an all-time record for Credit Card segment revenue and scaling our card marketing.  However, even though Bankrate, Inc.'s revenue and Adjusted EBITDA exceeded the top end of our second quarter 2016 guidance, we are not satisfied, particularly with our Banking segment results.  There are a number of key initiatives and investments in process across Bankrate, Inc. that we believe will further our progress towards continued long-term revenue growth and a return to increased profitability," said Kenneth S. Esterow, President and CEO of Bankrate, Inc.

Steven D. Barnhart, SVP and Chief Financial Officer added, "In our flagship Credit Cards segment, we have nearly doubled our marketing investment across SEM, display, social, and direct response television from prior year levels with positive contribution margin, as we continue to diversify our consumer demand for credit cards beyond natural search.  With NextAdvisor's leading content marketing capabilities, we expect to further accelerate our efforts in aggregating consumer demand.

"In our Banking segment, mortgage consumer inquiry revenue growth of 48% was driven by our ongoing value-based pricing efforts.  However, macro trends in online advertising for deposits continue to weigh on the Banking segment results.  This led us to conclude that the goodwill relating to our Banking segment was impaired, and to record a non-cash impairment charge in the second quarter."

Second Quarter 2016 Financial Highlights:

  • Total second quarter revenue of $98.3 million, up 10% versus second quarter of 2015.  Cards consumer inquiry revenue up 38% versus second quarter of 2015.  Mortgage consumer inquiry revenue up 48% versus second quarter of 2015.
  • Non-cash impairment charge of $25 million, along with a $20 million charge to reserve for a previously announced pending legal settlement, resulted in GAAP Net Loss. 
  • Second quarter GAAP Net Loss of $(41.0) million, representing loss per share of $(0.47); Adjusted Net Income in the second quarter of $9.7 million representing earnings per share of $0.11.
  • Second quarter Adjusted EBITDA of $22.6 million, down 28% versus second quarter of 2015.

Second Quarter 2016 Business Highlights:

Credit Cards Segment:

  • Total segment revenue of $69.7 million, an all-time record for the Credit Card segment, driven by 38% growth in consumer inquiry revenue.
  • Total segment Adjusted EBITDA of $24.7 million, 4% lower versus second quarter of 2015.  Strong revenue growth from paid marketing did not fully offset the expected impact of lower organic traffic.
  • Integration of the NextAdvisor acquisition started with the launch of content marketing for CreditCards.com category pages.
  • Released CreditCards.com 'Score and Report' App.  Beyond just monitoring their credit scores, 'Score and Report' helps consumers track spending and debt utilization trends along with monitoring account payment history.

Banking Segment:

  • Total segment revenue of $23.2 million, a 14% decline versus second quarter of 2015 on lower deposit consumer inquiry revenue and display revenue.  Mortgage consumer inquiry revenue increased 48% versus second quarter of 2015 due to our value-based pricing initiatives.
  • Total segment Adjusted EBITDA of $4.8 million, $4.4 million lower versus second quarter of 2015. Advertiser weakness in deposit consumer inquiry and display revenue led to the decline.
  • Programmatic ad revenue increased 49%, sequentially versus first quarter of 2016, as we continue to optimize our programmatic ad serving technology and work with additional exchange providers.

Senior Care Segment:

  • Total segment revenue of $6.0 million was 5% higher versus second quarter of 2015.
  • The number of participating senior living communities in the Caring network reached an all-time high in June 2016, up 20% versus the second quarter of 2015.

Business Outlook Third Quarter and Full Year 2016:

The following guidance for the third quarter and full year 2016 reflects the impact of the acquisition of NextAdvisor, which was completed on June 17, 2016. 

Bankrate, Inc.'s guidance for the third quarter ending September 30, 2016:

  • Revenue is expected to be in the range of $110 million to $116 million.
  • Adjusted EBITDA is expected to be in the range of $23 million to $25 million.

Bankrate, Inc.'s guidance for the full year ending December 31, 2016:

  • Revenue is expected to be in the range of $419 million to $430 million.
  • Adjusted EBITDA is expected to be in the range of $99 million to $103 million.

August 4, 2016 at 5:00 p.m. EDT - Conference Call Interactive Dial-In and Webcast Information:

To participate in the teleconference please dial: (877) 809-9810 and enter the passcode 51877582.  International callers should dial: (330) 863-3286 and enter the passcode 51877582.  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/.

Second Quarter 2016 Earnings Call Presentation:

Supplemental information including segment metrics and non-GAAP information can be found in the "Second Quarter 2016 Earnings Call Presentation" located in the "Investor Overview" section on http://investor.bankrate.com/.

Replay Information:

A replay of the conference call will be available beginning August 4, 2016 at 8:00 p.m. ET / 5:00 p.m. PT through August 11, 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: 51877582.  International callers should dial (404) 537-3406 and enter the passcode: 51877582.

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 Net Income 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 (NYSE: RATE) is a leading online publisher, aggregator, and distributor of personal finance content.  The Company's vision is to help consumers Maximize Your Money™ when they borrow, save or invest. With this in mind, RATE 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 credit cards, mortgages, deposits, senior care and other categories, such as personal and auto loans retirement, and taxes.  RATE's flagship sites Bankrate.com, CreditCards.com, and Caring.com are leading destinations in each of their respective verticals and connect their vast audiences with financial service and senior care providers and other contextually relevant advertisers. RATE also owns and operates a number of specialist sites, apps and social platforms, including NextAdvisor.com, The Points Guy, Interest.com, Quizzle.com and Walla.byBankrate also develops and provides content, tools, web services and co-branded websites to over 100 online partners, including Yahoo!, CNBC and MarketWatch. In addition, Bankrate licenses editorial content to leading news organizations such as The Wall Street Journal 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; changes in the way that search engines display paid and organic search results and the impact of those changes on the number of consumers that visit our online network and the cost of driving consumers to our online network; 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; risks related to the successful integration of the NextAdvisor business acquired and the ability to realize the expected benefits from such acquisition; risks and uncertainties associated with the NextAdvisor business; 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; the material weakness in the operating effectiveness of our internal controls over financial reporting discussed in our 2015 Annual Report on Form 10-K and our ability to remediate the weakness completely and promptly; risks relating to the defense or litigation of lawsuits, including without limitation the failure to obtain preliminary or final court approval of the proposed settlement of the putative securities law class action lawsuit described in our SEC filings or delay in obtaining such approval, risks related to decisions by class members to opt out of or object to the proposed settlement, or the potential impact of the proposed settlement on our stock price; 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; the costs of indemnification obligations to former directors, officers and employees; 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, including without limitation in connection with the putative securities class action lawsuit; 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, including without limitation the impairment of our Banking segment and the potential for impairment of the goodwill of our Senior Care segment as discussed in our SEC filings; 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.

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

-Financial Statements Follow-

 


Bankrate, Inc. and Subsidiaries


Condensed Consolidated Balance Sheet


(Unaudited)


(In thousands, except share and per share data)


















June 30,


December 31,




2016


2015


Assets








Cash and cash equivalents


$

121,951


$

237,204


Accounts receivable, net of allowance for doubtful accounts of








$142 and $147, respectively



59,054



56,265


Prepaid expenses and other current assets



33,614



27,773


Total current assets



214,619



321,242


Furniture, fixtures and equipment, net of accumulated depreciation of








$16,977 and $16,027, respectively



10,294



10,189


Intangible assets, net of accumulated amortization of








$185,212 and $168,627, respectively



218,714



205,766


Goodwill



609,008



567,544


Other assets



35,143



23,127


Total assets


$

1,087,778


$

1,127,868


Liabilities and stockholders' equity








Liabilities








Accounts payable


$

5,442


$

10,147


Accrued expenses



30,689



25,838


Deferred revenue and customer deposits



1,509



1,508


Accrued interest payable



6,984



6,890


Other current liabilities



26,385



15,583


Total current liabilities



71,009



59,966


Deferred income taxes



6,950



7,552


Long term debt, net of unamortized discount



294,487



293,284


Other liabilities



41,111



5,871


Total liabilities



413,557



366,673


Commitments and contingencies








Stockholders' equity








Common stock, par value $.01 per share -








300,000,000 shares authorized








103,241,990 shares and 103,845,310 shares issued,








respectively; 90,266,376 shares and 96,794,018 shares outstanding, respectively



1,034



1,039


Additional paid-in capital



893,705



886,261


Accumulated deficit



(77,659)



(36,985)


Less: Treasury stock, at cost - 12,975,614 shares and 7,051,292 shares, respectively



(142,198)



(88,616)


Accumulated other comprehensive loss



(661)



(504)


Total stockholders' equity



674,221



761,195


Total liabilities and stockholders' equity


$

1,087,778


$

1,127,868


 

Bankrate, Inc. and Subsidiaries


Condensed Consolidated Statements of Income (Loss)


(Unaudited)


(In thousands, except share and per share data)





















Three months ended



Six months ended



June 30,


June 30,


June 30,


June 30,




2016


2015


2016


2015


Revenue


$

98,302


$

89,334


$

191,780


$

178,560
















Costs and expenses:














Cost of revenue



52,641



41,768



99,952



83,174


Sales and marketing



4,471



4,401



9,366



8,504


Product development and technology



7,470



5,796



14,049



10,740


General and administrative



19,822



16,510



36,710



32,399


Legal settlements



20,000



3



19,149



3


Acquisition, disposition and related expenses



1,335



311



1,335



574


Restructuring charges



-



-



(34)



-


Changes in fair value of contingent acquisition consideration



263



628



101



387


Impairment charge



25,000



-



25,000



-


Depreciation and amortization



11,079



9,744



20,706



19,302


Total costs and expenses



142,081



79,161



226,334



155,083


(Loss) income from operations



(43,779)



10,173



(34,554)



23,477
















Interest and other expenses, net



4,974



6,414



9,822



11,683
















(Loss) income before taxes



(48,753)



3,759



(44,376)



11,794


Income tax (benefit) expense



(7,444)



1,647



(3,788)



5,303


Net (loss) income from continuing operations



(41,309)



2,112



(40,588)



6,491
















Net income (loss) from discontinued operations



353



(1,792)



(86)



(1,221)


Net (loss) income


$

(40,956)


$

320


$

(40,674)


$

5,270
















Basic net (loss) income per share:














Continuing operations


$

(0.47)


$

0.02


$

(0.45)


$

0.07


Discontinued operations



-



(0.02)



-



(0.02)


Basic net (loss) income per share


$

(0.47)


$

0.00


$

(0.45)


$

0.05
















Diluted net (loss) income per share:














Continuing operations


$

(0.47)


$

0.02


$

(0.45)


$

0.07


Discontinued operations



-



(0.02)



-



(0.02)


Diluted net (loss) income per share


$

(0.47)


$

0.00


$

(0.45)


$

0.05
















Weighted average common shares outstanding:














Basic



88,030,655



98,592,056



90,469,093



98,502,592


Diluted



88,030,655



99,157,615



90,469,093



99,055,782
















Net (loss) income


$

(40,956)



320



(40,674)



5,270


Other comprehensive (loss) income, net of tax



94



138



(157)



27


Comprehensive (loss) income


$

(40,862)


$

458


$

(40,831)


$

5,297


 

 

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,




2016


2015


2016


2015


Revenue


$

98,302


$

89,334


$

191,780


$

178,560
















Adjusted EBITDA (1)


$

22,616


$

31,268


$

45,925


$

63,346


Adjusted EBITDA margin



23.0%



35.0%



23.9%



35.5%
















Adjusted net income (2)


$

9,650


$

14,559


$

20,479


$

30,240


Adjusted EPS


$

0.11


$

0.15


$

0.23


$

0.31
















Adjusted weighted average common shares outstanding (diluted):



88,563,552



99,157,615



91,005,953



99,055,782
















(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; Next Advisor contingent payments for the acquisition; costs related to the restatement, the internal review, the SEC and DOJ investigations and related litigation and indemnification obligations; purchase accounting adjustments; stock-based compensation; legal settlements; and the Adjusted EBITDA results of the operations in China as we are winding them down and ceasing the operations.


Reconciliation of Adjusted EBITDA














Net (loss) income


$

(40,956)


$

320


$

(40,674)


$

5,270


Interest and other expenses, net



4,974



6,414



9,822



11,683


Income tax (benefit) expense



(7,444)



1,647



(3,788)



5,303


Depreciation and amortization



11,079



9,744



20,706



19,302


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



(32,347)



18,125



(13,934)



41,558


Net loss (income) from discontinued operations



(353)



1,792



86



1,221


China Adjusted EBITDA loss



598



64



770



292


Changes in fair value of contingent acquisition consideration



263



628



101



387


Acquisition, disposition and related expenses



1,335



311



1,335



574


Next Advisor contingent payments



1,371



-



1,371



-


Restatement-related expenses



1,995



5,385



3,422



9,558


Impact of purchase accounting



-



1



-



35


Stock-based compensation (4)



4,754



4,959



8,659



9,718


Legal settlements



20,000



3



19,149



3


Restructuring charge



-



-



(34)



-


Impairment



25,000



-



25,000



-


Adjusted EBITDA


$

22,616


$

31,268


$

45,925


$

63,346
















(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; Next Advisor contingent payments for the acquisition; costs related to the restatement, the internal review, the SEC and DOJ investigations and related litigation and indemnification obligations; purchase accounting adjustments; stock-based compensation; legal settlements; amortization; and the Adjusted EBITDA results of the operations in China as we are winding them down and ceasing the operations; net of tax.


Reconciliation of Adjusted net income














Net (loss) income


$

(40,956)


$

320


$

(40,674)


$

5,270


Net loss (income) from discontinued operations



(353)



1,792



86



1,221


China Adjusted EBITDA loss



598



64



770



292


Income tax (benefit) expense



(7,444)



1,647



(3,788)



5,303


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



95



-



(221)



(946)


Acquisition, disposition and related expenses



1,335



311



1,335



574


Next Advisor contingent payments



1,371



-



1,371



-


Restatement-related expenses



1,995



5,385



3,422



9,558


Impact of purchase accounting



-



1



-



35


Stock-based compensation (4)



4,754



4,959



8,659



9,718


Legal settlements



20,000



3



19,149



3


Amortization



9,425



9,386



18,497



18,546


Restructuring charge



-



-



(34)



-


Impairment



25,000



-



25,000



-


Adjusted income before tax



15,820



23,868



33,572



49,574


Income tax (5)



6,170



9,309



13,093



19,334


Adjusted net income


$

9,650


$

14,559


$

20,479


$

30,240
















(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


$

263


$

628


$

101


$

387


Less: Change in fair value due to passage of time



168



628



322



1,333


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


$

95


$

-


$

(221)


$

(946)
















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
















Cost of revenue


$

481


$

499


$

909


$

978


Sales and marketing



458



687



934



1,339


Product development and technology



1,122



963



1,866



1,863


General and administrative



2,693



2,810



4,950



5,538


Total stock-based compensation expense


$

4,754


$

4,959


$

8,659


$

9,718
















(5) Assumes 39% income tax rate.














 

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

 

To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/bankrate-reports-second-quarter-2016-financial-results-300309524.html

SOURCE Bankrate, Inc.

Data provided by Nasdaq. Minimum 15 minutes delayed.