Bankrate Announces Fourth Quarter and Full Year 2007 Financial Results

Company Reports Record Q4 Revenue of $25.2 Million, up 22% Over Q4 2006

NEW YORK, Feb. 5 /PRNewswire-FirstCall/ -- Bankrate, Inc. (Nasdaq: RATE),
today reported financial results for the fourth quarter and fiscal year ended
December 31, 2007. Total revenue for the fourth quarter increased by 22% to
$25.2 million over the $20.7 million reported in the fourth quarter of 2006.
Net income increased by 5% to $4.1 million, or $0.21 per fully diluted share
in the fourth quarter of 2007, compared to $3.9 million, or $0.21 per fully
diluted share in the fourth quarter of 2006. Earnings per fully diluted share
("EPS"), excluding stock compensation expense, increased by 22% to $0.33 for
the fourth quarter 2007, compared to the adjusted EPS of $0.27 for the fourth
quarter 2006.
(Logo: http://www.newscom.com/cgi-bin/prnh/20040122/FLTHLOGO )
Earnings before interest, taxes, depreciation and amortization ("EBITDA"),
excluding stock compensation expense, were $9.8 million, an increase of 21%
over the adjusted $8.1 million reported in the fourth quarter 2006. EBITDA for
the fourth quarter were $6.4 million, an increase of 5% over the $6.1 million
reported in the fourth quarter 2006.
"It was an unusual quarter in that we had two record months followed by a
soft December, when several display advertisers cancelled booked business in
that month as a result of anxiety in the mortgage and financial sectors," said
Thomas R. Evans, President and Chief Executive Officer at Bankrate, Inc.
"However, January's activity generated record traffic and click volume and
2008 is off to a great start," Mr. Evans added.
Total revenue for the year ended December 31, 2007 was $95.6 million, an
increase of $16.0 million, or 20%, over the $79.6 million reported for the
year ended December 31, 2006. Net income increased by 100% to $20.1 million,
or $1.04 per fully diluted share, in the year ended December 31, 2007,
compared to $10.0 million, or $0.56 per fully diluted share, in the same
period in 2006. Earnings per fully diluted share, excluding stock compensation
expense, increased by 51% to $1.39 for the year ended December 31, 2007,
compared to $0.92 for the same period in 2006. The $0.92 in adjusted EPS for
the year ended December 31, 2006 excludes a $3.0 million legal settlement
charge recorded in the third quarter of 2006.
EBITDA for the year ended December 31, 2007, excluding stock compensation
expense, were $41.6 million, an increase of 48% over the adjusted $28.1
million reported in same period in 2006. The adjusted $28.1 million EBITDA,
excluding stock compensation expense, excludes the $3.0 million legal
settlement charge.
Additionally, Bankrate announced earlier today that the company acquired
the assets of InsureMe, Inc. ("InsureMe") based in Englewood, CO, and Lower
Fees, Inc, ("Fee Disclosure"), which operates feedisclosure.com and is located
in Westlake Village, CA, in separate transactions. The purchase price for the
assets of InsureMe was $65 million in cash with an additional $20 million in
cash in potential earn-out based on achieving specific financial performance
metrics over the next two years. The assets of Fee Disclosure were acquired
for $2.85 million in cash and a cash earn-out based on the net revenue
achieved over the next five years.
Increase in 2008 Guidance
Bankrate is revising and increasing its 2008 guidance, which was
previously announced during the company's December 10, 2007 conference call.
As a result of the acquisitions of InsureMe and Fee Disclosure, along with the
strength of the company's core business, Bankrate is now forecasting revenues
of between $167 and $172 million dollars, and EBITDA of between $64 and $68
million dollars. The low end of the guidance represents a 75% increase in
revenue and a 54% increase in EBITDA in 2008 over 2007.
"With the new acquisitions and the expectation that our core business will
grow in excess of 25% in 2008, we have raised our guidance to reflect those
positive developments," said Mr. Evans.
2007 Company Highlights

Acquisitions
-- The Nationwide Card Services, Inc. ("NCS") asset acquisition was
completed on December 7, 2007. NCS, based in Memphis, Tennessee,
markets a comprehensive line of consumer and business credit cards
via the Internet. NCS was purchased for $27.4 million in cash, which
includes $1.0 million in working capital, with an additional $7.0
million in potential earn-out based on achieving specific financial
performance metrics over the next two years.

-- The Savingforcollege.com, LLC ("SFC") asset acquisition was completed
on December 5, 2007. SFC, based in Rochester, New York, is the
premier Internet destination for objective information about 529
college savings plans, helping consumers and financial professionals
learn more about options for college financing. SFC was purchased for
$2.3 million in cash and an earn-out of $2.0 million for the
achievement of certain performance metrics over the next two years.

Financial Highlights-Fourth Quarter 2007
-- Total revenue for the quarter was $25.2 million, an increase of 22%,
or $4.5 million, over the $20.7 million reported in the same period
last year.

-- Online revenue for the fourth quarter increased by 33% to $22.8
million, an increase of $5.7 million over the $17.1 million reported
in the fourth quarter of 2006.

-- Graphic advertising revenue increased 29% to $12.5 million in the
fourth quarter of 2007, compared to $9.7 million reported in the
fourth quarter of 2006.

-- Hyperlink revenue increased 39% to $10.3 million in the fourth
quarter of 2007 compared to $7.4 million reported for the same
quarter last year.

-- Print publishing and licensing revenue for the fourth quarter was
$2.5 million, a decrease of $1.1 million, or 32%, compared to the
$3.6 million reported in the fourth quarter of 2006.

-- The EBITDA margin, adjusted to exclude stock compensation expense,
was 39% for the fourth quarter of both 2007 and 2006.

-- Page views for the fourth quarter of 2007 increased by 9% to 131.0
million, compared to the 120.6 million reported in the fourth quarter
of 2006.

Financial Highlights-Full Year 2007
-- Total revenue for the year was $95.6 million, an increase of 20%, or
$16.0 million, over the $79.6 million reported in 2006.

-- Online revenue for the year increased by 31% to $83.7 million, an
increase of $19.7 million over the $64.0 million reported in 2006.

-- Graphic advertising revenue increased 26% to $46.8 million in 2007,
compared to $37.3 million reported in 2006.

-- Hyperlink revenue increased 38% to $36.9 million in 2007, compared to
$26.7 million reported last year.

-- Print publishing and licensing revenue for the year was $11.9
million, a decrease of $3.8 million or 24%, compared to the $15.7
million reported in 2006.

-- The EBITDA margin, adjusted to exclude stock compensation expense,
and the legal settlement charge in 2006, was 44% in 2007 compared to
35% in 2006.

-- Page views in 2007 increased by 14% to 554.5 million, compared to the
487.4 million reported in 2006.

February 5, 2008 Conference Call Interactive Dial-In and Webcast
Information:
To participate in the teleconference please call: (877) 545-1490.
International participants may dial: (719) 325-4930. 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 Web site:
http://investor.bankrate.com/events.cfm.
Replay Information:
A replay of the conference call will be available beginning February 5,
2008, 7:30 p.m. ET/ 4:30 p.m. PT through February 19, 2008. To listen to the
replay, call (888)203-1112 and use the passcode: 2487475. International
callers should dial (719) 457-0820 and use the passcode: 2487475.
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,
income from operations, earnings per diluted share and net income, which are
adjusted from results based on GAAP to exclude certain expenses, gains and
losses, which might not be calculated in the same manner as, and thus might
not be comparable to, similarly titled measures reported by other companies.
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, the Company 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 within the accompanying financial statement tables.
About Bankrate, Inc.
Bankrate, Inc. (Nasdaq: RATE) ("Bankrate") owns and operates Bankrate.com,
a leading Internet consumer banking marketplace. Bankrate.com is a destination
site of personal finance channels, including banking, investing, taxes, debt
management and college finance. Bankrate.com is the leading aggregator of more
than 300 financial products, including mortgages, credit cards, new and used
auto loans, money market accounts and CDs, checking and ATM fees, home equity
loans and online banking fees. Bankrate.com reviews more than 4,800 financial
institutions in 575 markets in 50 states. In 2007, Bankrate.com had nearly 60
million unique visitors. Bankrate.com provides financial applications and
information to a network of more than 75 partners, including Yahoo!
(Nasdaq: YHOO), America Online (NYSE: TWX), The Wall Street Journal and The
New York Times (NYSE: NYT). Bankrate.com's information is also distributed
through more than 450 national and state publications. In addition to
Bankrate.com, Bankrate also owns and operates Bankrate Select, an Internet
lead aggregator and Mortgage Market Information Services, Inc. and
Interest.com, Inc., each of which publishes mortgage guides and financial
rates and information; Nationwide Card Services, which markets a comprehensive
line of consumer and business credit cards via the Internet; and
Savingforcollege.com, the premier Internet destination for objective
information about 529 college savings plans.
Safe Harbor Statement Under the Private Securities Litigation Reform Act
of 1995:
Certain matters included in the discussion above may be considered to be
"forward-looking statements" within the meaning of the Securities Act of 1933
and the Securities Exchange Act of 1934, as amended by 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, 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. 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 site, interest rate volatility, our ability to establish
and maintain distribution arrangements, our ability to integrate the
operations and realize the expected benefits of businesses that we have
acquired and may acquire in the future, our need and ability to obtain
additional equity or debt financing, consumers' increasing acceptance of the
Internet as a medium for obtaining financial product information, the ability
of consumers to access our online network through non-PC devices, our ability
to maintain the confidence of our advertisers by detecting click-through fraud
or unscrupulous advertisers, the effect of unexpected liabilities we assume
from our acquisitions, the impact of resolution of lawsuits to which we are a
party, our ability to manage traffic on our web sites and service
interruptions, the effects of facing liability for content on our web sites,
changes in, or interpretations of, accounting rules and regulations, changes
in, monetary and fiscal policies of the United States government, the effect
of changes in the stock markets and other capital markets, increased
competition and its effect on traffic, advertising rates, margins and market
share, our ability to protect our intellectual property, legislative and
regulatory changes in Internet regulation, technological changes, changes in
consumer spending and saving habits, the concentration of ownership of our
common stock, the effect of provisions in our Articles of Incorporation,
Bylaws and certain laws on change-in-control transactions, fluctuating
results of operations , and the accuracy of our financial statement estimates
and assumptions. These and additional important factors to be considered are
set forth under "Introductory Note", "Item 1A. Risk Factors,'' "Item 7.
Management's Discussion and Analysis of Financial Condition and Results of
Operations'' and in the other sections of our Annual Report on Form 10-K for
the year ended December 31, 2006, and in our other filings with the Securities
and Exchange Commission. We undertake no obligation to update or revise
forward-looking statements to reflect changed assumptions, the occurrence of
unanticipated events or changes to future operating results or expectations.
-Financial Statements Follow-

Bankrate, Inc.
Condensed Consolidated Balance Sheets
(Unaudited)

December 31, December 31,
2007 2006
Assets

Cash and cash equivalents $125,057,650 $13,125,360
Short-term investments - 96,800,000
Accounts and notes receivable, net
of allowance for doubtful accounts
of approximately $2,290,000 and
$2,155,000 at December 31, 2007
and 2006, respectively 19,052,557 15,801,403
Deferred income taxes, current portion 877,977 1,703,747
Prepaid expenses and other current
assets 5,349,522 1,032,423
Total current assets 150,337,706 128,462,933

Furniture, fixtures and equipment, net 1,802,276 1,703,680
Deferred income taxes 3,671,029 1,262,279
Intangible assets, net 27,485,005 14,441,162
Goodwill 43,719,639 30,039,425
Other assets 1,338,389 774,117

Total assets $228,354,044 $176,683,596

Liabilities and Stockholders'
Equity

Liabilities:
Accounts payable $2,245,967 $312,489
Accrued expenses 8,091,524 5,237,222
Deferred revenue 550,473 729,019
Other current liabilities 13,072 27,427
Total current liabilities 10,901,036 6,306,157

Other liabilities 187,067 222,920

Total liabilities 11,088,103 6,529,077

Stockholders' equity:
Preferred stock, 10,000,000
shares authorized and
undesignated - -
Common stock, par value $.01 per
share-- 100,000,000 shares
authorized; 18,876,393 and
18,224,620 shares issued and
outstanding at December 31,
2007 and 2006, respectively 188,764 182,246
Additional paid in capital 205,306,070 178,255,314
Retained earnings (deficit) 11,771,107 (8,283,041)
Total stockholders' equity 217,265,941 170,154,519

Total liabilities and
stockholders' equity $228,354,044 $176,683,596

Bankrate, Inc.
Condensed Consolidated Statements of Income
(Unaudited)

Three Months Ended Year Ended
December 31, December 31,
Revenue: 2007 2006 2007 2006
Online publishing $22,778,838 $17,112,733 $83,694,628 $63,970,860
Print publishing
and licensing 2,452,485 3,596,022 11,897,231 15,679,115
Total revenue 25,231,323 20,708,755 95,591,859 79,649,975
Cost of revenue (1):
Online publishing 5,816,277 2,745,029 15,149,215 11,101,425
Print publishing
and licensing 2,283,464 3,171,945 10,697,546 13,845,594
Total cost
of revenue 8,099,741 5,916,974 25,846,761 24,947,019

Gross margin 17,131,582 14,791,781 69,745,098 54,702,956

Operating expenses (1):
Sales 1,684,238 1,326,461 6,383,981 5,055,076
Marketing 2,612,126 1,398,105 8,474,823 4,835,941
Product development 1,327,237 854,515 4,656,064 3,620,750
General and
administrative 5,079,850 5,100,246 19,853,112 21,835,046
Legal settlement - - - 3,000,000
Depreciation and
amortization 805,453 647,722 2,731,417 2,401,710
11,508,904 9,327,049 42,099,397 40,748,523
Income from
operations 5,622,678 5,464,732 27,645,701 13,954,433

Interest income 1,726,802 1,240,424 6,688,400 2,961,080

Income before
income taxes 7,349,480 6,705,156 34,334,101 16,915,513
Income tax expense 3,254,564 2,808,918 14,279,953 6,911,383
Net income $4,094,916 $3,896,238 $20,054,148 $10,004,130

Basic and diluted
net income per share:
Basic $0.22 $0.21 $1.09 $0.58
Diluted $0.21 $0.21 $1.04 $0.56

Shares used in
computing basic
net income per
share 18,688,571 18,170,816 18,423,414 17,332,632
Shares used in
computing diluted
net income per
share 19,505,158 18,498,656 19,356,039 17,845,754

(1) Includes stock
compensation
expense as
follows:
Cost of revenue:
Online publishing $562,893 $290,286 $1,983,815 $1,076,828
Print publishing
and licensing 39,155 39,647 159,296 147,453
Other expenses:
Sales 472,606 119,072 1,334,036 662,089
Marketing 190,343 - 629,912 -
Product development 239,677 115,680 803,351 473,956
General and
administrative 1,879,170 1,453,397 6,299,008 6,363,207
$3,383,844 $2,018,082 $11,209,418 $8,723,533

Bankrate, Inc.
Non-GAAP Condensed Consolidated Statements of Income
(Unaudited)

Three Months Ended Year Ended
December 31, December 31,
Revenue: 2007 2006 2007 2006
Online publishing $22,778,838 $17,112,733 $83,694,628 $63,970,860
Print publishing
and licensing 2,452,485 3,596,022 11,897,231 15,679,115
Total revenue 25,231,323 20,708,755 95,591,859 79,649,975

Cost of revenue:
Online publishing 5,253,384 2,454,743 13,165,400 10,024,597
Print publishing
and licensing 2,244,309 3,132,298 10,538,250 13,698,141
Total cost of
revenue 7,497,693 5,587,041 23,703,650 23,722,738

Gross margin 17,733,630 15,121,714 71,888,209 55,927,237

Operating expenses:
Sales 1,211,632 1,207,389 5,049,945 4,392,987
Marketing 2,421,783 1,398,105 7,844,911 4,835,941
Product development 1,087,560 738,835 3,852,713 3,146,794
General and
administrative 3,200,680 3,646,849 13,554,104 15,471,839
Legal settlement (1) - - - 3,000,000
Stock compensation
expense (1) 3,383,844 2,018,082 11,209,418 8,723,533
Depreciation and
amortization 805,453 647,722 2,731,417 2,401,710
12,110,952 9,656,982 44,242,508 41,972,804

Income from
operations 5,622,678 5,464,732 27,645,701 13,954,433

Interest income 1,726,802 1,240,424 6,688,400 2,961,080

Income before
income taxes 7,349,480 6,705,156 34,334,101 16,915,513
Income tax expense 3,254,564 2,808,918 14,279,953 6,911,383
Net income $4,094,916 $3,896,238 $20,054,148 $10,004,130

Basic and diluted net
income per share:
Basic $0.22 $0.21 $1.09 $0.58
Diluted $0.21 $0.21 $1.04 $0.56
Basic and diluted net
income per share
excluding stock
compensation expense
and legal settlement (1)
Basic $0.34 $0.29 $1.48 $0.99
Diluted $0.33 $0.27 $1.39 $0.92

Shares used in
computing basic
net income per
share, GAAP basis 18,688,571 18,170,816 18,423,414 17,332,632
Shares used in
computing diluted
net income per
share, GAAP basis 19,505,158 18,498,656 19,356,039 17,845,754
Shares used in
computing diluted
net income per
share, Non-GAAP
basis 19,757,598 19,512,703 19,603,203 18,722,810

(1) See reconciliation of GAAP to Non-GAAP Condensed Consolidated
Statements of Income.

Three Months Ended Year Ended
December 31, December 31,
Non-GAAP Measures
Reconciliation
(Unaudited): 2007 2006 2007 2006

EBITDA-
Income from
operations, GAAP
basis $5,622,678 $5,464,732 $27,645,701 $13,954,433
Depreciation and
amortization 805,453 647,722 2,731,417 2,401,710
EBITDA 6,428,131 6,112,454 30,377,118 16,356,143
Legal settlement - - - 3,000,000
EBITDA, excluding
legal settlement $6,428,131 $6,112,454 $30,377,118 $19,356,143

EBITDA excluding
stock compensation
expense and legal
settlement-
Income from
operations, GAAP
basis $5,622,678 $5,464,732 $27,645,701 $13,954,433
Stock compensation
expense 3,383,844 2,018,082 11,209,418 8,723,533
Legal settlement - - - 3,000,000
Depreciation and
amortization 805,453 647,722 2,731,417 2,401,710
EBITDA excluding
stock compensation
expense and legal
settlement- $9,811,975 $8,130,536 $41,586,536 $28,079,676

Net income excluding
stock compensation
expense and legal
settlement-
Net income, GAAP
basis $4,094,916 $3,896,238 $20,054,148 $10,004,130
Stock compensation
expense, net of tax 2,345,078 1,337,705 7,271,963 5,379,298
Legal settlement,
net of tax - - - 1,800,000
Net income excluding
stock compensation
expense and legal
settlement- $6,439,994 $5,233,943 $27,326,111 $17,183,428

Per basic share,
excluding stock
compensation
expense and legal
settlement $0.34 $0.29 $1.48 $0.99
Per diluted share,
excluding stock
compensation
expense and legal
settlement $0.33 $0.27 $1.39 $0.92

Shares used in
computing basic net
income per share,
GAAP basis 18,688,571 18,170,816 18,423,414 17,332,632

Shares used in
computing diluted
net income per
share, GAAP basis 19,505,158 18,498,656 19,356,039 17,845,754
Impact of applying
SFAS No. 123R 252,440 1,014,047 247,164 877,056
Shares used in
computing diluted
net income per
share, excluding
the impact of
applying
SFAS No. 123R 19,757,598 19,512,703 19,603,203 18,722,810

Bankrate, Inc.
Condensed Consolidated Statements of Income
Reconciliation of GAAP to Non-GAAP Condensed Consolidated Statements of
Income
(Unaudited)

Three Months Ended
December 31, 2007
Revenue: GAAP Adjustments Non-GAAP
(1)

Online publishing $22,778,838 $- $22,778,838
Print publishing and
licensing 2,452,485 - 2,452,485
Total revenue 25,231,323 - 25,231,323
Cost of revenue:
Online publishing 5,816,277 (562,893) 5,253,384
Print publishing and licensing 2,283,464 (39,155) 2,244,309
Total cost of revenue 8,099,741 (602,048) 7,497,693

Gross margin 17,131,582 602,048 17,733,630

Operating expenses:
Sales 1,684,238 (472,606) 1,211,632
Marketing 2,612,126 (190,343) 2,421,783
Product development 1,327,237 (239,677) 1,087,560
General and administrative 5,079,850 (1,879,170) 3,200,680
Legal settlement - - -
Stock compensation expense - 3,383,844 3,383,844
Depreciation and amortization 805,453 - 805,453
11,508,904 602,048 12,110,952
Income from operations 5,622,678 - 5,622,678

Interest income, net 1,726,802 - 1,726,802

Income before income taxes 7,349,480 - 7,349,480
Provision for income taxes 3,254,564 - 3,254,564
Net income $4,094,916 $- $4,094,916

Basic and diluted net income per
share:
Basic $0.22 $- $0.22
Diluted $0.21 $- $0.21

Shares used in computing
basic net income per share 18,688,571 - 18,688,571
Shares used in computing
diluted net income per share 19,505,158 252,440 19,757,598

(1) Adjustments for the impact of applying SFAS No. 123R

Bankrate, Inc.
Condensed Consolidated Statements of Income
Reconciliation of GAAP to Non-GAAP Condensed Consolidated Statements of
Income
(Unaudited)

Three Months Ended
December 31, 2006
Revenue: GAAP Adjustments Non-GAAP
(1)

Online publishing $17,112,733 $- $17,112,733
Print publishing and
licensing 3,596,022 - 3,596,022
Total revenue 20,708,755 - 20,708,755
Cost of revenue:
Online publishing 2,745,029 (290,286) 2,454,743
Print publishing and
licensing 3,171,945 (39,647) 3,132,298
Total cost of revenue 5,916,974 (329,933) 5,587,041

Gross margin 14,791,781 329,933 15,121,714

Operating expenses:
Sales 1,326,461 (119,072) 1,207,389
Marketing 1,398,105 - 1,398,105
Product development 854,515 (115,680) 738,835
General and administrative 5,100,246 (1,453,397) 3,646,849
Legal settlement - - -
Stock compensation expense - 2,018,082 2,018,082
Depreciation and amortization 647,722 - 647,722
9,327,049 329,933 9,656,982
Income from operations 5,464,732 - 5,464,732

Interest income, net 1,240,424 - 1,240,424

Income before income taxes 6,705,156 - 6,705,156
Provision for income taxes 2,808,918 - 2,808,918
Net income $3,896,238 $- $3,896,238

Basic and diluted net income per
share:
Basic $0.21 $- $0.21
Diluted $0.21 $- $0.21

Shares used in computing
basic net income per share 18,170,816 - 18,170,816
Shares used in computing
diluted net income per share 18,498,656 1,014,047 19,512,703

(1) Adjustments for the impact of applying SFAS No. 123R

Bankrate, Inc.
Condensed Consolidated Statements of Income
Reconciliation of GAAP to Non-GAAP Condensed Consolidated Statements of
Income
(Unaudited)

Year Ended
December 31, 2007
Revenue: GAAP Adjustments Non-GAAP
(1)
Online publishing $83,694,628 $- $83,694,628
Print publishing and
licensing 11,897,231 - 11,897,231
Total revenue 95,591,859 - 95,591,859
Cost of revenue:
Online publishing 15,149,215 (1,983,815) 13,165,400
Print publishing and
licensing 10,697,546 (159,296) 10,538,250
Total cost of revenue 25,846,761 (2,143,111) 23,703,650

Gross margin 69,745,098 2,143,111 71,888,209

Operating expenses:
Sales 6,383,981 (1,334,036) 5,049,945
Marketing 8,474,823 (629,912) 7,844,911
Product development 4,656,064 (803,351) 3,852,713
General and administrative 19,853,112 (6,299,008) 13,554,104
Legal settlement - - -
Stock compensation expense - 11,209,418 11,209,418
Depreciation and amortization 2,731,417 - 2,731,417
42,099,397 2,143,111 44,242,508
Income from
operations 27,645,701 - 27,645,701

Interest income, net 6,688,400 - 6,688,400

Income before income taxes 34,334,101 - 34,334,101
Provision for income taxes 14,279,953 - 14,279,953
Net income $20,054,148 $- $20,054,148

Basic and diluted net income per
share:
Basic $1.09 $- $1.09
Diluted $1.04 $- $1.04

Shares used in computing
basic net income per share 18,423,414 - 18,423,414
Shares used in computing
diluted net income per share 19,356,039 247,164 19,603,203

(1) Adjustments for the impact of applying SFAS No. 123R

Bankrate, Inc.
Condensed Consolidated Statements of Income
Reconciliation of GAAP to Non-GAAP Condensed Consolidated Statements of
Income
(Unaudited)

Year Ended
December 31, 2006
Revenue: GAAP Adjustments Non-GAAP
(1)
Online publishing $63,970,860 $- $63,970,860
Print publishing and
licensing 15,679,115 - 15,679,115
Total revenue 79,649,975 - 79,649,975
Cost of revenue:
Online publishing 11,101,425 (1,076,828) 10,024,597
Print publishing and
licensing 13,845,594 (147,453) 13,698,141
Total cost of revenue 24,947,019 (1,224,281) 23,722,738

Gross margin 54,702,956 1,224,281 55,927,237

Operating expenses:
Sales 5,055,076 (662,089) 4,392,987
Marketing 4,835,941 - 4,835,941
Product development 3,620,750 (473,956) 3,146,794
General and administrative 21,835,046 (6,363,207) 15,471,839
Legal settlement 3,000,000 - 3,000,000
Stock compensation expense - 8,723,533 8,723,533
Depreciation and amortization 2,401,710 - 2,401,710
40,748,523 1,224,281 41,972,804
Income from
operations 13,954,433 - 13,954,433

Interest income, net 2,961,080 - 2,961,080

Income before income taxes 16,915,513 - 16,915,513
Provision for income taxes 6,911,383 - 6,911,383
Net income $10,004,130 $- $10,004,130

Basic and diluted net income per
share:
Basic $0.58 $- $0.58
Diluted $0.56 $- $0.56

Shares used in computing
basic net income per share 17,332,632 - 17,332,632
Shares used in computing
diluted net income per share 17,845,754 877,056 18,722,810

(1) Adjustments for the impact of applying SFAS No. 123R

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

Reminder -- Conference Call and Webcast Today at 4:30 P.M. Eastern Time
Interactive Dial-In: (877) 545-1490 International Callers (719) 325-4930
(10 minutes before the call)
Webcast: http://investor.bankrate.com/

SOURCE Bankrate, Inc.

Edward J. DiMaria, SVP, Chief Financial Officer, +1-917-368-8608,
edimaria@bankrate.com; or Bruce J. Zanca, SVP, Chief Communications-Marketing
Officer, +1-917-368-8648, bzanca@bankrate.com, both of Bankrate, Inc.