Bankrate, Inc. Message Board

Oct 16 - Standard & Poor's Ratings Services said today that its ratings on
Bankrate Inc. are not affected by the company's preliminary
third-quarter results, which were below our expectations. The company stated
that third-quarter revenue growth is expected to be 2% to 4% and EBITDA is
expected to fall 17% to 21%. Management now expects full-year 2012 revenue
growth of 8% to 12%. The company cited continued efforts to cut back on
low-quality leads in the insurance business and weakness in credit card approval
rates as the drivers of the underperformance. Over the long term, Bankrate
expects that generating higher-quality leads in the insurance area will lead to
significantly improved pricing. However, the company's reduction in low-quality
insurance leads has been greater than originally forecasted. Weakness in credit
card advertising has been broad-based across various advertising channels and we
expect it to come back at some point. We still believe that Bankrate is a
meaningful customer acquisition source for financial services customers. Even
with weak performance in the second half, we expect that leverage will remain
well below 2x and that liquidity will remain strong. Sources of liquidity
include $64.5 million of cash, full availability under the company's $100
million revolving credit facility, and expected discretionary cash flow of $60
million or more in 2012. Under our revised base-case scenario for 2013, we
expect revenue to grow at a
mid-single-digit percent rate or higher depending on the strength of credit
card advertising and the company's ability to improve pricing in the insurance
vertical. Although we expect EBITDA growth at a similar rate, the amount of
higher-margin credit card revenue will have an effect.