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Announces SEC Investigation Relating to 2012 Financial Reporting
Bankrate, Inc.
RATE today
announced the appointment of Steven D. Barnhart, as interim Chief Financial
Officer, effective immediately.
He succeeds Edward J. DiMaria, Senior Vice President and Bankrate's current
Chief Financial Officer. Mr. Barnhart was most recently Senior Vice President
and Chief Financial Officer of Sears Hometown and Outlet Stores. Prior to
that, he was CFO at Bally Total Fitness, where he oversaw the finance and
technology functions. From 2003 to 2009, Mr. Barnhart served in various
executive leadership roles at Orbitz Worldwide, including Chief Financial
Officer, President and then Chief Executive Officer. From 1990 to 2003, Mr.
Barnhart served in various finance and strategy roles for PepsiCo, and as
Finance Director, Southeast Business Unit, The Pepsi Bottling Group. He
graduated from the University of Chicago with a Bachelor of Arts degree in
Economics and an MBA in Finance from the Booth School of Business. Mr.
Barnhart currently serves as the lead Independent Director on the Board of USA
Technologies, a leader in cashless payment solutions for the small ticket,
unattended retail market.
Mr. Barnhart will report to Bankrate's President and Chief Executive Officer
Kenneth S. Esterow.
"Steve brings to Bankrate deep financial and operating experience with online
commerce and consumer services companies," said Mr. Esterow. "We look forward
to his contribution."
Mr. DiMaria has resigned his position as Chief Financial Officer of
Bankrate. He will remain a Senior Vice President of Bankrate.
Bankrate also announced that the Securities and Exchange Commission (the
"SEC") is conducting a non-public formal investigation relating to the
Company's financial reporting during 2012, with the principal focus on the
quarters ending March 31, 2012 and June 30, 2012. The investigation is
examining three accruals of revenue totaling approximately $781,000 in the
aggregate and two adjustments to reduce accrued expenses totaling
approximately $850,000 in the aggregate. All of these entries were made during
the close process for the second quarter of 2012. The investigation is also
examining, among other things, (1) the timing and classification of additional
entries relating to certain expenses, expense accruals and credits in the
second quarter and other periods in 2012; (2) an entry originally made in the
third quarter of 2011 establishing an allowance of $460,000 for anticipated
customer credits in the Insurance business that was ultimately reversed in the
first quarter of 2012; and (3) revenue and expense adjustments totaling
$225,000 in May 2012 that were reversed in June 2012. The investigation is
examining whether accounting entries in these periods may have improperly
impacted the Company's reported results, including relative to market
expectations at such time.
In connection with the examination of the matters described above and
developments in the ongoing SEC investigation, on September 14, 2014,
Bankrate's Audit Committee, which is comprised entirely of independent outside
directors, concluded that the Company's previously issued financial statements
for each of fiscal years 2011, 2012 and 2013 should no longer be relied upon
pending the conclusion of a full internal review of these matters, which is
ongoing. The Audit Committee is retaining additional counsel and independent
forensic accountants, who will be assisted in this review by Mr. Barnhart.
The Company is providing documents and information in response to the SEC's
requests and is endeavoring to reach a resolution of the matter.
It is not possible to predict when matters relating to the SEC investigation
or Bankrate's review of the financial statements referenced above will be
completed, the final outcome of the SEC investigation or financial statement
review, and what if any actions may be taken by Bankrate or the SEC.
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