Company's Advanced Media Information (AMI) Division Delivers
Continued Revenue and Profit Growth Strategic Moves Position
Company for Future Success PORTLAND, Ore., Nov. 9
/PRNewswire-FirstCall/ -- Rentrak Corporation (NASDAQ:RENT) today
announced financial results for its fiscal second quarter ended
September 30, 2009. Consolidated revenues were $21.3 million for
the fiscal 2010 second quarter, compared with $24.3 million for the
prior-year period. -- Revenues in the company's Advanced Media
Information (AMI) division increased 63% to $5.0 million from $3.1
million for the second quarter of fiscal 2009, primarily reflecting
incremental revenues generated from new and existing customers of
the company's Essentials suite of multimedia measurement services,
as well as a contract that was completed during the quarter that is
expected to generate less revenue in subsequent periods. The AMI
segment represented 24 percent of consolidated revenues and
contributed 43 percent of consolidated gross margin dollars for the
second quarter of fiscal 2010, compared with 13 percent and 31
percent, respectively, in the corresponding prior-year period. --
Revenues in the company's Pay-Per-Transaction® (PPT) division
totaled $16.3 million, versus $21.2 million in the similar quarter
last fiscal year, resulting from approximately 25 percent fewer
available rental titles during the quarter. The company reiterated
that it expects a normalization of available rental titles in its
third fiscal quarter. "Since joining Rentrak last quarter, the
company has made numerous strategic changes designed to make us an
even stronger and more agile company," said Bill Livek, Rentrak's
Chief Executive Officer. "We significantly enhanced our executive
management team and board of directors, adding valuable skill sets
and substantial knowledge to the company. We expanded our sales
organization to drive greater industry awareness for our products
and services. We streamlined our cost structure by finding more
efficient ways to propel growth. As a result, I am convinced that
Rentrak is better positioned, not only to help our customers
understand consumer viewing patterns across all digital media
platforms, but to develop new and innovative products that will
become part of the ongoing fabric of the entertainment industry.
"Our multiple achievements during the quarter are testament to our
work in support of our goal to further position Rentrak as a
leading digital currency. Our organization is already enmeshed in
the DNA of connecting advertisers to consumers, and Rentrak is the
only company that possesses the decades of experience and
technological prowess necessary to realize the significant
opportunity ahead," Livek added. "Our progress has been admirable,
and our successes, many. I am very proud of all we have
accomplished to date, but am even more excited about the future."
The company said it recently concluded several important agreements
including: -- Addition of several new TV Essentials partners, such
as Jewelry Television, Outdoor Channel and PBS KIDS Sprout, which
will use the Rentrak service to gain a broader understanding of the
value and appeal of their programming. -- Launch of the mobile
television industry's first comprehensive viewership and
advertising impression reporting using TV Essentials in
collaboration with Flo TV, a company that allows viewers to watch
TV "on-the-go." -- Addition of Cinelatino, the leading Spanish
language movie channel, as a new OnDemand Essentials customer.
OnDemand Essentials currently processes daily, census-level
on-demand data representing 70 million set-top boxes from 33 MSOs
and 100% of the top-25 operators offering video-on-demand.
Rentrak's extensive on-demand data is being utilized by more than
125 content provider clients. -- Further expansion into the
Canadian marketplace with the addition of new customer Stingray
Digital, a music video-on-demand service launching on Rogers Cable,
a current Rentrak customer. -- Extension of Box Office Essentials
into Russia, the world's ninth largest motion picture exhibition
market. New customers for this service include the international
distribution businesses of five major movie studios. -- Expansion
of a revenue sharing agreement with Warner Home Video, which
significantly increases the amount of Blu-ray disc content
available to retailers participating in Rentrak's PPT System.
Selling and administrative expenses for the fiscal 2010 second
quarter were $7.8 million, or 37 percent of revenues, compared with
$6.7 million, or 27 percent of revenues, in last year's second
fiscal quarter. The increase primarily reflects Rentrak's ongoing
investment in its multi screen business development and
implementation activities, investments in new senior executives and
sales talent, and the addition of a sales office in New York City.
Operating income for the second quarter of fiscal 2010 was
$502,000, compared with $1.3 million in the second quarter of the
last fiscal year. Operating income in the fiscal 2010 period
included a total of $1.2 million in one-time and non-cash stock
compensation expenses, consisting of $400,000 in severance expense,
$100,000 in legal expense and $700,000 in non-cash stock
compensation expense, $300,000 of which was due largely to an award
granted to Bill Livek upon his hiring. In the fiscal 2009 second
quarter, one-time expenses totaled $100,000 and non-cash stock
compensation expense totaled $100,000. Net income totaled $676,000,
or $0.06 per diluted share, for the second quarter of fiscal 2010,
compared with $842,000, or $0.08 per diluted share, for the second
quarter of fiscal 2009. Excluding one-time costs and stock
compensation expense, net income in the fiscal 2010 period would
have been $1.5 million, or $0.13 per diluted share, in the fiscal
2010 period compared with $1.0 million, or $0.09 per diluted share,
in the fiscal 2009 period. The company generated adjusted EBITDA
for the fiscal 2010 second quarter of $1.7 million, compared with
$1.8 million in the same quarter of fiscal 2009. The reconciliation
of adjusted EBITDA to net income, the most comparable financial
measure based upon generally accepted accounting principles (GAAP),
as well as a further explanation about adjusted EBITDA, is included
in the financial tables included with this press release. Rentrak's
cash, cash equivalents and marketable securities balance grew by
$3.6 million to $38.1 million at September 30, 2009, compared with
$34.5 million at March 31, 2009. The company's effective tax rate
for the second quarter of fiscal 2010 was 5% compared with 43% for
the second quarter of fiscal 2009. The decrease was due to a tax
benefit of $200,000 which relates to a reduction in the company's
tax contingencies due to a lapse of the applicable statute of
limitations on tax positions taken in prior fiscal years.
Conference Call Rentrak will hold a conference call at 5:00 p.m.
(ET) / 2:00 p.m. (PT) today to discuss the company's second quarter
financial performance. Shareowners, members of the media and other
interested parties may participate in the call by dialing
800-798-2801 from the U.S. or Canada, or 617-614-6205 from
international locations, passcode 97363554. This call is being
webcast and can be accessed at Rentrak's web site at
http://www.rentrak.com/ where it will be archived through November
9, 2010. An audio replay of the conference call is available
through midnight November 16, 2009 by dialing 888-286-8010 from the
U.S. or Canada, or 617-801-6888 from international locations,
passcode 90773911. About Rentrak Corporation Rentrak Corporation is
an industry-advancing media measurement and research company,
serving the most recognizable names in the entertainment industry.
Reaching across numerous platforms including box office, home
entertainment, on-demand and linear television, broadband and
mobile, Rentrak provides unique and actionable insight for our
clients and partners. From the introduction of our revolutionary
Pay-Per-Transaction® distribution and revenue-sharing system, which
equipped Rentrak with the intelligence and ability to deal with
large, complex data streams, to the company's exclusive
Essentials(TM) suite of services, Rentrak has redefined digital
audience measurement. Rentrak is headquartered in Portland, Oregon,
with additional offices in Los Angeles, New York City and Miami/
Ft. Lauderdale. For more information on any of Rentrak's services,
please visit http://www.rentrak.com/. Safe Harbor Statement When
used in this discussion, the words "anticipates," "expects,'
"intends' and similar expressions are intended to identify
forward-looking statements. Such statements relate to, among other
things, the fact that Rentrak is better positioned to help its
customers understand consumer viewing patterns across all digital
media platforms and to develop new and innovative products that
will become part of the ongoing fabric of the entertainment
industry; and that the company will achieve its goal of becoming a
leading digital currency; and are subject to certain risks and
uncertainties that could cause actual results to differ materially
from those projected. Factors that could affect Rentrak's financial
results include customer demand for movies in various media formats
subject to company guarantees, the company's ability to attract new
revenue-sharing customers and retain existing customers, the
company's success in maintaining its relationships with studios and
other product suppliers, the company's ability to successfully
develop and market new services to create new revenue streams, and
Rentrak's customers continuing to comply with the terms of their
agreements. Additional factors that could affect Rentrak's
financial results are described in Rentrak's March 31, 2009 annual
report on Form 10-K and subsequent quarterly reports filed with the
Securities and Exchange Commission. Results of operations in any
past period should not be considered indicative of the results to
be expected for future periods. CONTACT: Investors PondelWilkinson
Inc. Laurie Berman 310-279-5962 (Financial Tables Follow) Rentrak
Corporation and Subsidiaries Condensed Consolidated Balance Sheets
(Unaudited) September 30, March 31, 2009 2009 ---- ---- Assets
Current Assets: Cash and cash equivalents $7,894 $4,601 Marketable
securities 30,252 29,874 Accounts and notes receivable, net of
allowances for doubtful accounts of $558 and $597 12,995 16,406
Taxes receivable and prepaid taxes 532 1,231 Deferred income tax
assets - 135 Other current assets 982 960 --- --- Total Current
Assets 52,655 53,207 Property and equipment, net of accumulated
depreciation of $10,543 and $9,472 6,629 6,128 Other assets 531 543
--- --- Total Assets $59,815 $59,878 ======= ======= Liabilities
and Stockholders' Equity Current Liabilities: Accounts payable
$5,475 $6,738 Accrued liabilities 631 499 Accrued compensation
1,160 1,100 Deferred revenue 600 1,530 Other current liabilities
121 96 --- -- Total Current Liabilities 7,987 9,963 Deferred rent,
long-term portion 956 982 Deferred income tax liabilities 603 714
Taxes payable, long-term 1,094 1,242 ----- ----- Total Liabilities
10,640 12,901 Commitments and Contingencies - - Stockholders'
Equity: Preferred stock, $0.001 par value; 10,000 shares
authorized; none issued - - Common stock, $0.001 par value; 30,000
shares authorized; shares issued and outstanding: 10,491 and 10,421
11 11 Capital in excess of par value 46,338 45,504 Accumulated
other comprehensive income (loss) 203 (203) Retained earnings 2,623
1,665 ----- ----- Total Stockholders' Equity 49,175 46,977 ------
------ Total Liabilities and Stockholders' Equity $59,815 $59,878
======= ======= Rentrak Corporation and Subsidiaries Condensed
Consolidated Income Statements (Unaudited) For the Three For the
Six Months Ended Months Ended September 30, September 30,
------------- ------------ 2009 2008 2009 2008 ---- ---- ---- ----
Revenue $21,323 $24,327 $42,960 $49,680 Cost of sales 12,902 16,351
27,139 33,163 ------ ------ ------ ------ Gross margin 8,421 7,976
15,821 16,517 Operating expenses: Selling and administrative 7,792
6,655 14,909 13,435 Provision for doubtful accounts and notes 127
42 298 122 --- -- --- --- 7,919 6,697 15,207 13,557 ----- -----
------ ------ Income from operations 502 1,279 614 2,960 Other
income (expense): Interest income, net 206 206 505 374 --- --- ---
--- Income before income taxes 708 1,485 1,119 3,334 Provision for
income taxes 32 643 161 1,456 -- --- --- ----- Net income $676 $842
$958 $1,878 ==== ==== ==== ====== Basic net income per share $0.06
$0.08 $0.09 $0.18 ===== ===== ===== ===== Diluted net income per
share $0.06 $0.08 $0.09 $0.17 ===== ===== ===== ===== Shares used
in per share calculations: Basic 10,478 10,614 10,466 10,611 ======
====== ====== ====== Diluted 11,040 11,166 10,954 11,153 ======
====== ====== ====== Rentrak Corporation and Subsidiaries Condensed
Consolidated Statements of Cash Flows (Unaudited) For the Six
Months Ended September 30, ------------- 2009 2008 ---- ---- Cash
flows from operating activities: Net income $958 $1,878 Adjustments
to reconcile net income to net cash flows provided by operating
activities: Depreciation and amortization 1,072 799 Stock-based
compensation 808 260 Other adjustments 240 192 (Increase) decrease
in: Accounts receivable 3,190 (2,027) Taxes receivable and prepaid
taxes 699 450 Other assets (305) 383 Increase (decrease) in:
Accounts payable (1,016) 3,590 Deferred revenue (930) 749 Other
liabilities 19 (132) -- ---- Net cash provided by operating
activities 4,735 6,142 Cash flows from investing activities:
Maturity of marketable securities - 4,986 Purchase of marketable
securities - (30,006) Purchase of property and equipment (1,639)
(1,219) ------ ------ Net cash used in investing activities (1,639)
(26,239) Net cash provided by financing activities 19 135 Effect of
foreign exchange translation on cash 178 (13) --- --- Increase
(decrease) in cash and cash equivalents 3,293 (19,975) Cash and
cash equivalents: Beginning of period 4,601 26,862 ----- ------ End
of period $7,894 $6,887 ====== ====== Supplemental non-cash
information: Deferred gain related to forgiven loan for capital
assets $- $219 Unrealized gains (losses) on investments, net of tax
of $159 and $(82) 221 (108) Rentrak Corporation Reconciliation of
GAAP and Non-GAAP Financial Measures Adjusted EBITDA (Unaudited)
(in thousands) For the Three For the Six Months Ended Months Ended
September 30, September 30, ------------- ------------- 2009 2008
2009 2008 ---- ---- ---- ---- Net Income $676 $842 $958 $1,878
Adjustments: Provision for income taxes 32 643 161 1,456 Interest
income, net (206) (206) (505) (374) Depreciation and amortization
548 411 1,072 799 Stock based compensation 688 133 808 260 ------
------ ------ ------ Adjusted EBITDA $1,738 $1,823 $2,494 $4,019
====== ====== ====== ====== About Adjusted EBITDA From time to
time, we may refer to Adjusted EBITDA (Earnings Before Interest,
Taxes, Depreciation, Amortization and Stock Based Compensation) in
our conference calls and discussions with analysts in connection
with our reported historical financial results. Adjusted EBITDA
does not represent cash flows from operations as defined by
generally accepted accounting principles ("GAAP"), is not derived
in accordance with GAAP and should not be considered by the reader
as an alternative to net income (the most comparable GAAP financial
measure to Adjusted EBITDA). The reconciliation of GAAP and
Non-GAAP financial measures for the three and six month periods
ended September 30, 2009 and 2008 is included in the above table.
Management of the Company believes that Adjusted EBITDA is helpful
as an indicator of the current financial performance of the Company
and its capacity to operationally fund capital expenditures and
working capital requirements. Due to the nature of the Company's
internally-developed software policies and the Company's use of
stock based compensation, the Company incurs significant non-cash
charges for depreciation, amortization and stock based compensation
expense that may not be indicative of its operating performance
from a cash perspective. Therefore, the Company believes that using
the measure of Adjusted EBITDA will help provide a better
understanding of the Company's underlying financial performance and
ability to generate cash flows from operations. DATASOURCE: Rentrak
Corporation CONTACT: Investors, Laurie Berman of PondelWilkinson
Inc., +1-310-279-5962, , for Rentrak Corporation Web Site:
http://www.rentrak.com/
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