Rentrak Reports Strong First Quarter; Net Income Rises 142 Percent on 29 Percent Revenue Growth

Rentrak Reports Strong First Quarter; Net Income Rises 142 Percent on 29 Percent Revenue Growth

PORTLAND, Ore., Aug. 8 /PRNewswire-FirstCall/ -- Rentrak Corp. (NASDAQ:RENT) today announced strong financial results for its first fiscal quarter ended June 30, 2006.

First quarter net income increased 142.4 percent to $1.6 million, or $0.14 per diluted share, from $655,000, or $0.06 per diluted share, in last year's comparable period. Revenues increased 28.8 percent to $26.9 million from $20.9 million and operating income increased 169 percent, to $2.4 million from $877,000 in last year's first fiscal quarter.

First quarter revenues in the company's Pay-Per-Transaction (PPT) segment totaled $23.5 million, an increase of 29.1 percent compared with $18.2 million in last year's comparable period, benefiting from a strong slate of movie titles available for rental which resulted in increased sales to existing customers.

First quarter revenues in the company's Advanced Media & Information (AMI) segment increased 26.6 percent to $3.4 million compared with $2.7 million in last year's first fiscal quarter. Revenues from the company's Essentials(TM) services increased 34.2 percent, while revenues from the company's Direct Revenue Sharing (DRS) service increased 19.8 percent, compared with the same period last year. Beginning with the first quarter of fiscal 2007, the AMI division now includes results from all of the company's Essentials services, including Box Office Essentials(TM), Direct Revenue Sharing (DRS), OnDemand Essentials(TM); Supply Chain Essentials(TM); Retail Essentials(TM) and Home Video Essentials(TM).

Selling and administrative expenses in the first quarter totaled $6.0 million compared with $5.2 million in last year's first quarter, but declined to 22.1 percent of revenue from 24.8 percent of revenue last year. The increased spending related primarily to the company's continuing development and enhancement efforts in support of its AMI services and incremental non- cash, stock-based compensation expenses of $178,000 related to the company's adoption of SFAS 123(R).

As of July 31, the company has repurchased 193,500 shares of its common stock for $1.9 million under the board of directors' January 2006 authorization to repurchase up to 1,000,000 shares. The company's cash and equivalents totaled $29.0 million at June 30, 2006 compared with $30.5 million at March 31, 2006.

Rentrak Chairman and Chief Executive Officer Paul Rosenbaum commented, "Our strong first quarter results represent a solid start to fiscal 2007, with our PPT and AMI divisions each contributing double-digit revenue growth. Our PPT division benefited from a rich home video movie release schedule and increased revenues in our AMI division reflected the new customers we've added over the past year. In July, our OnDemand Essentials customer base grew to 34 and we added three more network operators to our family of content data providers."

Rosenbaum concluded, "We continue to expect revenues for the full fiscal year to be comparable to those of fiscal 2006, with revenues for the remaining three quarters spread fairly evenly. We also continue to expect quarterly profitability throughout fiscal 2007 and that our PPT segment and current offerings within the AMI segment will remain a steady source of revenue, earnings and cash flow. We intend to use this cash flow to invest in ongoing development of additional Entertainment Essentials services and to repurchase shares of our common stock subject to market conditions."

Conference Call

Rentrak has scheduled a conference call for 2 p.m. (PDT) August 8, 2006 to discuss the company's financial performance. Shareowners, members of the media and other interested parties may participate in the call by dialing 888.396.2356 from the U.S. or Canada, or 617.847.8709 for international callers, passcode 21991203. An audio replay of the conference call is available through midnight June 15 by dialing 888-286-8010 from the U.S. or Canada, or 617-801-6888 from international locations, passcode 52747467. This call is being webcast by CCBN and can be accessed at Rentrak's web site at www.rentrak.com where it will be archived through August 8, 2007. The webcast is also accessible over CCBN's Investor Distribution Network and available to both institutional and individual investors. Individual investors can listen to the call through CCBN's individual investor center at www.fulldisclosure.com or by visiting any of the investor sites in CCBN's Individual Investor Network. Institutional investors can access the call via CCBN's password-protected event management site, StreetEvents (www.streetevents.com).

About Rentrak Corporation

Rentrak Corporation, based in Portland, Oregon, is an information management company serving clients in the media, entertainment, retail, advertising and manufacturing industries. The company's Entertainment Essentials(TM) suite of services is redefining media measurement in the digital broadband era. Entertainment Essentials provides customers with near- real-time, actionable insight into performance of content distributed over a wide variety of modern media technologies. Available by license or subscription, each ASP-based Entertainment Essentials application allows executives to analyze detailed industry-wide and title-specific data to make decisions that enhance the bottom line and provide competitive advantage. For further information, please visit Rentrak's corporate Web site at 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 revenues and results of operations for the company's PPT(R) and information services segments 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, 2006 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: Paul Rosenbaum, Chairman & CEO of Rentrak Corporation, +1-503-284-7581, or exitpoll@aol.com; or Investors, Ron Parham of PondelWilkinson Parham, +1-503-297-0202, or rparham@pondel.com.

Rentrak Corporation and Subsidiaries
Condensed Consolidated Balance Sheet
(Unaudited)
(In thousands, except per share amounts)

June 30, March 31,
2006 2006 (1)

Assets
Current Assets:
Cash and cash equivalents $6,862 $15,666
Marketable securities 22,089 14,832
Accounts receivable, net of
allowances for doubtful
accounts of $484 and $461 18,637 18,314
Advances to program suppliers,
net of program supplier
reserves of $32 and $32 235 225
Income tax receivable and prepaid
taxes 48 -
Deferred income tax assets 107 110
Other current assets 712 607
Total Current Assets 48,690 49,754

Property and Equipment, net of
accumulated depreciation of
$6,276 and $5,876 4,323 3,623
Deferred Income Tax Assets 337 312
Other Assets 616 639
Total Assets $53,966 $54,328

Liabilities and Stockholders' Equity
Current Liabilities:
Accounts payable $14,377 $15,493
Taxes payable 1,368 972
Accrued liabilities 389 532
Deferred rent, current portion 20 -
Accrued compensation 762 1,366
Deferred revenue 746 484
Total Current Liabilities 17,662 18,847

Deferred rent, long-term portion 376 -

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:
10,569 and 10,697 11 11
Capital in excess of par value 46,928 48,069
Accumulated other comprehensive
income 181 181
Accumulated deficit (11,192) (12,780)
Total Stockholders' Equity 35,928 35,481
Total Liabilities and
Stockholders' Equity $53,966 $54,328

(1) Derived from our March 31, 2006 audited consolidated financial
statements.

See accompanying Notes to Condensed Consolidated Financial Statements

Rentrak Corporation and Subsidiaries
Condensed Consolidated Income Statements
(Unaudited)
(In thousands, except per share amounts)

For the Three Months Ended June 30,
2006 2005

Revenue $26,901 $20,882

Operating expenses:
Cost of sales 18,586 14,832
Selling and administrative 5,956 5,173
24,542 20,005
Income from operations 2,359 877

Other income (expense):
Interest income 354 156
Interest expense (1) (1)
353 155

Income before income taxes 2,712 1,032
Provision for income taxes 1,124 377
Net income $1,588 $655

Basic net income per share $0.15 $0.06

Diluted net income per share $0.14 $0.06

Shares used in per share
calculations:
Basic 10,699 10,549
Diluted 11,225 11,095

See accompanying Notes to Condensed Consolidated Financial Statements

Rentrak Corporation and Subsidiaries
Condensed Consolidated Statements of Cash Flows
(Unaudited)
(In thousands)

For the Three Months Ended June 30,
2006 2005

Cash flows from operating
activities:
Net income $1,588 $655
Adjustments to reconcile net
income to net cash flows
provided by (used in) operating
activities:
Tax benefits from stock
option exercises 48 13
Depreciation and
amortization 405 312
Adjustment to allowance for
doubtful accounts 23 79
Stock-based compensation 197 -
Deferred income taxes (22) 364
(Increase) decrease in:
Accounts receivable (346) 1,226
Advances to program
suppliers (10) 524
Income taxes receivable
and prepaid taxes (48) 6
Other current assets (201) (158)
Increase (decrease) in:
Accounts payable (1,116) (3,064)
Accrued liabilities and
compensation (351) (299)
Deferred rent 396 -
Deferred revenue and
other liabilities 262 223
Net cash provided by
(used in) operating
activities 825 (119)

Cash flows from investing activities:
Purchase of marketable securities (7,257) -
Purchase of property and equipment (1,100) (570)
Note receivable payments received 114 74
Net cash used in
investing activities (8,243) (496)

Cash flows from financing activities:
Payment of capital lease
obligations - (10)
Issuance of common stock 149 22
Repurchase of common stock (1,535) -
Note receivable, related party - 753
Net cash provided by
(used in) financing
activities (1,386) 765

Increase (decrease) in cash and cash
equivalents (8,804) 150

Cash and cash equivalents:
Beginning of year 15,666 21,983
End of period $6,862 $22,133

Supplemental Cash Flow Information:
Cash paid during the period for
interest $- $1
Cash paid during the period for
income income taxes, net 748 2

See accompanying Notes to Condensed Consolidated Financial Statements

Source: Rentrak Corporation

CONTACT: Paul Rosenbaum, Chairman & CEO of Rentrak Corporation,
+1-503-284-7581, or exitpoll@aol.com; or Investors, Ron Parham of
PondelWilkinson Parham, +1-503-297-0202, or rparham@pondel.com

Web site: http://www.rentrak.com/

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