Rentrak Reports Fiscal 2014 First Quarter Financial Results

Rentrak Reports Fiscal 2014 First Quarter Financial Results

-- Company Posts 24 Percent Increase in Consolidated Revenue; Generates More than $3.0 Million in Cash for the Quarter --

PORTLAND, Ore., Aug. 7, 2013 /PRNewswire/ -- Rentrak Corporation (Nasdaq: RENT), a leader in multi-screen media measurement serving the advertising, television and movie industries, today announced financial results for its first fiscal quarter ended June 30, 2013.

Consolidated revenue increased 24 percent to $28.8 million for the first quarter of fiscal 2014 from $23.2 million for the same period last year, reflecting 25 percent growth in Rentrak's Advanced Media and Information (AMI) business, and 23 percent growth in the company's Home Entertainment business.

Revenue in the company's AMI division improved to $15.8 million for the fiscal 2014 first quarter, up from $12.6 million for the same period last year, and represented 55 percent of Rentrak's consolidated revenue, versus 54 percent last year. Revenue in the company's Home Entertainment business rose to $13.1 million from $10.6 million for last year's first fiscal quarter.

"All of Rentrak's business units performed very well this quarter, as we generated the highest level of sales growth since our current management team has been in place, and the fifth consecutive quarter of year-over-year consolidated revenue growth," said Bill Livek, Rentrak's Vice Chairman and Chief Executive Officer. "The hard work of our team resulted in meeting or surpassing our expectations in nearly every part of our organization."



(revenue in millions) 1Q FY14 1Q FY13 Percent
Change

Box Office Essentials(R) $6.5 $6.0 8%

TV Essentials(R) $5.7 $3.7 52%

OnDemand Everywhere(TM) $3.6 $2.9 24%

Total AMI $15.8 $12.6 25%
--------- ----- ----- ---


Total Home Entertainment $13.1 $10.6 23%


Consolidated Revenue $28.8 $23.2 24%
-------------------- ----- ----- ---



Numbers may not sum
due to rounding.
Gross margin was 46 percent of consolidated revenue for the first quarter of fiscal 2014, compared with 50 percent for the same period last year. Gross margin for the company's AMI business was 60 percent for the first quarter of fiscal 2014, compared with 66 percent a year ago. The change was due primarily to a shift in revenue mix, with a greater percentage being generated by the company's TV Essentials(® )business. Gross margin for Rentrak's Home Entertainment business was 28 percent for the first quarter of fiscal 2014, compared with 30 percent last year.

Operating expenses for the fiscal 2014 first quarter totaled $14.2 million, compared with $12.2 million for the fiscal 2013 first quarter. The increase mainly reflected a 10 percent increase in costs associated with the expansion of Rentrak's AMI business, after offsetting a $621,000 credit related to the company's stock-based compensation agreement with DISH Network L.L.C. in the fiscal 2013 first quarter. The increase in costs was due to adding employees and other expenses related to growth in the company's TV business.

Operating loss for the first quarter of fiscal 2014 was $1.0 million, which included $1.4 million in stock-based compensation costs and $84,000 in acquisition-related costs. For last year's first fiscal quarter, operating loss was $644,000, which included $1.5 million in stock-based compensation costs, $198,000 in reorganization costs, and $130,000 in acquisition-related costs, offset by the $621,000 credit noted above. Excluding these amounts for both periods, operating income would have been $464,000 for the fiscal 2014 first quarter, compared with $593,000 for the fiscal 2013 first quarter.

Net loss totaled $1.2 million, or $0.10 per share, for the first quarter of fiscal 2014, compared with a net loss of $618,000, or $0.06 per share, for the same period last year. Excluding the costs already mentioned for both periods, net income for the fiscal 2014 first quarter would have been $292,000, or $0.03 per diluted share, compared with $619,000, or $0.05 per diluted share, for the first quarter of fiscal 2013. The reconciliation of these non-GAAP earnings per share (EPS) to EPS, the most comparable financial measure based upon generally accepted accounting principles (GAAP), as well as a further explanation about non-GAAP EPS, is included in the financial tables at the end of this press release.

Adjusted EBITDA (a non-GAAP measure) was $1.9 million for the first quarter of fiscal 2014, compared with $1.7 million for the first quarter of fiscal 2013. The reconciliation of adjusted EBITDA to net income, the most comparable financial measure based upon GAAP, as well as a further explanation about adjusted EBITDA, is included in the financial tables at the end of this press release.

The company generated $3.3 million in cash from operating activities for the first quarter of fiscal 2014, compared with $337,000 for the comparable fiscal 2013 period.

Rentrak's cash, cash equivalents and marketable securities balance grew to $21.6 million at June 30, 2013, up from $20.4 million at March 31, 2013. The company's cash balances include a $2.0 million investment made in the second quarter of fiscal 2013 in its Chinese TV measurement joint venture, Sinotrak. Rentrak's Chinese joint venture partner contributed 51 percent of this funding. The joint venture will measure viewership on all forms of video screens from digital devices in China.

Rentrak recently achieved several important milestones including:


-- Signing six Scripps television networks, including HGTV, the Food
Network, Great American Country, the Cooking Channel, DIY, and the
Travel Channel.
-- Launching Rentrak's Digital Download Essentials(TM) Industry service,
the first service in the U.S. to provide studios with competitive
title-level purchase and rental data for digital movies from licensees
such as iTunes, Amazon Instant Video, Google Play, Xbox Live,
PlayStation, Wal-Mart's Vudu service, and other over-the-top providers
on an aggregate basis.
-- Launching PreAct(TM), a social media tracking tool that monitors
consumer conversations about a film as early as one year before release,
to help content creators estimate a film's gross revenues and adjust
pre-release marketing campaigns.
-- Expanding the company's growing roster of clients, including several top
local and national advertising agencies, television networks and local
TV stations.
-- Serving more than 230 local TV station clients across more than 50 TV
station groups, up from approximately 190 local TV stations and more
than 40 station groups one year ago.
Long-Term Outlook

Rentrak said that it remains confident in its ability to continue generating substantial growth in revenue, including:


-- 80 percent annual revenue growth in its TV business in fiscal 2014.
Gross margins are expected to be in the 50 percent range annually.
-- 12 percent revenue growth in the company's Box Office business annually,
with gross margins in the 75 percent range.
-- 20 percent annual revenue growth in its OnDemand Everywhere((TM))
business, with gross margins in the 75 percent range.
-- Five to eight percent revenue growth in Home Entertainment revenues for
fiscal 2014, with gross margins approximating 27 percent.
Conference Call

Rentrak will hold a conference call at 5:00 p.m. ET/2:00 p.m. PT today to discuss its 2014 first quarter financial results. Shareholders, members of the media and other interested parties may participate in the call by dialing 877-941-8609 from the U.S. or Canada, or 480-629-9645 from international locations, conference ID 4629811. This call is being webcast and can be accessed at Rentrak's Web site at www.rentrak.com, where it will be archived through August 7, 2014. An audio replay of the conference call will be available through midnight August 14, 2013 by dialing 800-406-7325 from the U.S. or Canada, or 303-590-3030 from international locations, passcode 4629811.

About Rentrak Corporation

Rentrak (RENT) is the entertainment and marketing industries' premier provider of worldwide consumer viewership information, precisely measuring actual viewing behavior of movies and TV everywhere. Using our proprietary intelligence and technology, combined with advanced demographics, only Rentrak is the census currency for VOD and Movies. Rentrak provides the stable and robust audience measurement services that movie, television and advertising professionals across the globe have come to rely on to better deliver their business goals and more precisely target advertising across numerous platforms including box office, multiscreen television and home video. For more information on Rentrak, please visit www.rentrak.com.

Safe Harbor Statement

The foregoing paragraphs contain forward-looking statements within the meaning of the federal securities laws, including, without limitation, expected rates of revenue increase in Rentrak's Home Entertainment business for fiscal 2014, Rentrak's ability to continue generating substantial growth in AMI revenue and estimated gross margins for the AMI and Home Entertainment businesses. These forward-looking statements are based on Rentrak's current expectations, estimates and projections about its business and industry, management's beliefs, and certain assumptions, all of which are subject to change. Forward-looking statements are not guarantees of future performance and Rentrak's actual results may differ significantly as a result of a number of factors, including 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, the company's ability to successfully integrate acquired businesses, 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 reports on Form 10-K, 10-Q and other filings 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.

RENTF

(Logo: http://photos.prnewswire.com/prnh/20130114/LA42144LOGO)

CONTACT:

Investors
PondelWilkinson Inc.

Laurie Berman

310-279-5962
lberman@pondel.com

(Financial Tables Follow)








Rentrak Corporation and Subsidiaries
Consolidated Statements of Operations
(In thousands, except per share amounts)

(unaudited)




For the Three Months
Ended
June 30,
--------

2013 2012
---- ----

Revenue $28,842 $23,223

Cost of sales 15,692 11,711
------ ------

Gross margin 13,150 11,512

Operating expenses:

Selling and administrative 14,169 12,156
------ ------

Loss from operations (1,019) (644)

Other income:

Interest income, net 47 79
--- ---

Loss before income taxes (972) (565)

Provision for income taxes 226 53
--- ---

Net loss (1,198) (618)

Net loss attributable to
noncontrolling interest (7) -
--- ---

Net loss attributable to
Rentrak Corporation $(1,191) $(618)
======= =====

Net loss per share
attributable to Rentrak
Corporation common
stockholders:

Basic $(0.10) $(0.06)
====== ======

Diluted $(0.10) $(0.06)
====== ======

Shares used in per share
calculations:

Basic 12,062 11,207
====== ======

Diluted 12,062 11,207
====== ======







Rentrak Corporation and Subsidiaries
Consolidated Balance Sheets
(In thousands, except per share amounts)

(unaudited)


June 30, 2013 March 31, 2013
------------- --------------

Assets

Current Assets:

Cash and cash equivalents $4,081 $3,835

Marketable securities 17,549 16,588

Accounts and notes receivable,
net of allowances for
doubtful accounts of $828 and
$866 15,479 16,682

Taxes receivable and prepaid
taxes 193 -

Other current assets 2,137 2,188
----- -----

Total Current Assets 39,439 39,293

Property and equipment, net of
accumulated depreciation of
$21,109 and $19,925 14,515 14,262

Goodwill 4,993 4,998

Other intangible assets, net
of accumulated amortization
of $2,559 and $2,343 12,294 12,396

Other assets 830 830
--- ---

Total Assets $72,071 $71,779
======= =======

Liabilities and Stockholders' Equity

Current Liabilities:

Accounts payable $6,333 $5,856

Accrued liabilities 5,982 4,369

Accrued compensation 3,736 5,862

Deferred tax liabilities 46 36

Deferred revenue and other
credits 2,638 2,610
----- -----

Total Current Liabilities 18,735 18,733

Deferred rent, long-term
portion 2,308 2,238

Taxes payable, long-term 709 713

Deferred tax liability, long-
term 1,069 574

Note payable and accrued
interest - 550
--- ---

Total Liabilities 22,821 22,808

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: 11,897 and
11,892 12 12

Capital in excess of par value 76,999 75,508

Accumulated other
comprehensive income 17 31

Accumulated deficit (28,760) (27,569)
------ ------

Stockholders' Equity
attributable to Rentrak
Corporation 48,268 47,982

Noncontrolling interest 982 989
--- ---

Total Stockholders' Equity 49,250 48,971
------ ------

Total Liabilities and
Stockholders' Equity $72,071 $71,779
======= =======







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

(unaudited)




For the Three Months
Ended
June 30,
--------

2013 2012
---- ----

Cash flows from operating activities:

Net loss $(1,198) $(618)

Adjustments to reconcile net loss to net
cash flows provided by operating
activities:

Depreciation
and
amortization 1,417 1,150

Stock-based
compensation 1,399 909

Deferred
income
taxes 505 (14)

Loss on
disposition
of assets - 1

Interest on
note
payable - 6

Adjustment
to
allowance
for
doubtful
accounts (38) (28)

(Increase) decrease in:

Accounts and
notes
receivable 1,203 2,067

Taxes
receivable
and prepaid
taxes (193) -

Other assets 146 (150)

Increase (decrease) in:

Accounts
payable 477 (702)

Taxes
payable (97) 15

Accrued
liabilities
and
compensation (388) (1,850)

Deferred
revenue 29 (388)

Deferred
rent 69 (61)
--- ---

Net cash
provided by
operating
activities 3,331 337

Cash flows from investing activities:

Purchase of
marketable
securities (1,000) -

Payments
made to
develop
intangible
assets (80) (57)

Purchase of
property
and
equipment (1,891) (1,606)
------ ------

Net cash
used in
investing
activities (2,971) (1,663)

Cash flows from financing activities:

Issuance of
common
stock - 543
--- ---

Net cash
provided by
financing
activities - 543

Effect of
foreign
exchange
translation
on cash (114) (304)
---- ----

Increase
(decrease)
in cash and
cash
equivalents 246 (1,087)

Cash and cash equivalents:

Beginning of
period 3,835 5,526

End of
period $4,081 $4,439
====== ======

Supplemental non-cash information:

Capitalized
stock-
based
compensation $124 $114

Common stock
used to pay
for option
exercises 69 58

Decrease in
leasehold
improvements
related to
forgiven
loan 550 -







Rentrak Corporation and Subsidiaries
Information by Segment
(In thousands)
(Unaudited)


For the Three Months
Ended
June 30,

2013 2012
---- ----

AMI

Sales to external customers $15,758 $12,611

Gross margin $9,469 $8,317

Income from operations $1,766 $1,942


HOME ENTERTAINMENT

Sales to external customers $13,084 $10,612

Gross margin $3,681 $3,195

Income from operations $2,202 $1,799


TOTAL OPERATING SEGMENTS

Sales to external customers $28,842 $23,223

Gross margin $13,150 $11,512

Income from operations $3,968 $3,741




Note: The segment
operating income
figures do not
include corporate
and other expenses
which are not
allocated to a
specific segment.




Rentrak Corporation
Reconciliation of GAAP and Non-GAAP Financial Measures
Adjusted EBITDA & Non-GAAP Diluted EPS
(In thousands, except per share amounts)
(Unaudited)


For the Three Months
Ended
June 30,
--------

2013 2012
---- ----

Net loss attributable to
Rentrak Corporation $(1,191) $(618)

Adjustments:

Provision for income taxes 226 53

Interest income, net (47) (79)

Depreciation and
amortization 1,417 1,150

Stock-based compensation
(1) 1,399 1,530
----- -----

Adjusted EBITDA $1,804 $2,036
------ ------

DISH stock-based
compensation - (621)

Acquisition costs 84 130

Reorganization costs - 198
--- ---

Adjusted EBITDA before
DISH stock-based
compensation, acquisition
and reorganization costs $1,888 $1,743
====== ======


(1) Excludes DISH stock-based compensation


For the Three Months
Ended
June 30,

2013 2012
---- ----

Diluted EPS, as reported $(0.10) $(0.06)

DISH stock-based
compensation - (0.06)

Other items:

Acquisition costs 0.01 0.01

Reorganization costs - 0.02

Stock-based
compensation(1) 0.12 0.14
---- ----

Total other items 0.13 0.17
---- ----

Diluted EPS, non-GAAP $0.03 $0.05
===== =====


(1) Excludes DISH stock-based compensation


About Adjusted EBITDA and Non-GAAP Diluted EPS

From time to time, Rentrak may refer to Adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation, Amortization and Stock-based Compensation) and "non-GAAP diluted EPS" in its conference calls and discussions with investors and analysts in connection with the company's 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). Non-GAAP diluted EPS does not measure diluted EPS as defined by GAAP, is not derived in accordance with GAAP and should not be considered by the reader as an alternative to reported diluted EPS. The reconciliation of GAAP and non-GAAP financial measures for the three month periods ended June 30, 2013 and 2012 are included in the above table. Rentrak's management 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 its use of stock-based compensation, Rentrak 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. Rentrak also adjusts for acquisition and non-recurring costs as Rentrak's management believes this provides a useful metric by which to compare the performance from period to period. In addition, Rentrak's management believes that these costs as well as stock-based compensation should be factored out of reported EPS in order to provide a more useful indicator of the current financial performance of the company. No tax rate was applied to these adjustments because the company has established a valuation reserve against its deferred tax assets and, as such, the prior period tax rates used previously have been updated. Due to the nature of the company's equity and stock-based compensation plans and arrangements, costs associated with acquisitions and items which are considered nonrecurring in nature, the company's diluted EPS, which includes these items, may not be indicative of its on-going operating performance.



SOURCE Rentrak Corporation

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Rentrak Corporation

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


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