Rentrak Reports Fiscal 2011 First Quarter Financial Results

PORTLAND, Ore., Aug. 3 /PRNewswire-FirstCall/ -- Rentrak Corporation (Nasdaq: RENT), the leader in multi-screen media measurement serving the advertising and entertainment industries, today announced financial results for its fiscal first quarter ended June 30, 2010.

Consolidated revenues increased more than 13 percent to $24.6 million for the fiscal 2011 first quarter, versus $21.6 million for the fiscal 2010 first quarter, driven primarily by strong growth in the company's Advanced Media Information (AMI) division.

• Revenues in the company's AMI division grew 132 percent to $8.3 million, from $3.6 million for the first quarter of fiscal 2011, reflecting a full quarter contribution from the company's acquisition of Nielsen EDI and incremental revenues generated from the company's Essentials^© suite of multimedia measurement services.  The AMI segment grew to 34 percent of consolidated revenues, from 17 percent for the prior-year period.
• Revenues in the company's Home Entertainment division were $16.3 million, compared with $18.1 million for the first quarter of fiscal 2010.

"Our results this quarter were fantastic, including triple-digit growth in our AMI business and non-GAAP earnings per share of $0.12 before increased stock compensation expense and costs relating to our acquisition of Nielsen EDI.  Adding EDI boosted our global box office currency business while Rentrak's TV database currencies continue to show strong results," said Bill Livek, Rentrak's Chief Executive Officer.  "We are continuing to successfully execute against our business initiatives as we become the database currency of choice throughout the entertainment and advertising industries."

Gross margin improved to $10.7 million, or 43 percent of consolidated revenues, for the first quarter of fiscal 2011, versus $7.4 million, or 34 percent of consolidated revenues, for the same period last year, as the company continues to shift its revenue and profit mix toward its AMI division, which generates significantly higher returns than its Home Entertainment business.  Gross margin in the company's AMI division totaled 72 percent of AMI revenues and 56 percent of consolidated gross profit.

Operating expenses for the fiscal 2011 first quarter were $10.7 million, or 44 percent of consolidated revenues, compared with $7.3 million, or 34 percent of consolidated revenues, for last year's fiscal first quarter.  The increase primarily reflects $400,000 in one-time charges related to the acquisition of EDI, $1.4 million in recurring EDI operating expenses, and a $1.6 million increase in stock-based compensation expense.  

Operating loss for the fiscal 2011 first quarter was $34,000, which included the one-time item and stock-based compensation costs already mentioned.  Operating income for the fiscal 2010 first quarter was $112,000, which included $120,000 in stock-based compensation expense and an asset impairment charge of $65,000.  Excluding the one-time items and stock-based compensation costs in both periods, operating income would have been $2.1 million for the fiscal 2011 first quarter, versus $300,000 for the fiscal 2010 first quarter.

Net income totaled $87,000, or $0.01 per diluted share, for the first quarter of fiscal 2011, compared with $282,000, or $0.03 per diluted share, for the first quarter of fiscal 2010.  Excluding the one-time costs and stock-based compensation expense already mentioned in both quarters, net income for the fiscal 2011 first quarter would have been $1.3 million, or $0.12 per diluted share, compared with $390,000, or $0.04 per diluted share, for the fiscal 2010 first quarter.  The reconciliation of non-GAAP 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 for the first quarter of fiscal 2011 grew substantially to $2.5 million from $756,000 for the same quarter of the prior fiscal year.  Excluding the one-time costs already mentioned in both quarters, adjusted EBITDA would have been $2.9 million for the fiscal 2011 first quarter, versus $821,000 for the fiscal 2010 first quarter.  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 at the end of this press release.  

The company recorded a tax benefit of $27,000 for the first quarter of fiscal 2011, versus an expense of $129,000 for the prior-year period.  The change was due primarily to tax benefits related to stock options that were exercised and the reversal of a tax contingency due to a lapse in the statute of limitations.

The company generated $3.8 million in cash from operating activities for the first quarter of fiscal 2011, compared with $2.6 million for the first quarter of fiscal 2010.

Rentrak's cash, cash equivalents and marketable securities balance rose to $23.9 million at June 30, 2010, from $19.9 million at March 31, 2010.  

Rentrak said that it recently accomplished several important milestones during the quarter including:

• The integration of DISH Network's data into TV Essentials^®, the company's national viewership measurement service, and StationView Essentials, the company's local measurement service, making Rentrak the only service to provide a comprehensive database look at television viewing habits in all 210 television markets throughout the U.S.  The data is expected to be commercially available during the company's quarter ending September 30, 2010, combining viewership information from satellite TV, telco TV and cable TV...an industry first.  
• Signing an agreement to integrate Charter Communications' set-top-box data from all of their markets, further extending Rentrak's leadership role in combining viewership intelligence from satellite TV, telco TV and cable TV.
• Integrating Experian-Simmons' national and local consumer purchase propensity information with TV Essentials^® and StationView Essentials. By combining these powerful information databases, advertisers can better reach their targets; networks and local stations can attract new advertisers; and consumers will see messages and offers that are more relevant to them.
• Growing StationView Essentials to include 42 TV stations in 23 TV markets, up from 25 TV stations in 13 TV markets in June.
• Expanding its board of directors with the nomination of William Engel, a 40-year media and marketing veteran and co-holder of a patent for the integration of disparate datasets, and Martin O'Connor, a prominent attorney with extensive international media relationships and involvement in the digital film industry.

Conference Call

Rentrak will hold a conference call at 5:00 p.m. (ET) / 2:00 p.m. (PT) today to discuss its 2011 first quarter financial results.  Shareowners, members of the media and other interested parties may participate in the call by dialing 800-706-7745 from the U.S. or Canada, or 617-614-3472 from international locations, passcode 77948202.  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 3, 2011. An audio replay of the conference call is available through midnight August 10, 2010 by dialing 888-286-8010 from the U.S. or Canada, or 617-801-6888 from international locations, passcode 36216216.

About Rentrak Corporation

Rentrak Corporation (Nasdaq: RENT) is a global digital media measurement and research company, serving the most recognizable companies in the entertainment industry. With a reach across numerous platforms including box office, home entertainment, on-demand and linear television, broadband and mobile, Rentrak is headquartered in Portland, Oregon, with additional offices worldwide in Los Angeles, New York City, Miami/Ft. Lauderdale, Chicago, Argentina, Australia, Canada, France, Germany, Mexico, Spain and the United Kingdom. For more information on any of Rentrak's services, please visit www.rentrak.com.

Safe Harbor Statement

When used in this discussion, the words "anticipate," "expects,'' "intends'' and similar expressions are intended to identify forward-looking statements.  Such statements relate to, among other things, that Rentrak will continue to execute against its business initiatives and become the database currency of choice, 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, its 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 March 31, 2010 annual report on Form 10-K 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.

(Financial Tables Follow)

SOURCE Rentrak Corporation