Rentrak Reports Fiscal 2011 Fourth Quarter and Full Year Financial Results

PORTLAND, Ore., June 9, 2011 /PRNewswire/ -- Rentrak Corporation (NASDAQ: RENT), a leader in multi-screen media measurement serving the advertising, television and entertainment industries, today announced financial results for its fiscal fourth quarter and full year ended March 31, 2011.

Fiscal 2011 Fourth Quarter Financial Results

Consolidated revenues for the fourth quarter of fiscal 2011 were $24.7 million, primarily reflecting continued growth in the company's AMI division.  Excluding revenues associated with the company's acquisitions of $3.2 million for the fiscal 2011 fourth quarter and $1.8 million for the fiscal 2010 fourth quarter, AMI division revenues grew approximately 16 percent.  The AMI segment represented 37 percent of Rentrak's consolidated revenues for the fiscal 2011 fourth quarter, up from 28 percent for the fiscal 2010 fourth quarter.  Gross margin in the AMI segment was 62 percent of AMI revenues for the fiscal 2011 fourth quarter, compared with 73 percent for last year's fourth quarter.  AMI gross margin for the fourth quarter of fiscal 2011 was affected by higher fixed costs associated with obtaining data for the company's TV business.

Revenues in the company's Home Entertainment business declined approximately 14 percent from the year-ago period to $15.7 million.  The decline primarily related to weaker rental titles throughout the industry during the quarter.

"Rentrak successfully strengthened its market position in fiscal 2011 by providing relevant and innovative database measurement services to an expanding roster of clients throughout the advertising, television and entertainment industries," said Bill Livek, Rentrak's Chief Executive Officer.  "Although our fourth quarter results did not meet my expectations, we are making substantial progress against our plan.  From the big screen to the small screen, as consumer viewing habits and technology continue to evolve, Rentrak is deploying its unique census-like measurement platform to help the industry recognize increased value."  

Gross margin improved to $10.9 million, or 44 percent of consolidated revenues, for the fiscal 2011 fourth quarter, from $10.4 million, or 41 percent of consolidated revenues, for the same period last year, as the company continued to shift its revenue and profit mix toward its AMI division, which generates higher returns than its Home Entertainment business.  

Operating expenses for the fiscal 2011 fourth quarter were $11.7 million, or 47 percent of consolidated revenues, compared with $10.6 million, or 42 percent of consolidated revenues, for the fiscal 2010 fourth quarter.  The increase in operating expenses mainly reflected $0.3 million in costs primarily related to the acquisitions of Cine Chiffres and Media Salvation, $0.9 million in recurring operating expenses from EDI, the company purchased by Rentrak in January, 2010, and $0.2 million in increased stock-based compensation expense from the fourth quarter of fiscal 2010, offset by $0.6 million in costs relating to executive changes in the prior year's fourth quarter.  

Operating loss for the fourth quarter of 2011 was $0.8 million, which included the acquisition related expenses and stock-based compensation costs.  For the fiscal fourth quarter of last year, operating loss totaled $0.2 million, which included $1.3 million in acquisition and transition costs related to the purchase of EDI, costs associated with changes relating to senior management of $0.6 million and $0.9 million in stock-based compensation costs.  Excluding these amounts for both periods, operating income would have been $0.7 million for the fiscal 2011 fourth quarter, compared with $2.5 million for the fiscal 2010 fourth quarter.

Net loss was $789,000, or $0.07 per share, for the fourth quarter of fiscal 2011, compared with net income of $197,000, or $0.02 per diluted share, for the similar period last year.  Excluding the costs already mentioned for both periods, net loss for the fiscal 2011 fourth quarter would have been $0.1 million, or $0.01 per share, compared with net income of $2.2 million, or $0.19 per diluted share, for the fourth quarter of fiscal 2010.  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 for the fiscal 2011 fourth quarter was $1.3 million, the same as for the fiscal 2010 fourth quarter.  Excluding the costs already mentioned for both periods, adjusted EBITDA would have been $1.7 million for the fiscal 2011 fourth quarter, compared with $3.2 million for the fiscal 2010 fourth quarter.  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.  

Rentrak recorded a tax provision of $0.1 million for the fourth quarter of fiscal 2011, compared with a tax benefit of $0.3 million for the prior year period.  The change in tax was primarily due to increases in valuation allowances on foreign deferred tax assets and shifts in the mix of U.S., foreign sourced and tax exempt income.  

Rentrak said that it recently achieved several important milestones including:

• Growing its StationView Essentials product to include two stations from Bonten Media Group, three from Lockwood Broadcast Group, two from London Broadcasting Company, and WDBD-TV, a Fox affiliate in Mississippi.  Rentrak now has approximately 75 local TV station clients in 21 station groups.
• Adding time shifted, DVR, ratings to StationView Essentials, an industry first.
• Increasing its TV Essentials® client base through the addition of Documentary Channel, Hallmark and the Hallmark Movie Channel, Media World, and National Geographic's WILD and Mundo channels.  Rentrak also extended its TV Essentials® relationship with SiTV.
• Building its leading OnDemand Essentials® client base to include Image Entertainment, Kabillion, Phase 4 Films, Relativity Media, Shaw Media and Tribeca Enterprises.
• Partnering with Collective to offer an online advertising capability that enables advertisers to support and reinforce their TV campaigns with additional exposures in online video, rich media and display advertising.
• Licensing its TV Essentials® database to MPG, the U.S. media division of HAVAS, to provide MPG with additional insight to utilize behavioral targeting rather than just demographic targeting during the current upfront television ad buying season.
• Integrating the first phase of Epsilon anonymous demographic and lifestyle information into Rentrak's Station View Essentials local TV database measurement service.  
• Signing several new agreements for the integration of the company's national and local TV database measurement service into the systems of industry-leading software providers Donovan Data Systems, One Domain and STRATA.
• Authorizing a one-year, $5.0 million share repurchase program.

Fiscal 2011 Full Year Financial Results

Consolidated revenues for fiscal 2011 rose to $97.1 million from $91.1 million for fiscal 2010.  AMI revenues grew 72 percent to $34.1 million from $19.8 million last year.  Revenues in the company's Home Entertainment division were $63.0 million, compared with $71.3 million for fiscal 2010.

Operating loss for fiscal 2011 was $2.6 million, compared with $0.9 million for fiscal 2010.  The fiscal 2011 operating loss included $2.1 million in non-recurring items and acquisition costs, and $6.7 million in non-cash stock compensation expense.  Fiscal 2010 operating income included $2.9 million in non-recurring items and acquisition costs, and $2.4 million in non-cash stock compensation expense.  Excluding the non-recurring items, costs associated with acquisitions and stock-based compensation costs for both periods, operating income would have been $6.2 million for fiscal 2011, compared with $4.4 million for fiscal 2010.

The fiscal 2011 net loss was $767,000, or $0.07 per share, compared with net income of $576,000, or $0.05 per diluted share, for fiscal 2010.  Excluding the costs and stock-based compensation expense already described for both periods, net income would have been $4.7 million, or $0.43 per diluted share, for fiscal 2011, compared with $4.4 million, or $0.40 per diluted share, for the prior year.  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 rose to $7.7 million for fiscal 2011, from $3.8 million for fiscal 2010.  Excluding the costs described above and non-cash stock compensation for both years, adjusted EBITDA would have been $9.7 million for fiscal 2011, compared with $6.7 million for fiscal 2010.  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 said that it generated strong cash from operating activities for fiscal 2011.  Cash flow from operating activities increased 36% to $5.4 million for fiscal 2011, compared with $4.0 million for fiscal 2010.

Rentrak's cash, cash equivalents and marketable securities balance rose to $26.4 million at March 31, 2011, from $19.9 million at March 31, 2010.  

Conference Call

Rentrak will hold a conference call at 5:00 p.m. (ET)/2:00 p.m. (PT) today to discuss its 2011 fourth quarter and full year financial results.  Shareowners, 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 480-629-9818 from international locations, passcode 4441419.  This call is being webcast and can be accessed at Rentrak's web site at www.rentrak.com where it will be archived through June 8, 2012.  An audio replay of the conference call is available through midnight June 16, 2011 by dialing 800-406-7325 from the U.S. or Canada, or 303-590-3030 from international locations, passcode 4441419.

About Rentrak Corporation

Rentrak (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, multi-screen television, and home video, Rentrak has developed more efficient metrics to be used as database currencies for the evaluation and selling of media.  Rentrak is headquartered in Portland, Oregon, with additional U.S. and international offices.  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, execution of the company's business plan and the growing importance of its database, or census-like, measurement services.  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, 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 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.

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CONTACT:
Investors
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SOURCE Rentrak Corporation