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      Rentrak Reports Fiscal 2011 Fourth Quarter and Full Year Financial Results

      -- Fiscal 2011 Cash Flow from Operations Grew 36% from Fiscal 2010 --

      -- Advanced Media Information (AMI) Division Represents 37% of Total Company Revenues, Up from 28% a Year Ago --


      News provided by

      Rentrak Corporation

      Jun 09, 2011, 04:05 ET

      Share this article

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      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.


      ($ in millions)

      4Q FY11

      4Q FY10

      Percent
      Change

      FY11

      FY10

      Percent

      Change

      AMI revenue(1)

      $9.0

      $6.9

      30%

      $34.1

      $19.8

      72%

        TV Essentials®

      $2.0

      $1.3

      46%

      $6.9

      $4.1

      70%

        Box Office Essentials®(1)

      $4.9

      $3.5

      40%

      $18.3

      $8.1

      124%

        OnDemand Essentials®

      $1.9

      $1.7

      13%

      $7.7

      $6.1

      27%

      Home Entertainment revenue(2)

      $15.7

      $18.1

      -14%

      $63.0

      $71.3

      -12%

      1. Includes full-quarter contribution from acquisitions of $3.2 million for 4Q FY11 and full year contribution of $11.6 million for FY11.

      2. Includes full-quarter contribution from acquisition of $0.3 million for 4Q FY11 and partial year contribution of $0.3 million for FY11.




      "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.

      RENTF

      CONTACT:
      Investors
      PondelWilkinson Inc.
      Laurie Berman
      310-279-5962
      [email protected]

      (Financial Tables Follow)






      Rentrak Corporation and Subsidiaries

      Consolidated Income Statements

      (In thousands, except per share amounts)













      For the Three Months Ended March 31,



      For the Twelve Months Ended March 31,



      2011


      2010



      2011


      2010



      (Unaudited)


      (Unaudited)



      (Unaudited)


      (Audited)











      Revenue

      $

      24,679

      $

      25,006


      $

      97,088

      $

      91,076

      Cost of Sales


      13,769


      14,629



      54,853


      58,277

      Gross Margin


      10,910


      10,377



      42,235


      32,799











      Operating expenses:










         Selling and administrative


      11,550


      10,550



      44,319


      33,254

         Provision for doubtful accounts


      159


      52



      519


      469



      11,709


      10,602



      44,838


      33,723











      Loss from operations


      (799)


      (225)



      (2,603)


      (924)











      Other income:










         Interest income, net


      119


      137



      470


      1,151

         Other, net


      1


      -



      125


      -











      Income (loss) before income taxes


      (679)


      (88)



      (2,008)


      227

      Provision (benefit) for income taxes


      110


      (285)



      (1,241)


      (349)

      Net income (loss)

      $

      (789)

      $

      197


      $

      (767)

      $

      576





















      Basic net income (loss) per share

      $

      (0.07)

      $

      0.02


      $

      (0.07)

      $

      0.05











      Diluted net income (loss) per share

      $

      (0.07)

      $

      0.02


      $

      (0.07)

      $

      0.05











      Shares used in per share calculations:










       Basic


      11,180


      10,607



      10,962


      10,527

       Diluted


      11,180


      11,172



      10,962


      11,013















      Rentrak Corporation and Subsidiaries

      Consolidated Balance Sheets

      (In thousands, except per share amounts)








      March 31,



      2011


      2010



      (Unaudited)


      (Audited)

      Assets





      Current Assets:





         Cash and cash equivalents

      $

      3,821

      $

      2,435

         Marketable securities


      22,556


      17,490

         Accounts and notes receivable, net of allowances for





            doubtful accounts of $645 and $565


      16,713


      19,862

         Taxes receivable and prepaid taxes


      1,726


      1,235

         Deferred income taxes


      152


      -

         Other current assets


      1,091


      916

             Total Current Assets


      46,059


      41,938






      Property and equipment, net of accumulated





       depreciation of $13,750 and $10,985


      8,834


      7,569

      Deferred tax assets


      1,242


      -

      Goodwill


      5,222


      3,396

      Other intangible assets, net of accumulated





       amortization of $724 and $76


      14,122


      11,344

      Other assets


      696


      559

             Total Assets

      $

      76,175

      $

      64,806






      Liabilities and Stockholders' Equity





      Current Liabilities:





         Accounts payable

      $

      7,223

      $

      6,170

         Accrued liabilities


      3,022


      1,174

         Accrued compensation


      6,144


      2,543

         Deferred income tax liabilities


      -


      68

         Deferred revenue


      1,210


      1,356

             Total Current Liabilities


      17,599


      11,311






      Deferred rent, long-term portion


      942


      924

      Deferred income tax liabilities


      -


      328

      Taxes payable, long-term


      1,261


      1,015

             Total Liabilities


      19,802


      13,578






      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:  





          11,243 and 10,595


      11


      11

         Capital in excess of par value


      54,358


      48,887

         Accumulated other comprehensive income


      530


      89

         Retained earnings


      1,474


      2,241

            Total Stockholders' Equity


      56,373


      51,228

            Total Liabilities and Stockholders' Equity

      $

      76,175

      $

      64,806










      Rentrak Corporation and Subsidiaries

      Consolidated Statements of Cash Flows

      (In thousands)










      For the Twelve Months Ended March 31,



      2011


      2010


      2009



      (Unaudited)


      (Audited)


      (Audited)

      Cash  flows from operating activities:







        Net income  (loss)

      $

      (767)

      $

      576

      $

      5,363

        Adjustments to reconcile net income (loss) to net cash flows







           provided by operating activities:







              Tax benefit (expense) from stock-based compensation


      1,253


      461


      (31)

              Depreciation and amortization


      3,432


      2,329


      1,750

              Gain on disposal of fixed assets


      (15)


      -


      -

              Gain on liquidation of foreign investment


      (104)


      -


      -

              Impairment of capitalized software projects


      8


      199


      257

              Adjustment to allowance for doubtful accounts


      80


      (32)


      25

              Stock-based compensation


      6,714


      2,361


      487

              Excess tax benefits from stock-based compensation


      (3,987)


      (332)


      (8)

              Deferred income taxes


      (1,813)


      (245)


      661

              Realized gain on marketable securities


      (12)


      (374)


      -

              (Increase) decrease, net of effect of acquisitions, in:







                 Accounts and notes receivable


      2,505


      (982)


      (1,076)

                 Taxes receivable and prepaid taxes


      (491)


      (4)


      224

                 Other current assets


      (212)


      113


      381

              Increase (decrease), net of effect of acquisitions, in:







                 Accounts payable


      935


      (942)


      50

                 Taxes payable


      248


      (227)


      (723)

                 Accrued liabilities and compensation


      (2,101)


      1,659


      3

                 Deferred rent


      (23)


      (59)


      (7)

                 Deferred revenue and other liabilities


      (262)


      (549)


      659

                    Net cash provided by operating activities


      5,388


      3,952


      8,015








      Cash flows from investing activities:







        Purchase of marketable securities


      (14,911)


      (7,300)


      (30,000)

        Sale or maturity of marketable securities


      9,800


      20,200


      4,986

        Proceeds from the sale of assets


      17


      -


      -

        Proceeds from the liquidation of investment


      224


      -


      -

        Purchase of property and equipment


      (3,591)


      (3,703)


      (2,953)

        Cash paid for acquisitions, net of cash acquired  


      (1,930)


      (16,659)


      -

                    Net cash used in investing activities


      (10,391)


      (7,462)


      (27,967)








      Cash flows from financing activities:







        Issuance of common stock


      1,836


      1,043


      150

        Excess tax benefits from stock-based compensation


      3,987


      332


      8

        Repurchase of common stock


      -


      (302)


      (2,291)

                    Net cash provided by (used in) financing activities


      5,823


      1,073


      (2,133)








      Effect of foreign exchange translation on cash


      566


      271


      (176)








      Increase (decrease) in cash and cash equivalents


      1,386


      (2,166)


      (22,261)








      Cash and cash equivalents:







        Beginning of year


      2,435


      4,601


      26,862

        End of year

      $

      3,821

      $

      2,435

      $

      4,601















      Supplemental information:







      Income taxes paid

      $

      156

      $

      384

      $

      810

      Income tax refunds


      264


      643


      1

      Deferred gain related to forgiven loan for capital assets


      -


      -


      967

      Capitalized stock-based compensation


      474


      36


      -












      Rentrak Corporation and Subsidiaries

      Information by Segment

      (Unaudited)

      (in thousands)


















      For the Three Months


      For the Twelve Months






      Ended March 31,


      Ended March 31,






      2011


      2010


      2011


      2010

      HOME

      Sales to external customers


      $     15,650


      $     18,084


      $     63,000


      $     71,252

      ENTERTAINMENT

      Gross margin



      $       5,292


      $      5,339


      $     19,359


      $     19,821













      AMI

      Sales to external customers


      $       9,029


      $      6,922


      $     34,088


      $     19,824


      Gross margin



      $       5,618


      $      5,038


      $     22,876


      $     12,978













      Total

      Sales to external customers


      $     24,679


      $     25,006


      $     97,088


      $     91,076


      Gross margin



      $     10,910


      $     10,377


      $     42,235


      $     32,799

















      Rentrak Corporation

      Reconciliation of GAAP and Non-GAAP Financial Measures

      Adjusted EBITDA

      (Unaudited)

      (in thousands)


















      For the Three Months


      For the Twelve Months






      Ended March 31,


      Ended March 31,


















      2011


      2010


      2011


      2010













      Net Income (loss)



      $    (789)


      $     197


      $    (767)


      $     576

      Adjustments:












      Provision (benefit) for income taxes


      110


      (285)


      (1,241)


      (349)


      Interest income, net



      (119)


      (137)


      (470)


      (1,151)


      Depreciation and amortization


      1,040


      687


      3,432


      2,329


      Stock-based compensation


      1,064


      882


      6,714


      2,361













      Adjusted EBITDA



      $  1,306


      $  1,344


      $  7,668


      $  3,766















      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 twelve month periods ended March 31, 2011 and 2010 are 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.  




      Rentrak Corporation and Subsidiaries

      Reconciliation of GAAP and Non-GAAP Financial Measures

      Non-GAAP Diluted EPS

      (Unaudited)





















      For the Three Months

      Ended March 31,















      2011





      2010











      Diluted EPS, as reported


      $ (0.07)


      Diluted EPS, as reported

      $   0.02

      One-time items:




      One-time items:






      -




      Severance

      0.03



        Total non-recurring items


      -




        Total non-recurring items

      0.03


      Acquisitions


      0.02



      Acquisitions

      0.08


      Stock-based compensation


      0.04



      Stock-based compensation

      0.06

      Total one-time items, acquisition costs and stock-based compensation


      0.06


      Total one-time items, acquisition costs and stock-based compensation

      0.17











      Diluted EPS, non-GAAP


      $ (0.01)


      Diluted EPS, non-GAAP

      $   0.19





















      For the Twelve Months

      Ended March 31,  















      2011





      2010











      Diluted EPS, as reported


      $ (0.07)


      Diluted EPS, as reported

      $   0.05

      One-time items:




      One-time items:




      Severance


      0.01




      Severance

      0.06





      -




      Organizational changes

      0.02



        Total non-recurring items


      0.01




        Total non-recurring items

      0.08


      Acquisitions


      0.11



      Acquisitions

      0.11


      Stock-based compensation


      0.38



      Stock-based compensation

      0.16

      Total one-time items, acquisition costs and stock-based compensation


      0.50


      Total one-time items, acquisition costs and stock-based compensation

      0.35











      Diluted EPS, non-GAAP


      $  0.43


      Diluted EPS, non-GAAP

      $   0.40














      From time to time, Management may refer to "non-GAAP diluted EPS" in our conference calls and discussions with analysts in connection with the Company's reported historical financial results.  This financial measure does not represent diluted EPS 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 reported diluted EPS.  The reconciliation of GAAP and Non-GAAP financial measures for the three and twelve month periods ended March 31, 2011 and 2010, is included in the above table.  Management of the Company believes that non-recurring items, acquisition costs and 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.  Due to the nature of the Company's equity and stock-based compensation plans , 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. Therefore, the Company believes that using the measure of "non-GAAP diluted EPS" may help provide a better understanding of the Company's underlying financial performance.  



      SOURCE Rentrak Corporation

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