Rentrak Reports Fiscal 2013 Third Quarter Financial Results

         Rentrak Reports Fiscal 2013 Third Quarter Financial Results

-- 12% Increase in Consolidated Revenue and Third Consecutive Quarter of
Year-Over-Year Revenue Growth --

-- 107% Increase in Year-to-Date Revenue in TV Business --

PR Newswire

PORTLAND, Ore., Feb. 7, 2013

PORTLAND, Ore., Feb.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
third fiscal quarter ended December31, 2012, including the third consecutive
quarter of year-over-year revenue growth.

Consolidated revenue increased 12 percent to $24.9 million for the third
quarter of fiscal 2013, compared with $22.2 million for the same period last
year, reflecting 32 percent revenue growth in the company's Advanced Media and
Information (AMI) business, partially offset by a better than expected 5
percent decline in revenue in the company's Home Entertainment business.

The company's AMI division revenue improved to $13.7 million for the fiscal
2013 third quarter, up from $10.4 million for the same period last year, and
represented 55 percent of Rentrak's consolidated revenue, up from 47 percent
last year. Revenue in the company's Home Entertainment business was $11.2
million, compared with $11.8 million for last year's third fiscal quarter.

"The many accomplishments of our management team helped drive a great quarter
for Rentrak as we performed very well in all of our divisions and continued
the trend of year-over-year consolidated revenue growth for the third
consecutive quarter," said Bill Livek, Rentrak's Vice Chairman and CEO. "The
team's success in growing our AMI business included 99 percent growth in our
TV business over last year and 107 percent growth year-to-date. Much better
than anticipated results in Home Entertainment resulted from our team's
continued success in extending the life cycle of this business through a
variety of initiatives."

(revenue in millions)    3QFY13 3QFY12 Percent Change
Box Office Essentials™   $6.1    $5.5    11%
OnDemand Everywhere      $3.1    $2.6    17%
TV Essentials™           $4.6    $2.3    99%
Total AMI                $13.7   $10.4   32%
Total Home Entertainment $11.2   $11.8   (5)%
Consolidated Revenue     $24.9   $22.2   12%
Numbers may not add due to rounding.

Gross margin was 45 percent of consolidated revenue for the third quarter of
fiscal 2013, compared with 48 percent for the same period last year. Gross
margin for the company's AMI business was 60 percent for the third quarter of
fiscal 2013, compared with 66 percent a year ago, due to a shift in the mix of
revenue, more of which was generated by the company's TV business. Gross
margin for Rentrak's Home Entertainment business was 26 percent for the third
quarter of fiscal 2013, compared with 32 percent last year.

Operating expenses for the fiscal 2013 third quarter totaled $12.9 million,
compared with $11.6 million for the fiscal 2012 third quarter. The increase
mainly reflected a 22 percent increase in costs associated with the expansion
of the company's AMI business, with approximately three-quarters of the
increase in AMI expenses related to the company's TV business, partially
offset by a 21 percent reduction in Home Entertainment-related costs.

Operating loss for the third quarter of fiscal 2013 was $1.8 million, which
included $1.5 million in stock-based compensation costs. For last year's
third fiscal quarter, operating loss was $974,000, which included $1.1 million
in stock-based compensation costs and $186,000 in acquisition-related costs,
offset by a $110,000 credit related to the company's stock-based compensation
agreement with DISH Network L.L.C. Excluding these amounts for both periods,
operating loss would have been $241,000 for the fiscal 2013 third quarter,
compared with operating income of $234,000 for the fiscal 2012 third quarter.

Net loss totaled $1.8 million, or $0.15 per share, for the third quarter of
fiscal 2013, compared with a net loss of $1.9 million, or $0.18 per share, for
the same period last year. Excluding the costs already mentioned for both
periods and a tax valuation allowance of $1.2 million recorded in the third
quarter of fiscal 2012, net loss for the fiscal 2013 third quarter would have
been $286,000, or $0.02 per share, compared with net income of $433,000, or
$0.04 per share, for the third quarter of fiscal 2012. 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 $1.0 million for the fiscal 2013
third quarter versus $1.3 million for the fiscal 2012 third 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.

The company generated $1.1 million in cash from operating activities for the
first nine months of fiscal 2013, compared with $5.7 million for the
comparable fiscal 2012 period. Excluding the impact of an amendment to the
company's agreement with DISH in the second quarter of fiscal 2013, Rentrak
generated $6.9 million in cash from operating activities for the first nine
months of fiscal 2013.

Rentrak's cash, cash equivalents and marketable securities balance was $26.2
million at December31, 2012, compared with $27.8 million at March31, 2012.
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:

  oServing nearly 210 local TV station clients across approximately 50 TV
    station groups. This represents year-over-year growth of approximately 50
    percent in local TV stations clients and 67 percent in station group
    clients.
  oBeing selected by the Mobile Content Venture, a joint venture of 12 major
    broadcast groups, to provide the TV industry's first-ever mobile broadcast
    TV measurement for local television markets.
  oEntering the measurement of the Indian movie industry through
    collaboration with one of Asia's largest independent marketing research
    firms.

Long-Term Outlook

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

  oDoubling TV revenue annually over the next three years, with gross margins
    in the 50 percent range over the long-term, with variability due to fixed
    cost agreements.
  oGenerating 12 percent annual Box Office revenue growth with some
    year-to-year variability, and gross margins in the 75 percent range.

The company also noted that it expects OnDemand Everywhere revenue growth to
be approximately 15 percent for the fourth quarter of fiscal 2013 and revenue
in its Home Entertainment business to decline for the fourth quarter of fiscal
2013, but at a slower rate than in the fiscal 2013 third quarter.

Conference Call

Rentrak will hold a conference call at 5:00 p.m. ET/2:00 p.m. PT today to
discuss its 2013 third quarter financial results. Shareowners, members of the
media and other interested parties may participate in the call by dialing
800-762-8779 from the U.S. or Canada, or 480-629-9645 from international
locations, conference ID 4589906. This call is being webcast and can be
accessed at Rentrak's Web site at www.rentrak.com, where it will be archived
through February 6, 2014. An audio replay of the conference call will be
available through midnight February 14, 2013 by dialing 800-406-7325 from the
U.S. or Canada, or 303-590-3030 from international locations, passcode
4589906.

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 decline in Rentrak's Home Entertainment business for the fourth
quarter of fiscal 2013, Rentrak's ability to continue generating substantial
growth in AMI revenue and estimated gross margins for the AMI business. 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.

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

RENTF

CONTACT:
Investors
PondelWilkinson Inc.
Laurie Berman
310-279-5962
lberman@pondel.com

(Financial Tables Follow)

Rentrak Corporation and Subsidiaries

Condensed Consolidated Statements of Operations

(In thousands, except per share amounts)

(Unaudited)


                              For the Three Months     For the Nine Months
                              Ended                    Ended
                              December 31,             December 31,
                              2012        2011         2012          2011
Revenue                       $ 24,948    $ 22,211     $ 70,662      $ 66,471
Cost of sales                 13,847      11,590       37,343        35,229
Gross margin                  11,101      10,621       33,319        31,242
Operating expenses:
Selling and administrative    12,870      11,595       54,150        32,354
Loss from operations          (1,769)     (974)        (20,831)      (1,112)
Other income:
Interest income, net          41          133          390           348
Loss before income taxes      (1,728)     (841)        (20,441)      (764)
Provision for income taxes    117         1,106        179           1,046
Net loss                      (1,845)     (1,947)      (20,620)      (1,810)
Net loss attributable to      (31)        —            (31)          —
noncontrolling interest
Net loss attributable to      $ (1,814)   $ (1,947)   $ (20,589)    $ (1,810)
Rentrak Corporation
Basic net loss per share      $  (0.15)  $  (0.18)  $   (1.77)  $ 
                                                                     (0.16)
Diluted net loss per share    $  (0.15)  $  (0.18)  $   (1.77)  $ 
                                                                     (0.16)
Shares used in per share
calculations:
Basic                         11,996      11,102       11,634        11,205
Diluted                       11,996      11,102       11,634        11,205



Rentrak Corporation and Subsidiaries
Condensed Consolidated Balance Sheets
(In thousands, except per share amounts)
(Unaudited)
                                                       December 31,  March 31,
                                                       2012          2012
Assets
Current Assets:
Cash and cash equivalents                              $ 4,685      $ 5,526
Marketable securities                                  21,483        22,227
Accounts and notes receivable, net of allowances for   12,354        14,260
doubtful accounts of $712 and $649
Deferred tax assets, net                               53            48
Other current assets                                   1,118         985
Total Current Assets                                   39,693        43,046
Property and equipment, net of accumulated             12,493        10,846
depreciation of $18,868 and $17,032
Goodwill                                               5,085         5,101
Other intangible assets, net of accumulated            12,647        13,165
amortization of $2,213 and $1,579
Other assets                                           777           723
Total Assets                                           $ 70,695      $ 72,881
Liabilities and Stockholders' Equity
Current Liabilities:
Accounts payable                                       $ 6,476      $ 5,291
Accrued liabilities                                    4,991         3,093
Accrued compensation                                   4,940         8,781
Deferred revenue and other credits                     1,860         2,037
Total Current Liabilities                              18,267        19,202
Deferred rent, long-term portion                       1,670         1,819
Taxes payable, long-term                               678           731
Deferred tax liability, long-term                      71            79
Note payable and accrued interest                      544           525
Total Liabilities                                      21,230        22,356
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: 11,844 and  11            11
11,078
Capital in excess of par value                         73,751        55,125
Accumulated other comprehensive income                 255           341
Accumulated deficit                                    (25,541)      (4,952)
Total Stockholders' Equity attributable to Rentrak     48,476        50,525
Corporation
Noncontrolling interest                                989           —
Total Stockholders' Equity                             49,465        50,525
Total Liabilities and Stockholders' Equity             $ 70,695      $ 72,881

Rentrak Corporation and Subsidiaries

Condensed Consolidated Statements of Cash Flows

(In thousands)

(Unaudited)
                                        For the Nine Months Ended December 31,
                                        2012                  2011
Cash flows from operating activities:
Net loss                                $ (20,620)            $ (1,810)
Adjustments to reconcile net loss to
net cash flows provided by operating
activities:
Depreciation and amortization           3,607                 3,233
Stock-based compensation                17,781                813
Deferred income taxes                   (3)                   1,407
(Gain) loss on disposition of assets    (26)                  2
Realized gain on marketable securities  (196)                 (37)
Interest on note payable                19                    19
Adjustment to allowance for doubtful    63                    125
accounts
(Increase) decrease in:
Accounts and notes receivable           1,906                 3,433
Taxes receivable and prepaid taxes      —                     923
Other assets                            (291)                 304
Increase (decrease) in:
Accounts payable                        1,185                 (2,827)
Taxes payable                           (78)                  (596)
Accrued liabilities and compensation    (1,918)               (10)
Deferred revenue                        (178)                 299
Deferred rent                           (148)                 407
Net cash provided by operating          1,103                 5,685
activities
Cash flows from investing activities:
Purchase of marketable securities       (22,987)              (15,903)
Sale of marketable securities           23,793                15,371
Proceeds from the sale of assets        47                    —
Payments made to develop intangible     (113)                 —
assets
Purchase of property and equipment      (4,304)               (3,355)
Net cash used in investing activities   (3,564)               (3,887)
Cash flows from financing activities:
Proceeds from note payable              —                     500
Contributions from noncontrolling       1,020                 —
interest
Issuance of common stock                551                   60
Repurchase of common stock              —                     (4,341)
Net cash provided by (used in)          1,571                 (3,781)
financing activities
Effect of foreign exchange translation  49                    (618)
on cash
Decrease in cash and cash equivalents   (841)                 (2,601)
Cash and cash equivalents:
Beginning of period                     5,526                 3,821
End of period                           $  4,685             $  1,220
Supplemental non-cash information:
Capitalized stock-based compensation    $   348            $   253
Common stock used to pay for option     —                     306
exercises



Rentrak Corporation and Subsidiaries

Information by Segment

(In thousands)

(Unaudited)


                     For the Three Months Ended        For the Nine Months
                     December 31,                      Ended December 31,
                     2012                2011          2012         2011
AMI
Sales to external    $ 13,712           $ 10,393     $ 39,553    $ 29,775
customers
Gross margin         $  8,210          $  6,868    $ 24,291    $ 19,174
Income (loss) from   $  1,194          $  1,100    $ (12,555)   $  3,773
operations
HOME ENTERTAINMENT
Sales to external    $ 11,236           $ 11,818     $ 31,109    $ 36,696
customers
Gross margin         $  2,891          $  3,753    $  9,028   $ 12,068
Income from          $  1,523          $  2,019    $  5,016   $  6,929
operations
TOTAL OPERATING
SEGMENTS
Sales to external    $ 24,948           $ 22,211     $ 70,662    $ 66,471
customers
Gross margin         $ 11,101           $ 10,621     $ 33,319    $ 31,242
Income (loss) from   $  2,717          $  3,119    $  (7,539)  $ 10,702
operations
Note: Prior period amounts are reclassified to reflect the move of Digital
Download Essentials from Home Entertainment into the AMI division. The segment
operating income figures are before corporate overhead costs.



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    For the Nine Months
                                  Ended December 31,      Ended December 31,
                                  2012        2011        2012        2011
Net loss attributable to Rentrak  $ (1,814)  $ (1,947)  $ (20,589)  $
Corporation                                                           (1,810)
Adjustments:
Provision for income taxes        117         1,106       179         1,046
Interest income, net              (41)        (133)       (390)       (348)
Depreciation and amortization     1,258       1,097       3,607       3,233
Stock-based compensation^(1)      1,528       1,132       4,544       3,376
Adjusted EBITDA                   $  1,048   $  1,255   $ (12,649)  $ 5,497
DISH stock-based compensation     —           (110)       15,864      (2,563)
Acquisition/reorganization costs  —           186         405         633
Adjusted EBITDA before DISH
stock-based compensation,         $  1,048   $  1,331   $  3,620   $ 
acquisition and reorganization                                        3,567
costs
(1) Excludes DISH

                                     For the Three Months  For the Nine Months
                                     Ended December 31,    Ended December 31,
                                     2012       2011       2012       2011
Diluted EPS, as reported             $ (0.15)  $ (0.18)  $ (1.77)  $
                                                                      (0.16)
DISH stock-based compensation        —          (0.01)     1.36       (0.23)
Other items:
Acquisitions/Reorganizations         —          0.02       0.04       0.06
Valuation allowance on deferred tax  —          0.11       —          0.10
assets
Stock-based compensation             0.13       0.10       0.39       0.30
Total other items                    0.13       0.23       0.43       0.46
Diluted EPS, non-GAAP                $ (0.02)  $  0.04   $  0.02   $  0.07



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 and nine
month periods ended December31, 2012 and 2011 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. 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

Website: http://www.rentrak.com
 
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