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RENTRAK REPORTS FISCAL 2010 SECOND QUARTER FINANCIAL RESULTS

 

Company’s Advanced Media Information (AMI) Division

Delivers Continued Revenue and Profit Growth

 

Strategic Moves Position Company for Future Success

 

PORTLAND, Ore. (November 9, 2009) -- Rentrak Corporation (NASDAQ: RENT) today announced financial results for its fiscal second quarter ended September 30, 2009.

 

Consolidated revenues were $21.3 million for the fiscal 2010 second quarter, compared with $24.3 million for the prior-year period.

 

“Since joining Rentrak last quarter, the company has made numerous strategic changes designed to make us an even stronger and more agile company,” said Bill Livek, Rentrak’s Chief Executive Officer. “We significantly enhanced our executive management team and board of directors, adding valuable skill sets and substantial knowledge to the company. We expanded our sales organization to drive greater industry awareness for our products and services. We streamlined our cost structure by finding more efficient ways to propel growth. As a result, I am convinced that Rentrak is better positioned, not only to help our customers understand consumer viewing patterns across all digital media platforms, but to develop new and innovative products that will become part of the ongoing fabric of the entertainment industry.

 

 

“Our multiple achievements during the quarter are testament to our work in support of our goal to further position Rentrak as a leading digital currency. Our organization is already enmeshed in the DNA of connecting advertisers to consumers, and Rentrak is the only company that possesses the decades of experience and technological prowess necessary to realize the significant opportunity ahead,” Livek added. “Our progress has been admirable, and our successes, many. I am very proud of all we have accomplished to date, but am even more excited about the future.”

 

The company said it recently concluded several important agreements including:

 

 

Selling and administrative expenses for the fiscal 2010 second quarter were $7.8 million, or 37 percent of revenues, compared with $6.7 million, or 27 percent of revenues, in last year’s second fiscal quarter. The increase primarily reflects Rentrak’s ongoing investment in its multi screen business development and implementation activities, investments in new senior executives and sales talent, and the addition of a sales office in New York City.

 

Operating income for the second quarter of fiscal 2010 was $502,000, compared with $1.3 million in the second quarter of the last fiscal year. Operating income in the fiscal 2010 period included a total of $1.2 million in one-time and non-cash stock compensation expenses, consisting of $400,000 in severance expense, $100,000 in legal expense and $700,000 in non-cash stock compensation expense, $300,000 of which was due largely to an award granted to Bill Livek upon his hiring. In the fiscal 2009 second quarter, one-time expenses totaled $100,000 and non-cash stock compensation expense totaled $100,000.

 

Net income totaled $676,000, or $0.06 per diluted share, for the second quarter of fiscal 2010, compared with $842,000, or $0.08 per diluted share, for the second quarter of fiscal 2009. Excluding one-time costs and stock compensation expense, net income in the fiscal 2010 period would have been $1.5 million, or

 

 

$0.13 per diluted share, in the fiscal 2010 period compared with $1.0 million, or $0.09 per diluted share, in the fiscal 2009 period.

 

The company generated adjusted EBITDA for the fiscal 2010 second quarter of $1.7 million, compared with $1.8 million in the same quarter of fiscal 2009. 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 included with this press release.

 

Rentrak’s cash, cash equivalents and marketable securities balance grew by $3.6 million to $38.1 million at September 30, 2009, compared with $34.5 million at March 31, 2009. The company's effective tax rate for the second quarter of fiscal 2010 was 5% compared with 43% for the second quarter of fiscal 2009. The decrease was due to a tax benefit of $200,000 which relates to a reduction in the company’s tax contingencies due to a lapse of the applicable statute of limitations on tax positions taken in prior fiscal years.

 

Conference Call

Rentrak will hold a conference call at 5:00 p.m. (ET) / 2:00 p.m. (PT) today to discuss the company’s second quarter financial performance. Shareowners, members of the media and other interested parties may participate in the call by dialing 800-798-2801 from the U.S. or Canada, or 617-614-6205 from international locations, passcode 97363554. This call is being webcast and can be accessed at Rentrak’s web site at www.rentrak.com where it will be archived through November 9, 2010. An audio replay of the conference call is available through midnight November 16, 2009 by dialing 888-286-8010 from the U.S. or Canada, or 617-801-6888 from international locations, passcode 90773911.

 

About Rentrak Corporation

Rentrak Corporation is an industry-advancing media measurement and research company, serving the most recognizable names in the entertainment industry. Reaching across numerous platforms including box office, home entertainment, on-demand and linear television, broadband and mobile, Rentrak provides unique and actionable insight for our clients and partners. From the introduction of our revolutionary Pay-Per-Transaction^® distribution and revenue-sharing system, which equipped Rentrak with the intelligence and ability to deal with large, complex data streams, to the company’s exclusive Essentials™ suite of services, Rentrak has redefined digital audience measurement. Rentrak is headquartered in Portland, Oregon, with additional offices in Los Angeles, New York City and Miami/ Ft. Lauderdale. For more information on any of Rentrak’s services, please visit www.rentrak.com.

 

Safe Harbor Statement

When used in this discussion, the words “anticipates,” “expects,'' “intends'' and similar expressions are intended to identify forward-looking statements. Such statements relate to, among other things, the fact that Rentrak is better positioned to help its customers understand consumer viewing patterns across all digital media platforms and to develop new and innovative products that will become part of the ongoing fabric of the entertainment industry; and that the company will achieve its goal of becoming a leading digital currency; 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, 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, 2009 annual report on Form 10-K and subsequent quarterly reports 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.

 

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(Financial Tables Follow)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Rentrak Corporation

Reconciliation of GAAP and Non-GAAP Financial Measures

Adjusted EBITDA

 

(Unaudited)

(in thousands)

 

 

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 six month periods ended September 30, 2009 and 2008 is 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.