FOR RELEASE AT 4:00pm EDT
Contacts:
Paul Rosenbaum Investors
Rentrak Corporation PondelWilkinson Parham
Chairman & CEO Ron Parham
503-284-7581 503-924-1186
exitpoll@aol.com rparham@pondel.com
RENTRAK REPORTS FISCAL 2004 THIRD QUARTER EARNINGS OF
$0.08 PER SHARE vs. YEAR-AGO LOSS OF $(0.04) PER SHARE
PORTLAND, Ore. (February 12, 2004)--Rentrak Corp. (Nasdaq:RENT) today
announced significantly improved financial results for its third fiscal quarter
ended December 31, 2003.
Consolidated net income totaled $792,500, or $0.08 per share, for the
third quarter of fiscal 2004, compared with consolidated net loss of $374,600,
or $(0.04) per share, for the comparable quarter of fiscal 2003. Income from
continuing operations for the third fiscal quarter totaled $921,200, or $0.09
per share, compared with a loss from continuing operations of $299,200, or
$(0.03) per share, in the third quarter of fiscal 2003.
Consolidated revenues in the quarter totaled $19.4 million and were
generated entirely from the company's continuing entertainment operations, which
include video and game revenue-sharing and incremental revenues from the
company's new Box Office Essentials(TM), Supply-Chain Essentials(TM) and
Business Intelligence Essentials(TM) services. Consolidated revenues of $21.3
million in the year-ago quarter consisted of $15.5 million from entertainment
operations and $5.8 million, excluding intercompany activities, from the
company's former third-party fulfillment subsidiary, 3PF, Inc.
Rentrak Chairman and Chief Executive Officer Paul Rosenbaum commented,
"We're very pleased with our third quarter financial performance. Our
entertainment business recorded its first revenue growth in three quarters,
thanks to our new combined VHS/DVD revenue-sharing programs. These agreements,
and the increasing possibility that additional studios will begin to offer DVD
revenue-sharing in the future, should result in positive year-over-year revenue
comparisons through fiscal 2005."
"The cash flow generated by our revenue-sharing services continues to
fund the development of our expanding portfolio of business intelligence
services. Among other developments in the third quarter, we saw Box Office
Essentials(TM) add four studio customers - MGM Studios, New Line Cinemas,
Paramount Pictures and Universal Pictures. In addition, Sony Pictures recently
became our newest Box Office Essentials customer, bringing the total number of
1
studio customers to 21. In just one year we have completed a near-clean sweep of
the major domestic studio market."
The 25 percent increase in entertainment revenues, to $19.4 million
from $15.5 million, was driven primarily by the company's combined VHS/DVD
revenue-sharing programs with Warner Home Video, MGM Home Entertainment and
Twentieth Century Fox Home Entertainment. The Warner Home Video program was
announced in August 2003 and fully implemented during the third fiscal quarter.
Other entertainment revenues grew to $2.1 million during the third
fiscal quarter, compared with $644,000 in the comparable period, reflecting
increased revenues from the company's new business intelligence services and a
doubling of revenue from the company's data collection, auditing and reporting
services in support of studio-direct revenue-sharing agreements with major video
retailers.
The company's continuing entertainment operations generated income of
$582,000, or $0.06 per share, compared with a net loss of $118,100, or $(0.01)
per share in the third quarter of fiscal 2003. In addition, continued wind-down
activities at the company's former fulfillment subsidiary resulted in income of
$339,200, or $0.03 per share, during the current quarter, including a recovery
of $403,000, net of tax, related to settlement of a lease obligation. In last
year's third fiscal quarter, the company's fulfillment subsidiary incurred a
loss of $181,100, or $(0.02) per share. The company's entertainment discontinued
operations recorded a loss of $128,600, net of tax, or $(0.01) per share, in the
current quarter, representing a reserve against substantially all of the balance
of the note receivable relating to the sale of a portion of the company's former
Blow-Out Video Store operation, as to which the purchaser is in default.
The company's balance sheet remained solid at December 31, 2003, with
zero debt and $6.9 million in cash. The $2.9 million reduction in cash from
September 30, 2003 is primarily related to terms of various combined VHS/DVD
revenue-sharing agreements and reflects differences in the timing of Rentrak's
collection of revenue-sharing funds from video retailers and the company's
remittance of the portion of those funds owed to program suppliers. However,
despite this effect upon working capital, management remains confident that the
company has sufficient funds and cash flow to support the growth it plans in
existing entertainment operations and continued investment in the development of
new business intelligence services.
Mr. Rosenbaum concluded, "These quarterly results reflect our
continued investment in new services and the growing recognition of Rentrak's
leadership role in developing state-of-the art systems for the aggregation of
consumption data. Our expertise in collecting and analyzing massive amounts of
data and turning it into timely, actionable information is allowing us to pursue
other
2
promising markets assisting retailers and manufacturers. We believe we have
substantial room for growth in the years ahead."
Business Outlook
- ----------------
The company continues to experience great change, pursuing rapid
expansion of recently launched services and investing in the development and
launch of several new services. In addition, a number of dynamics currently at
play in the movie rental industry could have a direct impact, favorable or
unfavorable, on the company's core revenue-sharing business. The timing and
magnitude of the impacts from these dynamics, together with the timing of the
launch and pace of expansion in the company's new business initiatives, are
difficult to predict, but management believes there is significant promise in
the new markets it has preliminarily sized.
Based on current customer agreements and titles scheduled for release
under revenue-sharing terms, the company expects fiscal fourth quarter
revenue-sharing revenues to grow by between 15 and 20 percent compared with the
fourth quarter of fiscal 2003, and to produce the necessary cash flow to enable
the company to continue investing in new business intelligence services.
Management currently expects fourth quarter earnings of between approximately
$0.6 and $0.8 million, or $0.06 and $0.08 per share.
Conference Call
- ---------------
Rentrak has scheduled a conference call for 2 p.m. (PST), February 12,
2004 to discuss the company's financial performance. Shareowners, members of the
media and other interested parties may participate in the call by dialing
1-800-901-5218, or 1-617-786-4511 for international callers and entering
passcode 70096382. This call is being webcast by CCBN and can be accessed at
Rentrak's web site at www.rentrak.com where it will be archived through February
11, 2005. The webcast is also being distributed over CCBN's Investor
Distribution Network to both institutional and individual investors. Individual
investors can listen to the call through CCBN's individual investor center at
www.fulldisclosure.com or by visiting any of the investor sites in CCBN's
Individual Investor Network. Institutional investors can access the call via
CCBN's password-protected event management site, StreetEvents
(www.streetevents.com). A telephone replay of the call will be available through
February 19, 2004 by dialing 888-286-8010 from the U.S. and Canada, or
617-801-6888 from international locations and entering passcode 52451785.
3
About Rentrak Corporation
- -------------------------
Rentrak Corporation, based in Portland, Oregon, is the developer of
the Essentials(TM) suite of web-based information management and business
intelligence products used by clients in the media, entertainment, retail and
manufacturing industries. Vertical market editions of Essentials(TM)
applications are customizable to the needs of each licensee, allowing marketers
to collect, manage, analyze and make critical business decisions based on
detailed, real-time point-of-sale and supply chain data. The Essentials(TM)
suite of services offers competitive advantages to executives in selected
industries by providing timely and actionable insight into their own company's
performance in tandem with valuable perspective against aggregated industry-wide
data. For further information, please visit Rentrak's corporate Web site at
http://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 revenues and
results of operations for the company's PPT(R) and business intelligence
services 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 and consumer demand for
movies in various media formats subject to company guarantees, the company's
ability to attract new revenue-sharing customers, 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, 2003 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.
Business outlook statements are based on current expectations. These
statements are forward-looking, subject to risks and uncertainties, and actual
results may differ materially. Readers are cautioned not to place undue reliance
on these forward-looking statements, which speak only as of the date of this
press release. The inclusion of any statement in this release does not
constitute a suggestion by the company or any other person that the events or
circumstances described in such statements are material. The company does not
undertake to publicly update or revise these forward-looking statements even if
future experience or events make it clear that any projected results expressed
or implied in this release will not be realized.
# # #
(Financial Tables Follow)
4
RENTRAK CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
ASSETS
(UNAUDITED)
December 31, March 31,
2003 2003(1)
-------------------------------------------------
CURRENT ASSETS:
Cash and cash equivalents $ 6,923,650 $ 10,063,541
Accounts receivable, net of allowance for doubtful
accounts of $706,966 and $748,139 11,476,629 9,910,532
Advances to program suppliers 1,685,687 418,101
Income tax receivable 142,803 81,085
Deferred tax asset 3,375,367 2,796,908
Other current assets 1,504,563 2,226,287
-------------------------------------------------
Total current assets
25,108,699 25,496,454
PROPERTY AND EQUIPMENT, net 2,324,778 2,404,763
DEFERRED TAX ASSET 919,392 894,083
OTHER ASSETS 1,022,813 1,931,133
-------------------------------------------------
TOTAL ASSETS $ 29,375,682 $ 30,726,433
=================================================
(1) Derived from Rentrak's audited consolidated financial statement as of March 31, 2003
The accompanying notes are an integral part
of these consolidated balance sheets.
RENTRAK CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
LIABILITIES AND STOCKHOLDERS' EQUITY
(UNAUDITED)
December 31, March 31,
2003 2003(1)
----------------------------------------------
CURRENT LIABILITIES:
Accounts payable $ 11,266,909 $ 12,710,999
Accrued liabilities 772,276 1,143,785
Accrued compensation 523,501 610,022
Deferred revenue 316,956 156,692
----------------------------------------------
Total current liabilities 12,879,642 14,621,498
----------------------------------------------
LONG-TERM LIABILITIES:
Lease obligations, deferred gain and
customer deposits 349,735 668,039
----------------------------------------------
Total long-term liabilities 349,735 668,039
----------------------------------------------
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
Preferred stock, $.001 par value;
Authorized: 10,000,000 shares, none issued - -
Common stock, $.001 par value;
Authorized: 30,000,000 shares
Issued and outstanding: 9,700,020 shares
at December 31, 2003 and 9,471,612 at
March 31, 2003 9,700 9,472
Capital in excess of par value 40,838,794 39,655,212
Accumulated other comprehensive income 180,879 180,879
Accumulated deficit (24,883,068) (24,408,667)
----------------------------------------------
16,146,305 15,436,896
----------------------------------------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 29,375,682 $ 30,726,433
==============================================
(1) Derived from Rentrak's audited consolidated financial statement as of March 31, 2003
The accompanying notes are an integral part of
these consolidated balance sheets.
RENTRAK CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
Three Months Ended December 31,
2003 2002
-------------------------------------------------
REVENUES $ 19,402,730 $ 21,279,830
-------------------------------------------------
OPERATING COSTS AND EXPENSES:
Cost of sales 13,995,528 18,030,371
Selling, general, and administrative 3,960,758 3,743,390
-------------------------------------------------
17,956,286 21,773,761
-------------------------------------------------
INCOME (LOSS) FROM OPERATIONS 1,446,444 (493,931)
-------------------------------------------------
OTHER INCOME (EXPENSE):
Interest income 41,025 11,354
Interest expense (2,415) -
-------------------------------------------------
38,610 11,354
-------------------------------------------------
INCOME (LOSS) FROM CONTINUING
OPERATIONS BEFORE INCOME TAX
PROVISION (BENEFIT) 1,485,054 (482,577)
INCOME TAX PROVISION (BENEFIT) 563,880 (183,382)
-------------------------------------------------
INCOME (LOSS) FROM CONTINUING
OPERATIONS 921,174 (299,195)
LOSS FROM DISCONTINUED
OPERATIONS, NET OF TAX BENEFIT
OF $78,850 AND $46,193 (128,649) (75,369)
-------------------------------------------------
NET INCOME (LOSS) $ 792,525 $ (374,564)
=================================================
NET INCOME (LOSS) PER SHARE:
Basic:
Continuing operations $ 0.09 $ (0.03)
Discontinued operations (0.01) (0.01)
-------------------------------------------------
Total $ 0.08 $ (0.04)
=================================================
Diluted:
Continuing operations $ 0.09 $ (0.03)
Discontinued operations (0.01) (0.01)
-------------------------------------------------
Total $ 0.08 $ (0.04)
=================================================
The accompanying notes are an integral part
of these consolidated statements.
RENTRAK CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
Nine Months Ended December 31,
2003 2002
------------------------------------------------
REVENUES $ 52,362,037 $ 64,481,753
------------------------------------------------
OPERATING COSTS AND EXPENSES:
Cost of sales 40,358,628 53,330,943
Selling, general, and administrative 12,714,726 11,299,645
Net gain from litigation settlement - (361,847)
------------------------------------------------
53,073,354 64,268,741
------------------------------------------------
INCOME (LOSS) FROM OPERATIONS (711,317) 213,012
------------------------------------------------
OTHER INCOME (EXPENSE):
Interest income 163,892 82,854
Interest expense (10,240) -
------------------------------------------------
153,652 82,854
------------------------------------------------
INCOME (LOSS) FROM CONTINUING
OPERATIONS BEFORE INCOME TAX
PROVISION (BENEFIT) (557,665) 295,866
INCOME TAX PROVISION (BENEFIT) (211,913) 112,429
------------------------------------------------
INCOME (LOSS) FROM CONTINUING
OPERATIONS (345,752) 183,437
LOSS FROM DISCONTINUED
OPERATIONS, NET OF TAX BENEFIT
OF $78,850 AND $304,367 (128,649) (496,599)
------------------------------------------------
NET LOSS $ (474,401) $ (313,162)
================================================
NET INCOME (LOSS) PER SHARE:
Basic:
Continuing operations $ (0.04) $ 0.02
Discontinued operations (0.01) (0.05)
------------------------------------------------
Total $ (0.05) $ (0.03)
================================================
Diluted:
Continuing operations $ (0.04) $ 0.02
Discontinued operations (0.01) (0.05)
------------------------------------------------
Total $ (0.05) $ (0.03)
================================================
The accompanying notes are an integral part of
these consolidated statements.
RENTRAK CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
Three Months Ended December 31, 2003
ENTERTAINMENT FULFILLMENT TOTAL
------------------------ --------------------- -----------------------
REVENUES $ 19,402,730 $ - $ 19,402,730
------------------------ --------------------- -----------------------
OPERATING COSTS AND EXPENSES:
Cost of sales 14,523,959 (528,431) 13,995,528
Selling, general, and administrative 3,963,183 (2,425) 3,960,758
------------------------ --------------------- -----------------------
18,487,142 (530,856) 17,956,286
------------------------ --------------------- -----------------------
INCOME FROM OPERATIONS 915,588 530,856 1,446,444
------------------------ --------------------- -----------------------
OTHER INCOME (EXPENSE):
Interest income 24,762 16,263 41,025
Interest expense (1,647) (768) (2,415)
------------------------ --------------------- -----------------------
23,115 15,495 38,610
------------------------ --------------------- -----------------------
INCOME FROM CONTINUING
OPERATIONS BEFORE INCOME TAX
PROVISION 938,703 546,351 1,485,054
INCOME TAX PROVISION 356,707 207,173 563,880
------------------------ --------------------- -----------------------
INCOME FROM CONTINUING
OPERATIONS 581,996 339,178 921,174
LOSS FROM DISCONTINUED
OPERATIONS, NET OF TAX BENEFIT
OF $78,850 (128,649) - (128,649)
------------------------ --------------------- -----------------------
NET INCOME $ 453,347 $ 339,178 $ 792,525
======================== ===================== =======================
NET INCOME PER SHARE:
Basic:
Continuing operations $ 0.06 $ 0.03 $ 0.09
Discontinued operations (0.01) - 0.01)
------------------------ --------------------- -----------------------
Total $ 0.05 $ 0.03 $ 0.08
======================== ===================== =======================
Diluted:
Continuing operations $ 0.06 $ 0.03 $ 0.09
Discontinued operations (0.01) - 0.01)
------------------------ --------------------- ----------------------
Total $ 0.05 $ 0.03 $ 0.08
======================== ===================== =======================
RENTRAK CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
Three Months Ended December 31, 2002
ENTERTAINMENT FULFILLMENT TOTAL
------------------------ --------------------- -----------------------
REVENUES $ 15,499,116 $ 6,314,907 (1) $ 21,279,830
------------------------ --------------------- -----------------------
OPERATING COSTS AND EXPENSES:
Cost of sales 12,438,302(1) 6,126,262 18,030,371
Selling, general, and administrative 3,262,644 480,746 3,743,390
------------------------ --------------------- -----------------------
15,700,946 6,607,008 21,773,761
------------------------ --------------------- -----------------------
LOSS FROM OPERATIONS (201,830) (292,101) (493,931)
------------------------ --------------------- -----------------------
OTHER INCOME (EXPENSE):
Interest income 11,354 - 11,354
------------------------ --------------------- -----------------------
11,354 - 11,354
------------------------ --------------------- -----------------------
LOSS FROM CONTINUING
OPERATIONS BEFORE INCOME TAX
BENEFIT (190,476) (292,101) (482,577)
INCOME TAX BENEFIT (72,383) (110,999) (183,382)
------------------------ --------------------- -----------------------
LOSS FROM CONTINUING
OPERATIONS (118,093) (181,102) (299,195)
LOSS FROM DISCONTINUED
OPERATIONS, NET OF TAX BENEFIT
OF $46,193 (75,369) - (75,369)
------------------------ --------------------- -----------------------
NET LOSS $ (193,462) $ (181,102) $ (374,564)
======================== ===================== =======================
NET LOSS PER SHARE:
Basic:
Continuing operations $ (0.01) $ (0.02) $ (0.03)
Discontinued operations (0.01) - (0.01)
------------------------ --------------------- -----------------------
Total $ (0.02) $ (0.02) $ (0.04)
======================== ===================== =======================
Diluted:
Continuing operations $ (0.01) $ (0.02) $ (0.03)
Discontinued operations (0.01) - (0.01)
------------------------ --------------------- -----------------------
Total $ (0.02) $ (0.02) $ (0.04)
======================== ===================== =======================
(1) - Includes Intercompany transactions of $534,193, which are eliminated in consolidated total amounts.
RENTRAK CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
Nine Months Ended December 31, 2002
ENTERTAINMENT FULFILLMENT TOTAL
------------------------- -------------------- ----------------------
REVENUES $ 47,737,738 $ 5,154,443(1) $ 52,362,037
------------------------- -------------------- ----------------------
OPERATING COSTS AND EXPENSES:
Cost of sales 35,164,170(1) 5,724,602 40,358,628
Selling, general, and administrative 11,976,556 738,170 12,714,726
------------------------- -------------------- --------------------------
47,140,726 6,462,772 53,073,354
------------------------- -------------------- ----------------------
INCOME (LOSS) FROM OPERATIONS 597,012 (1,308,329) (711,317)
------------------------- -------------------- ----------------------
OTHER INCOME (EXPENSE):
Interest income 76,465 87,427 163,892
Interest expense (5,076) (5,164) (10,240)
------------------------- -------------------- ----------------------
71,389 82,263 153,652
------------------------- -------------------- ----------------------
INCOME (LOSS) FROM CONTINUING
OPERATIONS BEFORE INCOME TAX
PROVISION (BENEFIT) 668,401 (1,226,066) (557,665)
INCOME TAX PROVISION (BENEFIT) 253,992 (465,905) (211,913)
------------------------- -------------------- ----------------------
INCOME (LOSS) FROM CONTINUING
OPERATIONS 414,409 (760,161) (345,752)
LOSS FROM DISCONTINUED
OPERATIONS, NET OF TAX BENEFIT
OF $78,850 (128,649) - (128,649)
------------------------- -------------------- ----------------------
NET INCOME (LOSS) $ 285,760 $ (760,161) $ (474,401)
========================= ==================== ======================
NET INCOME (LOSS) PER SHARE:
Basic:
Continuing operations $ 0.04 $ (0.08) $ (0.04)
Discontinued operations (0.01) - 0.01)
------------------------- -------------------- ----------------------
Total $ 0.03 $ (0.08) $ (0.05)
========================= ==================== ======================
Diluted:
Continuing operations $ 0.04 $ (0.08) $ (0.04)
Discontinued operations 0.01) - 0.01)
------------------------- -------------------- ----------------------
Total $ 0.03 $ (0.08) $ (0.05)
========================= ==================== ======================
(1)- Includes Intercompany transactions of $530,144, which are eliminated in consolidated total amounts.
RENTRAK CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
Nine Months Ended December 31, 2002
ENTERTAINMENT FULFILLMENT TOTAL
-------------------------- -------------------- -------------------------
REVENUES $ 53,315,821 $ 12,786,135 (1) $ 64,481,753
-------------------------- -------------------- -------------------------
OPERATING COSTS AND EXPENSES:
Cost of sales 41,764,674(1) 13,186,472 53,330,943
Selling, general, and administrative 9,500,216 1,799,429 11,299,645
Net gain from litigation settlement (361,847) - (361,847)
-------------------------- -------------------- -------------------------
50,903,043 14,985,901 64,268,741
-------------------------- -------------------- -------------------------
INCOME (LOSS) FROM OPERATIONS 2,412,778 (2,199,766) 213,012
-------------------------- -------------------- -------------------------
OTHER INCOME (EXPENSE):
Interest income 82,854 - 82,854
Interest expense - - -
-------------------------- -------------------- -------------------------
82,854 - 82,854
-------------------------- -------------------- -------------------------
INCOME (LOSS) FROM CONTINUING
OPERATIONS BEFORE INCOME TAX
PROVISION (BENEFIT) 2,495,632 (2,199,766) 295,866
INCOME TAX PROVISION (BENEFIT) 948,341 (835,912) 112,429
-------------------------- -------------------- -------------------------
INCOME (LOSS) FROM CONTINUING
OPERATIONS 1,547,291 (1,363,854) 183,437
LOSS FROM DISCONTINUED
OPERATIONS, NET OF TAX BENEFIT
OF $304,367 (496,599) - (496,599)
-------------------------- -------------------- -------------------------
NET INCOME (LOSS) $ 1,050,692 $ (1,363,854) $ (313,162)
========================== ==================== =========================
NET INCOME (LOSS) PER SHARE:
Basic:
Continuing operations $ 0.16 $ (0.14) $ 0.02
Discontinued operations (0.05) - (0.05)
-------------------------- -------------------- -------------------------
Total $ 0.11 $ (0.14) $ (0.03)
========================== ==================== =========================
Diluted:
Continuing operations $ 0.16 $ (0.14) $ 0.02
Discontinued operations (0.05) - (0.05
-------------------------- -------------------- -------------------------
Total $ 0.11 $ (0.14) $ (0.03)
========================== ==================== =========================
(1) - Includes Intercompany transactions of $1,620,203, which are eliminated in consolidated total amounts.