Exhibit 99.1
FOR IMMEDIATE RELEASE
Contacts:
Paul Rosenbaum Investors
Rentrak Corporation PondelWilkinson Parham
Chairman & CEO Ron Parham
503-284-7581 503-924-1985
exitpoll@aol.com rparham@pondel.com
RENTRAK FISCAL 2004 FOURTH QUARTER EARNINGS
EXCEED $2 MILLION, OR $0.20 PER DILUTED SHARE
--Company Restates Fiscal Year 2003 and 2002 to Correct Errors--
PORTLAND, Ore. (July 14, 2004)-- Rentrak Corp. (Nasdaq:RENT) today
announced significantly improved financial results for its fourth fiscal quarter
and full fiscal year ended March 31, 2004 and the restatement of results for
fiscal years 2003 and 2002 to correct errors.
For the fourth quarter of fiscal 2004, consolidated net income totaled $2.1
million, or $0.20 per diluted share, compared with consolidated net loss of
$503,869, or $(0.05) per share, as restated, for the comparable quarter of
fiscal 2003.
Consolidated fourth quarter revenues totaled $24.2 million, generated
exclusively from the company's entertainment operations and incremental revenues
from the company's new Essentials(TM) services. In the comparable year-ago
period, consolidated revenues totaled $21.6 million, comprised of $17.5 million
from the company's entertainment operations and $4.6 million from the company's
former fulfillment subsidiary, 3PF.com, Inc.
Rentrak Chairman and Chief Executive Officer Paul Rosenbaum commented, "We
achieved significant milestones during fiscal 2004 and enter fiscal 2005 focused
on what we believe are significant opportunities for growth in business
intelligence."
"During fiscal 2004, our revenue-sharing business saw renewed growth while
we continued to bring new business intelligence services to market. Our most
successful introduction thus far, Box Office Essentials(TM), has achieved over
95 percent market share since its introduction 15 months ago. In 2005 we have
already begun expanding Box Office Essentials to Germany and Australia and plan
to continue expanding in Europe, which represents a market larger than the U.S.
At the other end of the distribution spectrum, we recently launched a one-year
video-on-demand measurement trial with Comcast. If successful, this trial has
the potential of establishing Rentrak's proprietary OnDemand Essentials(TM) as
the new media measurement standard for the digital era."
Rentrak Reports Fiscal 2004 Fourth Quarter and Full Year Results
Page 2 of 5
"Increasingly, participants from every corner of the media and
entertainment industry - movie studios, TV networks, programmers, videogame
publishers, content producers, cable and satellite operators, advertising and
marketing companies, and financial analysts - are seeking more timely and
accurate ways of measuring, analyzing, understanding, responding to and
predicting viewership and consumption."
"This powerful industry need is precisely what Rentrak's Entertainment
Essentials(TM) services are uniquely designed to address. Essentials services
provide our clients the power to quickly turn their business transaction data
into actionable information and insight to drive better decisions and improve
results. Entertainment Essentials services enable them to respond within minutes
of customer purchases and viewership, not weeks or months after the fact."
"Together, these and our other new services hold the potential to transform
Rentrak into the only company in the world able to track viewing dynamics of
entertainment media throughout its entire life-cycle, regardless of creator or
distribution format, thereby enabling studios, suppliers, and advertisers to
make better use of marketing and promotional dollars and to better serve the
viewing interests of consumers."
Mr. Rosenbaum concluded, "Rentrak is committed to leveraging its core
expertise in collecting and analyzing massive amounts of data and turning it
into timely, actionable information. We have never been in better position to
pursue our strategy of becoming a leading provider of business intelligence
services."
Fourth Quarter Fiscal 2004 vs. Fourth Quarter Fiscal 2003
The company's fiscal 2004 fourth quarter entertainment revenues increased
38.3 percent, to $24.2 million from $17.5 million in last year's fourth quarter,
driven primarily by increased activity under new and existing revenue-sharing
programs. In addition, a portion of the revenue growth resulted from the
company's new business intelligence services and increased revenue from the
company's data collection, auditing and reporting services in support of
studios' direct revenue-sharing agreements with major video retailers. Fiscal
2003 fourth quarter revenues also included $4.6 million related to the company's
former fulfillment subsidiary, the assets of which were sold effective July 1,
2003.
Selling, general and administrative expenses totaled $4.1 million in the
fourth quarter of fiscal 2004, versus $3.5 million in the comparable year-ago
period, as restated, primarily reflecting the company's continued investment in
developing new business intelligence services.
Rentrak Reports Fiscal 2004 Fourth Quarter and Full Year Results
Page 3 of 5
Fiscal 2004 Financial Analysis
Continuing entertainment operations generated revenues of $73.5 million in
fiscal 2004, an increase of 4.1 percent above continuing entertainment revenues
of $70.6 million in fiscal year 2003. The company's continuing entertainment
operations generated operating income of $3.1 million in fiscal 2004 compared
with operating income from continuing entertainment operations of $2.9 million
in fiscal 2003.
The company's former fulfillment subsidiary generated revenues of $5.2
million in fiscal 2004, including intercompany sales, and recorded an operating
loss of $1.4 million. In fiscal 2003, the subsidiary generated revenues of $17.4
million, including intercompany sales, and recorded an operating loss of $3.3
million.
Selling, general and administrative expenses totaled $16.4 million in
fiscal 2004, versus $14.4 million in fiscal 2003, primarily reflecting an
increase of approximately $1.4 million in the company's investment in developing
new business intelligence services in fiscal 2004.
Discontinued Operations
As of March 31, 2003, Rentrak discontinued operations at BlowOut Video, a
subsidiary that operated several discount video stores. These discontinued
operations incurred a loss of $128,649, or $(0.01) per diluted share, in fiscal
2004, compared with a loss of $582,627, or $(0.06) per diluted share, in fiscal
2003.
Restatement of Previously Reported Results
As previously disclosed on June 29, 2004, in conjunction with its annual
independent audit, misinterpretations and misapplications of certain contractual
terms were discovered involving two revenue-sharing agreements, resulting in
accounting errors. These errors, combined with other fiscal 2004 audit
adjustments, created an incremental net year-to-date loss of approximately $0.03
per share on the company's previously reported loss of $0.05 per share through
the nine-month period ended December 31, 2003. The combined net impact of these
adjustments to fiscal 2003 was to increase the previously reported loss by $0.03
per diluted share, with no change to the previously reported earnings of $0.85
per diluted share in fiscal 2002. Importantly, there was no effect on the
accuracy of amounts Rentrak has periodically remitted to the content providers
under the terms of the revenue-sharing agreements or on Rentrak's reported cash
balances. Correction of these errors will not result in additional payments to
any supplier.
Rentrak Reports Fiscal 2004 Fourth Quarter and Full Year Results
Page 4 of 5
The following table summarizes the effect of the restatement on the net
income (loss) reported during each of the fiscal years 2003 and 2002:
Fiscal Year Ended March 31,
--------------------------------------------------
2003 2002
---- ----
As Reported As Restated As Reported As Restated
Net Income (Loss) $(498,379) $(727,103) $8,994,031 $9,061,741
Net Income(Loss)
Per Diluted Share $(0.05) $(0.08) $0.85 $0.85
Conference Call
Rentrak has scheduled a conference call for 2 p.m. (PDT), July 14, 2004 to
discuss the company's financial performance. Shareholders, members of the media
and other interested parties may participate in the company's conference call by
dialing 1-888-482-0024, or 1-617-801-9702 for international callers, and
entering passcode 76616873. 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 July 14, 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
July 21, 2004 by dialing 888-286-8010 from the U.S. and Canada, or 617-801-6888
from international locations and entering passcode 44709528.
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.
Rentrak Reports Fiscal 2004 Fourth Quarter and Full Year Results
Page 5 of 5
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)
RENTRAK CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
March 31, March 31,
2004 2003
----------------------------------
ASSETS (restated)
CURRENT ASSETS:
Cash and cash equivalents $ 8,735,683 $ 10,063,541
Accounts receivable, net of allowance
for doubtful accounts
of $839,122 and $748,139 15,016,924 9,429,283
Advances to program suppliers 4,188,222 1,831,018
Income tax receivable 68,384 81,085
Deferred tax asset 2,262,186 2,423,038
Other current assets 1,533,895 2,430,334
Total current assets 31,805,294 26,258,299
PROPERTY AND EQUIPMENT, net 2,466,668 2,404,763
DEFERRED TAX ASSET 1,099,660 894,083
OTHER ASSETS 831,617 1,931,133
------------- ----------
TOTAL ASSETS $ 36,203,239 $ 31,488,278
============= ============
RENTRAK CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
March 31, March 31,
2004 2003
----------------------------------
LIABILITIES AND STOCKHOLDERS' EQUITY (restated)
CURRENT LIABILITIES:
Accounts payable $ 15,446,818 $ 12,800,736
Accrued liabilities 889,377 1,205,893
Accrued compensation 598,875 610,022
Deferred revenue 237,575 156,692
------------ ------------
Total current liabilities 17,172,645 14,773,343
------------ ------------
LONG-TERM LIABILITIES:
Lease obligations, deferred gain and
customer deposits 234,922 668,039
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: 9,739,537 shares
at March 31, 2004 and 9,471,612 at
March 31, 2003 9,740 9,472
Capital in excess of par value 41,093,976 39,655,212
Accumulated other comprehensive income 180,879 180,879
Accumulated deficit (22,488,923) (23,798,667)
------------- ------------
18,795,672 16,046,896
------------- ------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 36,203,239 $ 31,488,278
============== ============
RENTRAK CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
Three Months Ended March 31,
2004 2003
-------------- ---------------
(Restated)
REVENUES $ 24,230,448 $ 21,582,053
OPERATING EXPENSES:
Cost of sales 17,518,180 17,988,187
Selling and administrative 4,054,301 3,487,161
Net gain from litigation settlement
Asset Impairment - 844,041
------------- --------------
21,572,481 22,319,389
------------- ---------------
INCOME (LOSS) FROM OPERATIONS 2,657,967 (737,336)
------------- ---------------
OTHER INCOME (EXPENSE):
Interest income 80,360 121,429
Interest expense (1,344) (25,009)
------------- ---------------
79,016 96,420
------------- ---------------
INCOME (LOSS) FROM CONTINUING
OPERATIONS BEFORE INCOME TAXES 2,736,983 (640,916)
PROVISION (BENEFIT) FOR INCOME TAXES 683,820 (223,075)
------------- ---------------
NET INCOME (LOSS) FROM CONTINUING
OPERATIONS 2,053 (417,841)
LOSS FROM DISCONTINUED
OPERATIONS, NET OF TAX
BENEFIT OF $52,727 - (86,028)
------------- ---------------
NET INCOME (LOSS) $ 2,053,163 $ (503,869)
============= ===============
NET INCOME (LOSS) PER SHARE:
Basic:
Continuing operations $ 0.21 $ (0.04)
Discontinued operations - (0.01)
------------- ---------------
Total $ 0.21 $ (0.05)
============= ===============
Diluted:
Continuing operations $ 0.20 $ (0.04)
Discontinued operations - (0.01)
------------- ---------------
Total $ 0.20 $ (0.05)
============= ===============
RENTRAK CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
Twelve Months Ended March 31,
2004 2003
--------------------------------
(Restated)
REVENUES $ 78,132,413 $ 85,884,262
OPERATING EXPENSES:
Cost of sales 60,090,493 71,347,003
Selling and administrative 16,357,299 14,434,343
Net gain from litigation settlement - (361,847)
Asset Impairment - 844,041
------------- --------------
76,447,792 86,263,540
------------- --------------
INCOME (LOSS) FROM OPERATIONS 1,684,621 (379,278)
------------- --------------
OTHER INCOME (EXPENSE):
Interest income 244,252 204,283
Interest expense (11,584) (25,009)
------------- --------------
232,668 179,274
------------- --------------
INCOME (LOSS) FROM CONTINUING
OPERATIONS BEFORE INCOME TAXES 1,917,289 (200,004)
PROVISION (BENEFIT) FOR INCOME TAXES 478,896 (55,528)
------------- --------------
NET INCOME (LOSS) FROM CONTINUING
OPERATIONS 1,438,393 (144,476)
LOSS FROM DISCONTINUED
OPERATIONS, NET OF TAX BENEFIT
OF $78,850 AND $357,094 (128,649) (582,627)
------------- --------------
NET INCOME (LOSS) $ 1,309,744 $ (727,103)
============= ===============
NET INCOME (LOSS) PER SHARE:
Basic:
Continuing operations $ 0.15 $ (0.02)
Discontinued operations (0.01) (0.06)
------------- ---------------
Total $ 0.14 $ (0.08)
============= ===============
Diluted:
Continuing operations $ 0.14 $ (0.02)
Discontinued operations (0.01) (0.06)
------------- ---------------
Total $ 0.13 $ (0.08)
============= ===============
RENTRAK CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
Three Months Ended March 31, 2004
ENTERTAINMENT FULFILLMENT TOTAL
------------- ----------- ---------
REVENUES $ 24,230,449 $ - $ 24,230,448
OPERATING EXPENSES:
Cost of sales 17,479,513 38,667 17,518,180
Selling and administrative 4,026,759 27,542 4,054,301
------------- ---------- ------------
21,506,272 66,209 1,572,481
------------- ---------- ------------
INCOME (LOSS) FROM OPERATIONS 2,724,176 (66,209) 2,657,967
------------- ---------- ------------
OTHER INCOME (EXPENSE):
Interest income 19,456 60,904 80,360
Interest expense (1,344) - (1,344)
------------- ---------- ------------
18,112 60,904 79,016
------------- ---------- ------------
INCOME (LOSS) FROM CONTINUING
OPERATIONS BEFORE INCOME TAXES
PROVISION (BENEFIT) 2,742,288 (5,305) 2,736,983
PROVISION (BENEFIT) FOR INCOME TAXES 685,836 (2,016) 683,820
------------- ---------- ------------
INCOME (LOSS) FROM CONTINUING
OPERATIONS 2,056,452 (3,289) 2,053,163
INCOME FROM DISCONTINUED
OPERATIONS, NET OF TAX PROVISION
OF $0 - - -
------------- ---------- -----------
NET INCOME $ 2,056,452 $ (3,289) $ 2,053,163
============= ========== ============
NET INCOME PER SHARE:
Basic:
Continuing operations $ 0.22 $ - $ 0.21
Discontinued operations - - -
------------- ---------- -----------
Total $ 0.22 $ - $ 0.21
============= ========== ============
Diluted:
Continuing operations $ 0.20 $ - $ 0.20
Discontinued operations - - -
------------- ---------- ------------
Total $ 0.20 $ - $ 0.20
============= ========== ============
RENTRAK CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
Twelve Months Ended March 31, 2004
ENTERTAINMENT FULFILLMENT TOTAL
------------- ----------- ---------
REVENUES $ 73,508,114 $ 5,154,443(1)$78,132,413
OPERATING EXPENSES:
Cost of sales 54,857,368(1) 5,763,269 60,090,493
Selling and administrative 15,591,587 765,712 16,357,299
------------ ----------- -----------
70,448,955 6,528,981 76,447,792
------------ ----------- -----------
INCOME (LOSS) FROM OPERATIONS 3,059,159 (1,374,538) 1,684,621
------------ ----------- -----------
OTHER INCOME (EXPENSE):
Interest income 95,921 148,331 244,252
Interest expense (6,420) (5,164) (11,584)
------------ ----------- -----------
89,501 143,167 232,668
------------ ----------- -----------
INCOME (LOSS) FROM CONTINUING
OPERATIONS BEFORE INCOME TAXES
PROVISION (BENEFIT) 3,148,660 (1,231,371) 1,917,289
PROVISION (BENEFIT) FOR INCOME TAXES 946,817 (467,921) 478,896
------------ ----------- -----------
INCOME (LOSS) FROM CONTINUING
OPERATIONS 2,201,843 (763,450) 1,438,393
LOSS FROM DISCONTINUED
OPERATIONS, NET OF TAX BENEFIT
OF $78,850 (128,649) - (128,649)
------------ ----------- -----------
NET INCOME (LOSS) $ 2,073,194 $ (763,450) $ 1,309,744
============ =========== ===========
NET INCOME (LOSS) PER SHARE:
Basic:
Continuing operations $ 0.23 $ (0.08) $ 0.15
Discontinued operations (0.01) - (0.01)
------------ ----------- -----------
Total $ 0.22 $ (0.08) $ 0.14
============ =========== ===========
Diluted:
Continuing operations $ 0.22 $ (0.08) $ 0.14
Discontinued operations (0.01) - (0.01)
------------ ----------- -----------
Total $ 0.21 $ (0.08) $ 0.13
============ =========== ===========
(1) - Includes Intercompany transactions of $530,144, which are eliminated in
consolidated total amounts.
RENTRAK CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED, RESTATED)
Three Months Ended March 31, 2003
ENTERTAINMENT FULFILLMENT TOTAL
------------- ----------- ----------
REVENUES $ 17,482,145 $ 4,594,409(1) $ 21,582,053
OPERATING COSTS AND EXPENSES:
Cost of sales 14,256,367(1) 4,226,321 17,988,187
Selling, general, and administrative 2,888,076 599,085 3,487,161
Net gain from litigation settlement - - -
Asset Impairment - 844,041 844,041
------------ ----------- ------------
17,144,443 5,669,447 22,319,389
------------ ----------- ------------
INCOME (LOSS) FROM OPERATIONS 337,702 (1,075,038) (737,336)
------------ ----------- -------------
OTHER INCOME (EXPENSE):
Interest income 75,020 46,409 121,429
Interest expense (25,009) - (25,009)
------------ ----------- -------------
50,011 46,409 96,420
------------ ----------- -------------
INCOME (LOSS) FROM CONTINUING
OPERATIONS BEFORE INCOME TAX
PROVISION (BENEFIT) 387,713 (1,028,629) (640,916)
INCOME TAX PROVISION (BENEFIT) 167,804 (390,879) (223,075)
------------ ----------- -------------
INCOME (LOSS) FROM CONTINUING
OPERATIONS 219,909 (637,750) (417,841)
INCOME (LOSS) FROM DISCONTINUED
OPERATIONS, NET OF TAX BENEFIT
OF ($270,253) (86,028) - (86,028)
------------ ------------ -------------
NET INCOME (LOSS) $ 133,881 $ (637,750) $ (503,869)
============ ============ =============
NET LOSS PER SHARE:
Basic:
Continuing operations $ 0.02 $ (0.06) $ (0.04)
Discontinued operations (0.01) - (0.01)
------------ ------------ -------------
Total $ 0.01 $ (0.06) $ (0.05)
============ ============ =============
Diluted:
Continuing operations $ 0.02 $ (0.06) $ (0.04)
Discontinued operations (0.01) - (0.01)
------------ ------------ -------------
$ 0.01 $ (0.06) $ (0.05)
============ ============ =============
(1) - Includes Intercompany transactions of $494,501, which are eliminated in
consolidated total amounts.
RENTRAK CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED, RESTATED)
Twelve Months Ended March 31, 2003
ENTERTAINMENT FULFILLMENT TOTAL
------------- ----------- ----------
REVENUES $ 70,618,422 $ 17,380,544(1) $85,884,262
OPERATING COSTS AND EXPENSES:
Cost of sales 56,048,914(1) 17,412,793 71,347,003
Selling, general, and administrative 12,035,829 2,398,514 14,434,343
Net gain from litigation settlement (361,847) (361,847)
Asset Impairment - 844,041 844,041
----------- ----------- -----------
67,722,896 20,655,348 86,263,540
----------- ----------- -----------
INCOME (LOSS) FROM OPERATIONS 2,895,526 (3,274,804) (379,278)
----------- ----------- -----------
OTHER INCOME (EXPENSE):
Interest income 138,759 65,524 204,283
Interest expense (5,894) (19,115) (25,009)
----------- ----------- -----------
132,865 46,409 179,274
----------- ----------- -----------
INCOME (LOSS) FROM CONTINUING
OPERATIONS BEFORE INCOME TAX
PROVISION (BENEFIT) 3,028,391 (3,228,395) (200,004)
INCOME TAX PROVISION (BENEFIT) 1,171,263 (1,226,791) (55,528)
----------- ----------- -----------
INCOME (LOSS) FROM CONTINUING
OPERATIONS 1,857,128 (2,001,604) (144,476)
LOSS FROM DISCONTINUED
OPERATIONS, NET OF TAX BENEFIT
OF ($1,410,532) (582,627) - (582,627)
----------- ----------- -----------
NET INCOME (LOSS) $ 1,274,501 $ (2,001,604) $ (727,103)
=========== =========== ===========
NET INCOME (LOSS) PER SHARE:
Basic:
Continuing operations $ 0.19 $ (0.21) $ (0.02)
Discontinued operations (0.06) - (0.06)
----------- ----------- -----------
Total $ 0.13 $ (0.21) $ (0.08)
=========== =========== ===========
Diluted:
Continuing operations $ 0.19 $ (0.21) $ (0.02)
Discontinued operations (0.06) - (0.06)
----------- ----------- -----------
Total $ 0.13 $ (0.21) $ (0.08)
=========== =========== ===========
(1) - Includes Intercompany transactions of $2,114,704, which are eliminated in
consolidated total amounts.