Rentrak Reports Fiscal 2010 Fourth Quarter And Full Year Financial Results
— 47 Networks and 25 Local Stations Now Signed to Multi-Screen Product —
— AMI Division Revenues More Than Double; Grow to 28% of Total Revenue —
— Operating Earnings Before One-Time Items and Non-Cash Compensation Up 30 Percent; Diluted EPS $0.20 per Share Before Item —
PORTLAND, Ore., Jun 14, 2010 --
Rentrak Corporation (NASDAQ: RENT) the leader in multi-screen media measurement serving the advertising and entertainment industries, today announced financial results for its fiscal fourth quarter and full year ended March 31, 2010.Consolidated revenues increased more than 12 percent to $25.0 million for the fiscal 2010 fourth quarter, versus $22.3 million for the fiscal 2009 fourth quarter, driven primarily by strong growth in the company's Advanced Media Information (AMI) division.
- Revenues in the company's AMI division more than doubled to $6.9 million, from $3.3 million for the fourth quarter of fiscal 2009, reflecting a partial-quarter contribution from the acquisition of Nielsen EDI, as well as incremental revenues generated from the company's Essentials suite of multimedia measurement services. The AMI segment represented nearly 28 percent of consolidated revenues, up from 15 percent for the prior-year period.
- Revenues in the company's Pay-Per-Transaction® (PPT) division were $18.1 million, compared with $19.0 million for the fourth quarter of fiscal 2009.
“Our AMI division grew exceptionally well this quarter and represents almost 28 percent of our total revenue and is now roughly half of our gross margin dollars,” said Bill Livek, Rentrak's Chief Executive Officer. “With many new customers now utilizing our suite of multimedia measurement services, we are cementing our marketplace position by successfully establishing new metrics and a new database currency to help our customers increase their revenue and profits.”
Gross margin improved to $10.4 million, or 41 percent of consolidated revenues, for the fourth quarter of fiscal 2010, compared with $8.7 million, or 39 percent of consolidated revenues, for the same period last year, related primarily to changes in the company's business mix. Gross margin in the company's AMI division totaled 73 percent of AMI revenues.
Operating expenses for the fiscal 2010 fourth quarter were $10.6 million, or 42 percent of consolidated revenues, compared with $6.8 million, or 31 percent of consolidated revenues, for last year's fiscal fourth quarter. The change primarily reflects approximately $2.0 million in one-time items, including $1.3 million related to the company's acquisition of Nielsen EDI, $0.5 million related to a previously disclosed management transition and a $0.1 million asset impairment related to a former non-core business line. Additionally, Rentrak continued its ongoing investment in the company's Multi-Screen business development and implementation activities during the quarter.
Operating loss for the fiscal 2010 fourth quarter was $0.2 million, versus operating income of $1.8 million in the fiscal 2009 fourth quarter. Operating loss in the fiscal 2010 period included the one-time items already mentioned, as well as $0.9 million in non-cash stock compensation expense. Operating income for the fiscal 2010 fourth quarter before those items would have been $2.6 million, versus $2.0 million in the fiscal 2009 fourth quarter, which included $0.1 million in one-time items and $0.1 million in non-cash stock compensation expense.
Net income totaled $0.2 million, or $0.02 per diluted share, for the fourth quarter of fiscal 2010, versus net income of $2.2 million, or $0.21 per diluted share, for the fourth quarter of fiscal 2009. Excluding the one-time costs and non-cash stock compensation expense described above, net income for the fiscal 2010 fourth quarter would have been $2.2 million, or $0.20 per diluted share, compared with $2.4 million, or $0.22 per diluted share, for the fiscal 2009 fourth quarter, which included a tax benefit of $0.9 million primarily due to adjustments that resulted from the completion of a federal tax audit, one-time items of $0.1 million and $0.1 million in non-cash stock based compensation.
The company generated adjusted EBITDA of $1.3 million for the fiscal 2010 fourth quarter, compared with $2.4 million in the same quarter of the prior fiscal year. Excluding the one-time costs described above in both quarters, adjusted EBITDA would have been $3.3 million for the fiscal 2010 fourth quarter, versus $2.5 million for the fiscal 2009 fourth quarter. 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.
The company recorded a tax benefit for the fourth quarter of fiscal 2010 of $285,000, compared with a benefit of $90,000 for the fourth quarter of fiscal 2009. The change in the tax benefit was due primarily to lower tax rates in foreign jurisdictions, as well as tax benefits relating to net reductions in tax contingencies. Last year's tax benefit resulted from favorable settlements relating to the completion of a tax audit.
Rentrak said that it recently accomplished several important milestones, including:
- Growing its local station measurement service, StationView Essentials, to include 25 stations in 13 markets that are now using Rentrak's robust television viewing information via its digital set-top device database reporting system to better monetize TV viewership. New StationView Essentials customers are being added on a regular basis.
- Extending its industry-leading OnDemand Essentials business to the equivalent of 80 million set-top boxes through expansion of Rentrak's video-on-demand measurement capabilities to customers in Canada and United States.
- Increasing the number of networks utilizing TV Essentials to gain access to anonymous second-by-second audience viewing patterns in all facets of programming and advertising to 47 networks. New TV Essentials customers include MTV Networks, the first major cable group to become a Rentrak customer; Daystar TV, one of the world's largest Christian television networks; Zee TV, the leading television network in South Asian entertainment; and the Hispanic Information TV Network, the first Latino public television network in the United States.
- Working with Zenith Media USA, one of the premier strategic media planning and buying agencies in the U.S., which is using Rentrak's second-by-second information from 300 ad-supported networks to help build the agency's strategy for this year's television upfront.
“We are extremely gratified by the tremendous progress that has been made, particularly over the past six months as we've successfully delivered on our promise to measure entertainment viewership wherever and whenever it is being consumed,” said Livek. “Rentrak is continuing to demonstrate the significant value of providing industry participants, including studios; national networks; cable, satellite, and telco-TV operators: local TV stations; and advertising agencies, with Rentrak's viewership currencies.
“As we work to further educate the marketplace, establish new customer relationships and achieve our vision of becoming the leading provider of consumer entertainment behavior and segmentation database currencies across all media distribution platforms, we will carefully balance anticipated growth with the investments necessary to facilitate that growth. While we recognize that this may impact our short-term results as they did this quarter, these strategic investments ultimately improve our marketplace position, which we believe will result in improved and sustainable shareholder value.”
Fiscal 2010 Full Year Financial Results
Consolidated revenues were $91.1 million for fiscal 2010, versus $95.0 million for fiscal 2009. AMI division revenues rose 57 percent to $19.8 million from $12.6 million for fiscal 2009, demonstrating continued growth of the company's Essentials suite of services. Revenues in the company's PPT division were $71.3 million, compared with $82.3 million for the last fiscal year.
Operating loss for fiscal 2010 was of $0.9 million, compared with operating income of $5.2 million in fiscal 2009. The fiscal 2010 operating loss included $4.2 million in one-time items and $2.1 million in non-cash stock compensation expense. Fiscal 2009 operating income included $0.3 million in one-time items and $0.5 million in non-cash stock compensation expense. Operating income for fiscal 2010 before those items would have been $5.3 million, versus $6.1 million in fiscal 2009, which included $0.3 million in one-time items and $0.5 million in non-cash stock compensation expense.
Net income was $0.6 million, or $0.05 per diluted share, for fiscal 2010, compared with $5.4 million, or $0.49 per diluted share, last year. Excluding the one-time costs and non-cash stock compensation expense described in both periods, and the tax benefit in the fourth quarter of fiscal 2009, net income would have been $4.7 million, or $0.43 per diluted share, in fiscal 2010, versus $4.9 million, or $0.45 per diluted share, in the prior year.
Adjusted EBITDA was $3.8 million for fiscal 2010, compared with $7.5 million for fiscal 2009. Excluding the one-time costs described above in both years, adjusted EBITDA would have been $7.7 million for fiscal 2010, versus $7.8 million for fiscal 2009.
The company generated $4.0 million in cash from operating activities in fiscal 2010, compared with $8.0 million in fiscal 2009.
Rentrak's cash, cash equivalents and marketable securities balance was $19.9 million at March 31, 2010 compared with $34.5 million at March 31, 2009. The reduction in cash related primarily to the company's acquisition of Nielsen EDI and to a lesser extent the purchase of equipment and certain capitalized IT costs.
Conference Call
Rentrak will hold a conference call at 5:00 p.m. (ET) / 2:00 p.m. (PT) today to discuss 2010 fourth quarter and full year end results. Shareowners, members of the media and other interested parties may participate in the call by dialing 866-788-0538 from the U.S. or Canada, or 857-350-1676 from international locations, passcode 97272648. 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 14, 2011. An audio replay of the conference call is available through midnight June 21, 2010 by dialing 888-286-8010 from the U.S. or Canada, or 617-801-6888 from international locations, passcode 12238363.
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About Rentrak Corporation
Rentrak Corporation (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, home entertainment, on-demand and linear television, broadband and mobile, Rentrak is headquartered in Portland, Oregon, with additional offices worldwide in Los Angeles, New York City, Miami/Ft. Lauderdale, Argentina, Australia, Canada, France, Germany, Mexico, Spain and the United Kingdom. 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 company's ability to successfully manage expenses and run its business as efficiently as possible; the ability to successfully grow revenues, effectively manage costs, steadily generate cash and maintain strong and flexible balance sheet; the ability for Rentrak to create new and valuable products and services that best serve the company's customers and industry; the company's ability to monetize and reach the full potential of its development activities; 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, 2008 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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