Rentrak Reports Fiscal 2015 First Quarter Financial Results - KATV - Breaking News, Weather and Razorback Sports

Rentrak Reports Fiscal 2015 First Quarter Financial Results

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SOURCE Rentrak Corporation

- TV Business Revenue Increases 84 Percent; Quarterly Revenue Grows 34 Percent -

- Rentrak to Provide Local Ratings Information to Three NBC Owned and Operated Television Stations -

PORTLAND, Ore., Aug. 7, 2014 /PRNewswire/ -- Rentrak Corporation (Nasdaq: RENT), the leader in precisely measuring movies and TV everywhere, today announced financial results for its first fiscal quarter ended June 30, 2014. 

Revenue for Rentrak's TV Everywhere™ business increased 84 percent for the fiscal first quarter to $10.5 million, from $5.7 million last year.  Total company revenue(1) increased 34 percent to $22.3 million for the first quarter of fiscal 2015, up from $16.7 million for the same period last year.  

(revenue in millions)

1Q FY15

1Q FY14

Percent Change

TV Everywhere™

$  10.5

$    5.7

84 %

Movies Everywhere™

7.4

6.5

14 %

OnDemand Everywhere®

3.2

3.3

(2)%

Other services*

1.2

1.2

-%

Total Revenue

$ 22.3

$ 16.7

34 %


Numbers may not sum due to rounding.




* Other services includes the company's Studio Direct Revenue Share (DRS) and Home Entertainment Essentials information businesses.

Gross margin improved to 66 percent of revenue for the first quarter of fiscal 2015, up from 62 percent for the same period last year.  The increase was primarily due to the growth in revenue, as the costs associated with the company's data supplier agreements are largely fixed.

"We started fiscal 2015 on a strong note, with 84 percent growth in our TV business and a 34 percent increase in total revenue," said Bill Livek, Rentrak's Vice Chairman and CEO.  "Rentrak continues to make substantial progress with multichannel programming distributors, TV networks, local television stations, movie studios, and advertisers and their agencies, as well as with automated ad tech TV buying platforms.  We are continuing to identify new ways to provide innovative products that help our clients run their businesses more profitably."

Operating expenses for the first quarter of fiscal 2015 totaled $16.1 million, versus $12.7 million for the first quarter of fiscal 2014.  The increase primarily related to increases in headcount and stock-based compensation expenses.

Operating loss for the first quarter of fiscal 2015 was reduced to $1.4 million, which included $1.7 million in stock-based compensation costs and $46,000 in acquisition and reorganization costs, partially offset by a $500,000 credit related to the contingent consideration associated with the company's acquisition of iTVX in August 2013.  Operating loss for the first quarter of fiscal 2014 was $2.3 million, which included $1.3 million in stock-based compensation costs and $84,000 in acquisition costs.  Excluding all of these amounts for both periods, operating loss would have improved to $122,000 for the first quarter of fiscal 2015, compared with a loss of $942,000 for the first quarter of fiscal 2014.

Loss from continuing operations, net of income taxes, totaled $1.4 million, or $0.11 per share, for the first quarter of fiscal 2015, versus $2.0 million, or $0.16 per share, for the same period last year.  Excluding all of the costs mentioned above for both periods, loss from continuing operations, net of income taxes, for the first quarter of fiscal 2015 would have been $131,000, or $0.01 per share, compared with a loss of $570,000, or $0.04 per share, for the same period last year.

Net loss, including discontinued operations, was $966,000, or $0.08 per share, for the first quarter of fiscal 2015, compared with a loss of $1.2 million, or $0.10 per share, for the first quarter of fiscal 2014.  Excluding all of the costs mentioned above for both periods, net income would have been $270,000, or $0.02 per share, compared with net income of $198,000, or $0.02 per share, for the same period last year. 

Adjusted EBITDA (a non-GAAP measure) grew to $1.6 million for the first quarter of fiscal 2015, up from $440,000 for the same period last year.  The reconciliation of adjusted EBITDA to net income, the most comparable financial measure based upon GAAP, as well as a further explanation of adjusted EBITDA, is included in the financial tables at the end of this press release.

The company used $606,000 in cash from operating activities, including discontinued operations, for the first quarter of fiscal 2015, compared with generating $3.3 million for the comparable fiscal 2014 period. 

Rentrak's cash, cash equivalents and marketable securities balance was $20.0 million at June 30, 2014, versus $22.0 million at March 31, 2014.

Rentrak's recent milestones include:

  • Signing a multi-year agreement to provide Rentrak's local ratings information, including the company's automotive and political advanced demographics, to three NBC owned and operated television stations in Dallas, Los Angeles and Miami.
  • Adding all of Fox Television Stations' 29 stations as clients across 18 markets.
  • Expanding its number of local TV station clients to approximately 350, across 60 TV station groups, representing 52 and 20 percent year-over-year growth, respectively.
  • Adding several new national and regional advertising agency clients.
  • Working with Horizon Media to pilot Rentrak's new multi-screen measurement service, giving advertisers a full picture of video measurement across TV and video-on-demand.

Long-Term Outlook

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

  • 80 percent annual growth in its TV Everywhere business for the next several years.
  • 12 percent annual growth in its Movies Everywhere business for the foreseeable future.
  • 20 percent annual growth in its OnDemand Everywhere® business for the foreseeable future.
  • 5 percent annual decline in its Other services that measure physical DVDs.

Conference Call

Rentrak will hold a conference call at 5:00 p.m. ET/2:00 p.m. PT today to discuss its fiscal 2015 first quarter financial results.  Shareholders, members of the media and other interested parties may participate in the call by dialing 866-652-5200 from the U.S. or Canada, or 412-317-6060 from international locations, conference ID 10050282.  This call is being webcast and can be accessed at Rentrak's web site at www.rentrak.com, where it will be archived through August 6, 2015.  An audio replay of the conference call will be available through midnight August 15, 2014 by dialing 877-344-7529 from the U.S. or Canada, or 412-317-0088 from international locations, passcode 10050282.

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, Rentrak's ability to continue generating substantial growth in its TV Everywhere business and expected rates of growth for Rentrak's Movies Everywhere and OnDemand Everywhere® businesses, expected rate of decrease in its service that measures physical DVDs, and expected divestiture of the PPT® 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  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 products 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.

RENTF

(1) Rentrak's Pay Per Transaction® (PPT®) business is now reflected in its entirety as discontinued operations, as a result of the company's plan to divest this business. All periods presented have been revised to reflect this presentation. Unless otherwise noted, all discussions in this press release relate to continuing operations.

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 Ended



June 30,



2014


2013

Revenue


$ 22,344


$ 16,682

Cost of revenue


7,604


6,289

Gross margin


14,740


10,393

Operating expenses:





Selling, general and administrative


12,834


10,854

Research, technology and innovation


3,264


1,870

Total operating expenses


16,098


12,724

Loss from continuing operations


(1,358)


(2,331)

Other income:





Investment income, net


20


47

Loss from continuing operations before income taxes


(1,338)


(2,284)

Provision (benefit) for income taxes


29


(325)

Loss from continuing operations, net of income taxes


(1,367)


(1,959)

Income from discontinued operations, net of income taxes


348


761

Net loss


(1,019)


(1,198)

Net loss attributable to noncontrolling interest


(53)


(7)

Net loss attributable to Rentrak Corporation


$    (966)


$ (1,191)






Loss per share from continuing operations attributable to Rentrak Corporation common stockholders:





Basic


$   (0.11)


$   (0.16)

Diluted


$   (0.11)


$   (0.16)

Income per share from discontinued operations attributable to Rentrak Corporation common stockholders:





Basic


$     0.03


$     0.06

Diluted


$     0.03


$     0.06

Net loss per share attributable to Rentrak Corporation common stockholders:





Basic


$   (0.08)


$   (0.10)

Diluted


$   (0.08)


$   (0.10)

Shares used in per share calculations:





Basic


12,505


12,062

Diluted


12,505


12,062

 

 

 

Rentrak Corporation and Subsidiaries  

Condensed Consolidated Balance Sheets  

(In thousands, except per share amounts)  

(Unaudited)  








June 30, 2014


March 31, 2014




Assets





Current Assets:





Cash and cash equivalents


$              7,178


$                5,102

Marketable securities


12,868


16,868

Accounts receivable, net of allowances for doubtful accounts of $72 and $162


12,870


12,199

Taxes receivable and prepaid taxes


-


122

Deferred tax assets, net


43


44

Assets held for sale


4,834


5,443

Other current assets


2,195


2,818

Total Current Assets


39,988


42,596

Property and equipment, net of accumulated depreciation of $25,106 and $23,785


18,415


17,891

Goodwill


7,035


7,034

Other intangible assets, net of accumulated amortization of $3,728 and $3,447


12,504


12,724

Other assets


1,026


1,022

Total Assets


$            78,968


$              81,267

Liabilities and Stockholders' Equity





Current Liabilities:





Accounts payable


$              1,920


$                1,766

Accrued liabilities


681


370

Accrued data provider liabilities


6,373


4,460

Accrued compensation


4,953


6,743

Deferred revenue and other credits


2,682


2,644

Liabilities held for sale


3,210


3,858

Total Current Liabilities


19,819


19,841

Deferred rent, long-term


2,379


2,413

Accrued compensation, long-term


4,200


4,700

Taxes payable, long-term


531


520

Deferred tax liability, net, long-term


818


759

Total Liabilities


27,747


28,233

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: 12,291 and 12,213


12


12

Capital in excess of par value


82,742


83,562

Accumulated other comprehensive income


435


409

Accumulated deficit


(32,789)


(31,823)

Stockholders' Equity attributable to Rentrak Corporation


50,400


52,160

Noncontrolling interest


821


874

Total Stockholders' Equity


51,221


53,034

Total Liabilities and Stockholders' Equity


$            78,968


$              81,267

 

Rentrak Corporation and Subsidiaries

Condensed Consolidated Statements of Cash Flows

(In thousands)

(Unaudited)




For the Three Months Ended June 30,


2014


2013

Cash flows from operating activities:




Net loss

$ (1,019)


$ (1,198)

Income from discontinued operations, net of income taxes

(348)


(761)

Adjustments to reconcile net loss to net cash flows (used in) provided by operating activities of continuing operations:




Depreciation and amortization

1,655


1,375

Stock-based compensation

1,190


1,305

Deferred income taxes

60


505

Loss on disposition of assets

41


-

Adjustment to allowance for doubtful accounts

(90)


(35)

(Increase) decrease in:




Accounts receivable

(671)


(136)

Taxes receivable and prepaid taxes

122


(193)

Other assets

441


165

Increase (decrease) in:




Accounts payable

154


809

Taxes payable

341


(97)

Accrued liabilities and compensation

(2,877)


(43)

Deferred revenue

38


29

Deferred rent

(35)


69

Net cash provided by operating activities of discontinued operations

392


1,537

Net cash (used in) provided by operating activities

(606)


3,331

Cash flows from investing activities:




Purchase of marketable securities

(2,000)


(1,000)

Sale of marketable securities

6,000


-

Payments made to develop intangible assets

(26)


(80)

Purchase of property and equipment

(1,870)


(1,782)

Net cash used in investing activities of discontinued operations

-


(109)

Net cash provided by (used in) investing activities

2,104


(2,971)

Cash flows from financing activities:




Issuance of common stock

298


-

Net cash provided by financing activities

298


-

Effect of foreign exchange translation on cash

280


(114)

Increase in cash and cash equivalents

2,076


246

Cash and cash equivalents:




Beginning of period

5,102


3,835

End of period

$  7,178


$  4,081

Supplemental non-cash information:




Capitalized stock-based compensation

$       70


$     124

Common stock used to pay for option exercises

1,485


69

Common stock used to pay for taxes associated with option exercises

990


32

Common stock used to pay for taxes associated with vested restricted stock units

1,991


-

Decrease in leasehold improvements related to forgiven loan

-


550

 

  

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 Ended June 30,



2014


2013

Net loss attributable to Rentrak Corporation


$  (966)


$ (1,191)

Adjustments:





Income from discontinued operations, net of income taxes


(348)


(761)

Provision (benefit) for income taxes


29


(325)

Investment income, net


(20)


(47)

Depreciation and amortization


1,655


1,375

Stock-based compensation (1)


1,690


1,305

Adjusted EBITDA


$ 2,040


$     356

iTVX stock-based compensation


(500)


-

Acquisition/reorganization costs


46


84

Adjusted EBITDA before iTVX stock-based compensation, acquisition and reorganization costs


$ 1,586


$     440

(1)  Excludes iTVX stock-based compensation












For the Three Months Ended June 30,



2014


2013

Diluted EPS, as reported


$ (0.08)


$   (0.10)

iTVX stock-based compensation


(0.04)


-

Income from discontinued operations, net of income taxes


(0.03)


(0.06)

Other items:





Acquisition/reorganization costs


-


0.01

Stock-based compensation(1)


0.14


0.11

Total other items


0.14


0.12

Diluted EPS, non-GAAP


$ (0.01)


$   (0.04)

(1)  Excludes iTVX stock-based compensation





 

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 month periods ended June 30, 2014 and 2013 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. 

Rentrak is the entertainment industry's premier provider of worldwide consumer viewership information, measuring movie and television content everywhere the consumer is watching including box office, multiscreen television and home video.

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