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., Nov. 9  /PRNewswire-FirstCall/ -- 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.

  --  Revenues in the company's Advanced Media Information (AMI) division
      increased 63% to $5.0 million from $3.1 million for the second quarter
      of fiscal 2009, primarily reflecting incremental revenues generated
      from new and existing customers of the company's Essentials suite of
      multimedia measurement services, as well as a contract that was
      completed during the quarter that is expected to generate less revenue
      in subsequent periods.  The AMI segment represented 24 percent of
      consolidated revenues and contributed 43 percent of consolidated gross
      margin dollars for the second quarter of fiscal 2010, compared with 13
      percent and 31 percent, respectively, in the corresponding prior-year
      period.

  --  Revenues in the company's Pay-Per-Transaction® (PPT) division totaled
      $16.3 million, versus $21.2 million in the similar quarter last fiscal
      year, resulting from approximately 25 percent fewer available rental
      titles during the quarter.  The company reiterated that it expects a
      normalization of available rental titles in its third fiscal quarter.




"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:

  --  Addition of several new TV Essentials partners, such as Jewelry
      Television, Outdoor Channel and PBS KIDS Sprout, which will use the
      Rentrak service to gain a broader understanding of the value and
      appeal of their programming.
  --  Launch of the mobile television industry's first comprehensive
      viewership and advertising impression reporting using TV Essentials in
      collaboration with Flo TV, a company that allows viewers to watch TV
      "on-the-go."
  --  Addition of Cinelatino, the leading Spanish language movie channel, as
      a new OnDemand Essentials customer.  OnDemand Essentials currently
      processes daily, census-level on-demand data representing 70 million
      set-top boxes from 33 MSOs and 100% of the top-25 operators offering
      video-on-demand.  Rentrak's extensive on-demand data is being utilized
      by more than 125 content provider clients.
  --  Further expansion into the Canadian marketplace with the addition of
      new customer Stingray Digital, a music video-on-demand service
      launching on Rogers Cable, a current Rentrak customer.
  --  Extension of Box Office Essentials into Russia, the world's ninth
      largest motion picture exhibition market.  New customers for this
      service include the international distribution businesses of five
      major movie studios.

  --  Expansion of a revenue sharing agreement with Warner Home Video, which
      significantly increases the amount of Blu-ray disc content available
      to retailers participating in Rentrak's PPT System.




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 http://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(TM) 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 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 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.

  CONTACT:
  Investors
  PondelWilkinson Inc.
  Laurie Berman
  310-279-5962
  


                          (Financial Tables Follow)




                     Rentrak Corporation and Subsidiaries
                     Condensed Consolidated Balance Sheets
                                  (Unaudited)

                                                     September 30, March 31,
                                                         2009        2009
                                                         ----        ----

  Assets
  Current Assets:
      Cash and cash equivalents                          $7,894      $4,601
      Marketable securities                              30,252      29,874
      Accounts and notes receivable, net of allowances
       for doubtful accounts of $558 and $597            12,995      16,406
      Taxes receivable and prepaid taxes                    532       1,231
      Deferred income tax assets                              -         135
      Other current assets                                  982         960
                                                            ---         ---
          Total Current Assets                           52,655      53,207

  Property and equipment, net of accumulated
    depreciation of $10,543 and $9,472                    6,629       6,128
  Other assets                                              531         543
                                                            ---         ---
          Total Assets                                  $59,815     $59,878
                                                        =======     =======

  Liabilities and Stockholders' Equity
  Current Liabilities:
      Accounts payable                                   $5,475      $6,738
      Accrued liabilities                                   631         499
      Accrued compensation                                1,160       1,100
      Deferred revenue                                      600       1,530
      Other current liabilities                             121          96
                                                            ---          --
          Total Current Liabilities                       7,987       9,963

  Deferred rent, long-term portion                          956         982
  Deferred income tax liabilities                           603         714
  Taxes payable, long-term                                1,094       1,242
                                                          -----       -----
          Total Liabilities                              10,640      12,901

  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:
       10,491 and 10,421                                     11          11
      Capital in excess of par value                     46,338      45,504
      Accumulated other comprehensive income (loss)         203        (203)
      Retained earnings                                   2,623       1,665
                                                          -----       -----
         Total Stockholders' Equity                      49,175      46,977
                                                         ------      ------
         Total Liabilities and Stockholders' Equity     $59,815     $59,878
                                                        =======     =======

                     Rentrak Corporation and Subsidiaries
                   Condensed Consolidated Income Statements
                                 (Unaudited)

                                              For the Three    For the Six
                                              Months Ended     Months Ended
                                              September 30,    September 30,
                                              -------------    ------------
                                               2009    2008    2009    2008
                                               ----    ----    ----    ----

  Revenue                                   $21,323 $24,327 $42,960 $49,680
  Cost of sales                              12,902  16,351  27,139  33,163
                                             ------  ------  ------  ------
  Gross margin                                8,421   7,976  15,821  16,517

  Operating expenses:
      Selling and administrative              7,792   6,655  14,909  13,435
      Provision for doubtful accounts and
       notes                                    127      42     298     122
                                                ---      --     ---     ---
                                              7,919   6,697  15,207  13,557
                                              -----   -----  ------  ------

  Income from operations                        502   1,279     614   2,960

  Other income (expense):
      Interest income, net                      206     206     505     374
                                                ---     ---     ---     ---

  Income before income taxes                    708   1,485   1,119   3,334
  Provision for income taxes                     32     643     161   1,456
                                                 --     ---     ---   -----
  Net income                                   $676    $842    $958  $1,878
                                               ====    ====    ====  ======

  Basic net income per share                  $0.06   $0.08   $0.09   $0.18
                                              =====   =====   =====   =====

  Diluted net income per share                $0.06   $0.08   $0.09   $0.17
                                              =====   =====   =====   =====

  Shares used in per share calculations:
    Basic                                    10,478  10,614  10,466  10,611
                                             ======  ======  ======  ======
    Diluted                                  11,040  11,166  10,954  11,153
                                             ======  ======  ======  ======

                     Rentrak Corporation and Subsidiaries
                Condensed Consolidated Statements of Cash Flows
                                  (Unaudited)

                                                              For the Six
                                                              Months Ended
                                                              September 30,
                                                              -------------
                                                              2009     2008
                                                              ----     ----

  Cash flows from operating activities:
     Net income                                               $958   $1,878
     Adjustments to reconcile net income to net cash
        flows provided by operating activities:
           Depreciation and amortization                     1,072      799
           Stock-based compensation                            808      260
           Other adjustments                                   240      192
           (Increase) decrease in:
              Accounts receivable                            3,190   (2,027)
              Taxes receivable and prepaid taxes               699      450
              Other assets                                    (305)     383
           Increase (decrease) in:
              Accounts payable                              (1,016)   3,590
              Deferred revenue                                (930)     749
              Other liabilities                                 19     (132)
                                                                --     ----
                 Net cash provided by operating activities   4,735    6,142

  Cash flows from investing activities:
     Maturity of marketable securities                           -    4,986
     Purchase of marketable securities                           -  (30,006)
     Purchase of property and equipment                     (1,639)  (1,219)
                                                            ------   ------
                 Net cash used in investing activities      (1,639) (26,239)

  Net cash provided by financing activities                     19      135

  Effect of foreign exchange translation on cash               178      (13)
                                                               ---      ---

  Increase (decrease) in cash and cash equivalents           3,293  (19,975)

  Cash and cash equivalents:
     Beginning of period                                     4,601   26,862
                                                             -----   ------
     End of period                                          $7,894   $6,887
                                                            ======   ======

  Supplemental non-cash information:
  Deferred gain related to forgiven loan for capital assets     $-     $219
  Unrealized gains (losses) on investments, net of tax of
   $159 and $(82)                                              221     (108)

                                Rentrak Corporation
              Reconciliation of GAAP and Non-GAAP Financial Measures
                                  Adjusted EBITDA
                                    (Unaudited)
                                   (in thousands)

                                              For the Three   For the Six
                                              Months Ended    Months Ended
                                              September 30,   September 30,
                                              -------------   -------------

                                               2009    2008    2009    2008
                                               ----    ----    ----    ----

  Net Income                                   $676    $842    $958  $1,878
  Adjustments:
    Provision for income taxes                   32     643     161   1,456
    Interest income, net                       (206)   (206)   (505)   (374)
    Depreciation and amortization               548     411   1,072     799
    Stock based compensation                    688     133     808     260

                                             ------  ------  ------  ------
  Adjusted EBITDA                            $1,738  $1,823  $2,494  $4,019
                                             ======  ======  ======  ======



  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.


DATASOURCE: Rentrak Corporation



CONTACT:  Investors, Laurie Berman of PondelWilkinson Inc.,

[phone], , for Rentrak Corporation



Web Site:  http://www.rentrak.com/ 

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