PORTLAND, Ore., Aug. 10,
2015 /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,
2015.
Revenue for Rentrak's TV Everywhere™ product line
increased 49 percent for the first quarter of fiscal 2016 to
$15.6 million, up from $10.5 million for the same period last
year. Total company revenue increased 23 percent to
$27.5 million for the fiscal 2016
first quarter, up from $22.3 million
for the same period last year.
|
|
|
Percent
Change
|
|
|
|
|
(revenue in
millions)
|
1Q
FY16
|
1Q
FY15
|
As
Reported
|
Constant
Currency*
|
TV
Everywhere™
|
$ 15.6
|
$ 10.5
|
49 %
|
49 %
|
Movies
Everywhere™
|
$ 7.6
|
$ 7.4
|
3 %
|
8 %
|
OnDemand
Everywhere®
|
$ 3.8
|
$ 3.2
|
18 %
|
18 %
|
Other
Services**
|
$ 0.5
|
$ 1.2
|
(62)%
|
(62)%
|
Total
Revenue
|
$ 27.5
|
$ 22.3
|
23 %
|
25 %
|
Numbers may not sum
due to rounding.
|
|
* Constant currency
growth assumes foreign exchange rates were held constant with
exchange rates for fiscal 2015.
|
** Other
Services includes the company's Studio Revenue Share Essentials™
and Home Entertainment Essentials information product
lines.
|
"We are very pleased with our progress this quarter, and
continue to believe that we are firmly on target to achieve our
full year guidance given the health of our business in the media
ecosystem," said Bill Livek,
Rentrak's Vice Chairman and CEO. "Our partnership with Oracle
Data Cloud will expand our Advanced Demographics offering to
help advertisers and networks better understand how to reach their
customers and viewers. We are also making great headway with
Rubik, where we increased our client base from 10 to 14 in a short
period of time. Our political vertical will benefit from
almost $4.5 billion in expenditures
related to the 2016 elections, and our Sports business addresses a
very large market. We are excited about these and many other
opportunities and our ongoing ability to monetize them."
Gross margin was 64 percent of revenue for the first quarter of
fiscal 2016, compared with 66 percent for the same period last
year, related to changes in revenue mix, including a substantial
increase in TV Everywhere™ revenue which generates lower
margins than Rentrak's other product lines, and the addition of two
major data providers for the company's TV Essentials®
product.
Operating expenses for the first quarter of fiscal 2016 totaled
$15.6 million, versus $16.1 million for the first quarter of fiscal
2015. For the fiscal 2016 period, Rentrak adjusted its
earn-out arrangement with iTVX, and recorded a benefit of
$3.7 million because it was
determined that only the minimum earn-out provisions would be
achieved. Subsequent to the end of the quarter, Rentrak paid
approximately $500,000 in cash to
settle the earn-out obligation in full.
Operating income for the first quarter of fiscal 2016 was
$2.0 million, which included
$1.8 million in stock-based
compensation costs and $213,000 in
acquisition costs, offset by the $3.7
million credit related to the iTVX earn-out. Operating
loss for the first quarter of fiscal 2015 was $1.4 million, which included $1.7 million in stock-based compensation costs
and $46,000 in acquisition costs,
partially offset by a $500,000 credit
related to the iTVX earn-out. Excluding these amounts for
both periods, operating income would have increased to $345,000 for the first quarter of fiscal 2016, up
from an operating loss of $122,000
for the first quarter of fiscal 2015.
Income from continuing operations, net of income taxes, totaled
$1.5 million, or $0.10 per diluted share, for the first quarter of
fiscal 2016, versus a loss of $1.4
million, or $0.11 per share,
for the same period last year. Excluding the costs mentioned
above for both periods, as well as the net loss attributable to
noncontrolling interest, loss from continuing operations, net of
income taxes, for the first quarter of fiscal 2016 would have been
$157,000, or $0.01 per share, compared with a loss from
continuing operations of $131,000, or
$0.01 per share, for the same period
last year. For the first quarter of fiscal 2016 the company's
tax rate was 30 percent, compared with a benefit of 2
percent for the same period last year.
Net income was $1.6 million, or
$0.10 per diluted share, for the
first quarter of fiscal 2016, compared with a net loss, including
discontinued operations, of $966,000,
or $0.08 per share, for the first
quarter of fiscal 2015. Excluding the costs mentioned above
for both periods, the company's net loss would have been
$84,000, or $0.01 per share, for the first quarter of fiscal
2016, compared with net income, including discontinued operations,
of $270,000, or $0.02 per diluted share, for the same period last
year. The reduction related primarily to higher tax expense
in the fiscal 2016 period, compared with the prior-year period.
Adjusted EBITDA (a non-GAAP measure) grew to $2.7 million for the first quarter of fiscal
2016, up from $1.5 million for the
same period last year. A 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.
Rentrak used $3.0 million in cash
from operating activities, for the first quarter of fiscal 2016,
compared with using $606,000 in cash
from operating activities, including discontinued operations, for
the first quarter of fiscal 2015. Most of the cash used was
for payments to Kantar for transition-related services resulting
from Rentrak's acquisition of Kantar's U.S.-based television
measurement assets, as well as payments related to the sale of
Rentrak's Pay-Per-Transaction (PPT) business.
Rentrak's cash, cash equivalents and marketable securities
balance was $79.0 million at
June 30, 2015, compared with $84.0
million at March 31, 2015.
Rentrak's recent milestones include:
- Entering into a partnership agreement with Oracle Data
Cloud.
- Working with two major advertising agency holding companies
that will conduct business using Rentrak's currency in the majority
of local television markets in the United
States.
- Adding 25 local TV station clients, and eight new local
markets, including from major television station groups such as
Sinclair Broadcast Group and Nexstar Broadcasting Group.
- Entering into an exclusive contract with MovieTickets.com to
create tools that will benefit television networks, MVPDs and movie
studios.
Business Outlook
Rentrak reiterated its fiscal 2016 guidance and selected
longer-term metrics, including:
- Total company revenue growth of 36 percent to 39 percent.
- TV Everywhere™ revenue growth of 55 percent to 65 percent.
- Accelerating Movies Everywhere™ growth in the second half of
fiscal 2016 related to anticipated contract renewal increases from
large domestic studios. The product line will continue to be
affected by foreign exchange movements.
- Adjusted EBITDA before acquisition and reorganization costs of
$22.7 million to $25.9 million, or 16
percent to 18 percent of revenues.
- Longer-term adjusted EBITDA return on revenue target of
35%.
- Tax expense of approximately $4.0
million for the year, most of which is expected to be
non-cash.
- Approximately 16.4 million fully diluted weighted average
shares outstanding.
- Capital spending of approximately $13.0
million to $14.0 million.
Conference Call
Rentrak will hold a conference call at 5:00
p.m. ET/2:00 p.m. PT today to
discuss its fiscal 2016 first quarter financial results.
Shareholders, members of the media and other interested parties may
participate in the call by dialing 866-652-5200 toll free, or
412-317-6060 from international locations, and asking to be
connected to the Rentrak Corporation conference call. 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 10, 2016. An audio replay of this
call will be available until August 17,
2015 by dialing 877-344-7529 from the U.S., 855-669-9658
from Canada, or 412-317-0088 from
international locations, passcode 10068817.
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 its 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.
Forward-looking statements may be identified by the use of
forward-looking words such as "should," "plan," "believe,"
"expects," "anticipate," target," "outlook," or "continues" or the
negative thereof or variations thereon or comparable
terminology. Forward-looking statements in this release
include, without limitation, statements regarding Rentrak's ability
to achieve its full year guidance, the impact of Rentrak's new
partnership with Oracle, headway the company is making with
Rubik, its Sports business and in the political
category, its ability to monetize future opportunities and
statements under the heading "Business Outlook." 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 customers and retain
existing customers, the company's success in maintaining its
relationships with its customers and partners, the company's
ability to successfully develop and market new products to create
new revenue streams and grow its existing revenue streams, foreign
currency exchange rate fluctuations, 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
CONTACT:
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,
|
|
|
2015
|
|
2014
|
Revenue
|
|
$ 27,529
|
|
$ 22,344
|
Cost of
revenue
|
|
9,893
|
|
7,604
|
Gross
margin
|
|
17,636
|
|
14,740
|
Operating
expenses:
|
|
|
|
|
Selling, general and
administrative
|
|
11,660
|
|
12,834
|
Research, technology
and innovation
|
|
3,979
|
|
3,264
|
Total operating
expenses
|
|
15,639
|
|
16,098
|
Income (loss) from
continuing operations
|
|
1,997
|
|
(1,358)
|
Other income,
net
|
|
151
|
|
20
|
Income (loss) from
continuing operations before income taxes
|
|
2,148
|
|
(1,338)
|
Provision for income
taxes
|
|
653
|
|
29
|
Income (loss) from
continuing operations, net of income taxes
|
|
1,495
|
|
(1,367)
|
Income from
discontinued operations, net of income taxes
|
|
—
|
|
348
|
Net income
(loss)
|
|
1,495
|
|
(1,019)
|
Net loss attributable
to noncontrolling interest
|
|
(73)
|
|
(53)
|
Net income (loss)
attributable to Rentrak Corporation
|
|
$ 1,568
|
|
$ (966)
|
|
|
|
|
|
Income (loss) per
share from continuing operations attributable to Rentrak
Corporation common stockholders:
|
|
|
Basic
|
|
$ 0.10
|
|
$ (0.11)
|
Diluted
|
|
$ 0.10
|
|
$ (0.11)
|
|
|
|
|
|
Income per share from
discontinued operations attributable to Rentrak Corporation common
stockholders:
|
|
|
Basic
|
|
$ —
|
|
$ 0.03
|
Diluted
|
|
$ —
|
|
$ 0.03
|
|
|
|
|
|
Net income (loss) per
share attributable to Rentrak Corporation common
stockholders:
|
|
|
Basic
|
|
$ 0.10
|
|
$ (0.08)
|
Diluted
|
|
$ 0.10
|
|
$ (0.08)
|
|
|
|
|
|
Shares used in per
share calculations:
|
|
|
|
|
Basic
|
|
15,273
|
|
12,505
|
Diluted
|
|
16,178
|
|
12,505
|
Rentrak
Corporation and Subsidiaries
|
Condensed
Consolidated Balance Sheets
|
(In thousands, except
per share amounts)
|
(Unaudited)
|
|
|
|
June 30,
2015
|
|
March 31,
2015
|
Assets
|
|
|
|
|
Current
Assets:
|
|
|
|
|
Cash and cash
equivalents
|
|
$
7,965
|
|
$
3,691
|
Marketable
securities
|
|
70,991
|
|
80,318
|
Accounts receivable,
net of allowances for doubtful accounts of $69 and $179
|
|
17,569
|
|
16,884
|
Deferred tax assets,
net
|
|
97
|
|
60
|
Other current
assets
|
|
3,531
|
|
3,928
|
Total Current
Assets
|
|
100,153
|
|
104,881
|
Property and
equipment, net of accumulated depreciation of $30,929 and
$29,121
|
|
26,874
|
|
23,035
|
Goodwill
|
|
135,952
|
|
135,890
|
Other intangible
assets, net of accumulated amortization of $4,669 and
$4,203
|
|
16,111
|
|
16,384
|
Other
assets
|
|
4,347
|
|
4,333
|
Total
Assets
|
|
$
283,437
|
|
$
284,523
|
Liabilities and
Stockholders' Equity
|
|
|
|
|
Current
Liabilities:
|
|
|
|
|
Accounts
payable
|
|
$
5,925
|
|
$
3,967
|
Accrued
liabilities
|
|
550
|
|
592
|
Accrued data provider
liabilities
|
|
7,109
|
|
6,690
|
Accrued
compensation
|
|
5,912
|
|
11,724
|
Deferred revenue and
other credits
|
|
3,485
|
|
3,812
|
Total Current
Liabilities
|
|
22,981
|
|
26,785
|
Deferred rent,
long-term
|
|
2,285
|
|
2,358
|
Accrued compensation,
long-term
|
|
92
|
|
90
|
Taxes payable,
long-term
|
|
470
|
|
465
|
Deferred tax
liability, net, long-term
|
|
2,813
|
|
2,228
|
Total
Liabilities
|
|
28,641
|
|
31,926
|
Commitments and
Contingencies
|
|
—
|
|
—
|
Stockholders'
Equity:
|
|
|
|
|
Preferred stock,
$0.001 par value; 10,000 shares authorized; none issued
|
|
—
|
|
—
|
Common stock, $0.001
par value; shares authorized: 75,000; shares issued and
outstanding: 15,339 and 15,251
|
|
15
|
|
15
|
Capital in excess of
par value
|
|
285,835
|
|
285,280
|
Accumulated other
comprehensive income
|
|
613
|
|
464
|
Accumulated
deficit
|
|
(32,243)
|
|
(33,811)
|
Stockholders' Equity
attributable to Rentrak Corporation
|
|
254,220
|
|
251,948
|
Noncontrolling
interest
|
|
576
|
|
649
|
Total Stockholders'
Equity
|
|
254,796
|
|
252,597
|
Total Liabilities and
Stockholders' Equity
|
|
$
283,437
|
|
$
284,523
|
Rentrak
Corporation and Subsidiaries
|
Condensed
Consolidated Statements of Cash Flows
|
(In
thousands)
|
(Unaudited)
|
|
|
For the Three
Months Ended June 30,
|
|
2015
|
|
2014
|
Cash flows from
operating activities:
|
|
|
|
Net income
(loss)
|
$ 1,495
|
|
$ (1,019)
|
Income from
discontinued operations, net of income taxes
|
—
|
|
(348)
|
Adjustments to
reconcile net income (loss) to net cash flows used in operating
activities of continuing operations:
|
|
|
|
Depreciation and
amortization
|
2,317
|
|
1,655
|
Stock-based
compensation
|
1,840
|
|
1,690
|
iTVX stock-based
compensation
|
(3,705)
|
|
(500)
|
Deferred income
taxes
|
548
|
|
60
|
Loss on disposition
of assets
|
2
|
|
41
|
Realized loss on
marketable securities
|
54
|
|
—
|
Adjustment to
allowance for doubtful accounts
|
(110)
|
|
(90)
|
(Increase) decrease
in:
|
|
|
|
Accounts
receivable
|
(900)
|
|
(671)
|
Taxes receivable and
prepaid taxes
|
—
|
|
122
|
Other
assets
|
331
|
|
441
|
Increase (decrease)
in:
|
|
|
|
Accounts
payable
|
(542)
|
|
154
|
Taxes
payable
|
30
|
|
341
|
Accrued liabilities
and compensation
|
(4,007)
|
|
(2,877)
|
Deferred
revenue
|
(326)
|
|
38
|
Deferred
rent
|
(74)
|
|
(35)
|
Net cash provided by
operating activities of discontinued operations
|
—
|
|
392
|
Net cash used in
operating activities
|
(3,047)
|
|
(606)
|
Cash flows from
investing activities:
|
|
|
|
Purchase of
marketable securities
|
—
|
|
(2,000)
|
Sale of marketable
securities
|
9,250
|
|
6,000
|
Payments made to
develop intangible assets
|
(37)
|
|
(26)
|
Purchase of property
and equipment, including capitalized IT labor costs
|
(2,853)
|
|
(1,870)
|
Net cash provided
by investing activities
|
6,360
|
|
2,104
|
Cash flows from
financing activities:
|
|
|
|
Proceeds from
issuance of common stock
|
856
|
|
298
|
Net cash provided
by financing activities
|
856
|
|
298
|
Effect of foreign
exchange translation on cash
|
105
|
|
280
|
Increase in cash
and cash equivalents
|
4,274
|
|
2,076
|
Cash and cash
equivalents:
|
|
|
|
Beginning of
period
|
3,691
|
|
5,102
|
End of
period
|
$ 7,965
|
|
$ 7,178
|
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,
|
|
|
2015
|
|
2014
|
Net income (loss)
attributable to Rentrak Corporation
|
|
$ 1,568
|
|
$ (966)
|
Adjustments:
|
|
|
|
|
Income from
discontinued operations, net of income taxes
|
|
—
|
|
(348)
|
Provision for income
taxes
|
|
653
|
|
29
|
Investment income,
net
|
|
(207)
|
|
(61)
|
Depreciation and
amortization from continuing operations
|
|
2,317
|
|
1,655
|
Stock-based
compensation from continuing operations(1)
|
|
1,840
|
|
1,690
|
Adjusted
EBITDA
|
|
$ 6,171
|
|
$ 1,999
|
iTVX stock-based
compensation
|
|
(3,705)
|
|
(500)
|
Acquisition
costs
|
|
213
|
|
46
|
Adjusted EBITDA
before iTVX stock-based compensation and acquisition
costs
|
|
$ 2,679
|
|
$ 1,545
|
|
|
|
|
|
|
|
For the Three
Months Ended June 30,
|
|
|
2015
|
|
2014
|
EPS (diluted), as
reported
|
|
$ 0.10
|
|
$ (0.08)
|
iTVX stock-based
compensation
|
|
(0.23)
|
|
(0.04)
|
Income from
discontinued operations, net of income taxes
|
|
—
|
|
(0.03)
|
Acquisition
costs
|
|
0.01
|
|
—
|
Stock-based
compensation from continuing operations(1)
|
|
0.11
|
|
0.14
|
Non-GAAP Diluted
EPS
|
|
$ (0.01)
|
|
$ (0.01)
|
(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, 2015 and 2014 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 non-cash
items, such as stock-based compensation, as well as cash-settled
items, such as acquisition and non-recurring costs, as we believe
these are not representative of our ongoing operating performance
and we believe excluding these costs provide a useful metric by
which to compare 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.
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SOURCE Rentrak Corporation