Company Affirms Annual EPS Projection of $0.80-0.85 Range
1.1 Million Shares Repurchased During Quarter
PORTLAND, Ore. (August 14, 2001)-Rentrak Corporation (Nasdaq:RENT) today announced that for the quarter ended June 30, 2001, consolidated net earnings were a record $4.7 million or $0.42 per diluted share on 11.3 million shares outstanding, compared with $249,999 or $0.02 per diluted share on 10.9 million shares outstanding in the comparable quarter the prior year. Total consolidated revenues in the quarter were $29.0 million, compared with $29.5 million in the same period last year.
Total revenues for the fourth quarter were $30.5 million, up 3.4 percent from $29.5 million in the comparable quarter of the prior year. Quarterly revenues for the company`s core entertainment business included the recognition of revenue from Movie Gallery (Nasdaq:MOVI) related to the amendment of the supply agreement between the two parties.
Excluding 3PF.COM, Inc. (3PF), Rentrak`s majority-owned e-fulfillment subsidiary, Rentrak reported net earnings of $6.8 million or $0.60 per diluted share on revenues of $25.0 million, compared with net earnings of $796,859 million or $0.07 per diluted share on revenues of $25.9 million in the same period last year. Revenues were negatively impacted by videocassettes for three major revenue-generating titles being shipped near the end of the first fiscal quarter, which reduced the rental transaction revenue recorded in the period. The total after-tax benefit to the company in the first quarter from the previously announced restructuring of its joint venture agreement with Rentrak Japan was $6.8 million or $0.60 per diluted share. Excluding the impact from the restructuring of the Rentrak Japan agreement and excluding other one-time charges unrelated to operations, totaling approximately $0.7 million in the quarter, Pay-Per-Transaction (PPTŪ) net operating results would have been approximately $0.4 million or $0.04 per diluted share.
Paul Rosenbaum, Rentrak`s Chairman and CEO said, "We are encouraged that our PPTŪ business, which excludes all subsidiary operations and the Rentrak Japan restructuring impact, was profitable from continuing operations in the quarter despite lower revenues. We shipped more videocassettes this fiscal quarter than we did in the comparable quarter last year, and we are well ahead of last year`s shipment pace through two months of the current quarter."
Mr. Rosenbaum continued, "Our second fiscal quarter PPTŪ revenues should benefit from increased videocassette shipments, as well as from expected rental transactions for the titles we shipped near the end of the first fiscal quarter. We expect the remaining $2.4 million payment as part of the Rentrak Japan restructuring to occur in the third quarter."
During the quarter the company repurchased 1,004,000 shares of its common stock as part of its joint venture restructuring with Rentrak Japan. The company also repurchased 125,000 shares as part of its announced program to repurchase up to 750,000 shares of its common stock.
"Repurchasing more than 1.1 million shares of Rentrak`s common stock demonstrates that the members of the board of directors have confidence in the future direction on Rentrak and a commitment to increasing shareowner value," Mr. Rosenbaum said. "Rentrak`s core information management business for revenue-sharing videocassettes remains strong and our future growth opportunities for processing transactions of digitally delivered content are outstanding. We remain highly confident in affirming the previously announced expected annual earnings per share in the $0.80-0.85 range."
For the quarter ended June 30, 2001, revenues for 3PF were $4.8 million, up 12 percent from $4.3 million in the comparable period a year earlier. 3PF experienced a net quarterly loss equivalent to $0.18 per diluted Rentrak share, compared with a $0.05 loss in last year`s comparable quarter. Excluding one-time costs, 3PF`s net loss would have been $0.9 million or $0.08 per diluted share.
"Approximately 55 percent of 3PF`s loss for the quarter can be attributed to previously announced one-time costs associated with the bankruptcy filing of a 3PF client and the consolidation of the Chicago office into 3PF`s headquarters location in Wilmington, Ohio," noted Paul Rosenbaum, Chairman, President and CEO of 3PF.
Mr. Rosenbaum continued, "We believe we have taken the necessary steps to put 3PF on a path to profitability in the next 12 months. During the quarter, 3PF`s management team, headed by Chief Operating Officer, George Kuper, has developed new detailed budgets, marketing strategies and operations plans that are very encouraging. As we continue to improve 3PF operations, we also are exploring every possible option to increase value for Rentrak shareowners."
Mr. Rosenbaum continued, "We have made significant progress on the development of the company`s software solution that captures, processes and reports transaction data for any entertainment software delivered digitally or non-digitally to a consumer, including movies, special events, computer games and music. We have positioned ourselves to play a central role in this developing market by continuing to meet with key players including, studios, cable operators, equipment manufacturers, digital rights management companies and data streaming companies with which we expect to develop strategic alliances. Given our expertise and relationships with movie studios, we expect our first applications for the new software will be in full test phase by year-end."
About Rentrak Corporation
Rentrak Corporation is an information management company and the world`s largest processor of rental and sales data for home entertainment media obtained on a revenue-sharing basis. The company services most motion picture studios and over 10,000 retail video rental locations throughout the U.S. and Canada. For further information please refer to Rentrak`s corporate Web site at http://www.rentrak.com.
Through its third party fulfillment subsidiary, 3PF, the company provides inventory management, order processing, fulfillment and sophisticated information management services through its EssentialsŪ software suite to companies requiring 24/7 just-in-time fulfillment. 3PF can be accessed on the Web at http://www.3PF.com.
Contact: Rick Nida, Rentrak Corporation, 503-284-7581, Ext. 295, RAN@rentrak.com
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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 both 3PF and PPTŪ 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 videocassettes subject to company guarantees and Rentrak and 3PF 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, 2000, annual report on Form 10-K, 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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