SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) March 28, 1996
Rentrak Corporation
(Exact Name of Registrant as Specified in its Charter)
Oregon D-15159 93-0780536
(State or Other (Commission File (I.R.S. Employer
Jurisdiction of Number) Identification No.)
Incorporation)
7227 N.E. 55th Avenue,
Portland, Oregon 97218
(Address of Principal Executive (Zip Code)
Offices)
(503) 284-7581
(Registrant's Telephone Number, Including Area Code)
N/A
(Former Name or Former Address, if Changed Since Last Report)
Index to Exhibits appears at page 2.
Item 5. Other Events
On March 28, 1996, Rentrak Corporation released a press release
announcing Corporate restructuring designed to benefit Shareholders,
a copy of which is attached hereto as Exhibit 1. The information
contained in such press release is incorporated by reference herein
in its entirety.
Item 7. Financial Statements and Exhibits
(a) The following exhibit is filed as part of this Report:
1. Press Release Issued March 28, 1996
SIGNATURE
Pursuant to the requirements of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be
signed on its behalf by the undersigned hereunto duly authorized.
April 2, 1996
RENTRAK CORPORATION
/s/ F. Kim Cox
By:
Name: F. Kim Cox
Title: Executive Vice
President and Secretary
RENTRAK CORPORATION
7227 Northeast 55th Avenue
Portland, OR 97218
TRADED: NASDAQ - RENT
AT THE COMPANY: AT FRB SAN FRANCISCO:
Ron Berger Hannah Bruce (General Information)
Chairman, President and CEO Bonnie McBride (Analyst Contact)
(503) 284-7581 (415) 986-1591
FOR IMMEDIATE RELEASE
THURSDAY, MARCH 28, 1996
RENTRAK ANNOUNCES CORPORATE RESTRUCTURING DESIGNED TO
BENEFIT SHAREHOLDERS
PORTLAND, OR, MARCH 28, 1996 -- Rentrak Corporation (Nasdaq: RENT) today
announced that its Board of Directors approved in principle the spin-off of its
Pro Image, Inc. subsidiary into a public company. When completed, Rentrak
shareholders would be issued new shares representing 100 percent ownership of
Pro Image, Inc. Rentrak's Board of Directors and management also announced it
is reviewing alternatives for the divestiture of the company's Blowout
Entertainment subsidiary.
Rentrak Chairman and Chief Executive Officer, Ron Berger, said, "For quite some
time we have been evaluating alternatives for maximizing shareholder value in
Rentrak. We are very enthusiastic about this restructuring as we believe it will
contribute to increased growth in Rentrak s core business and its subsidiaries
as well as to Rentrak s improved corporate value. Rentrak currently has three
divisions: its core home entertainment Pay-Per-Transaction (PPT) division;
Blowout Entertainment, a chain of 181 video rental and sales stores; and Pro
Image, Inc., an independent chain of licensed sports apparel stores."
HOME ENTERTAINMENT DIVISION TO BECOME RENTRAK'S ONLY BUSINESS
If a separation of Rentrak s Pro Image, Inc. and Blowout Entertainment
subsidiaries is ultimately effected, Rentrak's Home Entertainment division,
which distributes videocassettes to video rental stores through its proprietary,
Pay-Per-Transaction (PPT) system, will become the company s only operating
business.
"Rentrak's Pay-Per-Transaction (PPT) revenue-sharing distribution system
reported revenues of
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nearly $78 million for the nine months ended December 31, 1995, adding over
1,000 new outlets to its active store base this year," Berger stated.
"Our business continues to grow as motion picture studios seek higher profits
through broader distribution and retailers seek cost-effective ways to deepen
their video selection offerings to consumers. We believe that this business
will significantly benefit from management s focused attention."
PRO IMAGE TO BECOME PUBLIC COMPANY
The company's Pro Image subsidiary, which franchises or owns over 236 licensed
sports apparel stores, would be spun-off to Rentrak shareholders in the form of
a stock dividend. The spin-off, which is subject to certain approvals and
filings, including the formal declaration of a dividend, is expected to be
completed during the second half of 1996.
As a result of its decision, Rentrak will treat this division as a discontinued
operation in the fiscal 1996 year-end results. These results are expected to
include a provision for losses and costs to be incurred in connection with the
divestiture. The company expects to announce fiscal 1996 results on or about
June 11, 1996. Rentrak intends to apply for a ruling from the Internal Revenue
Service on the tax-free nature of the proposed transaction, although the
spin-off will not be conditioned on obtaining a favorable ruling.
"While we have taken steps to increase sales and improve operating profits at
Pro Image, we believe that divestiture of this division is in the best long-term
interests of Rentrak shareholders. We believe that as an independent company,
Pro Image will be better able to manage its growth, and Rentrak management will
be able to focus its full attention and resources on its core PPT business,"
Berger stated.
Pro Image, Inc. is the world s largest specialty retailer of licensed sports
apparel. The chain s 236 stores are primarily located in major regional malls
and feature premium-priced clothing and accessories identical to those worn by
professional athletes. For the nine months ended December 31, 1995, this
division reported revenues of $26.8 million.
RENTRAK EXPLORING OPTIONS REGARDING BLOWOUT ENTERTAINMENT
The company intends to reduce its stake in its Blowout Entertainment subsidiary
at the earliest practicable date and has retained an investment advisor to
explore strategic options regarding the divestiture of this subsidiary for the
company to review. Blowout Entertainment is a chain of 181 video rental and
sales stores located inside Wal-Mart and Kmart supercenters and Ralphs grocery
stores.
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"Due to its "store within a store" arrangements with Wal-Mart, Kmart and Ralphs
grocery stores, we believe this business unit has a very exciting future.
However, with the expected rate of new store openings, it is also anticipated
that the subsidiary will incur significant costs that will require substantial
capital and management resources. The Board of Directors and management will be
evaluating divestiture alternatives," concluded Berger.
For the nine months ended December 31,1995, Blowout reported $10.7 million in
revenues.
PENNSYLVANIA MERCHANT GROUP RETAINED AS FINANCIAL ADVISOR
Rentrak also announced that it has retained Pennsylvania Merchant Group, Ltd.
(PMG), an investment banking and venture capital firm, to assist in the
corporate restructuring of the company. PMG has agreed to handle the
distribution of shares of Pro Image, act as a market maker for the stock and
assist Rentrak in exploring options regarding the divestiture of its Blowout
Entertainment subsidiary.
COMPANY PROFILE
Headquartered in Portland, Oregon, Rentrak Corporation's Pay-Per-Transaction
(PPT) division is the world's largest nontraditional distributor of
videocassettes. About 4,600 outlets throughout North America stock cassettes
leased through Rentrak s system from more than 30 suppliers. Rentrak offers
retailers using the PPT system videocassettes at an initial cost which is a
fraction of the usual distributor charge. The company also has two
subsidiaries: Pro Image, Inc., a chain of specialty retail stores and Blowout
Entertainment, a chain of video rental outlets that primarily operate within
Wal-mart and Kmart supercenters.
Forward-Looking Statements
When used in this discussion, the words "believes", "anticipates", "expects"
and similar expressions are intended to identify forward-looking statements.
Such statements are subject to certain risks and uncertainties that could cause
actual results to differ materially from those projected. Factors which could
affect the company's financial results are described in the company's March 31,
1995 Annual Report on Form 10-K and the company s 10-Q for the quarter ended
December 31, 1995 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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