SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 For Quarter Ended:
September 30, 2000
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934 For the Transition
Period from to
Commission file number: 0-15159
RENTRAK CORPORATION
(Exact name of registrant as specified in its charter)
OREGON 93-0780536
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification no.)
7700 NE Ambassador Place, Portland, Oregon 97220
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (503)
284-7581
Indicate by check mark whether the registrant (1) has filed
all reports required to be filed by Section 13 or 15(d) of
the Securities Exchange Act of 1934 during the preceding 12
months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. Yes (x) No
( )
As of October 31, 2000, the Registrant had 12,580,606 shares
of Common Stock outstanding.
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Balance Sheets as of September 30, 2000
and March 31, 2000
Consolidated Statements of Operations for the three
month periods ended September 30, 2000 and September
30, 1999
Consolidated Statements of Operations for the six month
periods ended September 30, 2000 and September 30, 1999
Consolidated Statements of Cash Flows for the six month
periods ended September 30, 2000 and September 30, 1999
Notes to Consolidated Financial Statements
<TABLE>
<CAPTION>
RENTRAK CORPORATION
CONSOLIDATED BALANCE SHEETS
ASSETS
(UNAUDITED)
September 30, March 31,
2000 2000
-------------- --------------
<S> <C> <C>
CURRENT ASSETS:
Cash and cash equivalents $ 747,950 $ 4,028,271
Accounts receivable, net of allowance for doubtful
accounts of $1,133,880 and $836,945 11,522,761 21,820,168
Advances to program suppliers 1,635,157 2,982,766
Inventory 3,739,332 3,889,603
Income tax receivable 660,710 169,300
Deferred tax asset 3,186,105 1,878,113
Notes receivable - 4,061,618
Other current assets 2,529,028 1,757,081
-------------- --------------
Total current assets 24,021,043 40,586,920
-------------- --------------
PROPERTY AND EQUIPMENT, net 3,282,498 2,642,700
OTHER INVESTMENTS, net - 302,481
DEFERRED TAX ASSET 7,612,778 3,346,212
OTHER ASSETS 2,085,971 3,595,041
-------------- --------------
TOTAL ASSETS $ 37,002,290 $50,473,354
============== ==============
The accompanying notes are an integral
part of these consolidated balance sheets.
</TABLE>
<TABLE>
<CAPTION>
RENTRAK CORPORATION
CONSOLIDATED BALANCE SHEETS
LIABILITIES AND STOCKHOLDERS' EQUITY
(UNAUDITED)
September 30, March 31,
2000 2000
------------- -------------
<S> <C> <C>
CURRENT LIABILITIES:
Line of credit $ 39,284 $ -
Accounts payable 17,967,726 24,162,040
Accrued liabilities 3,464,853 2,645,567
Accrued compensation 691,951 1,476,703
Current portion of deferred revenue 1,471,734 1,500,262
Notes payable - 500,000
Net current liabilities of
discontinued operations 273,136 430,923
------------- -------------
Total current liabilities 23,908,684 30,715,495
------------- -------------
LONG-TERM DEFERRED REVENUE 3,376,131 1,677,272
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
Preferred stock $.001 par value;
Authorized: 10,000,000 shares - -
Common stock, $.001 par value;
Authorized: 30,000,000 shares
Issued and outstanding: 12,579,961 shares
at September 30, 2000 and 10,514,561 at
March 31, 2000 12,580 10,515
Capital in excess of par value 54,297,172 44,445,199
Notes receivable (9,441,379) -
Cumulative other comprehensive income (51,395) (264,684)
Accumulated deficit (34,645,942) (25,326,951)
Less - Deferred charge - warrants (453,561) (783,492)
------------- -------------
9,717,475 18,080,587
------------- -------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $37,002,290 $50,473,354
============ ============
The accompanying notes are an integral
part of these consolidated balance sheets.
</TABLE>
<TABLE>
<CAPTION>
RENTRAK CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
Three Months Ended September 30,
2000 1999
<S> <C> <C>
REVENUES:
PPT $ 17,521,934 $ 22,967,631
Other 6,955,746 4,129,937
--------------- ---------------
24,477,680 27,097,568
--------------- ---------------
OPERATING COSTS AND EXPENSES:
Cost of sales 22,845,139 21,456,832
Selling, general, and administrative 16,881,299 4,108,825
Net expense from litigation settlement - 415,794
--------------- ---------------
39,726,438 25,981,451
--------------- ---------------
INCOME (LOSS) FROM OPERATIONS (15,248,758) 1,116,117
--------------- ---------------
OTHER INCOME (EXPENSE):
Interest income 99,640 35,761
Interest expense (166,037) (161,836)
--------------- ---------------
(66,397) (126,075)
--------------- ---------------
INCOME (LOSS) BEFORE INCOME TAX
PROVISION (BENEFIT) (15,315,155) 990,042
INCOME TAX PROVISION (BENEFIT) (5,746,162) 384,934
--------------- ---------------
NET INCOME (LOSS) $ (9,568,993) $ 605,108
=============== ===============
EARNINGS (LOSS) PER SHARE:
Basic: $ (0.77) $ 0.06
=============== ===============
Diluted: $ (0.77) $ 0.06
=============== ===============
The accompanying notes are an integral
part of these consolidated statements.
</TABLE>
<TABLE>
<CAPTION>
RENTRAK CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
Six Months Ended September 30,
2000 1999
<S> <C> <C>
REVENUES:
PPT $ 39,871,309 $ 49,408,942
Other 13,641,318 8,683,696
-------------- --------------
53,512,627 58,092,638
-------------- --------------
OPERATING COSTS AND EXPENSES:
Cost of sales 45,816,929 45,894,516
Selling, general, and administrative 22,761,661 8,076,954
Net (gain) expense from litigation set (225,000) 946,818
-------------- --------------
68,353,590 54,918,288
-------------- --------------
INCOME (LOSS) FROM OPERATIONS (14,840,963) 3,174,350
-------------- --------------
OTHER INCOME (EXPENSE):
Interest income 256,206 73,944
Interest expense (349,521) (327,261)
-------------- --------------
(93,315) (253,317)
-------------- --------------
INCOME (LOSS) FROM CONTINUING OPERATIONS
BEFORE INCOME TAX PROVISION (BENEFIT) (14,934,278) 2,921,033
INCOME TAX PROVISION (BENEFIT) (5,615,284) 1,076,439
-------------- --------------
INCOME (LOSS) FROM CONTINUING OPERATIONS (9,318,994) 1,844,594
GAIN FROM DISPOSAL OF DISCONTINUED
SUBSIDIARIES (PLUS INCOME TAX
BENEFIT OF $483,502) - 2,373,502
-------------- --------------
NET INCOME (LOSS) $ (9,318,994) $ 4,218,096
============== ==============
EARNINGS (LOSS) PER SHARE:
Basic:
Continuing operations $ (0.80) $ 0.18
Discontinued operations $ - $ 0.23
-------------- --------------
$ (0.80) $ 0.41
Diluted: ============== ==============
Continuing operations $ (0.80) $ 0.17
Discontinued operations $ - $ 0.23
-------------- --------------
$ (0.80) $ 0.40
============== ==============
The accompanying notes are an integral
part of these consolidated statements.
</TABLE>
<TABLE>
<CAPTION>
RENTRAK CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED) (UNAUDITED)
Six Months Six Months
Ended Ended
September 30, September 30,
2000 1999
-------- --------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income ($9,318,994) $4,218,096
Adjustments to reconcile income to
net cash provided by (used in) operating activities
Gain on disposal of discontinued operations - (2,373,502)
Loss on asset and investment / asset sales 567,986 17,697
Depreciation and amortization 639,577 668,775
Amortization of warrants 329,931 261,908
Studio advance reserves 1,158
Provision for doubtful accounts and other as 8,006,046 -
Deferred income taxes (5,705,280) -
Change in specific accounts:
Accounts receivable 5,005,870 (2,540,018)
Advances to program suppliers 1,240,828 133,702
Inventory (62,529) 193,528
Income tax receivable (491,410) 367,216
Notes receivable 4,061,618 -
Other current assets (1,192,472) 91,011
Accounts payable (7,509,856) (1,540,393)
Accrued liabilities & compensation 34,534 1,727,983
Deferred revenue 1,670,331 41,881
Notes payable (500,000) -
Net current liabilities of discontinued (157,787) (1,003,004)
-------- --------
Net cash provided by (used in) oper (3,381,607) 266,038
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property, equipment, and invent (1,226,334) (387,723)
Proceeds from sale of investments 1,554,750 361,894
Purchase of other assets & intangibles (679,073) (179,057)
-------- --------
Net cash used in investing activities (350,657) (204,886)
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net borrowings under line of credit 39,284 858,000
Issuance of common stock 412,659 138,012
-------- --------
Net cash provided by financing activit 451,943 996,012
-------- --------
NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS (3,280,321) 1,057,164
CASH AND CASH EQUIVALENTS AT BEGINNING
OF THIS PERIOD 4,028,271 2,145,963
-------- --------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $747,950 $3,203,127
===== =====
SUPPLEMENTAL DISCLOSURES OF CASH
FLOW INFORMATION:
Cash paid during the period for -
Interest $79,680 $169,076
Income taxes paid, net of refunds rece 336,530 76,085
NON-CASH TRANSACTIONS
Retailer Financing Program investment through
conversion of accounts receivable 41,149
Change in unrealized gain (loss) on investment
securities, net of tax (39,098) 276,786
Notes issued for common stock 9,441,379 -
The accompanying notes are an integral
part of these consolidated statements.
</TABLE>
RENTRAK CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
NOTE A: Basis of Presentation
The accompanying unaudited Condensed Consolidated Financial
Statements of RENTRAK CORPORATION (the "Company"), have
been prepared pursuant to the rules and regulations of the
Securities and Exchange Commission (SEC). Certain
information and footnote disclosures normally included in
financial statements prepared in accordance with generally
accepted accounting principles have been condensed or
omitted pursuant to such rules and regulations. The results
of operations for the three month and six month periods
ended September 30, 2000 are not necessarily indicative of
the results to be expected for the entire fiscal year ending
March 31, 2001. The Condensed Consolidated Financial
Statements should be read in conjunction with the
Consolidated Financial Statements and footnotes thereto
included in the Company's 2000 Annual Report to
Shareholders.
The Condensed Consolidated Financial Statements reflect, in
the opinion of management, all material adjustments (which
include, except as disclosed, only normal and recurring
adjustments) necessary to present fairly the Company's
financial position and results of operations.
The Condensed Consolidated Financial Statements include the
accounts of the Company, its majority owned subsidiaries,
and those subsidiaries in which the Company has a
controlling interest after elimination of all inter-company
accounts and transactions. Investments in affiliated
companies owned 20 to 50 percent are accounted for by the
equity method.
NOTE B: Net Income Per Share
Basic earnings per common share is computed by dividing net
income by the weighted average number of shares of common
stock outstanding during the periods. Diluted earnings per
common share is computed on the basis of the weighted
average shares of common stock outstanding plus common
equivalent shares arising from dilutive stock options and
warrants.
The weighted average number of shares of common stock
equivalents and net income used to compute basic and diluted
earnings per share for the three and six month periods ended
September 30, 2000 and 1999 were as follows:
<TABLE>
<CAPTION>
Note B: Net Income (Loss) Per Share
3-Months Ended 6-Months Ended
September 30, 2000 September 30, 2000
---------- ---------- ---------- ----------
Basic Diluted Basic Diluted
<S> <C> <C> <C> <C>
Weighted average
number of shares
of common stock
outstanding 12,373,606 12,373,606 11,595,261 11,595,261
Dilutive effect of
exercise of
stock options - - - -
---------- ---------- ---------- ----------
Weighted average
number of shares of
common stock
outstanding and
common stock
equivalents 12,373,606 12,373,606 11,595,261 11,595,261
========== ========== ========== ==========
Net Income:
Continuing operations $(9,568,993) $(9,568,993) $(9,318,994) $(9,318,994)
Discontinued operations - - - -
---------- ---------- ---------- ----------
Net income $(9,568,993) $(9,568,993) $(9,318,994) $(9,318,994)
========== ========== ========== ==========
Earnings per share:
Continuing operations ($0.77) ($0.77) ($0.80) ($0.80)
Discontinued operations - - - -
---------- ---------- ---------- ----------
Earnings per share ($0.77) ($0.77) ($0.80) ($0.80)
========== ========== ========== ==========
</TABLE>
<TABLE>
<CAPTION>
Note B: Net Income Per Share
3-Months Ended 6-Months Ended
September 30, 1999 September 30, 1999
--------- --------- --------- ---------
Basic Diluted Basic Diluted
<S> <C> <C> <C> <C>
Weighted average
number of shares
of common stock
outstanding 10,473,010 10,473,010 10,456,812 10,456,812
Dilutive effect of
exercise of
stock options - 327,073 - 214,072
--------- --------- --------- ---------
Weighted average
number of shares of
common stock
outstanding and
common stock
equivalents 10,473,010 10,800,083 10,456,812 10,670,884
========== ========== ========== ==========
Net Income:
Continuing operation $605,108 $ 605,108 $1,844,594 $1,844,594
Discontinued operati - - 2,373,502 2,373,502
--------- --------- --------- ---------
Net income $ 605,108 $ 605,108 $4,218,096 $4,218,096
========== ========== ========== ==========
Earnings per share:
Continuing operation $0.06 $0.06 $0.18 $0.17
Discontinued operati - - $0.23 $0.23
--------- --------- --------- ---------
Earnings per share $0.06 $0.06 $0.41 $0.40
========== ========== ========== ==========
</TABLE>
Note B: Net Income Per Share
Options and warrants to purchase approximately 3.3 million and 3.4 million
shares of common stock for the quarter ended September 30,
2000 and 1999 respectively, and 3.1 million and 4.5 million for the six
month period ended September 30, 2000 and 1999 respectively,
were outstanding but were not included in the computation of diluted
EPS because their effect would be antidilutive during the periods.
The options and warrants, which expire during fiscal years 2001
through 2009, remain outstanding at September 30, 2000.
NOTE C: Business Segments, Significant Suppliers and
Major Customers
The Company classifies its services in three segments, PPT,
3PF.COM, Inc. and Other. Under its Pay-Per-Transaction (PPT)
revenue sharing program, the Company enters into contracts
to lease videocassettes from program suppliers (producers of
motion pictures and licensees and distributors of home video
cassettes) which are then leased to retailers for a
percentage of the rentals charged by the retailers.
3PF.COM, Inc. is the Company's e-commerce provider of order
processing, fulfillment and inventory management services.
Other includes the operations of BlowOut Video, a video
retail subsidiary, ForMovies.Com, an internet service, and
amounts received pursuant to royalty agreements, primarily
from Rentrak Japan.
Business Segments
The following are the revenues and income (loss) from
operations of the company's business segments for the
periods indicated (unaudited):
(1) Total amounts differ from those reported on the
consolidated financial statements, as intercompany
transactions are not eliminated for segment reporting
purposes.
(2) 3PF.COM, Inc.'s revenues and PPT's costs related to the
shipment of cassettes to PPT customers was $477,992 and
$614,521 for the three month periods ended September
30, 2000 and 1999, respectively, and $1,249,181 and
$1,634,132 for the six month periods ended September
30, 2000 and September 30, 1999, respectively.
<TABLE>
<CAPTION>
Six Months Ended September 30, Three Months Ended September 30,
2000 1999 2000 1999
<S> <C> <C> <C> <C>
REVENUES: (1)
PPT $40,283,720 $49,808,149 $17,656,964 $23,252,501
3PF.COM, Inc. (2) 8,963,619 5,260,029 4,658,519 1,759,219
OTHER 5,926,880 5,057,799 2,775,219 2,985,239
------------ ------------ ------------ ------------
$55,174,219 $60,125,977 $25,090,702 $27,996,959
============ ============ ============ ============
INCOME (LOSS) FROM
OPERATIONS: (1)
PPT ($11,838,182) $2,051,342 ($12,847,988) $475,194
3PF.COM, Inc. (2,439,829) (98,596) (1,611,253) (440,630)
OTHER (562,952) 1,221,604 (789,517) 1,081,553
------------ ------------ ------------ ------------
($14,840,963) $3,174,350 ($15,248,758) $1,116,117
============ ============ ============ ============
</TABLE>
For the three month period ended September 30, 2000, the
Company had one program supplier whose product generated 21
percent, a second that generated 15 percent, and a third
that generated 11 percent of Rentrak revenue. For the six
month period ended September 30, 2000, the Company had one
program supplier whose product generated 20 percent, a
second that generated 19 percent, and a third that generated
an additional 11 percent of Rentrak revenue. No other
program supplier provided product which generated more than
10 percent of revenue for the three or six-month periods
ended September 30, 2000. No customer accounted for more
than 10 percent of the Company's revenue in the three and
six month periods ended September 30, 2000.
For the three month period ended September 30, 1999, the
Company had one program supplier whose product generated 29
percent, a second that generated 27 percent, and a third
that generated an additional 12 percent of Rentrak revenue.
For the six month period ended September 30, 1999, the
Company had one program supplier whose product generated 24
percent, a second that generated 23 percent, and a third
that generated an additional 15 percent of Rentrak revenue.
No other program supplier provided product which generated
more than 10 percent of revenue for the three or six month
periods ended September 30, 1999. No customer accounted for
more than 10 percent of the Company's revenue in the three
and six month periods ended September 30, 1999.
NOTE D: Discontinued Operations
On November 26, 1996, the Company made a distribution to its
shareholders of 1,457,343 shares of common stock of BlowOut
Entertainment, Inc. ("BlowOut"). The operations of BlowOut
were reflected as discontinued operations in the March 31,
1996 consolidated financial statements.
On March 22, 1999, BlowOut filed for Chapter 11 of the
Federal Bankruptcy Code in the United States Bankruptcy
Court for the District of Delaware. At that same time
BlowOut filed a motion to sell substantially all the assets
of BlowOut. The sale to a third party video retailer was
approved by the Bankruptcy Court on May 10, 1999, and closed
on May 17, 1999. The Company was the principal creditor of
BlowOut. In 1996, the Company had agreed to guarantee up to
$7 million of indebtedness of BlowOut ("Guarantee").
Pursuant to the terms of the Guarantee, the Company agreed
to guarantee any amounts outstanding under BlowOut's credit
facility. As the proceeds from the sale of the BlowOut
assets were not sufficient to cover the amounts due under
this facility, the Company, pursuant to the Guarantee,
agreed to a payment plan to fulfill BlowOut's obligation
under its credit facility. The amount outstanding at
September 30, 2000 is approximately $413,000. The funds
remaining, if any, after payment of administrative and cost
claims after dismissal of the case may further reduce the
amount due under the credit facility.
During the three month period ended June 30, 1999, the
Company recorded a gain on the disposal of discontinued
operations of $1.9 million related to BlowOut, as the
liability related to BlowOut contingencies was less than
estimated. The Company also reduced the valuation
allowance, which was recorded against the deferred tax asset
related to liabilities of discontinued operations. This
reduction of approximately $0.5 million in the valuation
allowance was recorded as an income tax benefit from
discontinued operations in the accompanying consolidated
income statement.
Net current liabilities of discontinued operations at
September 30, 2000, relate to amounts to be paid pursuant to
the Guarantee, net of tax benefit.
NOTE: E Agreement
In June 2000, the Company entered into an agreement with one
of its customers to modify an existing contract. Under
terms of the agreement the customer made a payment to the
Company in the amount of $2.5 million and also increased its
obligation to purchase PPT product. The entire payment has
been recorded as deferred revenue in the Company's restated
balance sheet at June 30, 2000. As part of this agreement,
the customer agreed to enter into certain additional
agreements to be agreed upon by the parties. One-half of
the payment relates to the modification of certain
contractual obligations, still to be negotiated by the
Company and the customer. This $1.25 million has been
recorded as long-term deferred revenue until the contract is
complete. The additional $1.25 million was paid to the
Company as a prepayment toward services to be provided by
the Company's subsidiary, 3PF.COM, Inc., through June 30,
2006, pursuant to an agreement under negotiation. As
services are provided by 3PF.COM, Inc., it is contemplated
that the customer can apply the prepaid $1.25 million as
payment for certain of these services. Accordingly, this
$1.25 million has been recorded as long-term deferred
revenue. The customer has taken the position that it is
entitled to a refund of the $2.5 million payment upon its
request if the additional agreements were not finalized by
July 14, 2000. While the customer has made such a request
for refund, the parties are continuing to negotiate the
additional agreements.
NOTE F: Related Party Transactions
On June 16, 2000, the Company loaned the total of $8,097,636
to two of its officers to purchase 1,663,526 shares of stock
upon exercise of their employee stock options. At various
times during the three month period ended September 30,
2000, the Company additionally loaned $1,343,743 to some of
its officers to purchase 283,277 shares of stock upon
exercise of their employee stock options. The loans bear
interest at the federal funds rate in effect on the date of
the loan (6.5%) and interest is payable annually. The
Company is not accruing interest on these loans. The
principal amount of the loans is due on the earliest to
occur of: (1) one year prior to the expiration of the term
of the borrower's current employment agreement with Rentrak,
(2) one year after the borrower leaves Rentrak's employment
unless such departure follows a "change of control" (as
defined in the loan agreements), (3) five years from the
date of the loan, or (4) one year from the date of the
borrower's death. The loans are secured by the stock
purchased. The loans are without recourse (except as to the
stock securing the loans) as to principal and are with full
recourse against the borrower as to interest. In accordance
with SEC regulations, the notes receivable arising from
these transactions are presented as deductions from
stockholders' equity.
Note G: Line of Credit
In May 2000 the Company obtained a replacement line of
credit with a lender in an amount not to exceed the lesser
of (a) $12 million or (b) the sum of 85% of the net amount
of eligible accounts receivable. Interest under the new
line is payable monthly at the bank's prime rate plus 1/4
percent (9.75 percent at September 30, 2000). The line is
secured by substantially all of the Company's assets. The
terms of the credit agreement include financial covenants
requiring: (1) $15 million of tangible net worth to be
maintained at all times; (2) a consolidated net profit to be
achieved each fiscal year equal to or exceeding $1.00 and
(3) $5 million of working capital to be maintained at all
times. The agreement also restricts the amount of loans and
indebtedness and limits the payment of dividends on the
Company's stock, among other requirements. This agreement
expires in May 2005. Based upon the financial results
reported as of September 30, 2000 and for the three month
and six month periods then ended, the Company has determined
it is out of compliance with the three financial covenants
as of September 30, 2000. The Company has initiated
discussions of these covenants with its lender and is
seeking waivers and covenant modifications. Based upon
discussions between the Company and its lender, the Company
believes it will successfully receive such waivers and
covenant modifications and will have sufficient cash
resources to repay all outstanding borrowings as due. At
September 30, 2000 and November 10, 2000, the Company had
$39,000 and $1.6 million outstanding borrowings,
respectively, under this agreement.
Note H: Proxy Contest
During the three month period ended September 30, 2000, the
Company was involved in a proxy contest that resulted in the
election of an entirely new board of directors. The cost of
this proxy contest to the Company included legal and proxy
solicitation expenses of $0.6 million and reimbursement in
the amount of $0.4 million by the Company to the dissident
shareholder group for their legal and proxy solicitation
expenses. Also as a result of the proxy contest, a
severance payment was made to the Company's former chairman
and chief executive officer in the amount of $1.3 million.
These amounts have been recorded in selling, general and
administrative expenses in the accompanying statements of
operations for the three and six month periods ended
September 30, 2000. In anticipation of a potential change
of control resulting from the proxy contest, the Company
developed a severance program for key employees. This
severance program provides for each key employee to receive
a designated severance payment, upon receipt of their
resignation by the Company within sixty days of the change
of control (September 19, 2000). The total amount of
potential severance payments designated for these key
employees is $1.7 million. As of September 30, 2000, no key
employee has received any payment or tendered their
resignation for payment under this severance program. As a
result, the Company has not accrued any liability at
September 30, 2000 for this potential cost.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Forward-Looking Statements
Certain information included in Management's Discussion and
Analysis of Financial Condition and Results of Operations
constitutes forward-looking statements that involve a number
of risks and uncertainties. Forward-looking statements are
identified by the use of forward-looking words such as
"may", "will", "expects", "intends", "anticipates",
"estimates", or "continues" or the negative thereof or
variations thereon or comparable terminology. The following
factors are among the factors that could cause actual
results to differ materially from the forward-looking
statements: the Company's ability to continue to market the
Pay Per Transaction ("PPT") System successfully, the
financial stability of participating retailers and their
performance of their obligations under the PPT System, non-
renewal or early termination of the Company's line of
credit, business conditions and growth in the video industry
and general economic conditions, both domestic and
international; competitive factors, including increased
competition, expansion of revenue sharing programs other
than the PPT System by program suppliers, new technology and
the continued availability of prerecorded videocassettes
("Cassettes") from program suppliers. Such factors are
discussed in more detail in the Company's 2000 Annual Report
to Shareholders.
Results of Operations
Continuing Operations
For the three month period ended September 30, 2000, total
revenue decreased $2.6 million, or 9.7 percent, to $24.5
million from $27.1 million for the three month period ended
September 30, 1999. For the six month period ended
September 30, 2000, total revenue decreased $4.6 million, or
7.9 percent, to $53.5 million from $58.1million for the six
month period ended September 30, 1999. Total revenue
includes the following PPT Program fees: application fees
generated when retailers are approved for participation in
the PPT System; order processing fees generated when
Cassettes are ordered by and distributed to retailers;
transaction fees generated when retailers rent Cassettes to
consumers; sell-through fees generated when retailers sell
Cassettes to consumers and buy out fees generated when
retailers purchase Cassettes at the end of the lease term.
In addition, total revenue includes charges to customers of
the Company's wholly owned subsidiary 3PF.COM, Inc., which
provides e-commerce order processing, fulfillment and
inventory management services, sales of Cassettes through
the Company's retail subsidiary BlowOut Video, charges for
internet services provided by the Company's subsidiary
ForMovies.Com and royalty payments primarily from Rentrak
Japan.
The decrease in total revenues for the three and six month
periods ended September 30, 2000, compared to the same
periods in the prior year, is primarily due to the reduction
in (i) the total number of Cassettes leased under the PPT
System due in part to actions by program suppliers to offer
more titles under copy depth programs than historical levels
and engage in direct revenue sharing with the larger chains;
(ii) the number of titles released to the PPT System; and
(iii) a lesser amount of box office titles released to the
PPT System. The reduction in revenue was partially offset
by an increase in revenue related to 3PF.COM, Inc.'s
services.
Cost of sales for the three month period ended September 30,
2000 increased to $22.8 million from $21.5 million for the
three month period ended September 30, 1999, an increase of
$1.3 million, or 6.5 percent. The increase is primarily due
to: (1) additional costs which were recorded in the quarter
ended September 30, 2000 related to the guaranteed minimum
payments due to program suppliers on certain movie titles
and (2) increased costs of sales of 3PF.COM, Inc. as the
result of the addition of more labor intensive customers,
the cost of new warehousing with no associated revenues, and
lease cost adjustments and increases. Cost of sales for
the six month period ended September 30, 2000 decreased to
$45.8 million from $45.9 million for the six month period
ended September 30, 1999, a decrease of $0.1 million, or 0.2
percent.
As a result, the gross profit margin decreased to 6.7
percent in the three month period ended September 30, 2000
from 20.8 percent in the three month period ended September
30, 1999 and the gross profit margin decreased to 14.4
percent in the six month period ended September 30, 2000
from 21.0 percent in the six month period ended September
30, 1999.
Selling, general and administrative expenses were $16.9
million for the three month period ended September 30, 2000
compared to $4.5 million for the three month period ended
September 30, 1999, an increase of $12.4 million. The
increase is primarily attributable to: (1) a $1.3 million
severance payment to the Company's former chairman and chief
executive officer (See Note H); (2) $0.6 million in legal
costs and proxy solicitation costs incurred by the Company
related to the proxy contest (See Note H);
(3) $0.4 million in costs to reimburse the dissident
shareholder group for their legal and other costs associated
with the proxy contest; (4) $6.1 million of costs
associated with the reserve or write-off of assets related
to the Company's Retailer Financing Program; (5) $1.0
million in write-offs of investments and other assets deemed
by the Company to be non-realizable; (6) $1.4 million in
write-offs of accounts receivable based on the Company's
assessment of the collectibility of those accounts due to
changes in the financial condition and payment ability of
those customers; and (7) a $0.5 million loss realized on the
sale of stock received previously by the Company pursuant to
the settlement of a claim with a prior customer. Selling,
general and administrative expenses were $22.5 million for
the six month period ended September 30, 2000 compared to
$9.0 million for the six month period ended September 30,
1999, an increase of $13.5 million. The increase is
primarily attributable to the same items described above.
The effective tax rate during the three month period ended
September 30, 2000 was
37.5 % compared to 38.9% during the three month period ended
September 30, 1999. The effective tax rate during the six
month period ended September 30, 2000 was 37.6 % compared to
36.9% during the six month period ended September 30, 1999.
As a result, for the three month period ended September 30,
2000, the Company recorded a loss from continuing operations
of $9.6 million, or 39.1 percent of total revenue, compared
to income from continuing operations of $0.6 million, or 2.2
percent of total revenue, in the three month period ended
September 30, 1999. For the six month period ended September
30, 2000, the Company recorded a loss from continuing
operations of $9.3 million, or 17.4 percent of total
revenue, compared to income from continuing operations of
$1.8 million, or 3.2 percent of total revenue, in the six
month period ended September 30, 1999.
Discontinued Operations
On March 22, 1999, BlowOut Entertainment, Inc. ("BlowOut")
filed for Chapter 11 of the Federal Bankruptcy Code in the
United States Bankruptcy Court for the District of Delaware.
At that same time BlowOut filed a motion to sell
substantially all the assets of BlowOut. BlowOut is not
related to the Company's wholly owned subsidiary BlowOut
Video, Inc. The sale to a third party video retailer was
approved on May 10, 1999 and closed on May 17, 1999.
During the three month period ended June 30, 1999, the
Company recorded a gain on the disposal of discontinued
operations of $1.9 million related to BlowOut as the
liability related to BlowOut contingencies was less than
anticipated. The Company also reduced the valuation
allowance, which was recorded against the deferred tax asset
related to liabilities of discontinued operations. This
reduction of $0.5 million in the valuation allowance was
recorded as an income tax benefit from discontinued
operations in the accompanying consolidated income
statement.
Consolidated Balance Sheet
At September 30, 2000, total assets were $37.0 million, a
decrease of $13.5 million from the $50.5 million at March
31, 2000. As of September 30, 2000, cash decreased $3.3
million to $0.7 million from $4.0 million at March 31, 2000,
primarily due to the reduction in accounts payable.
Accounts receivable decreased $10.3 million from $21.8
million at March 31, 2000 to $11.5 million at September 30,
2000 primarily due to the write off of amounts owing from
two customers in the Retailer Financing Program totaling
approximately $5.2 million and various other customer
account write-offs during the three month period ended
September 30, 2000, based on the Company's assessment of the
collectibility of those accounts due to changes in the
financial condition and payment ability of those customers ,
as well as a decline in revenues during the six month period
ended September 30, 2000. Advances to program suppliers
decreased $1.4 million from $3.0 million at March 31, 2000
to $1.6 million at September 30, 2000 primarily due to
timing of release dates for titles with guarantees to
suppliers and whether these guarantees are projected to be
achieved.
The current portion of the deferred tax asset increased $1.3
million from $1.9 million at March 31, 2000 to $3.2 million
at September 30, 2000 primarily due to the current portion
of the tax loss carryforward created from the loss from
continuing operations for
the three month period ended September 30, 2000 that the
Company anticipates it will benefit from in the subsequent
twelve month period. The long-term portion of the deferred
tax asset increased $4.3 million from $3.3 million at March
31, 2000 to $7.6 million at September 30, 2000 primarily for
the reason noted previously. Notes receivable decreased
$4.1 million from $4.1 million at March 31, 2000 to $0 at
September 30, 2000 due to a payment of $4.16 million,
including interest, received by the Company in July 2000
from a customer pursuant to the settlement of a claim.
Other current assets increased $0.7 million from $1.8
million at March 31, 2000 to $2.5 million at September 30,
2000 primarily due to an increase in various prepaid
expenses and deposits.
Accounts payable decreased $6.2 million from $24.2 million
at March 31, 2000 to $18.0 million at September 30, 2000 due
primarily to the timing of studio and other vendor payments.
Accrued compensation decreased $0.8 million from $1.5
million at March 31, 2000 to $0.7 million at September 30,
2000 primarily due to the payment of annual employee bonuses
during the three month period ended June 30, 2000, that were
accrued as of March 31, 2000. Notes payable decreased $0.5
million from $0.5 million at March 31, 2000 to $0 at
September 30, 2000 due to a payoff of a promissory note to a
former director of the Company during the three month period
ended September 30, 2000.
LIQUIDITY AND CAPITAL RESOURCES
At September 30, 2000, the Company had cash of $0.7 million
compared to $4.0 million at March 31, 2000. At September
30, 2000, the Company's current ratio (current
assets/current liabilities) decreased to 1.00 from 1.32 at
March 31, 2000.
As discussed in Note G, in May 2000 the Company obtained a
replacement line of credit with a lender in an amount not to
exceed the lesser of (a) $12 million or (b) the sum of 85%
of the net amount of eligible accounts receivable. The
terms of the credit agreement includes financial covenants
requiring: (1) $15 million of tangible net worth to be
maintained at all times; (2) a consolidated net profit to be
achieved each fiscal year equal to or exceeding $1.00 and
(3) $5 million of working capital to be maintained at all
times. The agreement also restricts the amount of loans and
indebtedness and limits the payment of dividends on the
Company's stock, among other requirements. This agreement
expires in May 2005. Based upon the financial results
reported as of September 30, 2000 and for the three month
and six month periods then ended, the Company has determined
it is out of compliance with the three financial covenants
as of September 30, 2000. The Company has initiated
discussions of discussions of these covenants with its
lender and is currently seeking waivers and covenant
modifications. Based upon discussions between the Company
and its lender, the Company believes it will successfully
receive such waivers and covenant modifications and will
have sufficient cash resources to repay all outstanding
borrowings as due. At September 30, 2000 and November 10,
2000, the Company had $39,000 and $1.6 million outstanding
borrowings, respectively, under this agreement.
In 1992, the Company established a Video Retailer Loan
Program whereby, on a selective basis, it provided financing
to Participating Retailers that the Company believed had
potential for substantial growth in the industry. In
connection with these financings, the Company typically made
a loan to and/or an equity investment in the Participating
Retailer. In some cases, the Company obtained a warrant to
purchase stock in the Participating Retailer. As part of
such financing, the Participating Retailer typically agreed
to cause all of its current and future retail locations to
participate in the PPT System for a designated period of
time (usually 5 - 20 years). Under these agreements,
Participating Retailers were typically required to obtain
some or all of their requirements of Cassettes from those
offered under the PPT System or obtain a minimum amount of
Cassettes based on a percentage of the Participating
Retailer's revenues. Notwithstanding the long term nature
of such agreements, both the Company and the Participating
Retailer, in some cases, retained the right to terminate
such agreement upon 30-90 days prior written notice. These
financings are highly speculative in nature and involve a
high degree of risk, and no assurance of a satisfactory
return on investment can be given.
The Rentrak Video Retailer Loan Program was adopted in 1992
at a time when the video industry was experiencing rapid
growth. The underlying rationale for this program was the
belief that the Company could expand its business and at the
same time participate in the rapid growth experienced by the
video retailers in which it invested. During the three
month period ended September 30, 2000 the Company announced
the discontinuance of new financings under this program.
Write-offs of assets associated with this program during the
three month period ended September 30, 2000 were $6.1
million, including $4.4 million due to the Company from
Video Update, Inc. The Company intends to continue to seek
to enforce agreements entered into in connection with this
program in accordance with their terms to the extent
practicable.
The Company was the principal creditor of BlowOut
Entertainment, Inc. ("BlowOut"). In 1996, the Company had
agreed to guarantee up to $7 million of indebtedness of
BlowOut ("Guarantee"). BlowOut had a credit facility (the
"Credit Facility") in an aggregate principal amount of $2
million for a five-year term. Amounts outstanding under the
Credit Facility bear interest at a fixed rate per annum
equal to 14.525 percent. Pursuant to the terms of the
Guarantee, the Company agreed to guarantee any amounts
outstanding under the Credit Facility until the lender is
satisfied, in its sole discretion, that BlowOut's financial
condition is sufficient to justify the release of the
Guarantee. As the proceeds from the sale of the BlowOut
assets were not sufficient to cover the amounts due under
this facility, the Company, pursuant to the Guarantee, has
agreed to a payment plan to fulfill BlowOut's obligation
under the Credit Facility. The funds remaining, if any,
after payment of administrative and cost claims after
dismissal of the case may further reduce the amount due
under the Credit Facility. As of September 30, 2000, the
balance owing under this obligation is approximately
$413,000.
Based on the Company's current budgets and projected cash
needs, the Company believes that its available sources of
liquidity will be sufficient to fund the Company's
operations for the fiscal year ending March 31, 2001.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT
MARKET RISK.
None.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
In June 1998, Video Update, Inc. ("Video Update") filed a
complaint (the "Video Update Complaint") against the Company
entitled Video Update, Inc. v. Rentrak Corp., Civil Action
No. 98-286, in the United States District Court for the
District of Delaware. The Video Update Complaint alleges
various violations of the antitrust laws, including that the
Company has monopolized or attempted to monopolize a market
for videocassettes leased to retail video stores in
violation of Section 2 of the Sherman Act. Video Update
further alleges that the Company's negotiation and execution
of an exclusive, long-term revenue sharing agreement with
Video Update violates Section 1 of the Sherman Act and
Section 3 of the Clayton Act. Video Update is seeking
unspecified monetary relief, including treble damages and
attorneys' fees, and equitable relief, including an
injunction prohibiting the Company from enforcing its
agreement with Video Update or any exclusivity provision
against videocassette suppliers and video retailers. In
August 1998, the Court granted the Company's motion to
dismiss the Video Update Complaint pursuant to Federal Rules
of Civil Procedure Rule 12(b)(3) on the basis of improper
venue.
In August 1998, Video Update filed a new complaint against
the Company in the United States District Court for the
District of Oregon (the "Re-Filed Complaint"), Case No. 98-
1013HA. The Re-Filed Complaint is substantially the same as
the previous complaint. The Company believes the Re-Filed
Complaint lacks merit and intends to vigorously defend
against the allegations in the Complaint. The Company has
answered the Re-Filed Complaint denying its material
allegations and asserting several affirmative defenses. The
Company also has counterclaimed against Video Update
alleging, among other things, breach of contract, breach of
the covenant of good faith and fair dealing, promissory
fraud, breach of fiduciary duty, breach of trust,
constructive fraud, negligent misrepresentation and
intentional interference with business advantage, and
seeking damages and equitable relief.
In October 1998, the Company filed a motion for summary
judgment seeking to dismiss the lawsuit filed against it by
Video Update. In January 1999, the Company filed a separate
motion for partial summary judgment on its breach of
contract counterclaim seeking to recover more than $4.4
million in fees and interest which the Company claims Video
Update owes to it. The court denied Rentrak's motions
without reaching the merits and without prejudice to re-
filing the motions after discovery had been conducted. On
October 21, 1999, the Company amended its counterclaims to
add additional claims, including a claim for trade secret
misappropriation and a claim for recovery of personal
property. The amended countercomplaint also added Video
Update's chairman, Daniel Potter as a defendant to the fraud
and negligent misrepresentation claims. Mr. Potter filed a
motion to dismiss the Company's claims against him which
motion was granted by the Court on April 13, 2000. Video
Update also moved to dismiss six of the Company's claims.
On April 13, 2000, the Court granted Video Update's motion
in part and dismissed the following claims: promissory
fraud, breach of fiduciary duty, breach of trust,
constructive fraud, and negligent misrepresentation. On
July 31, 2000, the Company filed multiple motions for
summary judgment including a motion seeking to dismiss Video
Update's antitrust claim and a motion seeking a finding that
Video Update breached its contract with Rentrak. On
September 18, 2000, Video Update filed a voluntary petition
under Chapter 11 of the federal Bankruptcy Code. The
Company has filed a motion for relief from stay with respect
to its claims pending in the United States District Court.
A hearing on the motion is scheduled for November 21, 2000.
Due to the bankruptcy filing, the District Court judge has
postponed the trial previously set for January 2001
indefinitely.
In August 1998, the Company filed a complaint (the "Movie
Buffs Complaint") against Susan Janae Kingston d/b/a/ Movie
Buffs ("Movies Buffs"), entitled Rentrak Corporation v.
Susan Janae Kingston, an individual, d/b/a/ Movie Buffs,
Case no. CV 98-1004 HA, in the United States District Court
for the District of Oregon. In September 1998, Movie Buffs
filed counterclaims against the Company and Third Party
Claims against Hollywood ("Movie Buffs Counterclaims"). In
September 1998 Roadrunner Video ("Roadrunner Video") filed a
third-party complaint in intervention against the Company
and Hollywood ("the Roadrunner Complaint"). This case is
described in the Company's 10-Q for the quarter ended
September 30, 1999. The Company filed a motion to dismiss
the Robinson-Patman Act claims pursuant to Federal Rules of
Civil Procedure 12(b)(6), which motion was granted. In July
2000, Roadrunner voluntarily dismissed with prejudice all of
its claims against the Company. Movie Buffs also dismissed
with prejudice certain of its claims against the Company,
including its allegations that the Company violated anti-
trust laws. In August 2000, the Court granted the Company's
motion for summary judgment against Movie Buffs and
dismissed all of Movie Buff's claims and granted certain
relief to the Company. In September 2000, the Company
entered into a settlement with Movie Buffs pursuant to which
both parties dismissed all remaining claims with prejudice.
The Company paid no money to either Roadrunner or Movie
Buffs in connection with the dismissal of claims or the
settlement.
On February 10, 2000 the Company filed a complaint ("the
Action Video Complaint") against David D. Passerallo, and
Action Video, Inc., Case No. CV 00-214-HA, in the United
States District Court for the District of Oregon. The
Action Video Complaint alleged claims for conversion, breach
of contract, payment on advance agreement and personal
guarantee. On April 10, 2000, Action Video filed
counterclaims against the Company ("the Action Video
Counterclaims). This case is described in the Company's 10-
K for the year ended March 31, 2000. In August 2000, the
parties dismissed all claims pursuant to a settlement
agreement under which Action Video made a cash payment to
the Company.
On June 13, 2000, the Company filed a lawsuit in the United
States District Court for the District of Oregon against
Jackson Hole Advisors ("JHA"), its principal Donald
Kundinger and another person associated with JHA, and a
number of Rentrak shareholders and prospective board
nominees who had either filed a Schedule 13D with the
Securities and Exchange Commission in May 2000 or had served
on Rentrak a demand for a special shareholders meeting. The
suit claimed that the defendants violated Sections 13 and 14
of the Securities Exchange Act of 1934 by, among other
things, filing a late and misleading Schedule 13D and
engaging in false and misleading solicitations of proxies.
The suit also alleged that JHA and its associates had
breached a financial advisory consulting agreement entered
into with Rentrak and their fiduciary duties owed to
Rentrak. The suit sought declaratory and preliminary and
permanent injunctive relief against all the defendants and
compensatory and punitive damages against JHA and its
associates.
Certain of the defendants filed an answer denying the
material allegations of the complaint asserting various
affirmative defenses and a counterclaim against Rentrak, its
directors, Rentrak Japan, K.K. and Culture Convenience Club
Co., Ltd., alleging that Rentrak and the other defendants
violated Section 13(d) of the Securities Exchange Act by
failing to file a Schedule 13D and that the directors of
Rentrak had violated their fiduciary duties by granting
loans to Messrs. Berger and Cox to enable them to exercise
certain stock options for the purpose of defeating an
impending proxy fight for control of Rentrak. The
counterclaimants sought declaratory and preliminary and
permanent injunctive relief. Both the complaint and the
counterclaim were dismissed as to all parties without
prejudice in October 2000.
The Company is also subject to legal proceedings and claims
that arise in the ordinary course of its business. In the
opinion of management, the amount of any ultimate liability
with respect to these actions is not expected to materially
affect the financial position or results of operations of
the Company as a whole.
Item 2. Changes in Securities and Use of Proceeds - None
Item 3. Defaults upon Senior Securities - None
Item 4. Submission of Matters to a Vote of Security Holders
-
On September 19, 2000, the Company conducted its
Annual Meeting of Shareholders. There were represented at
the meeting 11,103,004 shares of voting Common Stock of the
Company, of which 11,102,947 shares were represented by
valid proxies. The matters voted on were as follows:
1. Proposal to Amend Bylaws to fix the number of directors
at five:
For: Against: Abstain: Broker Non-Votes:
6,846,773 3,541,437 714,794 -0-
2. Voting for Directors was as follows:
Nominees For: Percentage:* Withheld:
Percentage:*
Peter Balner 3,588,895 32.3% 730,143 6.6%
Pradeep Batra 3,589,089 32.3% 729,949 6.6%
Skipper Baumgarten 3,589,065 32.3% 729,973 6.6%
Ron Berger 3,589,065 32.3% 729,973 6.6%
James Jimirro 3,589,089 32.3% 729,949 6.6%
Takaaki Kusaka 3,595,639 32.4% 723,399 6.5%
Bill LeVine 3,596,139 32.4% 722,899 6.5%
Muneaki Masuda 3,596,139 32.4% 722,899 6.5%
Stephen Roberts 3,596,145 32.4% 722,893 6.5%
Paul A. Rosenbaum 6,725,972 60.6% 58,000 0.5%
Cecil D. Andrus 6,725,372 60.6% 58,600 0.5%
George H. Kuper 6,725,972 60.6% 58,000 0.5%
Joon S. Moon 6,725,966 60.6% 58,006 0.5%
James G. Petcoff 6,725,972 60.6% 58,000 0.5%
*Percentage of votes cast at the meeting by Proxy.
In accordance with the foregoing results, Cecil D.
Andrus, George H. Kuper, Joon S. Moon, James G. Petcoff, and
Paul A. Rosenbaum were elected directors of the Company.
Item 5. Other Information - None
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits:
Exhibit 3.1 - Amendment Number 4 to Rentrak
Corporation's 1995 Restated Bylaws
Exhibit 10.1 - Amendment to Employment Agreement
between Rentrak Corporation and Ron Berger dated
August 28, 2000
Exhibit 10.2 Amendment to Employment Agreement
between Rentrak Corporation and Ron Berger dated September
11, 2000
Exhibit 27 - Financial Data Schedule
(b) Reports on Form 8-K
The Company filed the following reports on Form 8-
K during the three month period ended September 30, 2000:
A Form 8-K filed August 24, 2000, reporting
under Item 5 on the status of the legal proceedings
described under Item 1 of Part II of this report;
A Form 8-K filed September 14, 2000,
reporting under Items 5 and 7 information regarding the
Company's decision to establish a reserve for the $4.4
million balance on its books due from Video Update and to
restate its financial statements for the fiscal quarter
ended June 30, 2000, to adjust previously recorded revenues
of $1.25 million as deferred revenue related to a payment
received from a customer;
A Form 8-K filed September 15, 2000, filing
under Items 5 and 7 the Company's restated consolidated
statement of operations for the fiscal quarter ended
June 30, 2000; and
A Form 8-K filed September 21, 2000,
reporting under Item 5 the election of five new directors at
the Company's annual meeting of shareholders held on
September 19, 2000.
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 thereunto duly
authorized.
Dated this 14th day of November, 2000
RENTRAK CORPORATION
s/s Mark L. Thoenes
By: Mark L. Thoenes
Chief Financial Officer
Signing on behalf of the registrant
