Rentrak's 'Discontinued' PPT Business Still Profitable3 Jun, 2014 By: Erik Gruenwedel
While Rentrak continues to shop its legacy pay-per-transaction disc rental revenue-sharing business, the unit generated $550,000 in fourth-quarter (ended March 31) operating income on revenue of $9.3 million. For accounting purposes, Rentrak now refers to the PPT business as a "discontinued operations" line item.
While PPT operating income was down nearly 30% from $787,000 in operating income during the previous-year period, and revenue declined 19% from $11.5 million last year, the unit increased its gross margin to 25.5% from 22%.
For the fiscal year, the PPT business upped operating income 12.5% to $2.7 million.
Meanwhile, Portland, Ore.-based Rentrak, which has transitioned to a data-tracking company for multichannel video program distributors, theater operators, TV broadcaster and retailers, reported an overall net loss of $2 million on revenue of $21.5 million, excluding PPT.
“We are on track to sell our PPT business as soon as practical,” CEO Bill Livek said on the June 3 fiscal call. “We believe this business will continue to provide outstanding value for studios and brick and mortar retailers. And we are confident in our ability to find the right buyer.”
Livek said the PPT business, which enabled video rental stores to acquire new releases from the major studios without absorbing huge upfront stocking fees, has generated more than $100 million in cash since 2006.
“Rentrak management successfully redeployed that capital into building our high-margin, high-growth information business in the cloud,” he said.