News Release

Rosetta Stone Inc. Reports Third Quarter 2017 Results
Strong performance at Lexia increases Literacy segment to record high $11 million in revenue, 24% of total revenue

ARLINGTON, Va., Nov. 02, 2017 (GLOBE NEWSWIRE) -- Rosetta Stone Inc. (NYSE:RST), a world leader in technology-based learning solutions, today announced financial results for the third quarter ended September 30, 2017. Revenue totaled $46.2 million, down 5% from $48.7 million in the year-ago period. The third quarter net loss improved to $3.2 million, or $(0.14) per diluted share, which included pre-tax charges of $1.9 million for inventory obsolescence (in cost of product revenue) associated with the switch from packaged perpetual products to subscription-based offerings and restructuring charges totaling $0.2 million. In the year-ago period, the Company had a net loss of $5.5 million, or $(0.25) per diluted share, which included pre-tax charges of $1.0 million (non-cash) for impairment and restructuring charges of $0.2 million.

Third Quarter 2017 Overview

  • Revenue at Lexia, the Company’s Literacy segment, grew 26% year-over-year to a record high $11.0 million. Adjusting for the impact of purchase accounting, third quarter 2017 revenue at Lexia was $11.4 million and the revenue growth rate was 17% year-over-year. Revenue growth was driven in part by a 39% year-over-year increase in third quarter sales.
  • Total operating expenses decreased 12% year-over-year, reflecting a 13% reduction in sales and marketing expense and a 9% reduction in general and administrative expense. The year-over-year improvement marked the Company's 11th consecutive quarter of lower operating expenses. Total operating expenses of $39.1 million in the third quarter 2017 included restructuring charges of $0.2 million and total operating expenses of $44.5 million in the year-ago period included a $1.0 million (non-cash) impairment charge and restructuring charges of $0.2 million.
  • The Company had zero debt outstanding and ended the quarter with cash and cash equivalents of $40.1 million at September 30, 2017. Compared to June 30, 2017, cash and cash equivalents increased $13.8 million, reflecting the continued growth in the mix of education marketplace sales, which are seasonally strongest in the third quarter.

“The third quarter marked another important step on our path toward future growth and leveraging the Company's greatly reduced cost structure to improve bottom-line results. Lexia had a great quarter with sales up 39% year-over-year in the important back to school period. Lexia now accounts for nearly one-quarter of total revenue, up from 18% in the year-ago period and up from less than 5% of the mix in the same period of 2014,” said John Hass, Chairman, President and Chief Executive Officer. “In addition, we continue to build momentum as we work to complete the transformation of the Company to a SaaS-business with the transition of our Consumer Language retail channel partners to subscription-based products. On a year-to-date basis, these efforts have successfully reduced non-recurring product-based sales to less than 15% of the Company's total revenue mix."

Third Quarter 2017 Review

Revenue:  Total revenue decreased $2.5 million year-over-year to $46.2 million in the third quarter 2017, reflecting declines in the Company's Language segments. Revenue at Lexia grew 26% year-over-year to a record high $11.0 million, driven in part by a 39% year-over-year increase in third quarter sales. The revenue growth rate includes the benefit of purchase accounting impacts on acquired deferred revenue, as noted above.

Enterprise & Education ("E&E") Language segment revenue decreased $1.8 million or 10% year-over-year to $16.5 million in the third quarter 2017. The majority of the decline reflected the Company's strategic decision to exit certain geographies and customer lines on a direct sales basis and reduce overall selling expense, which was part of the E&E Language restructuring announced in March 2016. E&E Language revenue from continuing geographies declined $0.8 million or 5% year-over-year.

Consumer segment revenue decreased $2.9 million or 14% year-over-year to $18.6 million in the third quarter. The decline was due to a $5.5 million reduction in product revenue, reflecting both the shift to SaaS-based revenue in the DTC channel and lower unit sales in the retail channel as our partners prepared for the conversion to sell the Company's subscription-based offerings starting in the fourth quarter of 2017. The Company expects to complete the retail channel conversion during the first half of 2018. Subscription and service revenue increased $2.6 million or 19%, reflecting a record high 384,000 paid subscribers, up 100,000 or 35% year-over-year. The migration to a SaaS-based model in the Consumer segment has enabled the Company to offer an increased mix of lower-cost, shorter initial duration subscriptions; subscriptions with a duration of one year or less totaled 59% of the subscription unit mix sold in the third quarter 2017, up from 24% in the same quarter last year.

US$ thousands, except for percentages

    Three Months Ended September 30,    
    2017   Mix %   2016   Mix %   % change
Revenue from:                    
Literacy   $ 11,028     24 %   $ 8,786     18 %   26 %
E&E Language   16,529     36 %   18,336     38 %   (10 )%
Consumer   18,649     40 %   21,571     44 %   (14 )%
Total   $ 46,206     100 %   $ 48,693     100 %   (5 )%
                                   

Net Loss:  In the third quarter of 2017 the Company reported a net loss of $3.2 million or $(0.14) per diluted share, which included pre-tax charges of $1.9 million for inventory obsolescence, included in cost of product revenue, associated with the switch from packaged perpetual products to subscription-based offerings in the Consumer retail channel and restructuring charges of $0.2 million. In the comparable period a year ago, the Company incurred a net loss of $5.5 million or $(0.25) per diluted share, which included pre-tax charges of $1.0 million for impairment (non-cash) and $0.2 million for restructuring.

Total operating expenses decreased $5.4 million or 12% year-over-year to $39.1 million in the third quarter 2017. Net of a $1.0 million (non-cash) impairment charge related to capitalized software in the third quarter 2016 and restructuring expenses of $0.2 million in both the third quarter 2016 and the third quarter 2017, total selling, administrative and research expenses decreased $4.3 million or 10% year-over-year.

Balance Sheet:  As of September 30, 2017, the Company had zero debt and a cash and cash equivalents balance of $40.1 million, which included a $1.5 million receipt from SOURCENEXT in the third quarter 2017. On a year-to-date basis, a total of $13.0 million has been received from SOURCENEXT for the previously announced strategic partnership agreement in Japan.

Deferred revenue increased to a record high $150.9 million at September 30, 2017, up $16.3 million sequentially and up $9.4 million compared to $141.5 million at December 31, 2016. The balance includes $12.6 million from the SOURCENEXT transaction, which is substantially long-term. Short-term deferred revenue of $113.9 million at September 30, 2017, or approximately 76% of the total balance, will be recognized as revenue over the next 12 months.

Free Cash Flow and Adjusted EBITDA:  Free cash flow, a non-GAAP financial measure, was $13.8 million in the third quarter 2017, up $11.0 million compared to $2.8 million in the third quarter 2016. Third quarter 2017 free cash flow was also up $27.3 million sequentially compared to negative $13.5 million in the second quarter 2017, in part due to the seasonality of our business. The year-over-year improvement in free cash flow reflects the Company's lower net loss, plus favorable changes in working capital and a 5% reduction in capital expenditures. The Company's capital expenditures primarily relate to capitalized labor on product and IT projects.

Adjusted EBITDA, a non-GAAP financial measure, improved to $2.7 million in the third quarter, compared to $2.4 million in the year-ago period. The Company's cash flow has historically been seasonal, with a net use of cash during the first half of the year and positive cash generation during the second half of the year. With the continued growth at Lexia and the increasing mix of sales from the education marketplace, which is seasonally strongest in the third quarter, it is expected that the majority of the Company's second half positive cash flow will be generated in the third quarter.

Earnings Conference Call

In conjunction with this announcement, Rosetta Stone will host a conference call today at 5:00 p.m. ET during which time there will be a discussion of the results and the Company's 2017 outlook. Investors may dial into the live conference call using 1-778-331-2160 (toll / international) or 1-855-327-6837 (toll-free). A live webcast will also be available on the Investor Relations page of the Company's website at http://investors.rosettastone.com. A replay will be made available soon after the live conference call is completed and will remain available until midnight on November 9. Investors may dial into the replay using 1-412-317-6671 and passcode 10003711.

Caution on Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements can be identified by non-historical statements and often include words such as "outlook," "potential," "believes," "expects," "anticipates," "estimates," "intends," "plans," "seeks" or words of similar meaning, or future-looking or conditional verbs, such as "will," "should," "could," "may," "might, " "aims," "intends," "projects," or similar words or phrases. These statements may include, but are not limited to, statements relating to: our business strategy; guidance or projections related to revenue, Adjusted EBITDA, bookings (or "sales"), and other measures of future economic performance; the contributions and performance of our businesses including acquired businesses and international operations; projections for future capital expenditures; and other guidance, projections, plans, objectives, and related estimates and assumptions. A forward-looking statement is neither a prediction nor a guarantee of future events or circumstances. In addition, forward-looking statements are based on the Company’s current assumptions, expectations and beliefs and are subject to certain risks and uncertainties that could cause actual results to differ materially from our present expectations or projections. Some important factors that could cause actual results, performance or achievement to differ materially from those expressed or implied by these forward-looking statements include, but are not limited to: the risk that we are unable to execute our business strategy; declining demand for our language learning solutions; the risk that we are not able to manage and grow our business; the impact of any revisions to our pricing strategy; the risk that we might not succeed in introducing and producing new products and services; the impact of foreign exchange fluctuations; the adequacy of internally generated funds and existing sources of liquidity, such as bank financing, as well as our ability to raise additional funds; the risk that we cannot effectively adapt to and manage complex and numerous technologies; the risk that businesses acquired by us might not perform as expected; and the risk that we are not able to successfully expand internationally. We expressly disclaim any obligation to update or revise any forward-looking statements, whether as a result of new information, future developments or otherwise, except as required by law. These factors should not be construed as exhaustive and should be read in conjunction with the other cautionary statements, risks and uncertainties that are more fully described in the Company's filings with the U.S. Securities and Exchange Commission (SEC), including those described under the section entitled “Risk Factors” in the Company’s most recent quarterly Form 10-Q filings and Annual Report on Form 10-K for the year ended December 31, 2016, and those updated from time to time in our future reports filed with the Securities and Exchange Commission.

Non-GAAP Financial Measures

To supplement the condensed consolidated financial statements, which are prepared and presented in accordance with accounting principles generally accepted in the United States ("GAAP"), the Company uses, and this press release contains references to, the non-GAAP financial measures of financial performance listed below.

  • Bookings (or "Sales") represent executed sales contracts received by the Company that are either recorded immediately as revenue or as deferred revenue.
  • Adjusted EBITDA is GAAP net income/loss plus interest income and expense, other income/expense, income tax benefit/expense, impairment, lease abandonment and termination, depreciation, amortization, stock-based compensation, restructuring, and strategy and cost-reduction related consulting expenses. In addition, Adjusted EBITDA excludes "Other" items related to non-restructuring wind down and severance costs, and transaction and other costs associated with mergers and acquisitions, as well as all adjustments related to recording the non-cash tax valuation allowance for deferred tax assets. Adjusted EBITDA for prior periods has been revised to conform to current definition.
  • Free cash flow is cash flow from operating activities minus cash used in purchases of property and equipment.
  • Segment contribution is calculated as segment revenue less expenses directly incurred by or allocated to the segment. Direct segment expenses include costs and expenses that are directly incurred by or allocated to the segment and include materials costs, service costs, customer care and coaching costs, sales and marketing expenses, and bad debt expense. In addition to the previously referenced expenses, the Literacy segment includes direct research and development expenses and Combined Language includes shared research and development expenses, cost of revenue, and sales and marketing expenses applicable to the Consumer Language and Enterprise & Education Language segments.

The definitions, GAAP comparisons, and reconciliation of those measures with the most directly comparable GAAP financial measures are available in this press release or in the corresponding earnings presentation, which are posted on our website at www.rosettastone.com.

Management believes that these non-GAAP measures of financial results provide useful information to management and investors regarding certain financial and business trends relating to the Company’s financial condition and results of operations, enabling a better understanding of the long-term performance of the Company’s business. Management uses these non-GAAP measures to compare the Company’s performance to that of prior periods for trend analysis, and for budgeting and planning purposes. Management believes that the use of these non-GAAP financial measures provides an additional tool for investors to use in evaluating ongoing operating results and trends and in comparing the Company’s financial measures with other software and education-technology companies, many of which present similar non-GAAP financial measures to investors.

The presentation of this additional financial information is not intended to be considered in isolation from, as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP. The Company urges investors to review the reconciliation of its non-GAAP financial measures to the comparable GAAP financial measures, which it includes in press releases announcing earnings information, including this press release, or in corresponding earnings presentations, and not to rely on any single financial measure to evaluate the Company’s business. The Company’s non-GAAP measures may not be comparable to those used by other companies, and we encourage you to review and understand all our financial reporting before making any investment decision.

About Rosetta Stone Inc.

Rosetta Stone Inc. (NYSE:RST) is dedicated to changing people's lives through the power of language and literacy education. The company's innovative digital solutions drive positive learning outcomes for the inspired learner at home or in schools and workplaces around the world.

Founded in 1992, Rosetta Stone's language division uses cloud-based solutions to help all types of learners read, write and speak more than 30 languages. Lexia Learning, Rosetta Stone's literacy education division, was founded more than 30 years ago and is a leader in the literacy education space. Today, Lexia helps students build fundamental reading skills through its rigorously researched, independently evaluated, and widely respected instruction and assessment programs.

For more information, visit www.rosettastone.com. "Rosetta Stone" is a registered trademark or trademark of Rosetta Stone Ltd. in the United States and other countries.

Investors:
Frank Milano
ir@rosettastone.com
703-387-5876

Media Contact:
Michelle Alvarez
malvarez@rosettastone.com
703-387-5862


ROSETTA STONE INC.
CONSOLIDATED BALANCE SHEETS
(in thousands, except per share amounts)
(unaudited)
 
    September 30,
 2017
  December 31, 2016
Assets        
Current assets:        
Cash and cash equivalents   $ 40,147     $ 36,195  
Restricted cash   49     402  
Accounts receivable (net of allowance for doubtful accounts of $617 and $1,072, at September 30, 2017 and December 31, 2016, respectively)   29,801     31,788  
Inventory   4,194     6,767  
Deferred sales commissions   14,443     14,085  
Prepaid expenses and other current assets   4,870     3,813  
Total current assets   93,504     93,050  
Deferred sales commissions   3,498     4,143  
Property and equipment, net   28,822     24,795  
Goodwill   49,654     48,251  
Intangible assets, net   20,138     22,753  
Other assets   1,142     1,318  
Total assets   $ 196,758     $ 194,310  
Liabilities and stockholders' deficit        
Current liabilities:        
Accounts payable   $ 8,661     $ 10,684  
Accrued compensation   11,313     10,777  
Income tax payable   533     785  
Obligations under capital lease   440     532  
Other current liabilities   16,755     22,150  
Deferred revenue   113,932     113,821  
Total current liabilities   151,634     158,749  
Deferred revenue   36,961     27,636  
Deferred income taxes   7,132     6,173  
Obligations under capital lease   1,934     2,027  
Other long-term liabilities   524     1,384  
Total liabilities   198,185     195,969  
Commitments and contingencies        
Stockholders' deficit:        
Preferred stock, $0.001 par value; 10,000 and 10,000 shares authorized, zero and zero shares issued and outstanding at September 30, 2017 and December 31, 2016, respectively        
Non-designated common stock, $0.00005 par value, 190,000 and 190,000 shares authorized, 23,800 and 23,451 shares issued and 22,800 and 22,451 shares outstanding at September 30, 2017 and December 31, 2016, respectively   2     2  
Additional paid-in capital   194,348     190,827  
Accumulated loss   (181,256 )   (177,344 )
Accumulated other comprehensive loss   (3,086 )   (3,709 )
Treasury stock, at cost, 1,000 and 1,000 shares at September 30, 2017 and December 31, 2016, respectively   (11,435 )   (11,435 )
Total stockholders' deficit   (1,427 )   (1,659 )
Total liabilities and stockholders' deficit   $ 196,758     $ 194,310  



ROSETTA STONE INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
(unaudited)
         
    Three Months Ended September 30,   Nine Months Ended September 30,
    2017   2016   2017   2016
Revenue:                
Subscription and service   $ 42,117     $ 39,027     $ 125,552     $ 114,755  
Product   4,089     9,666     14,252     27,656  
Total revenue   46,206     48,693     139,804     142,411  
Cost of revenue:                
Cost of subscription and service revenue   6,499     5,910     19,091     16,888  
Cost of product revenue   2,949     2,461     6,089     7,495  
Total cost of revenue   9,448     8,371     25,180     24,383  
Gross profit   36,758     40,322     114,624     118,028  
Operating expenses:                
Sales and marketing   23,654     27,161     71,859     86,694  
Research and development   6,381     6,347     19,143     19,666  
General and administrative   9,035     9,969     25,654     30,864  
Impairment       1,028         3,930  
Lease abandonment and termination               30  
Total operating expenses   39,070     44,505     116,656     141,184  
Loss from operations   (2,312 )   (4,183 )   (2,032 )   (23,156 )
Other income and (expense):                
Interest income   13     11     43     34  
Interest expense   (138 )   (120 )   (383 )   (353 )
Other income and (expense)   85     633     821     2,788  
Total other income and (expense)   (40 )   524     481     2,469  
Loss before income taxes   (2,352 )   (3,659 )   (1,551 )   (20,687 )
Income tax expense   879     1,793     2,361     1,250  
Net loss   $ (3,231 )   $ (5,452 )   $ (3,912 )   $ (21,937 )
Loss per share:                
Basic   $ (0.14 )   $ (0.25 )   $ (0.18 )   $ (1.00 )
Diluted   $ (0.14 )   $ (0.25 )   $ (0.18 )   $ (1.00 )
Common shares and equivalents outstanding:                
Basic weighted average shares   22,285     21,993     22,220     21,936  
Diluted weighted average shares   22,285     21,993     22,220     21,936  



 

ROSETTA STONE INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
         
    Three Months Ended September 30,   Nine Months Ended September 30,
    2017   2016   2017   2016
CASH FLOWS FROM OPERATING ACTIVITIES:                
Net loss   $ (3,231 )   $ (5,452 )   $ (3,912 )   $ (21,937 )
Adjustments to reconcile net loss to cash provided by (used in) operating activities:                
Stock-based compensation expense   1,552     1,639     3,058     3,457  
Gain on foreign currency transactions   (9 )   (488 )   (461 )   (2,831 )
Bad debt (recovery) expense   157     191     (143 )   471  
Depreciation and amortization   3,015     3,226     9,077     9,812  
Deferred income tax expense   333     349     963     857  
Loss on disposal of equipment   5     96     5     132  
Amortization of deferred financing fees   82     71     238     203  
Loss on impairment       1,028         3,930  
Loss from equity method investments       6     100     46  
Gain on sale of subsidiary           (506 )    
Net change in:                
Restricted cash   (7 )   6     365     (354 )
Accounts receivable   (1,837 )   (3,177 )   2,358     8,912  
Inventory   1,673     (101 )   2,605     (723 )
Deferred sales commissions   (1,806 )   (1,429 )   321     552  
Prepaid expenses and other current assets   (209 )   998     (880 )   (705 )
Income tax receivable or payable   (51 )   1,238     (296 )   48  
Other assets   (125 )   39     67     365  
Accounts payable   (830 )   707     (2,084 )   (923 )
Accrued compensation   3,842     1,762     445     3,423  
Other current liabilities   (849 )   (7,156 )   (6,501 )   (13,077 )
Other long-term liabilities   (265 )   206     (750 )   43  
Deferred revenue   15,865     12,720     8,608     2,353  
Net cash provided by (used in) operating activities   17,305     6,479     12,677     (5,946 )
CASH FLOWS FROM INVESTING ACTIVITIES:                
Purchases of property and equipment   (3,510 )   (3,694 )   (8,903 )   (9,628 )
Proceeds from sale of fixed assets           2     38  
Proceeds from the sale of subsidiary           110      
Net cash used in investing activities   (3,510 )   (3,694 )   (8,791 )   (9,590 )
CASH FLOWS FROM FINANCING ACTIVITIES:                
Proceeds from the exercise of stock options   22     10     463     47  
Payment of deferred financing costs   (89 )   (82 )   (232 )   (182 )
Payments under capital lease obligations   (109 )   (102 )   (453 )   (440 )
Net cash used in financing activities   (176 )   (174 )   (222 )   (575 )
Increase (decrease) in cash and cash equivalents   13,619     2,611     3,664     (16,111 )
Effect of exchange rate changes in cash and cash equivalents   161     (95 )   288     550  
Net increase (decrease) in cash and cash equivalents   13,780     2,516     3,952     (15,561 )
Cash and cash equivalents—beginning of period   26,367     29,705     36,195     47,782  
Cash and cash equivalents—end of period   $ 40,147     $ 32,221     $ 40,147     $ 32,221  


 

ROSETTA STONE INC.
Reconciliation of GAAP Net Loss to Adjusted EBITDA
(in thousands)
(unaudited) 
   
                 
    Three Months Ended September 30,       Nine Months Ended September 30,    
  2017     2016     2017     2016  
GAAP net loss   $ (3,231 )     $ (5,452 )     $ (3,912 )     $ (21,937 )
Total other non-operating income, net   40       (524 )     (481 )     (2,469 )  
Income tax expense (benefit)   879       1,793       2,361       1,250    
Impairment         1,028             3,930    
Depreciation and amortization   3,015       3,226       9,077       9,812    
Stock-based compensation   1,552       1,639       3,058       3,457    
Restructuring expenses   196       162       1,181       5,183    
Lease abandonment and termination                     30    
Strategy consulting expense         458       169       1,379    
Other EBITDA adjustments   248       85       303       272    
Adjusted EBITDA*   $ 2,699       $ 2,415       $ 11,756       $ 907    

* Adjusted EBITDA is GAAP net income/loss plus interest income and expense, other income/expense, income tax benefit/expense, impairment, lease abandonment and termination, depreciation, amortization, stock-based compensation, restructuring, and strategy and cost-reduction related consulting expenses. In addition, Adjusted EBITDA excludes “Other” items related to non-restructuring wind down and severance costs, and transaction and other costs associated with mergers and acquisitions, as well as all adjustments related to recording the non-cash tax valuation allowance for deferred tax assets. Adjusted EBITDA for prior periods has been revised to conform to current definition.



ROSETTA STONE INC.
Reconciliation of Cash Provided by (Used in) Operating Activities to Free Cash Flow
(in thousands)
(unaudited)
         
    Three Months Ended
 September 30,
  Nine Months Ended
 September 30,
  2017   2016   2017   2016
Net cash provided by (used in) operating activities   $  17,305     $  6,479     $  12,677     $ (5,946)
Purchases of property and equipment   (3,510 )   (3,694 )   (8,903 )   (9,628 )
Free cash flow*   $ 13,795     $ 2,785     $ 3,774     $ (15,574 )

* Free cash flow is cash flow from operations minus cash used in purchases of property and equipment.



Rosetta Stone Inc.
Supplemental Information
(unaudited)
             
    Quarter-Ended   Year
Ended
  Quarter-Ended
    Mar 31
2016
  Jun 30
2016
  Sep 30
2016
  Dec 31
2016
  Dec 31
2016
  Mar 31
2017
  Jun 30
2017
  Sep 30
2017
Revenue by Segment (in thousands, except percentages)                
                                 
Literacy   7,577     7,950     8,786     9,810     34,123     10,170     10,370     11,028  
Enterprise & Education Language   18,331     17,490     18,336     17,926     72,083     16,500     17,260     16,529  
Consumer   22,094     20,276     21,571     23,942     87,883     21,023     18,275     18,649  
Total   48,002     45,716     48,693     51,678     194,089     47,693     45,905     46,206  
                                 
YoY Growth (%)                                
Literacy   82 %   68 %   52 %   35 %   56 %   34 %   30 %   26 %
Enterprise & Education Language   (4 )%   (6 )%   (6 )%   (6 )%   (5 )%   (10 )%   (1 )%   (10 )%
Consumer   (37 )%   (28 )%   (12 )%   (25 )%   (27 )%   (5 )%   (10 )%   (14 )%
Total   (18 )%   (11 )%   (2 )%   (11 )%   (11 )%   (1 )%   %   (5 )%
                                 
% of Total Revenue                                
Literacy   16 %   17 %   18 %   19 %   18 %   21 %   22 %   24 %
Enterprise & Education Language   38 %   38 %   38 %   35 %   37 %   35 %   38 %   36 %
Consumer   46 %   45 %   44 %   46 %   45 %   44 %   40 %   40 %
Total   100 %   100 %   100 %   100 %   100 %   100 %   100 %   100 %
                                 
Revenues by Geography                
                                 
United States   39,795     37,626     41,042     44,352     162,815     41,241     39,384     39,661  
International   8,207     8,090     7,651     7,326     31,274     6,452     6,521     6,545  
Total   48,002     45,716     48,693     51,678     194,089     47,693     45,905     46,206  
                                 
Revenues by Geography (as a %)                            
United States   83 %   82 %   84 %   86 %   84 %   86 %   86 %   86 %
International   17 %   18 %   16 %   14 %   16 %   14 %   14 %   14 %
Total   100 %   100 %   100 %   100 %   100 %   100 %   100 %   100 %

Prior period data has been modified where applicable to conform to current presentation for comparative purposes. Immaterial rounding differences may be present in this data in order to conform to Financial Statement totals.

 

Rosetta Stone Ltd.
"Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995: Statements in this press release regarding Rosetta Stone PR's business which are not historical facts are "forward-looking statements" that involve risks and uncertainties. For a discussion of such risks and uncertainties, which could cause actual results to differ from those contained in the forward-looking statements, see "Risk Factors" in the Company's Annual Report or Form 10-K for the most recently ended fiscal year.