Reports Second Quarter 2009 Results

Company Exceeds Revenue and Earnings Guidance ARLINGTON, Va. -- Rosetta Christian Louboutin Shoes
Stone Inc. (NYSE:RST), a leading provider of technology-based language learning solutions, today announced financial results for the company’s fiscal second quarter ended June 30, 2009. Total revenue for the second quarter was $56.5 million, an increase of 18%, compared to $47.7 million in the prior year period. GAAP net loss for the second quarter was ($7.3) million, or ($0.42) per share, compared to GAAP net income of $3.4 million, or $0.20 per share, in the prior year period. Non-GAAP net income, which excludes stock-based compensation expense, amortization of intangibles and IPO related compensation expense, was $4.7 million, or $0.23 per share, as compared to non-GAAP net income of $4.1 million, or $0.24 per share, in the prior year period. A reconciliation of GAAP to non-GAAP results has been provided in the financial statement tables included in this press release. An explanation of these measures is also included below under the heading “Non-GAAP Financial Measures.” “We are very pleased with Rosetta Stone’s second quarter performance. Despite the on-going challenges in the global economic environment, customers continued to recognize the value of our language learning solutions,” said Tom Adams, president and chief executive officer. “We had solid execution across all lines of our business, which enabled the company to deliver better-than-expected revenue and adjusted EBITDA that was well above our expectations.” Adams added, “Rosetta Stone continues to extend its product leadership position in the language learning market. During the second quarter, we saw high interest levels and adoption rates of the Level 4 & 5 editions that we launched for English and Spanish.?In addition, earlier this week we announced the availability of Rosetta Stone? TOTALeTM, which enables Rosetta Stone users to practice speaking their new Christian Louboutin 2011 Shoes
language with native speakers in an online manner, on our integrated language learning platform. Just as Rosetta Stone’s flagship solution dramatically changed?the competitive landscape of the language learning solutions market years ago, we believe that Rosetta Stone TOTALeTM is equally disruptive and solidifies our market leadership position.” Other Second Quarter 2009 Financial Highlights Revenue Mix - Product revenue for the second quarter was $48.7 million, or 86% of total revenues, while subscription and service revenue was $7.8 million, representing the remaining 14% of total revenues. Consumer revenue was $42.9 million, or 76% of total revenues, while Institutional revenue was $13.6 million, representing the remaining 24% of total revenues. Average Sales Per Unit and Unit Volume – Average sales price per unit increased 26% on a year-over-year basis, from $286 to $361. This increase was the result of a shift in the sales mix towards multi-level bundled products and the discontinuation of lower end offerings. Bundled solutions represented approximately 60% of second quarter total unit volume, an increase of approximately 12 percentage points compared to the prior year. Total unit volume decreased 9% on a year-over-year basis, however, it increased by approximately 15% after adjusting for two items in 2008. First, during the second quarter of 2008, Barnes & Noble placed a $2.6 million initial stocking order to support the expansion of our product line to over 650 of their stores. Second, 2008 included unit sales related to our 3-month online subscription offering, which was discontinued in October 2008. GAAP and non-GAAP Operating Income - GAAP operating loss for the second quarter was ($11.7) million, compared to operating income of $6.8 million for the second quarter of Cheap Christian Louboutin Ankle Boots
2008. Non-GAAP operating income, which excludes stock-based compensation expense, amortization of intangibles, and IPO related compensation expense, was $8.2 million for the second quarter of 2009, or 15% of revenues.