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Rosetta Stone Inc. Reports Second Quarter 2012 Results

Rosetta Stone Inc. (NYSE:RST), a leading provider of technology-based language-learning solutions, today announced financial results for the second quarter 2012, as summarized below:

US$ thousands   Three Months Ended  
except per share data June 30, %
  2012       2011   change
Total revenue $ 60,812 $ 66,743 -9 %
Net income/(loss) (4,544 ) (4,550 ) 0 %
Net income/(loss) per share: ($0.22 ) ($0.22 ) 0 %
Adjusted EBITDA 1 $ 1,123 ($1,329 ) 184 %
Cash flow from operations 3,412 (2,939 ) 216 %
Purchases of property and equipment   (1,031 )   (2,814 ) -63 %

Free cash flow 1

2,381 (5,753 ) 141 %

1Definitions and reconciliations for all non-GAAP measures are provided in this press release.

“Second quarter results reflected the beginnings of our efforts to improve profitability by better balancing the need to generate positive margins on the bottom line with investments to drive growth,” said Steve Swad, Rosetta Stone’s President and Chief Executive Officer. Swad added, “We undertook a number of actions during the quarter that focused on resetting our cost structure to enable us to pursue profitable growth. Some of these actions included reducing and better managing our media spending, continuing to optimize our distribution channels, streamlining our European operations and carrying out a modest headcount reduction, primarily in the U.S. The end result was positive Adjusted EBITDA of $1.1 million, a $2.4 million improvement compared to last year’s second quarter result of negative $1.3 million.”

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