Rosetta Stone Announces Management Change; Reports Preliminary Second Quarter 2010 Results
July 22, 2010
ARLINGTON, Va.--Rosetta Stone Inc. (NYSE:RST), a leading provider of technology-based language-learning solutions, today announced that Eric Eichmann, chief operating officer, has resigned from the company effective August 6, 2010. Tom Adams, president and CEO, will assume Mr. Eichmann’s sales and marketing related responsibilities on a permanent basis, effective immediately.
"I look forward to assuming direct oversight of our sales and marketing initiatives in order to further drive sales growth and our overall business expansion, as well as extend our position as the leading technology enabled language learning provider in the world," said Mr. Adams. "All of the company’s operational managers will now report directly to me. We have a very strong senior management team in place that is focused on the execution of our daily operations and performance."
Rosetta Stone also announced its preliminary financial results for its second quarter ended June 30, 2010. Based on its preliminary review, GAAP net income for the second quarter is expected to be in the range of $0.17 to $0.18 per share and non-GAAP net income, which excludes stock based compensation expense and amortization of intangibles, is expected to be in the range of $0.20 to $0.21 per share. Operating EBITDA for the second quarter is expected to be in the range of $10.2 million to $10.8 million. Operating EBITDA represents EBITDA excluding stock based compensation expense plus the change in deferred revenue. Sales bookings for the second quarter are expected to be approximately $64 million, and total revenue is expected to be approximately $60.5 million. Sales bookings are revenue plus the change in deferred revenue.
"Based on our initial review, we delivered second quarter earnings that were well above expectations, as our international and institutional businesses continued to produce solid results. However, our U.S. consumer business was not as strong as anticipated, as our advertising impressions in the U.S. were impacted by a television advertising market that was much tighter than expected. During the quarter, we continued our practice of maintaining our advertising margins, which, when combined with efficient cost management, enabled us to deliver strong earnings results," said Mr. Adams.
"More broadly, our two major initiatives for 2010, transformation of our product platform and international expansion, are proceeding according to plan. We remain on target to launch Rosetta Stone® Version 4 TOTALe™ in the current quarter, which we believe will enable us to better leverage our customer base as well as drive revenue growth and expand our reach in the broader language learning market. We also continue to pursue our aggressive program to scale our international business," concluded Mr. Adams.
Rosetta Stone expects to report final second quarter 2010 results on August 5, 2010, at which time it will provide further comments on the quarter and its outlook for the full-year 2010.
About Rosetta Stone
Rosetta Stone Inc. is changing the way the world learns languages. Rosetta Stone provides interactive solutions that are acclaimed for the power to unlock the natural language-learning ability in everyone. Available in more than 30 languages, Rosetta Stone language-learning solutions are used by schools, organizations and millions of individuals in over 150 countries throughout the world. The company was founded in 1992 on the core beliefs that learning a language should be natural and instinctive and that interactive technology can replicate and activate the immersion method powerfully for learners of any age. The company is based in Arlington, Va. For more information, visit RosettaStone.com.
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