Rosetta Stone Inc. (NYSE:RST), a world leader in technology-based
learning solutions, today announced financial results for
the second quarter ended June 30, 2020.
Second Quarter
2020 Highlights
- Consolidated revenue increased 7% year over year to $49.2
million.
- Revenue at Lexia Learning ("Lexia"), the Company's Literacy
segment, increased 18% year-over-year to $17.8
million.
- Revenue within the Consumer Language segment increased 9%
year-over-year to $17.7 million.
- Revenue within the Enterprise & Education (“E&E”)
Language segment decreased 6% year-over-year to $13.6 million.
- Consolidated second quarter net loss was $3.6 million, an
increase from the net loss of $2.8 million in the same quarter a
year ago, driven by an increase in operating expense.
- Consolidated bookings were $59.3 million, an increase of 41%
versus the second quarter of 2019, driven by 92% growth in Consumer
bookings and 59% growth in Literacy bookings.
- Adjusted EBITDA, a non-GAAP financial measure, was $4.1 million
in the second quarter 2020, an increase from $2.0 million in the
year-ago period.
- At June 30, 2020 the Company had cash and cash equivalents of
$31.3 million and no debt outstanding.
- Note: Consumer and consolidated bookings referenced above and
throughout this release are before $0.5 million in SourceNext
bookings that occurred in Q2 2019.
“During this unprecedented time, the Rosetta
Stone team delivered outstanding second quarter results,
highlighted by 41% growth year-over-year in consolidated bookings,
which included a 59% increase in our Literacy segment and 92%
growth in our Consumer Language segment. Our commitment to put the
customer first, coupled with extremely compelling K-12 and Language
product and service offerings, are clearly resonating in the
marketplace,” said John Hass, Chairman and Chief Executive
Officer. “As a result of our strong year-to-date performance
and confidence in the second half of the year, we are increasing
our 2020 full year guidance for bookings, revenue, Adjusted EBITDA
and year-end cash.”
Mr. Hass continued, “While we remain concerned
about the potential negative impact of the economic downturn on
school, corporate and consumer budgets, we are determined to
continue using this period to ensure that Rosetta Stone will be
even better positioned as a leader in learning in a post-COVID-19
world—a world that we believe will align very well with our
strengths as an expert provider of technology-based, adaptive
blended learning solutions.”
Second Quarter
2020 Review
Revenue: Total revenue in the
second quarter of 2020 was $49.2 million, compared to $45.9 million
in the second quarter of 2019, due to an increase in Lexia and
Consumer Language revenue, partially offset by a decline in E&E
Language revenue. Consolidated bookings were $59.3 million, an
increase of 41% versus the second quarter of 2019.
Revenue at Lexia
increased 18% year-over-year to $17.8 million. The
increase in Lexia revenues was a result of continued demand for its
product portfolio and the concentrated efforts of a focused direct
sales team. Literacy bookings increased $7.1 million, or 59%
over the prior year period driven by approximately $3.7 million in
bookings from new opportunities in Texas, as well as expansions
that benefited from the “Learn From Home” initiative that began in
March for all Lexia customers, after schools closed due to the
COVID-19 pandemic.
Consumer Language segment revenue increased 9%
year-over-year to $17.7 million, reflecting the recognition of
sales growth efforts made in prior quarters. Consumer Language
bookings increased $13.4 million, or 92% year over year, primarily
due to the sale of Lifetime Unlimited subscriptions in the Web
channel driven in part by people looking for self-improvement
alternatives as they spent more time at home as a result of the
COVID-19 pandemic. Subscriptions with a duration of one year
or more totaled 65% of the subscription unit mix at the end of the
second quarter 2020, up from 56% at the end of the same quarter
last year.
E&E Language segment revenue
decreased 6% year-over-year to $13.6 million. E&E
language bookings decreased $3.2 million, or 21%, year-over-year.
The bookings decrease was driven by lower bookings split equally
between the Enterprise and K-12 portions of the segment, with the
Enterprise portion of the decline largely due to COVID-19 related
pullbacks by corporate customers.
US$ thousands, except for percentages
|
|
Three months ended June 30, |
|
|
|
|
|
|
|
2020 |
|
|
Mix % |
|
|
2019 |
|
|
Mix % |
|
|
% change |
|
Revenue from: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Literacy |
|
$ |
17,814 |
|
|
|
36 |
% |
|
$ |
15,101 |
|
|
|
33 |
% |
|
|
18 |
% |
E&E Language |
|
|
13,640 |
|
|
|
28 |
% |
|
|
14,502 |
|
|
|
32 |
% |
|
|
(6 |
)% |
Consumer Language |
|
|
17,741 |
|
|
|
36 |
% |
|
|
16,339 |
|
|
|
35 |
% |
|
|
9 |
% |
Total Revenue |
|
$ |
49,195 |
|
|
|
100 |
% |
|
$ |
45,942 |
|
|
|
100 |
% |
|
|
7 |
% |
Net Loss: In
the second quarter 2020, the Company reported a net loss of
$3.6 million, or $(0.15) per diluted share, compared to a net
loss of $2.8 million, or $(0.12) per diluted share. The increase in
net loss of $0.8 million was driven by an increase in all operating
expense categories, and an increase in revenue which was offset by
a corresponding increase in cost of revenue as the Company focused
on supporting sharply increased bookings demand since Q2 2019.
Total operating expenses increased $1.0 million, or 2%
year-over-year, to $41.1 million, primarily due to higher
commission expense and higher variable compensation expense on the
higher bookings since Q2 2019.
Balance Sheet: The Company
ended the second quarter 2020 with cash and cash equivalents
of $31.3 million and no debt outstanding, versus $10.9
million before borrowings at June 30, 2019. Deferred revenue
totaled $174.1 million at June 30, 2020,
compared to $177.6 million at December 31, 2019. Of
the June 30, 2020 total deferred revenue balance, $109.3 million,
or approximately 63%, was short-term and will be recognized as
revenue over the next 12 months. Excluding SOURCENEXT and non-core
custom content, short-term deferred revenue at June 30, 2020 was
approximately 75% of total deferred revenue.
Free Cash Flow and Adjusted
EBITDA: Net cash used in operating activities was $0.3
million in the second quarter of 2020 compared to $14.8 million in
the second quarter last year. Free cash flow, a non-GAAP financial
measure, was an outflow of $4.1 million in
the second quarter 2020, compared to an outflow of $19.8
million in the same period a year ago.
Adjusted EBITDA, a non-GAAP financial measure,
was $4.1 million in the second quarter 2020, an increase
compared to $2.0 million in the year-ago period.
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 business outlook. Investors may dial into the live
conference call using 1-412-317-6026 (toll /
international) or 1-877-300-8521 (toll-free). A live
webcast will also be available in the investor relations section 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 11:59 p.m. ET on
Thursday, August 13, 2020. Investors may dial into the replay using
1-412-317-6671 and passcode 10146277.
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, 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
impact of the COVID-19 pandemic on the global economy; the risk
that we are unable to execute our business strategy; declining
demand for our literacy or 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, 2019, and those updated from time to time
in our future reports filed with the Securities and Exchange
Commission.
Operational Metrics, Segment Measures,
and 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, operational metrics, segment measures and
non-GAAP financial measures of financial performance listed
below.
- Bookings represents executed contracts received by the Company
that are either recorded immediately as revenue or deferred
revenue. Therefore, bookings is an operational metric and in any
one period is equal to revenue plus the change in deferred
revenue.
- Adjusted EBITDA is a non-GAAP Financial Measure of 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 the current
definition.
- Free cash flow is a non-GAAP Financial Measure of 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 E&E Language segments. Prior periods have been
reclassified to reflect our current segment presentation and
definition of segment contribution. Segment contribution is a
segment measure of profitability determined consistent with
Accounting Standards Codification 280.
The definitions, GAAP comparisons, and
reconciliation of non-GAAP 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 advanced digital technology to help all types of
learners read, write and speak more than 30 languages, including
several endangered 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:Lasse GlassenAddo
Investor Relations1-310-829-5400IR@rosettastone.com
Media Contact:Andrea
Riggs1-917-572-5555ariggs@rosettastone.com
ROSETTA STONE
INC.CONSOLIDATED BALANCE
SHEETS(in thousands, except per share
amounts)(unaudited)
|
As of |
|
|
June 30, 2020 |
|
|
December 31, 2019 |
|
Assets |
|
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
|
Cash and cash equivalents |
$ |
31,259 |
|
|
$ |
43,010 |
|
Restricted cash |
|
65 |
|
|
|
54 |
|
Accounts receivable (net of allowance for doubtful accounts of $603
and $510 at June 30, 2020 and December 31, 2019,
respectively) |
|
27,003 |
|
|
|
22,919 |
|
Inventory |
|
1,270 |
|
|
|
1,545 |
|
Deferred sales commissions |
|
10,730 |
|
|
|
11,558 |
|
Prepaid expenses and other current assets |
|
3,957 |
|
|
|
4,172 |
|
Total current assets |
|
74,284 |
|
|
|
83,258 |
|
Deferred sales commissions |
|
8,121 |
|
|
|
7,682 |
|
Property and equipment, net |
|
38,787 |
|
|
|
39,251 |
|
Operating lease right-of-use
assets |
|
5,013 |
|
|
|
5,818 |
|
Intangible assets, net |
|
13,555 |
|
|
|
14,317 |
|
Goodwill |
|
49,057 |
|
|
|
48,958 |
|
Other assets |
|
2,186 |
|
|
|
1,823 |
|
Total assets |
$ |
191,003 |
|
|
$ |
201,107 |
|
Liabilities and
stockholders' deficit |
|
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
|
Accounts payable |
$ |
4,727 |
|
|
$ |
7,534 |
|
Accrued compensation |
|
12,470 |
|
|
|
9,854 |
|
Income tax payable |
|
169 |
|
|
|
78 |
|
Operating lease liabilities |
|
1,436 |
|
|
|
1,455 |
|
Other current liabilities |
|
11,483 |
|
|
|
13,090 |
|
Deferred revenue |
|
109,288 |
|
|
|
119,851 |
|
Total current liabilities |
|
139,573 |
|
|
|
151,862 |
|
Deferred revenue |
|
64,815 |
|
|
|
57,766 |
|
Deferred income taxes |
|
2,723 |
|
|
|
2,590 |
|
Operating lease liabilities |
|
3,458 |
|
|
|
4,167 |
|
Other long-term liabilities |
|
675 |
|
|
|
914 |
|
Total liabilities |
|
211,244 |
|
|
|
217,299 |
|
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
June 30, 2020 and December 31, 2019, respectively) |
|
— |
|
|
|
— |
|
Non-designated common stock, $0.00005 par value, 190,000 and
190,000 shares authorized, 25,604 and 25,060 shares issued, and
24,604 and 24,060 shares outstanding, at June 30, 2020 and
December 31, 2019, respectively) |
|
2 |
|
|
|
2 |
|
Additional paid-in capital |
|
216,295 |
|
|
|
210,846 |
|
Treasury stock, at cost; 1,000 and 1,000 shares at June 30,
2020 and December 31, 2019, respectively) |
|
(11,435 |
) |
|
|
(11,435 |
) |
Accumulated loss |
|
(222,240 |
) |
|
|
(212,548 |
) |
Accumulated other comprehensive loss |
|
(2,863 |
) |
|
|
(3,057 |
) |
Total stockholders' deficit |
|
(20,241 |
) |
|
|
(16,192 |
) |
Total liabilities and
stockholders' deficit |
$ |
191,003 |
|
|
$ |
201,107 |
|
ROSETTA STONE
INC.CONSOLIDATED STATEMENTS OF
OPERATIONS(in thousands, except per share
amounts)(unaudited)
|
Three months ended June 30, |
|
|
Six months ended June 30, |
|
|
2020 |
|
|
2019 |
|
|
2020 |
|
|
2019 |
|
Revenue |
$ |
49,195 |
|
|
$ |
45,942 |
|
|
$ |
96,374 |
|
|
$ |
90,553 |
|
Cost of revenue |
|
11,436 |
|
|
|
8,861 |
|
|
|
22,537 |
|
|
|
17,287 |
|
Gross profit |
|
37,759 |
|
|
|
37,081 |
|
|
|
73,837 |
|
|
|
73,266 |
|
Operating expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales and marketing |
|
25,974 |
|
|
|
25,800 |
|
|
|
51,408 |
|
|
|
49,038 |
|
Research and development |
|
6,177 |
|
|
|
5,776 |
|
|
|
13,094 |
|
|
|
11,514 |
|
General and administrative |
|
8,945 |
|
|
|
8,566 |
|
|
|
18,507 |
|
|
|
17,258 |
|
Total operating expenses |
|
41,096 |
|
|
|
40,142 |
|
|
|
83,009 |
|
|
|
77,810 |
|
Loss from operations |
|
(3,337 |
) |
|
|
(3,061 |
) |
|
|
(9,172 |
) |
|
|
(4,544 |
) |
Other income and (expense): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest income |
|
10 |
|
|
|
9 |
|
|
|
26 |
|
|
|
42 |
|
Interest expense |
|
(54 |
) |
|
|
(99 |
) |
|
|
(107 |
) |
|
|
(159 |
) |
Other income and (expense) |
|
18 |
|
|
|
519 |
|
|
|
89 |
|
|
|
1,315 |
|
Total other income and
(expense) |
|
(26 |
) |
|
|
429 |
|
|
|
8 |
|
|
|
1,198 |
|
Loss before income taxes |
|
(3,363 |
) |
|
|
(2,632 |
) |
|
|
(9,164 |
) |
|
|
(3,346 |
) |
Income tax expense |
|
223 |
|
|
|
175 |
|
|
|
603 |
|
|
|
5 |
|
Net loss |
$ |
(3,586 |
) |
|
$ |
(2,807 |
) |
|
$ |
(9,767 |
) |
|
$ |
(3,351 |
) |
Loss per share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
$ |
(0.15 |
) |
|
$ |
(0.12 |
) |
|
$ |
(0.41 |
) |
|
$ |
(0.14 |
) |
Diluted |
$ |
(0.15 |
) |
|
$ |
(0.12 |
) |
|
$ |
(0.41 |
) |
|
$ |
(0.14 |
) |
Common shares and equivalents
outstanding: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic weighted average shares |
|
24,103 |
|
|
|
23,455 |
|
|
|
23,953 |
|
|
|
23,247 |
|
Diluted weighted average shares |
|
24,103 |
|
|
|
23,455 |
|
|
|
23,953 |
|
|
|
23,247 |
|
ROSETTA STONE
INC.CONSOLIDATED STATEMENTS OF CASH
FLOWS(in
thousands)(unaudited)
|
Three months ended June 30, |
|
|
Six months ended June 30, |
|
|
2020 |
|
|
2019 |
|
|
2020 |
|
|
2019 |
|
CASH FLOWS FROM OPERATING
ACTIVITIES: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss |
$ |
(3,586 |
) |
|
$ |
(2,807 |
) |
|
$ |
(9,767 |
) |
|
$ |
(3,351 |
) |
Non-cash adjustments to reconcile net loss to cash used in
operating activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock-based compensation expense |
|
3,009 |
|
|
|
1,356 |
|
|
|
5,270 |
|
|
|
2,576 |
|
(Gain) loss on foreign currency transactions |
|
(32 |
) |
|
|
(517 |
) |
|
|
(10 |
) |
|
|
191 |
|
Bad debt expense |
|
78 |
|
|
|
136 |
|
|
|
336 |
|
|
|
123 |
|
Depreciation and amortization |
|
4,351 |
|
|
|
3,457 |
|
|
|
8,771 |
|
|
|
6,986 |
|
Operating lease costs |
|
514 |
|
|
|
533 |
|
|
|
1,049 |
|
|
|
1,059 |
|
Deferred income tax expense (benefit) |
|
139 |
|
|
|
77 |
|
|
|
254 |
|
|
|
(515 |
) |
(Gain) loss on disposal or sale of assets |
|
— |
|
|
|
1 |
|
|
|
— |
|
|
|
(1,394 |
) |
Amortization of deferred financing costs |
|
11 |
|
|
|
19 |
|
|
|
30 |
|
|
|
33 |
|
Net change in: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts receivable |
|
(11,707 |
) |
|
|
(12,063 |
) |
|
|
(4,625 |
) |
|
|
(3,826 |
) |
Inventory |
|
107 |
|
|
|
111 |
|
|
|
275 |
|
|
|
(718 |
) |
Deferred sales commissions |
|
(1,208 |
) |
|
|
335 |
|
|
|
371 |
|
|
|
2,332 |
|
Prepaid expenses and other current assets |
|
(83 |
) |
|
|
(30 |
) |
|
|
114 |
|
|
|
(819 |
) |
Income tax receivable or payable |
|
20 |
|
|
|
(320 |
) |
|
|
91 |
|
|
|
(49 |
) |
Other assets |
|
(379 |
) |
|
|
(233 |
) |
|
|
(450 |
) |
|
|
(89 |
) |
Accounts payable |
|
(2,107 |
) |
|
|
1,129 |
|
|
|
(2,792 |
) |
|
|
(466 |
) |
Accrued compensation |
|
217 |
|
|
|
(3,468 |
) |
|
|
2,395 |
|
|
|
(1,027 |
) |
Other current liabilities |
|
733 |
|
|
|
1,298 |
|
|
|
(1,201 |
) |
|
|
(1,324 |
) |
Operating lease liabilities |
|
(491 |
) |
|
|
(516 |
) |
|
|
(969 |
) |
|
|
(1,060 |
) |
Other long-term liabilities |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(31 |
) |
Deferred revenue |
|
10,091 |
|
|
|
(3,345 |
) |
|
|
(2,947 |
) |
|
|
(20,045 |
) |
Net cash used in operating activities |
|
(323 |
) |
|
|
(14,847 |
) |
|
|
(3,805 |
) |
|
|
(21,414 |
) |
CASH FLOWS FROM INVESTING
ACTIVITIES: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Purchases of property and equipment |
|
(3,806 |
) |
|
|
(4,995 |
) |
|
|
(7,592 |
) |
|
|
(9,709 |
) |
Proceeds from sale of assets |
|
— |
|
|
|
400 |
|
|
|
— |
|
|
|
1,396 |
|
Net cash used in investing activities |
|
(3,806 |
) |
|
|
(4,595 |
) |
|
|
(7,592 |
) |
|
|
(8,313 |
) |
CASH FLOWS FROM FINANCING
ACTIVITIES: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Proceeds from the exercise of stock options |
|
368 |
|
|
|
2,143 |
|
|
|
410 |
|
|
|
2,887 |
|
Proceeds from borrowings under credit facility |
|
— |
|
|
|
10,500 |
|
|
|
— |
|
|
|
10,500 |
|
Repayments of borrowings under credit facility |
|
— |
|
|
|
(600 |
) |
|
|
— |
|
|
|
(600 |
) |
Payment of deferred financing costs |
|
— |
|
|
|
(45 |
) |
|
|
(66 |
) |
|
|
(47 |
) |
Payments under financing lease liabilities |
|
(56 |
) |
|
|
(112 |
) |
|
|
(171 |
) |
|
|
(222 |
) |
Net cash provided by financing activities |
|
312 |
|
|
|
11,886 |
|
|
|
173 |
|
|
|
12,518 |
|
Decrease in cash, cash
equivalents, and restricted cash |
|
(3,817 |
) |
|
|
(7,556 |
) |
|
|
(11,224 |
) |
|
|
(17,209 |
) |
Effect of exchange rate changes in cash, cash equivalents, and
restricted cash |
|
(30 |
) |
|
|
21 |
|
|
|
(516 |
) |
|
|
(159 |
) |
Net decrease in cash, cash
equivalents, and restricted cash |
|
(3,847 |
) |
|
|
(7,535 |
) |
|
|
(11,740 |
) |
|
|
(17,368 |
) |
Cash, cash equivalents, and
restricted cash—beginning of period |
|
35,171 |
|
|
|
28,341 |
|
|
|
43,064 |
|
|
|
38,174 |
|
Cash, cash equivalents, and
restricted cash—end of period |
$ |
31,324 |
|
|
$ |
20,806 |
|
|
$ |
31,324 |
|
|
$ |
20,806 |
|
ROSETTA STONE
INC.RECONCILIATION OF GAAP NET LOSS TO ADJUSTED
EBITDA(in
thousands)(unaudited)
|
Three months ended June 30, |
|
|
Six months ended June 30, |
|
|
2020 |
|
|
2019 |
|
|
2020 |
|
|
2019 |
|
GAAP net loss |
$ |
(3,586 |
) |
|
$ |
(2,807 |
) |
|
$ |
(9,767 |
) |
|
$ |
(3,351 |
) |
Total other non-operating (income) and expense, net |
|
26 |
|
|
|
(429 |
) |
|
|
(8 |
) |
|
|
(1,198 |
) |
Income tax expense |
|
223 |
|
|
|
175 |
|
|
|
603 |
|
|
|
5 |
|
Depreciation and amortization |
|
4,351 |
|
|
|
3,457 |
|
|
|
8,771 |
|
|
|
6,986 |
|
Stock-based compensation expense |
|
3,009 |
|
|
|
1,356 |
|
|
|
5,270 |
|
|
|
2,576 |
|
Other EBITDA adjustments |
|
104 |
|
|
|
269 |
|
|
|
431 |
|
|
|
322 |
|
Adjusted EBITDA* |
$ |
4,127 |
|
|
$ |
2,021 |
|
|
$ |
5,300 |
|
|
$ |
5,340 |
|
* 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 the current
definition.
ROSETTA STONE
INC.RECONCILIATION OF CASH USED IN OPERATING
ACTIVITIES TO FREE CASH FLOW(in
thousands)(unaudited)
|
Three months ended June 30, |
|
|
Six months ended June 30, |
|
|
2020 |
|
|
2019 |
|
|
2020 |
|
|
2019 |
|
Net cash used in operating activities |
$ |
(323 |
) |
|
$ |
(14,847 |
) |
|
$ |
(3,805 |
) |
|
$ |
(21,414 |
) |
Purchases of property and equipment |
|
(3,806 |
) |
|
|
(4,995 |
) |
|
|
(7,592 |
) |
|
|
(9,709 |
) |
Free cash flow * |
$ |
(4,129 |
) |
|
$ |
(19,842 |
) |
|
$ |
(11,397 |
) |
|
$ |
(31,123 |
) |
* 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 |
|
|
Jun 30 |
|
|
Sep 30 |
|
|
Dec
31 |
|
|
Dec 31 |
|
|
Mar 31 |
|
|
Jun 30 |
|
|
2019 |
|
|
2019 |
|
|
2019 |
|
|
2019 |
|
|
2019 |
|
|
2020 |
|
|
2020 |
|
Revenue by Segment (in thousands, except
percentages) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Literacy |
14,806 |
|
|
15,101 |
|
|
15,587 |
|
|
|
17,131 |
|
|
62,625 |
|
|
17,486 |
|
|
17,814 |
|
E&E Language |
14,443 |
|
|
14,502 |
|
|
14,074 |
|
|
|
13,793 |
|
|
56,812 |
|
|
13,552 |
|
|
13,640 |
|
Consumer Language |
15,362 |
|
|
16,339 |
|
|
15,795 |
|
|
|
15,769 |
|
|
63,265 |
|
|
16,141 |
|
|
17,741 |
|
Total |
44,611 |
|
|
45,942 |
|
|
45,456 |
|
|
|
46,693 |
|
|
182,702 |
|
|
47,179 |
|
|
49,195 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
YoY Growth (%) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Literacy |
20 |
% |
|
19 |
% |
|
18 |
% |
|
|
18 |
% |
|
19 |
% |
|
18 |
% |
|
18 |
% |
E&E Language |
(6 |
)% |
|
(6 |
)% |
|
(6 |
)% |
|
|
(5 |
)% |
|
(6 |
)% |
|
(6 |
)% |
|
(6 |
)% |
Consumer Language |
2 |
% |
|
6 |
% |
|
9 |
% |
|
|
2 |
% |
|
5 |
% |
|
5 |
% |
|
9 |
% |
Total |
4 |
% |
|
6 |
% |
|
6 |
% |
|
|
5 |
% |
|
5 |
% |
|
6 |
% |
|
7 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
% of Total Revenue |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Literacy |
33 |
% |
|
33 |
% |
|
34 |
% |
|
|
37 |
% |
|
34 |
% |
|
37 |
% |
|
36 |
% |
E&E Language |
32 |
% |
|
32 |
% |
|
31 |
% |
|
|
29 |
% |
|
31 |
% |
|
29 |
% |
|
28 |
% |
Consumer Language |
35 |
% |
|
35 |
% |
|
35 |
% |
|
|
34 |
% |
|
35 |
% |
|
34 |
% |
|
36 |
% |
Total |
100 |
% |
|
100 |
% |
|
100 |
% |
|
|
100 |
% |
|
100 |
% |
|
100 |
% |
|
100 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues by Geography |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
United States |
39,830 |
|
|
41,179 |
|
|
40,891 |
|
|
|
42,180 |
|
|
164,080 |
|
|
42,529 |
|
|
44,415 |
|
International |
4,781 |
|
|
4,763 |
|
|
4,565 |
|
|
|
4,513 |
|
|
18,622 |
|
|
4,650 |
|
|
4,780 |
|
Total |
44,611 |
|
|
45,942 |
|
|
45,456 |
|
|
|
46,693 |
|
|
182,702 |
|
|
47,179 |
|
|
49,195 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues by Geography (as a %) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
United States |
89 |
% |
|
90 |
% |
|
90 |
% |
|
|
90 |
% |
|
90 |
% |
|
90 |
% |
|
90 |
% |
International |
11 |
% |
|
10 |
% |
|
10 |
% |
|
|
10 |
% |
|
10 |
% |
|
10 |
% |
|
10 |
% |
Total |
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
INC.CONSOLIDATED BALANCE
SHEETS(in thousands, except per share
amounts)(unaudited)
|
As of |
|
|
June 30, 2020 |
|
|
December 31, 2019 |
|
Assets |
|
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
|
Cash and cash equivalents |
$ |
31,259 |
|
|
$ |
43,010 |
|
Restricted cash |
|
65 |
|
|
|
54 |
|
Accounts receivable (net of allowance for doubtful accounts of $603
and $510 at June 30, 2020 and December 31, 2019,
respectively) |
|
27,003 |
|
|
|
22,919 |
|
Inventory |
|
1,270 |
|
|
|
1,545 |
|
Deferred sales commissions |
|
10,730 |
|
|
|
11,558 |
|
Prepaid expenses and other current assets |
|
3,957 |
|
|
|
4,172 |
|
Total current assets |
|
74,284 |
|
|
|
83,258 |
|
Deferred sales commissions |
|
8,121 |
|
|
|
7,682 |
|
Property and equipment, net |
|
38,787 |
|
|
|
39,251 |
|
Operating lease right-of-use
assets |
|
5,013 |
|
|
|
5,818 |
|
Intangible assets, net |
|
13,555 |
|
|
|
14,317 |
|
Goodwill |
|
49,057 |
|
|
|
48,958 |
|
Other assets |
|
2,186 |
|
|
|
1,823 |
|
Total assets |
$ |
191,003 |
|
|
$ |
201,107 |
|
Liabilities and
stockholders' deficit |
|
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
|
Accounts payable |
$ |
4,727 |
|
|
$ |
7,534 |
|
Accrued compensation |
|
12,470 |
|
|
|
9,854 |
|
Income tax payable |
|
169 |
|
|
|
78 |
|
Operating lease liabilities |
|
1,436 |
|
|
|
1,455 |
|
Other current liabilities |
|
11,483 |
|
|
|
13,090 |
|
Deferred revenue |
|
109,288 |
|
|
|
119,851 |
|
Total current liabilities |
|
139,573 |
|
|
|
151,862 |
|
Deferred revenue |
|
64,815 |
|
|
|
57,766 |
|
Deferred income taxes |
|
2,723 |
|
|
|
2,590 |
|
Operating lease liabilities |
|
3,458 |
|
|
|
4,167 |
|
Other long-term liabilities |
|
675 |
|
|
|
914 |
|
Total liabilities |
|
211,244 |
|
|
|
217,299 |
|
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
June 30, 2020 and December 31, 2019, respectively) |
|
— |
|
|
|
— |
|
Non-designated common stock, $0.00005 par value, 190,000 and
190,000 shares authorized, 25,604 and 25,060 shares issued, and
24,604 and 24,060 shares outstanding, at June 30, 2020 and
December 31, 2019, respectively) |
|
2 |
|
|
|
2 |
|
Additional paid-in capital |
|
216,295 |
|
|
|
210,846 |
|
Treasury stock, at cost; 1,000 and 1,000 shares at June 30,
2020 and December 31, 2019, respectively) |
|
(11,435 |
) |
|
|
(11,435 |
) |
Accumulated loss |
|
(222,240 |
) |
|
|
(212,548 |
) |
Accumulated other comprehensive loss |
|
(2,863 |
) |
|
|
(3,057 |
) |
Total stockholders' deficit |
|
(20,241 |
) |
|
|
(16,192 |
) |
Total liabilities and
stockholders' deficit |
$ |
191,003 |
|
|
$ |
201,107 |
|
ROSETTA STONE
INC.CONSOLIDATED STATEMENTS OF
OPERATIONS(in thousands, except per share
amounts)(unaudited)
|
Three months ended June 30, |
|
|
Six months ended June 30, |
|
|
2020 |
|
|
2019 |
|
|
2020 |
|
|
2019 |
|
Revenue |
$ |
49,195 |
|
|
$ |
45,942 |
|
|
$ |
96,374 |
|
|
$ |
90,553 |
|
Cost of revenue |
|
11,436 |
|
|
|
8,861 |
|
|
|
22,537 |
|
|
|
17,287 |
|
Gross profit |
|
37,759 |
|
|
|
37,081 |
|
|
|
73,837 |
|
|
|
73,266 |
|
Operating expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales and marketing |
|
25,974 |
|
|
|
25,800 |
|
|
|
51,408 |
|
|
|
49,038 |
|
Research and development |
|
6,177 |
|
|
|
5,776 |
|
|
|
13,094 |
|
|
|
11,514 |
|
General and administrative |
|
8,945 |
|
|
|
8,566 |
|
|
|
18,507 |
|
|
|
17,258 |
|
Total operating expenses |
|
41,096 |
|
|
|
40,142 |
|
|
|
83,009 |
|
|
|
77,810 |
|
Loss from operations |
|
(3,337 |
) |
|
|
(3,061 |
) |
|
|
(9,172 |
) |
|
|
(4,544 |
) |
Other income and (expense): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest income |
|
10 |
|
|
|
9 |
|
|
|
26 |
|
|
|
42 |
|
Interest expense |
|
(54 |
) |
|
|
(99 |
) |
|
|
(107 |
) |
|
|
(159 |
) |
Other income and (expense) |
|
18 |
|
|
|
519 |
|
|
|
89 |
|
|
|
1,315 |
|
Total other income and
(expense) |
|
(26 |
) |
|
|
429 |
|
|
|
8 |
|
|
|
1,198 |
|
Loss before income taxes |
|
(3,363 |
) |
|
|
(2,632 |
) |
|
|
(9,164 |
) |
|
|
(3,346 |
) |
Income tax expense |
|
223 |
|
|
|
175 |
|
|
|
603 |
|
|
|
5 |
|
Net loss |
$ |
(3,586 |
) |
|
$ |
(2,807 |
) |
|
$ |
(9,767 |
) |
|
$ |
(3,351 |
) |
Loss per share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
$ |
(0.15 |
) |
|
$ |
(0.12 |
) |
|
$ |
(0.41 |
) |
|
$ |
(0.14 |
) |
Diluted |
$ |
(0.15 |
) |
|
$ |
(0.12 |
) |
|
$ |
(0.41 |
) |
|
$ |
(0.14 |
) |
Common shares and equivalents
outstanding: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic weighted average shares |
|
24,103 |
|
|
|
23,455 |
|
|
|
23,953 |
|
|
|
23,247 |
|
Diluted weighted average shares |
|
24,103 |
|
|
|
23,455 |
|
|
|
23,953 |
|
|
|
23,247 |
|
ROSETTA STONE
INC.CONSOLIDATED STATEMENTS OF CASH
FLOWS(in
thousands)(unaudited)
|
Three months ended June 30, |
|
|
Six months ended June 30, |
|
|
2020 |
|
|
2019 |
|
|
2020 |
|
|
2019 |
|
CASH FLOWS FROM OPERATING ACTIVITIES: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss |
$ |
(3,586 |
) |
|
$ |
(2,807 |
) |
|
$ |
(9,767 |
) |
|
$ |
(3,351 |
) |
Non-cash adjustments to reconcile net loss to cash used in
operating activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock-based compensation expense |
|
3,009 |
|
|
|
1,356 |
|
|
|
5,270 |
|
|
|
2,576 |
|
(Gain) loss on foreign currency transactions |
|
(32 |
) |
|
|
(517 |
) |
|
|
(10 |
) |
|
|
191 |
|
Bad debt expense |
|
78 |
|
|
|
136 |
|
|
|
336 |
|
|
|
123 |
|
Depreciation and amortization |
|
4,351 |
|
|
|
3,457 |
|
|
|
8,771 |
|
|
|
6,986 |
|
Operating lease costs |
|
514 |
|
|
|
533 |
|
|
|
1,049 |
|
|
|
1,059 |
|
Deferred income tax expense (benefit) |
|
139 |
|
|
|
77 |
|
|
|
254 |
|
|
|
(515 |
) |
(Gain) loss on disposal or sale of assets |
|
— |
|
|
|
1 |
|
|
|
— |
|
|
|
(1,394 |
) |
Amortization of deferred financing costs |
|
11 |
|
|
|
19 |
|
|
|
30 |
|
|
|
33 |
|
Net change in: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts receivable |
|
(11,707 |
) |
|
|
(12,063 |
) |
|
|
(4,625 |
) |
|
|
(3,826 |
) |
Inventory |
|
107 |
|
|
|
111 |
|
|
|
275 |
|
|
|
(718 |
) |
Deferred sales commissions |
|
(1,208 |
) |
|
|
335 |
|
|
|
371 |
|
|
|
2,332 |
|
Prepaid expenses and other current assets |
|
(83 |
) |
|
|
(30 |
) |
|
|
114 |
|
|
|
(819 |
) |
Income tax receivable or payable |
|
20 |
|
|
|
(320 |
) |
|
|
91 |
|
|
|
(49 |
) |
Other assets |
|
(379 |
) |
|
|
(233 |
) |
|
|
(450 |
) |
|
|
(89 |
) |
Accounts payable |
|
(2,107 |
) |
|
|
1,129 |
|
|
|
(2,792 |
) |
|
|
(466 |
) |
Accrued compensation |
|
217 |
|
|
|
(3,468 |
) |
|
|
2,395 |
|
|
|
(1,027 |
) |
Other current liabilities |
|
733 |
|
|
|
1,298 |
|
|
|
(1,201 |
) |
|
|
(1,324 |
) |
Operating lease liabilities |
|
(491 |
) |
|
|
(516 |
) |
|
|
(969 |
) |
|
|
(1,060 |
) |
Other long-term liabilities |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(31 |
) |
Deferred revenue |
|
10,091 |
|
|
|
(3,345 |
) |
|
|
(2,947 |
) |
|
|
(20,045 |
) |
Net cash used in operating activities |
|
(323 |
) |
|
|
(14,847 |
) |
|
|
(3,805 |
) |
|
|
(21,414 |
) |
CASH FLOWS FROM INVESTING
ACTIVITIES: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Purchases of property and equipment |
|
(3,806 |
) |
|
|
(4,995 |
) |
|
|
(7,592 |
) |
|
|
(9,709 |
) |
Proceeds from sale of assets |
|
— |
|
|
|
400 |
|
|
|
— |
|
|
|
1,396 |
|
Net cash used in investing activities |
|
(3,806 |
) |
|
|
(4,595 |
) |
|
|
(7,592 |
) |
|
|
(8,313 |
) |
CASH FLOWS FROM FINANCING
ACTIVITIES: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Proceeds from the exercise of stock options |
|
368 |
|
|
|
2,143 |
|
|
|
410 |
|
|
|
2,887 |
|
Proceeds from borrowings under credit facility |
|
— |
|
|
|
10,500 |
|
|
|
— |
|
|
|
10,500 |
|
Repayments of borrowings under credit facility |
|
— |
|
|
|
(600 |
) |
|
|
— |
|
|
|
(600 |
) |
Payment of deferred financing costs |
|
— |
|
|
|
(45 |
) |
|
|
(66 |
) |
|
|
(47 |
) |
Payments under financing lease liabilities |
|
(56 |
) |
|
|
(112 |
) |
|
|
(171 |
) |
|
|
(222 |
) |
Net cash provided by financing activities |
|
312 |
|
|
|
11,886 |
|
|
|
173 |
|
|
|
12,518 |
|
Decrease in cash, cash
equivalents, and restricted cash |
|
(3,817 |
) |
|
|
(7,556 |
) |
|
|
(11,224 |
) |
|
|
(17,209 |
) |
Effect of exchange rate changes in cash, cash equivalents, and
restricted cash |
|
(30 |
) |
|
|
21 |
|
|
|
(516 |
) |
|
|
(159 |
) |
Net decrease in cash, cash
equivalents, and restricted cash |
|
(3,847 |
) |
|
|
(7,535 |
) |
|
|
(11,740 |
) |
|
|
(17,368 |
) |
Cash, cash equivalents, and
restricted cash—beginning of period |
|
35,171 |
|
|
|
28,341 |
|
|
|
43,064 |
|
|
|
38,174 |
|
Cash, cash equivalents, and
restricted cash—end of period |
$ |
31,324 |
|
|
$ |
20,806 |
|
|
$ |
31,324 |
|
|
$ |
20,806 |
|
ROSETTA STONE
INC.RECONCILIATION OF GAAP NET LOSS TO ADJUSTED
EBITDA(in
thousands)(unaudited)
|
Three months ended June 30, |
|
|
Six months ended June 30, |
|
|
2020 |
|
|
2019 |
|
|
2020 |
|
|
2019 |
|
GAAP net
loss |
$ |
(3,586 |
) |
|
$ |
(2,807 |
) |
|
$ |
(9,767 |
) |
|
$ |
(3,351 |
) |
Total other non-operating (income) and expense, net |
|
26 |
|
|
|
(429 |
) |
|
|
(8 |
) |
|
|
(1,198 |
) |
Income tax expense |
|
223 |
|
|
|
175 |
|
|
|
603 |
|
|
|
5 |
|
Depreciation and amortization |
|
4,351 |
|
|
|
3,457 |
|
|
|
8,771 |
|
|
|
6,986 |
|
Stock-based compensation expense |
|
3,009 |
|
|
|
1,356 |
|
|
|
5,270 |
|
|
|
2,576 |
|
Other EBITDA adjustments |
|
104 |
|
|
|
269 |
|
|
|
431 |
|
|
|
322 |
|
Adjusted EBITDA* |
$ |
4,127 |
|
|
$ |
2,021 |
|
|
$ |
5,300 |
|
|
$ |
5,340 |
|
* 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 the current
definition.
ROSETTA STONE
INC.RECONCILIATION OF CASH USED IN OPERATING
ACTIVITIES TO FREE CASH FLOW(in
thousands)(unaudited)
|
Three months ended June 30, |
|
|
Six months ended June 30, |
|
|
2020 |
|
|
2019 |
|
|
2020 |
|
|
2019 |
|
Net cash used
in operating activities |
$ |
(323 |
) |
|
$ |
(14,847 |
) |
|
$ |
(3,805 |
) |
|
$ |
(21,414 |
) |
Purchases of property and equipment |
|
(3,806 |
) |
|
|
(4,995 |
) |
|
|
(7,592 |
) |
|
|
(9,709 |
) |
Free cash flow * |
$ |
(4,129 |
) |
|
$ |
(19,842 |
) |
|
$ |
(11,397 |
) |
|
$ |
(31,123 |
) |
* 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 |
|
|
Jun 30 |
|
|
Sep 30 |
|
|
Dec 31 |
|
|
Dec 31 |
|
|
Mar 31 |
|
|
Jun 30 |
|
|
2019 |
|
|
2019 |
|
|
2019 |
|
|
2019 |
|
|
2019 |
|
|
2020 |
|
|
2020 |
|
Revenue by Segment (in thousands, except
percentages) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Literacy |
14,806 |
|
|
15,101 |
|
|
15,587 |
|
|
17,131 |
|
|
62,625 |
|
|
17,486 |
|
|
17,814 |
|
E&E Language |
14,443 |
|
|
14,502 |
|
|
14,074 |
|
|
13,793 |
|
|
56,812 |
|
|
13,552 |
|
|
13,640 |
|
Consumer Language |
15,362 |
|
|
16,339 |
|
|
15,795 |
|
|
15,769 |
|
|
63,265 |
|
|
16,141 |
|
|
17,741 |
|
Total |
44,611 |
|
|
45,942 |
|
|
45,456 |
|
|
46,693 |
|
|
182,702 |
|
|
47,179 |
|
|
49,195 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
YoY Growth (%) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Literacy |
20 |
% |
|
19 |
% |
|
18 |
% |
|
18 |
% |
|
19 |
% |
|
18 |
% |
|
18 |
% |
E&E Language |
(6 |
)% |
|
(6 |
)% |
|
(6 |
)% |
|
(5 |
)% |
|
(6 |
)% |
|
(6 |
)% |
|
(6 |
)% |
Consumer Language |
2 |
% |
|
6 |
% |
|
9 |
% |
|
2 |
% |
|
5 |
% |
|
5 |
% |
|
9 |
% |
Total |
4 |
% |
|
6 |
% |
|
6 |
% |
|
5 |
% |
|
5 |
% |
|
6 |
% |
|
7 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
% of Total Revenue |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Literacy |
33 |
% |
|
33 |
% |
|
34 |
% |
|
37 |
% |
|
34 |
% |
|
37 |
% |
|
36 |
% |
E&E Language |
32 |
% |
|
32 |
% |
|
31 |
% |
|
29 |
% |
|
31 |
% |
|
29 |
% |
|
28 |
% |
Consumer Language |
35 |
% |
|
35 |
% |
|
35 |
% |
|
34 |
% |
|
35 |
% |
|
34 |
% |
|
36 |
% |
Total |
100 |
% |
|
100 |
% |
|
100 |
% |
|
100 |
% |
|
100 |
% |
|
100 |
% |
|
100 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues by Geography |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
United States |
39,830 |
|
|
41,179 |
|
|
40,891 |
|
|
42,180 |
|
|
164,080 |
|
|
42,529 |
|
|
44,415 |
|
International |
4,781 |
|
|
4,763 |
|
|
4,565 |
|
|
4,513 |
|
|
18,622 |
|
|
4,650 |
|
|
4,780 |
|
Total |
44,611 |
|
|
45,942 |
|
|
45,456 |
|
|
46,693 |
|
|
182,702 |
|
|
47,179 |
|
|
49,195 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues by Geography (as a %) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
United States |
89 |
% |
|
90 |
% |
|
90 |
% |
|
90 |
% |
|
90 |
% |
|
90 |
% |
|
90 |
% |
International |
11 |
% |
|
10 |
% |
|
10 |
% |
|
10 |
% |
|
10 |
% |
|
10 |
% |
|
10 |
% |
Total |
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.
Grafico Azioni Rosetta Stone (NYSE:RST)
Storico
Da Mag 2024 a Giu 2024
Grafico Azioni Rosetta Stone (NYSE:RST)
Storico
Da Giu 2023 a Giu 2024