Rosetta Stone Inc. (NYSE:RST), a world leader in technology-based
learning solutions, today announced financial results for
the first quarter ended March 31, 2020.
First Quarter 2020 Highlights
- Consolidated revenue increased 6% year over year to $47.2
million.
- Revenue at Lexia Learning ("Lexia"), the Company's Literacy
segment, increased 18% year-over-year to $17.5
million.
- Revenue within the Consumer Language segment increased 5%
year-over-year to $16.1 million.
- Revenue within the Enterprise & Education (“E&E”)
Language segment decreased 6% year-over-year to $13.6 million.
- Consolidated first quarter net loss was $6.2 million, a decline
from a net loss of $0.5 million in the same quarter a year ago,
driven by an increase in operating expenses and the absence of two
non-recurring prior period events.
- Consolidated bookings were $33.6 million, an increase of 20%
versus the first quarter of 2019, driven by a 42% growth in
Consumer bookings.
- Adjusted EBITDA, a non-GAAP financial measure, was $1.2 million
in the first quarter 2020, a decline from $3.3 million in the
year-ago period.
- At March 31, 2020 the Company had no debt outstanding and
cash and cash equivalents totaled $35.1 million.
“I am incredibly proud and thankful for the Rosetta Stone team.
We had a good start to the year, with our Literacy and Consumer
Language segments demonstrating particular strength. The team
remained focused and delivered a terrific Q1, even while
transitioning to an entirely remote work environment, highlighted
by year-over-year consolidated bookings growth of 20%, and
incredibly meaningful new initiatives to support customers in this
time of great uncertainty and pain for many,” said John Hass,
Chairman and Chief Executive Officer. “Programs like
unlimited site licenses for all existing K-12 literacy and language
customers for the rest of the school year and a free 3-month
student license through our Consumer Language business to support
families whose children were now learning from home are examples of
our “customer first” approach.”
Mr. Hass continued, “Ultimately, when the pandemic is under
control and life returns to some degree of normalcy, we are
confident that there will be even greater appreciation for the
power of adaptive, blended learning, and in particular, our ability
to deliver those solutions, anywhere, at any time. In all
cases, leveraging both the power of software to provide
personalized, adaptive instruction, while providing the data and
information to empower a teacher or a tutor to provide impactful
human instruction that so many are missing in this pandemic.”
First Quarter 2020 Review
Revenue: Total revenue in the first quarter of
2020 was $47.2 million, compared to $44.6 million in the first
quarter of 2019, due to an increase in Lexia and Consumer Language
revenue, partially offset by a slight decline in E&E Language
revenue. Consolidated bookings were $33.6 million, an increase of
20% versus the first quarter of 2019. Revenue growth lags bookings
growth.
Revenue at Lexia increased 18% year-over-year
to $17.5 million. The increase in Lexia revenues was a result
of continued demand for its product portfolio and the concentrated
efforts of a direct sales team. Literacy bookings increased
by 22% over the prior year period on a consistently high renewal
rate of 103% and a solid retention rate of 88%. Retention and
renewal rates have been and will continue to be affected in the
short-term by our decision to support our K-12 customers impacted
by the COVID-19 pandemic. We decided to leave licenses on for
customers even as license periods came to an end, and to not push
customers to pay immediately. We expect retention and renewal rates
will normalize, but in the interim our decision to accommodate
customers during this time has produced higher than normal
retention rates, because we aren’t turning schools off at their
license end date, and lower than normal renewal rates, because we
aren’t requesting immediate payment.
Consumer Language segment revenue increased $0.8 million,
or 5%, year-over-year to $16.1 million, reflecting the
recognition of sales growth efforts made in prior quarters.
Consumer Language bookings totaled $22.6 million in Q1 2020, up
$6.7 million, or 42%, year over year from $15.8 million. Consumer
Language bookings increased primarily due to the sale of Lifetime
subscriptions in the Web channel, but because those sales are
recognized as revenue over 24-months, they did not have a
significant impact on revenue in Q1 2020. Subscriptions with
a duration of one year or less totaled 38% of the subscription unit
mix at the end of the first quarter 2020, down from 45% 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 $2.1 million, or 28%, year-over-year. The bookings
decrease was driven by lower bookings in the Enterprise portion of
the segment spread across, Corporate, Reseller and Affiliate.
Included in the decline was a $0.6 million impact for a sale from
last year that the customer cancelled in Q1 2020.
US$ thousands, except for percentages
|
|
Three months ended
March 31, |
|
|
|
|
|
|
|
2020 |
|
|
Mix % |
|
|
2019 |
|
|
Mix % |
|
|
% change |
|
Revenue from: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Literacy |
|
$ |
17,486 |
|
|
|
37 |
% |
|
$ |
14,806 |
|
|
|
33 |
% |
|
|
18 |
% |
E&E Language |
|
|
13,552 |
|
|
|
29 |
% |
|
|
14,443 |
|
|
|
32 |
% |
|
|
(6 |
)% |
Consumer Language |
|
|
16,141 |
|
|
|
34 |
% |
|
|
15,362 |
|
|
|
35 |
% |
|
|
5 |
% |
Total Revenue |
|
$ |
47,179 |
|
|
|
100 |
% |
|
$ |
44,611 |
|
|
|
100 |
% |
|
|
6 |
% |
|
Net Loss: In the first quarter 2020,
the Company reported a net loss of $6.2 million, or
$(0.26) per diluted share. In the comparable period a
year ago, the Company reported a net loss of $0.5 million, or
$(0.02) per diluted share. The decline in net loss of $5.6 million
was driven by an increase in all operating expense categories, as
an increase in revenue was fully offset by an increase in cost of
revenue. Total operating expenses increased $4.2 million, or 11%
year-over-year, to $41.9 million, primarily due to higher online
media expense and higher stock based compensation expense as we
shift more variable compensation from cash-based to equity-based.
Additionally, the year-over-year change in net loss was also
impacted by two prior year non-recurring items related to a $1.4
million gain on sale of idle assets and a $0.6 million tax benefit
related to the Virginia state adoption of 2017 Tax Reform.
Balance Sheet: The Company had cash and cash
equivalents of $35.1 million and no debt outstanding
at March 31, 2020. Deferred revenue totaled $164.0
million at March 31, 2020, compared to $177.6
million at December 31, 2019. Short-term deferred revenue
before SourceNext and Custom Content, which will be recognized as
revenue over the next 12 months, totaled $104.4 million, or
approximately 78% of the combined total deferred revenue
balance at March 31, 2020.
Free Cash Flow and Adjusted EBITDA: Net cash
used in operating activities was $3.5 million in the first quarter
of 2020 compared to $6.6 million in the first quarter last year.
Free cash flow, a non-GAAP financial measure, was an outflow
of $7.3 million in the first quarter 2020, compared
to an outflow of $11.3 million in the same period a year
ago.
Adjusted EBITDA, a non-GAAP financial measure, was $1.2
million in the first quarter 2020, a decline compared to
$3.3 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 1-201-689-8470 (toll / international)
or 1-877-407-9039 (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 Wednesday, May 13,
2020. Investors may dial into the replay using 1-412-317-6671 and
passcode 13701431.
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.
Non-GAAP Financial and Statistical 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 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 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 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.
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, 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 Glassen / Jason TerryAddo
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 |
|
|
|
March 31,
2020 |
|
|
December 31,
2019 |
|
Assets |
|
|
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
35,122 |
|
|
$ |
43,010 |
|
Restricted cash |
|
|
49 |
|
|
|
54 |
|
Accounts receivable (net of allowance for doubtful accounts of $725
and $510 at March 31, 2020 and December 31, 2019,
respectively) |
|
|
15,391 |
|
|
|
22,919 |
|
Inventory |
|
|
1,377 |
|
|
|
1,545 |
|
Deferred sales commissions |
|
|
10,264 |
|
|
|
11,558 |
|
Prepaid expenses and other current assets |
|
|
3,905 |
|
|
|
4,172 |
|
Total current assets |
|
|
66,108 |
|
|
|
83,258 |
|
Deferred sales
commissions |
|
|
7,379 |
|
|
|
7,682 |
|
Property and equipment,
net |
|
|
39,124 |
|
|
|
39,251 |
|
Operating lease right-of-use
assets |
|
|
5,399 |
|
|
|
5,818 |
|
Intangible assets, net |
|
|
13,936 |
|
|
|
14,317 |
|
Goodwill |
|
|
48,807 |
|
|
|
48,958 |
|
Other assets |
|
|
1,855 |
|
|
|
1,823 |
|
Total assets |
|
$ |
182,608 |
|
|
$ |
201,107 |
|
Liabilities and
stockholders' deficit |
|
|
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
|
|
Accounts payable |
|
$ |
6,831 |
|
|
$ |
7,534 |
|
Accrued compensation |
|
|
10,955 |
|
|
|
9,854 |
|
Income tax payable |
|
|
150 |
|
|
|
78 |
|
Operating lease liabilities |
|
|
1,425 |
|
|
|
1,455 |
|
Other current liabilities |
|
|
10,979 |
|
|
|
13,090 |
|
Deferred revenue |
|
|
105,969 |
|
|
|
119,851 |
|
Total current liabilities |
|
|
136,309 |
|
|
|
151,862 |
|
Deferred revenue |
|
|
58,036 |
|
|
|
57,766 |
|
Deferred income taxes |
|
|
2,635 |
|
|
|
2,590 |
|
Operating lease
liabilities |
|
|
3,831 |
|
|
|
4,167 |
|
Other long-term
liabilities |
|
|
786 |
|
|
|
914 |
|
Total liabilities |
|
|
201,597 |
|
|
|
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
March 31, 2020 and December 31, 2019, respectively |
|
|
— |
|
|
|
— |
|
Non-designated common stock, $0.00005 par value, 190,000 and
190,000 shares authorized, 25,580 and 25,060 shares issued, and
24,580 and 24,060 shares outstanding, at March 31, 2020 and
December 31, 2019, respectively |
|
|
2 |
|
|
|
2 |
|
Additional paid-in capital |
|
|
214,208 |
|
|
|
210,846 |
|
Treasury stock, at cost; 1,000 and 1,000 shares at March 31,
2020 and December 31, 2019, respectively |
|
|
(11,435 |
) |
|
|
(11,435 |
) |
Accumulated loss |
|
|
(218,654 |
) |
|
|
(212,548 |
) |
Accumulated other comprehensive loss |
|
|
(3,110 |
) |
|
|
(3,057 |
) |
Total stockholders' deficit |
|
|
(18,989 |
) |
|
|
(16,192 |
) |
Total liabilities and
stockholders' deficit |
|
$ |
182,608 |
|
|
$ |
201,107 |
|
ROSETTA STONE
INC.CONSOLIDATED STATEMENTS OF
OPERATIONS(in thousands, except per share
amounts)(unaudited)
|
|
Three months ended
March 31, |
|
|
|
2020 |
|
|
2019 |
|
Revenue |
|
$ |
47,179 |
|
|
$ |
44,611 |
|
Cost of revenue |
|
|
11,101 |
|
|
|
8,426 |
|
Gross profit |
|
|
36,078 |
|
|
|
36,185 |
|
Operating expenses |
|
|
|
|
|
|
|
|
Sales and marketing |
|
|
25,434 |
|
|
|
23,238 |
|
Research and development |
|
|
6,917 |
|
|
|
5,738 |
|
General and administrative |
|
|
9,562 |
|
|
|
8,692 |
|
Total operating expenses |
|
|
41,913 |
|
|
|
37,668 |
|
Loss from operations |
|
|
(5,835 |
) |
|
|
(1,483 |
) |
Other income and
(expense): |
|
|
|
|
|
|
|
|
Interest income |
|
|
16 |
|
|
|
33 |
|
Interest expense |
|
|
(53 |
) |
|
|
(60 |
) |
Other income and (expense) |
|
|
71 |
|
|
|
796 |
|
Total other income and
(expense) |
|
|
34 |
|
|
|
769 |
|
Loss before income taxes |
|
|
(5,801 |
) |
|
|
(714 |
) |
Income tax expense (benefit) |
|
|
380 |
|
|
|
(170 |
) |
Net loss |
|
$ |
(6,181 |
) |
|
$ |
(544 |
) |
Loss per share: |
|
|
|
|
|
|
|
|
Basic |
|
$ |
(0.26 |
) |
|
$ |
(0.02 |
) |
Diluted |
|
$ |
(0.26 |
) |
|
$ |
(0.02 |
) |
Common shares and equivalents
outstanding: |
|
|
|
|
|
|
|
|
Basic weighted average shares |
|
|
23,803 |
|
|
|
23,036 |
|
Diluted weighted average shares |
|
|
23,803 |
|
|
|
23,036 |
|
ROSETTA STONE
INC.CONSOLIDATED STATEMENTS OF CASH
FLOWS(in
thousands)(unaudited)
|
|
Three months ended
March 31, |
|
|
|
2020 |
|
|
2019 |
|
CASH FLOWS FROM OPERATING ACTIVITIES: |
|
|
|
|
|
|
|
|
Net loss |
|
$ |
(6,181 |
) |
|
$ |
(544 |
) |
Non-cash adjustments to reconcile net loss to cash used in
operating activities: |
|
|
|
|
|
|
|
|
Stock-based compensation expense |
|
|
2,261 |
|
|
|
1,220 |
|
Loss on foreign currency transactions |
|
|
22 |
|
|
|
708 |
|
Bad debt expense (recovery) |
|
|
258 |
|
|
|
(13 |
) |
Depreciation and amortization |
|
|
4,420 |
|
|
|
3,529 |
|
Operating lease costs |
|
|
535 |
|
|
|
526 |
|
Deferred income tax expense (benefit) |
|
|
115 |
|
|
|
(592 |
) |
Gain on disposal or sale of assets |
|
|
— |
|
|
|
(1,395 |
) |
Amortization of deferred financing costs |
|
|
19 |
|
|
|
14 |
|
Net change in: |
|
|
|
|
|
|
|
|
Accounts receivable |
|
|
7,082 |
|
|
|
8,237 |
|
Inventory |
|
|
168 |
|
|
|
(829 |
) |
Deferred sales commissions |
|
|
1,579 |
|
|
|
1,997 |
|
Prepaid expenses and other current assets |
|
|
197 |
|
|
|
(789 |
) |
Income tax receivable or payable |
|
|
71 |
|
|
|
271 |
|
Other assets |
|
|
(71 |
) |
|
|
144 |
|
Accounts payable |
|
|
(685 |
) |
|
|
(1,595 |
) |
Accrued compensation |
|
|
2,178 |
|
|
|
2,441 |
|
Other current liabilities |
|
|
(1,934 |
) |
|
|
(2,622 |
) |
Operating lease liabilities |
|
|
(478 |
) |
|
|
(544 |
) |
Other long-term liabilities |
|
|
— |
|
|
|
(31 |
) |
Deferred revenue |
|
|
(13,038 |
) |
|
|
(16,700 |
) |
Net cash used in operating activities |
|
|
(3,482 |
) |
|
|
(6,567 |
) |
CASH FLOWS FROM
INVESTING ACTIVITIES: |
|
|
|
|
|
|
|
|
Purchases of property and equipment |
|
|
(3,786 |
) |
|
|
(4,714 |
) |
Proceeds from sale of assets |
|
|
— |
|
|
|
996 |
|
Net cash used in investing activities |
|
|
(3,786 |
) |
|
|
(3,718 |
) |
CASH FLOWS FROM
FINANCING ACTIVITIES: |
|
|
|
|
|
|
|
|
Proceeds from the exercise of stock options |
|
|
42 |
|
|
|
744 |
|
Payment of deferred financing costs |
|
|
(66 |
) |
|
|
(2 |
) |
Payments under financing lease liabilities |
|
|
(115 |
) |
|
|
(110 |
) |
Net cash (used in) provided by financing activities |
|
|
(139 |
) |
|
|
632 |
|
Decrease in cash, cash
equivalents, and restricted cash |
|
|
(7,407 |
) |
|
|
(9,653 |
) |
Effect of exchange rate changes in cash, cash equivalents, and
restricted cash |
|
|
(486 |
) |
|
|
(180 |
) |
Net decrease in cash, cash
equivalents, and restricted cash |
|
|
(7,893 |
) |
|
|
(9,833 |
) |
Cash, cash equivalents, and
restricted cash—beginning of period |
|
|
43,064 |
|
|
|
38,174 |
|
Cash, cash equivalents, and
restricted cash—end of period |
|
$ |
35,171 |
|
|
$ |
28,341 |
|
ROSETTA STONE
INC.RECONCILIATION OF GAAP NET LOSS TO ADJUSTED
EBITDA(in
thousands)(unaudited)
|
|
Three months ended
March 31, |
|
|
|
2020 |
|
|
2019 |
|
GAAP net loss |
|
$ |
(6,181 |
) |
|
$ |
(544 |
) |
Total other non-operating
(income) and expense, net |
|
|
(34 |
) |
|
|
(769 |
) |
Income tax expense
(benefit) |
|
|
380 |
|
|
|
(170 |
) |
Depreciation and
amortization |
|
|
4,420 |
|
|
|
3,529 |
|
Stock-based compensation
expense |
|
|
2,261 |
|
|
|
1,220 |
|
Other EBITDA adjustments |
|
|
327 |
|
|
|
53 |
|
Adjusted EBITDA* |
|
$ |
1,173 |
|
|
$ |
3,319 |
|
* 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
March 31, |
|
|
|
2020 |
|
|
2019 |
|
Net cash used in operating activities |
|
$ |
(3,482 |
) |
|
$ |
(6,567 |
) |
Purchases of property and
equipment |
|
|
(3,786 |
) |
|
|
(4,714 |
) |
Free cash flow
* |
|
$ |
(7,268 |
) |
|
$ |
(11,281 |
) |
* 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 |
|
|
|
2019 |
|
|
2019 |
|
|
2019 |
|
|
2019 |
|
|
2019 |
|
|
2020 |
|
Revenue by Segment (in thousands, except
percentages) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Literacy |
|
|
14,806 |
|
|
|
15,101 |
|
|
|
15,587 |
|
|
|
17,131 |
|
|
|
62,625 |
|
|
|
17,486 |
|
E&E Language |
|
|
14,443 |
|
|
|
14,502 |
|
|
|
14,074 |
|
|
|
13,793 |
|
|
|
56,812 |
|
|
|
13,552 |
|
Consumer Language |
|
|
15,362 |
|
|
|
16,339 |
|
|
|
15,795 |
|
|
|
15,769 |
|
|
|
63,265 |
|
|
|
16,141 |
|
Total |
|
|
44,611 |
|
|
|
45,942 |
|
|
|
45,456 |
|
|
|
46,693 |
|
|
|
182,702 |
|
|
|
47,179 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
YoY Growth
(%) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Literacy |
|
|
20 |
% |
|
|
19 |
% |
|
|
18 |
% |
|
|
18 |
% |
|
|
19 |
% |
|
|
18 |
% |
E&E Language |
|
|
(6 |
)% |
|
|
(6 |
)% |
|
|
(6 |
)% |
|
|
(5 |
)% |
|
|
(6 |
)% |
|
|
(6 |
)% |
Consumer Language |
|
|
2 |
% |
|
|
6 |
% |
|
|
9 |
% |
|
|
2 |
% |
|
|
5 |
% |
|
|
5 |
% |
Total |
|
|
4 |
% |
|
|
6 |
% |
|
|
6 |
% |
|
|
5 |
% |
|
|
5 |
% |
|
|
6 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
% of Total
Revenue |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Literacy |
|
|
33 |
% |
|
|
33 |
% |
|
|
34 |
% |
|
|
37 |
% |
|
|
34 |
% |
|
|
37 |
% |
E&E Language |
|
|
32 |
% |
|
|
32 |
% |
|
|
31 |
% |
|
|
29 |
% |
|
|
31 |
% |
|
|
29 |
% |
Consumer Language |
|
|
35 |
% |
|
|
35 |
% |
|
|
35 |
% |
|
|
34 |
% |
|
|
35 |
% |
|
|
34 |
% |
Total |
|
|
100 |
% |
|
|
100 |
% |
|
|
100 |
% |
|
|
100 |
% |
|
|
100 |
% |
|
|
100 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues by
Geography |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
United States |
|
|
39,830 |
|
|
|
41,179 |
|
|
|
40,891 |
|
|
|
42,180 |
|
|
|
164,080 |
|
|
|
42,529 |
|
International |
|
|
4,781 |
|
|
|
4,763 |
|
|
|
4,565 |
|
|
|
4,513 |
|
|
|
18,622 |
|
|
|
4,650 |
|
Total |
|
|
44,611 |
|
|
|
45,942 |
|
|
|
45,456 |
|
|
|
46,693 |
|
|
|
182,702 |
|
|
|
47,179 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues by Geography
(as a %) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
United States |
|
|
89 |
% |
|
|
90 |
% |
|
|
90 |
% |
|
|
90 |
% |
|
|
90 |
% |
|
|
90 |
% |
International |
|
|
11 |
% |
|
|
10 |
% |
|
|
10 |
% |
|
|
10 |
% |
|
|
10 |
% |
|
|
10 |
% |
Total |
|
|
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 (NYSE:RST)
Historical Stock Chart
From Jun 2024 to Jul 2024
Rosetta Stone (NYSE:RST)
Historical Stock Chart
From Jul 2023 to Jul 2024