Rosetta Stone, Inc.

(NYSE:RST) Home Entertainment Software 1919 North Lynn Street 7th Floor Arlington, Virginia 22209 United States Phone: 800-788-0822
www.rosettastone.com

Employees: 1,300

Incorporated: 1992 in Delaware, US

Rosetta Stone Inc., together with its subsidiaries, provides technology-based language-learning solutions in the United States and internationally. The company develops, markets, and sells language-learning solutions, such as software, online services, mobile applications, and audio practice tools in approximately 30 languages primarily under the Rosetta Stone brand. Its products and services include Rosetta Course, a self-study interactive language-learning curriculum that consists of sequences of listening, speaking, reading, and writing interactions designed to teach, reinforce, and test learners through its software program; and Rosetta Studio comprising a series of coach-led practice sessions that provide learners to practice what they have... EPS Estimate (USD) 12 Months 12 Months 12 Months 12 Months 12 Months Dec-31-2011A Dec-31-2012A Jun-30-2013A Dec-31-2013E Dec-31-2014E

Key Statistics

Total Revenue 268.45 273.24 Growth Over Prior Year 3.7% 1.8% Gross Profit Margin % 81.7% 82.1% EBITDA Margin % (7.5%) 0.4% EBIT Margin % (10.6%) (2.2%) Net Income Margin % (7.4%) (13.1%) Diluted EPS Excl. Extra (0.96) (1.70) Items Revenue by Business and Geographic Segments (USD, mm)

269.04 (2.2%) 83.4% 0.5% (2.2%) (14.0%) (1.77)

285.40 4.4% 5.4% (0.44)

316.23 10.8% 7.0% 0.03

Estimates Recommendation Target Price LT Growth % Forward Multiples FY2013 P/E TEV/REV TEV/EBITDA PEG NM 0.77x 14.14x NM FY2014 NM 0.69x 9.96x 38.40x Outperform(2.00) 18.50000000 15.00%

Competitors - NTM TEV/Fwd EBITDA

* Segments with negative values, such as corporate eliminations, are excluded from the total and percentage calculations and do not appear on the charts Top Holders Holder Norwest Equity Partners ABS Capital Partners Nierenberg Investment Management Company,... Osmium Partners, LLC Ariel Investments, LLC Holders as of Sunday, September 08, 2013 Market Data Last (Delayed) Open Previous Close Change on Day Change % on Day Day High/Low 52 wk High/Low Volume (mm) Beta 5Y 16.13 16.11 16.13 0.03 0.2% 16.2/15.7 18.3/10.5 0.09 0.95 Market Cap (mm) Shares Out. (mm) Float % Shares Sold Short... Yield % Dividend Diluted EPS Excl.... P/Diluted EPS Before... Avg 3M Dly Vlm (mm) 351.6 21.8 66.6% 0.7 (1.77) NM 0.20 Common Stock Equivalent Held 3,334,002 2,989,294 1,804,474 990,715 951,654 % of Total Shares Outstanding 15.29 13.71 8.28 4.54 4.37 Share Price & Volume (USD) Market Value (USD in mm) 53.8 48.2 29.1 16.0 15.4

Capitalization Share Price as of Sep-06-2013 Shares Out. Market Capitalization - Cash & Short Term Investments + Total Debt + Pref. Equity + Total Minority Interest = Total Enterprise Value (TEV)Value of Common Book Equity + Pref. Equity + Total Minority Interest + Total Debt = Total Capital 16.13 21.80 351.61 132.07 219.54 140.27 140.27

Key Executives and Board Members Gross, Patrick W. Swad, Stephen M. Pierno, Thomas M. Mannakkara, Pradeep Somers, Steve Chairman of the Board, Chairman of Corporate... Chief Executive Officer, President and Director Chief Financial Officer and Principal Accounting Officer Chief Information Officer Vice President of Corporate Development, Investor...

Events Date/Time Sep-12-2013 Sep-12-2013 Nov-06-2013 Event Conference Company Conference Presentation Estimated Earnings Release Date (CIQ Derived)

Date Created: Sep-08-2013

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