Puerto Rico's Telecom Market to Double its Data Revenue by 2014 despite Economic Contraction, finds Pyramid

CAMBRIDGE, Massachusetts, July 30 /PRNewswire/ --

With the voice market shrinking, telecom operators face an opportunity to expand data services in Puerto Rico, as data revenue is expected to more than double by 2014 despite the deep economic contraction, according to the latest report from Pyramid Research (www.pyr.com), the telecom research arm of the Light Reading Communications Network (www.lightreading.com).

Communications Markets in Puerto Rico offers a precise profile of the country's converged telecommunications, media, and technology sectors based on proprietary data from our research in the Puerto Rican market. The 28-page report provides detailed competitive analysis of both the fixed and mobile sectors, tracks the market shares of technologies and services, and monitors the introduction and spread of new technologies such as WiMax, IPTV, and VoIP. The executive study provides a comprehensive view of the Puerto Rican communications market by analyzing key trends, evaluating near-term opportunities and assessing upcoming risk factors. Download an excerpt of this report here: http://www.pyr.com/downloads.htm?id=18&sc=PR073009_CIRPR

Despite the deep economic contraction that Puerto Rico is facing, we see interesting opportunities in mobile data services, mobile content, and prepaid fixed services, notes Jose Magana, analyst at Pyramid Research and author of the report. "Several years of economic contraction and operators focusing on the more lucrative postpaid segment have constrained subscription's growth, but Pyramid expects penetration to advance to 84 percent by 2014," says Magana.

The recent incursion of big telecom operators, such as AT&T and T-Mobile, looking to expand beyond the U.S. in the mobile market may also put additional pressure on tariffs but will spur offerings in data services, such as mobile Internet and infotainment content. "Pyramid forecasts infotainment content to gain share in the total data market at the expense of messaging while connectivity revenue grows thanks to uptake in mobile Internet and datacards," says Magana. "Data as a percentage of ARPS will advance to more than 30 percent by 2014 from 18 percent in 2009," he adds.

In the fixed segment, Pyramid expects broadband to expand at a CAGR of 16.7 percent to generate US$390 million by 2014. "Broadband will also encourage subscribers to migrate to cheaper VoIP plans and will hasten a decline in PSTN lines," Magana explains.

Communications Markets in Puerto Rico is part of Pyramid Research's Latin America Country Intelligence Report Series. Pyramid Research's premium Country Intelligence Reports are the industry's best available analysis on market trends, regulatory environments, and competitive dynamics for 60 countries worldwide. Download an excerpt of this report here: http://www.pyr.com/downloads.htm?id=18&sc=PR073009_CIRPR

Communications Markets in Puerto Rico is priced at US$990 and can be purchased online here: http://www.pyramidresearch.com/store/CIRPUERTORICO.htm?sc=PR073009_CIRPR or through Amalia Vega via email at avega@pyr.com or telephone at +1-809-330-4520.

For more information about Pyramid Research's products and services, please visit www.pyr.com or contact us at info@pyr.com.

About Pyramid Research

Pyramid Research (www.pyr.com) offers practical solutions to the complex demands our clients face in the telecommunications, media and technology industries. Our analysis is uniquely positioned at the intersection of emerging markets, emerging technologies and emerging business models, powered by the bottom-up methodology of our market forecasts for over 100 countries-a distinction that has remained unmatched for more than 25 years. As the telecom research arm of the Light Reading Communications Network, Pyramid Research works with Heavy Reading, providing the communications industry's most comprehensive market data, trusted research and insightful technology analysis.

About Light Reading

Founded in 2000, Light Reading (www.lightreading.com) is the leading online media, research, and focused event company serving the US$3 trillion worldwide communications market. Lightreading.com is the ultimate source for technology and financial analysis of the communications industry, leading the media sector in terms of traffic, content, and reputation. Light Reading's research arms, Heavy Reading and Pyramid Research, provide the most comprehensive communications research, market data, and technology analysis in close to 100 markets around the world. Light Reading produces nearly 20 targeted communications events including TelcoTV, Ethernet Expo New York and Ethernet Expo London, The Tower Summit @ CTIA, and Optical Expo, as well as focused one-day events tailored for cable, mobile, and wireline executives. Light Reading was acquired by United Business Media in August 2005 and operates as a unit of TechWeb.

About TechWeb

TechWeb (http://techweb.com/aboutus), the global leader in business technology media, is an innovative business focused on serving the needs of technology decision-makers and marketers worldwide. TechWeb produces the most respected and consumed media brands in the business technology market. Today, more than 13.3 million* business technology professionals actively engage in our communities created around our global face-to-face events, Interop, Web 2.0, Black Hat, and VoiceCon; online resources such as the TechWeb Network, Light Reading, Intelligent Enterprise, InformationWeek.com, bMighty.com, and The Financial Technology Network; and the market leading, award-winning InformationWeek, TechNet Magazine, MSDN Magazine, and Wall Street & Technology magazines. TechWeb also provides end-to-end services including next-generation performance marketing, integrated media, research, and analyst services. TechWeb is a division of United Business Media, a global provider of news distribution and specialist information services with a market capitalization of more than US$2.5 billion.

*13.3 million business decision-makers: based on number of monthly connections

About United Business Media Limited

UBM (UBM.L) focuses on two principal activities: worldwide information distribution, targeting and monitoring; and, the development and monetization of B2B communities and markets. UBM's businesses inform markets and serve professional commercial communities - from doctors to game developers, from journalists to jewelry traders, from farmers to pharmacists - with integrated events, online, print and business information products. Our 6,500 staff in more than 30 countries are organized into specialist teams that serve these communities, bringing buyers and sellers together, helping them to do business and their markets to work effectively and efficiently. For more information, go to http://www.unitedbusinessmedia.com.

Press contact: Jennifer Baker +1-617-871-1910 jbaker@pyr.com

Pyramid Research

Jennifer Baker, +1-617-871-1910, jbaker@pyr.com

Aware, Inc. Reports Second Quarter 2009 Financial Results

BEDFORD, Mass., July 30 /PRNewswire-FirstCall/ -- Aware, Inc. , a leading supplier of broadband technology and biometrics software, today reported financial results for its second quarter ended June 30, 2009.

Revenues for the second quarter of 2009 were $5.8 million, a decrease of 7% compared to $6.2 million in the same quarter last year. For the six months ended June 30, 2009, revenues decreased 14% to $10.3 million, compared to $12.0 million in the same period a year ago.

The Company reports its net income and basic and diluted net income per share in accordance with U.S. generally accepted accounting principles (GAAP), and additionally, on a non-GAAP basis. Non-GAAP net income, where applicable, excludes the effect of stock-based compensation expense. The company uses the non-GAAP information internally to evaluate its operating performance and believes these non-GAAP measures are useful to investors as they provide additional insight into the underlying operating results. However, non-GAAP measures are not stated in accordance with, should not be considered in isolation from, and are not a substitute for, GAAP measures. A reconciliation of GAAP to non-GAAP results has been provided in the attached financial tables.

The GAAP net loss for the second quarter of 2009 was $1.6 million, or $0.08 per diluted share, which included $0.4 million of stock-based compensation charges in accordance with the provisions of FAS 123(R). This compared to a GAAP net loss of $1.3 million, or $0.05 per diluted share, for the same period a year ago. GAAP net loss for the six months ended June 30, 2009 was $3.7 million, or $0.17 per share, compared to a net loss of $2.5 million, or $0.11 per share, for the same period a year ago.

The non-GAAP net loss for the second quarter of 2009, excluding the effect of stock-based compensation, was $1.2 million, or $0.06 per diluted share. For the six months ended June 30, 2009, the company had a non-GAAP net loss, excluding the effect of stock-based compensation, of $2.9 million, or $0.13 per share.

Michael Tzannes, Aware's chief executive officer, said, "We are encouraged by the modest growth in our revenues this quarter. Our goal is to generate shareholder value by targeting growing portions of the biometrics, DSL test and home networking markets with a collection of technology, products and services."

Note: Aware's conference call will be broadcast live over the Internet today, July 30, 2009 at 5:00 p.m. Eastern Time. To listen to the call, please go to http://www.aware.com/ir. The conference call may also be heard by calling 719-325-2122 and referencing the confirmation number 2831084. A replay of the call will be archived on our website after the call.

About Aware

Aware is a leading technology and software supplier for the telecommunications and biometrics industries. For more than ten years, Aware has pioneered innovations at telecommunications standards-setting organizations and continues to develop and market DSL silicon intellectual property and test and diagnostics products. Its StratiPHY(tm) IP product line supports DSL standards, including ADSL2+ and VDSL2, and has been broadly licensed to leading semiconductor companies. Telecom equipment vendors and phone companies use Aware's DSL test and diagnostics modules and Dr. DSL software to help provision DSL circuits globally. Aware is also a veteran of the biometrics industry, providing biometric and imaging software components used in government systems worldwide since 1992. Aware's interoperable, standard-compliant, field-proven imaging products are used in a number of applications, from border management to criminal justice to medical imaging. Aware is a publicly held company based in Bedford, Massachusetts. http://www.aware.com/

Safe Harbor Warning

Portions of this release contain forward-looking statements regarding future events and are subject to risks and uncertainties, such as estimates or projections of future revenue and earnings and the growth of the DSL and biometrics markets. Aware wishes to caution you that there are factors that could cause actual results to differ materially from the results indicated by such statements. General factors include, but are not limited to: our quarterly results are unpredictable and may fluctuate significantly; our business is subject to rapid technological change; we face intense competition from a wide range of competitors; current economic conditions, including the credit crisis affecting the financial markets; our intellectual property is subject to limited protection; our ability to obtain or enforce patents could be affected by new laws, regulations or rules; and our business may be affected by government regulations. DSL factors include, but are not limited to: our DSL licensing and DSL test and diagnostic businesses depend upon a limited number of customers; there has been and may continue to be a cyclical demand for DSL chipsets; the success of our DSL licensing and test and diagnostics products businesses requires telephone companies to install DSL service in volume; our test and diagnostic hardware and software products could have quality problems; we depend on a single source contract manufacturer for the manufacture of our DSL hardware products; and we are dependent on single source suppliers for components in our DSL hardware products. Biometric factors include, but are not limited to: market acceptance of our biometric technologies and products; changes in contracting practices of government or law enforcement agencies; the failure of the biometrics market to experience continued growth; announcements or introductions of new technologies or products by our competitors; failures or problems in our biometric software products; delays in the adoption of new industry biometric standards; growth of proprietary biometric systems which do not conform to industry standards; our ability to sell services contracts in a manner that is consistent with our business model; our ability to deliver service contract milestones; and our dependence on third party contractors and consultants to deliver certain services contract milestones. We refer you to the documents Aware files from time to time with the Securities and Exchange Commission, specifically the section titled Risk Factors in our annual report on Form 10-K for the fiscal year ended December 31, 2008 and other reports and filings made with the Securities and Exchange Commission.

Aware, StratiPHY, and Dr. DSL are trademarks or registered trademarks of Aware, Inc.

AWARE, INC. CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except per share data) (unaudited) Three Months Ended Six Months Ended June 30, June 30, -------- -------- 2009 2008 2009 2008 ---- ---- ---- ---- Revenue: Product sales $3,852 $3,948 $6,671 $7,872 Contract revenue 1,442 1,776 2,719 3,298 Royalties 470 443 947 874 --- --- --- --- Total revenue 5,764 6,167 10,337 12,044 Costs and expenses: Cost of product sales (1) 1,043 624 1,556 1,448 Cost of contract revenue (1) 909 1,129 1,817 2,148 Research and development (1) 3,058 3,511 6,170 7,039 Selling and marketing (1) 1,184 1,186 2,265 2,155 General and administrative (1) 1,216 1,285 2,429 2,478 ----- ----- ----- ----- Total costs and expenses 7,410 7,735 14,237 15,268 Loss from operations (1,646) (1,568) (3,900) (3,224) Interest income 61 315 186 698 -- --- --- --- Loss before provision for income taxes (1,585) (1,253) (3,714) (2,526) Provision for income taxes 1 4 4 13 -- -- -- -- Net loss ($1,586) ($1,257) ($3,718) ($2,539) ======= ======= ======= ======= Net loss per share - basic ($0.08) ($0.05) ($0.17) ($0.11) Net loss per share - diluted ($0.08) ($0.05) ($0.17) ($0.11) Weighted average shares - basic 20,666 23,869 21,974 23,875 Weighted average shares - diluted 20,666 23,869 21,974 23,875 (1) Effective January 1, 2006 the Company adopted Statement of Financial Accounting Standard No. 123 (Revised), "Share-Based Payment" (FAS 123(R)). The amounts in the tables above include stock-based compensation as follows (in thousands): Three Months Ended Six Months Ended June 30, June 30, ------------------ ---------------- 2009 2008 2009 2008 ---- ---- ---- ---- Cost of product sales $3 $3 $5 $6 Cost of contract revenue 36 26 68 60 Research and development 138 160 285 327 Sales and marketing 57 50 109 81 General and administrative 175 154 333 244 --- --- --- --- Total stock-based compensation costs $409 $393 $800 $718 ==== ==== ==== ==== AWARE, INC. Non-GAAP Financial Measures and Reconciliation (In thousands, except per share data) (unaudited) Three Months Ended Six Months Ended June 30, June 30, ------------------ ---------------- 2009 2008 2009 2008 ---- ---- ---- ---- GAAP net loss ($1,586) ($1,257) ($3,718) ($2,539) Stock-based compensation 409 393 800 718 --- --- --- --- Non-GAAP net loss ($1,177) ($864) ($2,918) ($1,821) ======= ===== ======= ======= Three Months Ended Six Months Ended June 30, June 30, ------------------ ---------------- 2009 2008 2009 2008 ---- ---- ---- ---- GAAP net loss per share ($0.08) ($0.05) ($0.17) ($0.11) Stock-based compensation 0.02 0.01 0.04 0.03 ---- ---- ---- ---- Non-GAAP net loss per share ($0.06) ($0.04) ($0.13) ($0.08) ====== ====== ====== ====== AWARE, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands) (unaudited) June 30, December 31, 2009 2008 ---- ---- ASSETS Cash and investments $31,860 $45,516 Accounts receivable, net 4,635 2,211 Inventories, net 1,128 1,656 Property and equipment, net 7,165 7,463 Other assets, net 907 700 --- --- Total assets $45,695 $57,546 ======= ======= LIABILITIES AND STOCKHOLDERS' EQUITY Total current liabilities $2,707 $2,693 Long-term deferred revenue 330 330 Total stockholders' equity 42,658 54,523 ------ ------ Total liabilities and stockholders' equity $45,695 $57,546 ======= =======

Aware, Inc.

CONTACT: Rick Moberg of Aware, Inc., +1-781-276-4000

Web Site: http://www.aware.com/

SourceForge Reports Second Quarter 2009 Financial Results

MOUNTAIN VIEW, Calif., July 30 /PRNewswire-FirstCall/ -- SourceForge, Inc. today announced financial results for its second quarter ended June 30, 2009.

Total revenue for the second quarter of 2009 was $11.8 million compared to $11.8 million of revenue for the second quarter of 2008. Net loss for the second quarter of 2009 was $3.6 million or $0.06 per share compared to a net loss of $3.8 million or $0.06 per share, for the same period a year ago. Net loss for the second quarter of 2009 includes a $1.2 million loss resulting from the write-off of internally developed software.

Adjusted EBITDA loss for the second quarter of 2009 was $1.2 million, compared to adjusted EBITDA loss of $0.7 million for the same period a year ago. A reconciliation of our net loss as reported to adjusted EBITDA is included in this release.

"We executed well this quarter, growing each of our businesses from the first quarter and demonstrating early traction in our new strategy," said Scott Kauffman, President & CEO, SourceForge, Inc. "We made good progress on several of our key metrics, including the contribution from premium advertising, RPM, and orders shipped. We accomplished all this while maintaining our focus on our strategic initiatives, and are well positioned as our new strategy continues to take hold."

Second Quarter Highlights: -- Media revenue was $4.3 million for the second quarter of 2009, compared to $5.0 million for the second quarter of 2008. Revenue for the second quarter of 2009 included $1.6 million from our premium advertising products compared to $0.4 million of premium revenue for the same period last year. -- E-commerce revenue was $7.4 million for the second quarter of 2009, compared to $6.8 million for the second quarter of 2008. -- Total cash and investments balance, including restricted cash, at the end of the second quarter of 2009 was $40.5 million.

Supplemental schedules of the Company's quarterly statements of operations and operational statistics for the quarterly periods in the year ended December 31, 2008 and the six months ended June 30, 2009 are available on the Company's web site at http://web.sourceforge.com/cyresults.

A conference call and audio webcast will be held at 2:00 p.m. PT or 5:00 p.m. ET on July 30, 2009 and may be accessed by calling 877-407-8035 or 201-689-8035 or by visiting http://www.sourceforge.com/. Replays of both the telephonic audio and audio webcast will be available for 90 days. To access the conference call replay, dial 877-660-6853 or 201-612-7415, referencing replay account 286 and call ID 328440.

Use of Non-GAAP Financial Measures

In addition to reporting financial results in accordance with generally accepted accounting principles, or GAAP, we also report adjusted EBITDA. Adjusted EBITDA should be considered in addition to results prepared in accordance with GAAP, but should not be considered a substitute for, or superior to, GAAP results. We believe that adjusted EBITDA provides useful information to both management and investors and is an additional measurement which may be used to evaluate our operating performance. Our management and Board of Directors use adjusted EBITDA as part of their reporting and planning process and it is the primary measure we use to evaluate our operating performance. In addition, because we have historically reported non-GAAP earnings to the investment community, from which adjusted EBITDA can be derived, we believe the inclusion of adjusted EBITDA provides consistency in financial reporting. We also believe that the financial analysts who regularly follow and report on us and the business sector in which we compete use adjusted EBITDA to prepare their financial performance estimates, to measure our performance against other sector participants and to project our future financial results.

We define adjusted EBITDA as net loss which is adjusted for interest and other income (expense) net and income taxes as well as stock-based compensation, restructuring charges and depreciation and amortization. The method we use to produce adjusted EBITDA is not computed according to GAAP, is likely to differ from the methods used by other companies and should not be regarded as a substitute for results prepared in accordance with accounting principles generally accepted in the United States. Adjusted EBITDA, as we compute it, excludes certain expenses that we believe are not indicative of our core operating results, as well as income taxes, stock-based compensation and depreciation and amortization. We consider our core operating results to include revenue recorded in a particular period and the related expenses that are intended to directly drive operating income during that period.

The EBITDA calculation excludes interest, income taxes and depreciation and amortization by its nature. In addition, when we compute adjusted EBITDA we exclude stock-based compensation and restructuring charges and other amounts included in the Interest income and other income (expense) net caption as we believe that these amounts represent income and expenses that are not directly related to our core operations. Although some of the items may recur on a regular basis, management does not consider activities associated with these items as core to its operations. With respect to stock-based compensation, we recognize expenses associated with stock-based compensation that require management to make assumptions about our common stock, such as expected future stock price volatility, the anticipated duration of outstanding stock options and awards and the rate at which we recognize the corresponding stock-based compensation expense over the course of future fiscal periods. While other forms of expenses (such as cash compensation, inventory costs and real estate costs) are reasonably correlated to our underlying business and such costs are incurred principally or wholly in the particular fiscal period being reported, stock-based compensation expense is not reasonably correlated to the particular fiscal period in question, but rather is based on expected future events that have no relationship (and in certain instances, an inverse relationship) with how well we currently operate our business. Restructuring costs are excluded from adjusted EBITDA because they represent non-cash charges which are not representative of our core operations.

About SourceForge, Inc.

SourceForge's media and e-commerce web sites connect millions of influential technology professionals and enthusiasts each day. Combining user-developed content and e-commerce, SourceForge is the global technology community's nexus for information exchange, goods for geeks, and open source software distribution and services. SourceForge's network of web sites serves 35 million unique visitors each month* and includes: SourceForge.net, Slashdot, ThinkGeek, Ohloh.net, fossfor.us and freshmeat.net. For more information or to view our media kit online, visit http://www.sourceforge.com/. (*Source: Google Analytics, Coremetrics and Omniture, June 2009).

SourceForge, SourceForge.net, Slashdot, Ohloh, freshmeat, and ThinkGeek are registered trademarks of SourceForge, Inc. in the United States and other countries. All other trademarks or product names are property of their respective owners.

NOTE REGARDING FORWARD-LOOKING STATEMENTS: This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on management's current expectations, and involve risks and uncertainties. Forward-looking statements contained herein include statements regarding growth strategies and prospects for SourceForge's online media and e-commerce businesses. Actual results may differ materially from those expressed or implied in such forward-looking statements due to various factors, including: SourceForge's effectiveness at increasing engagement with, and traffic to, its Internet properties; SourceForge's ability to attract and retain qualified personnel; success in designing and offering innovative online advertising programs; decreases or delays in online advertising spending, especially in light of current macroeconomic challenges and uncertainty; SourceForge's effectiveness at planning and managing its e-commerce inventory; SourceForge's ability to achieve and sustain higher levels of revenue; SourceForge's ability to protect and defend its intellectual property rights; rapid technological and market change; unforeseen expenses that SourceForge may incur in future quarters; and competition with, and pricing pressures from larger and/or more established competitors. Investors should consult SourceForge's filings with the Securities and Exchange Commission, http://www.sec.gov/, including the risk factors section of its Annual Report on Form 10-K for the year ended July 31, 2008, and its Quarterly Report on Form 10-Q for the quarter ended March 31, 2009, for further information regarding these and other risks of SourceForge's business. All forward-looking statements included in this press release are based upon information available to SourceForge as of the date hereof, and SourceForge does not assume any obligations to update such statements or the reasons why actual results could differ materially from those projected in such statements.

SOURCEFORGE, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except per share data) (unaudited) Three Months Six Months Ended Ended June 30, June 30, ---------------- ---------------- 2009 2008 2009 2008 ---- ---- ---- ---- Online Media revenue $4,341 $5,018 $8,118 $9,603 E-commerce revenue 7,444 6,780 14,038 13,583 ----- ----- ------ ------ Net revenue 11,785 11,798 22,156 23,186 ------ ------ ------ ------ Online Media cost of revenue 1,718 1,967 3,625 3,921 E-commerce cost of revenue 6,152 5,207 11,762 10,980 ----- ----- ------ ------ Cost of revenue 7,870 7,174 15,387 14,901 ----- ----- ------ ------ Gross margin 3,915 4,624 6,769 8,285 ----- ----- ----- ----- Operating expenses: Sales and marketing 1,952 2,327 4,267 4,214 Research and development 2,078 1,251 3,672 2,382 General and administrative 2,244 4,085 4,349 6,041 Amortization of intangible assets 27 - 27 - Restructuring costs - 765 - 765 -- --- -- --- Total operating expenses 6,301 8,428 12,315 13,402 ----- ----- ------ ------ Operating loss (2,386) (3,804) (5,546) (5,117) Interest and other income (expense), net (1,231) 14 (5,561) 474 ------ -- ------ --- Loss before income taxes (3,617) (3,790) (11,107) (4,643) Provision (benefit) for income taxes (31) (37) (95) 26 --- --- --- -- Net loss $(3,586) $(3,753) $(11,012) $(4,669) ======= ======= ======== ======= Earnings per share: Basic and diluted $(0.06) $(0.06) $(0.18) $(0.07) ====== ====== ====== ====== Shares used in computing earnings per share: Basic and diluted 59,916 67,506 61,618 67,486 ====== ====== ====== ====== Reconciliation of net loss as reported to adjusted EBITDA: Net loss - as reported $(3,586) $(3,753) $(11,012) $(4,669) Reconciling items: Interest and other income (expense), net 1,231 (14) 5,561 (474) Income taxes (31) (37) (95) 26 Stock-based compensation expense included in COGS 87 85 154 134 Stock-based compensation expense included in Op Ex. 540 1,792 1,154 2,258 Restructuring costs - 765 - 765 Depreciation and amortization 555 484 1,158 940 --- --- ----- --- Adjusted EBITDA $(1,204) $(678) $(3,080) $(1,020) ======= ===== ======= ======= SOURCEFORGE, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands) (unaudited) June 30, December 31, 2009 2008 ----- ---- ASSETS Current assets: Cash and cash equivalents $30,103 $40,511 Short-term investments, including restricted cash 10,441 563 Accounts receivable, net 3,259 4,418 Inventories 3,264 3,264 Prepaid expenses and other current assets 3,036 1,841 ----- ----- Total current assets 50,103 50,597 Property and equipment, net 2,644 4,748 Long-term investments, including long- term restricted cash - 9,947 Other assets 5,003 8,874 ----- ----- Total assets $57,750 $74,166 ======= ======= LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $2,244 $4,021 Accrued restructuring liabilities 2,753 2,862 Deferred revenue 715 591 Accrued liabilities and other 2,102 2,702 ----- ----- Total current liabilities 7,814 10,176 Other long-term liabilities 192 1,423 --- ----- Total liabilities 8,006 11,599 ----- ------ Stockholders' equity: Common stock 61 65 Treasury stock (424) (331) Additional paid-in capital 797,319 799,037 Accumulated other comprehensive income 13 9 Accumulated deficit (747,225) (736,213) -------- -------- Total stockholders' equity 49,744 62,567 ------ ------ Total liabilities and stockholders' equity $57,750 $74,166 ======= ======= SOURCEFORGE, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) (unaudited) Six months ended June 30, ------------- 2009 2008 ---- ---- Cash flows from operating activities: Net loss $(11,012) $(4,669) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and amortization 1,158 940 Stock-based compensation expense 1,308 2,392 Provision for bad debts 87 80 Provision for excess and obsolete inventory 13 67 Loss on disposal of assets 1,020 1 Loss on sale of investments - 200 Impairment of investments 4,585 108 Non-cash restructuring expense - 765 Changes in assets and liabilities: Accounts receivable 1,077 (544) Inventories (13) 623 Prepaid expenses and other assets 260 (306) Accounts payable (1,784) (2,890) Accrued restructuring liabilities (1,363) (1,325) Deferred revenue 124 (133) Accrued liabilities and other (636) (261) Other long-term liabilities 23 12 -- -- Net cash used in operating activities (5,153) (4,940) ------ ------ Cash flows from investing activities: Purchase of property and equipment (250) (1,639) Purchases of marketable securities - (25,987) Maturities or sale of marketable securities 559 48,540 Acquisitions (2,613) - Proceeds from sale of intangible assets, net 172 - --- -- Net cash (used in) provided by investing activities (2,132) 20,914 ------ ------ Cash flows from financing activities: Proceeds from issuance of common stock 4 18 Repurchase of common stock (3,127) (104) ------ ---- Net cash used in financing activities (3,123) (86) ------ --- Cash flows from discontinued operations: Net cash provided by operating activities - 42 -- -- Net cash provided by discontinued operations - 42 -- -- Net increase (decrease) in cash and cash equivalents (10,408) 15,930 ------- ------ Cash and cash equivalents, beginning of period 40,511 25,037 ------ ------ Cash and cash equivalents, end of period $30,103 $40,967 ======= =======

SourceForge, Inc.

CONTACT: Todd Friedman or Stacie Bosinoff, both of The BlueShirt Group,
+1-415-217-5868, ir@corp.sourceforge.com, for SourceForge, Inc.

Web Site: http://www.sourceforge.com/

Sonic Foundry Reports Third Quarter 2009 Results

MADISON, Wis., July 30 /PRNewswire-FirstCall/ -- Sonic Foundry, Inc. , the recognized market leader for rich media webcasting and knowledge management, today announced financial results for its fiscal 2009 third quarter ended June 30, 2009. Results include:

-- Revenue of $5.0 million, down slightly from 2008 fiscal third quarter revenue of $5.1 million. -- Quarterly loss of $162 thousand equating to $0.00 per diluted share compared to an $829 thousand loss or $(0.02) per diluted share in the fiscal third quarter of 2008. -- Non-GAAP net income of $91 thousand or $0.00 per diluted share compared to non-GAAP net income of $210 thousand or $0.01 per diluted share in the fiscal third quarter of 2008. -- Billings of $5.0 million compared to $5.5 million in the fiscal third quarter of 2008. -- Service revenue of $2.4 million, up 17 percent from fiscal Q3 2008. -- Unearned revenue balance of $4.7 million at June 30, 2009 compared to $3.6 million at June 30, 2008. -- Operating expenses of $4.1 million, down 11 percent from $4.6 million during the fiscal third quarter of fiscal 2008. -- Gross margin of 78 percent, up from 74 percent for the fiscal third quarter of 2008.

Non-GAAP net income primarily excludes all non-cash related expenses of stock compensation, depreciation, amortization, personnel and program reduction and includes the cash impact of billings not recognized as revenue. Reconciliation between GAAP and non-GAAP results is provided at the end of this press release.

Expense reductions and cost control resulted in achieving $0.00 per diluted share for the second consecutive quarter and quarter over quarter EPS improvement for the fifth consecutive reporting period. The company now believes it will exceed 20 percent revenue growth for the full year at current operating expense levels. Previous company revenue growth guidance for fiscal 2009 was estimated to be between 15 and 20 percent, or $18 million to $18.7 million.

The company increased the balance of unearned revenue by $1.1 million or 29 percent from June 30, 2008 to its current end of quarter level of $4.7 million. Of the unearned revenue balance, the company expects to realize $1.8 million in the upcoming quarter. Gross margin was 78 percent, up from 74 percent in the prior year, primarily due to realizing a decrease in the cost of manufacturing Mediasite Recorders.

Billings to higher education customers totaled 64 percent of total billings for the third quarter of both fiscal 2009 and 2008. Total international sales accounted for approximately 25 percent of the quarter's billings, compared to 15 percent for the third quarter of fiscal 2008.

The company derives a substantial portion of revenues from public colleges and universities based in the United States. Quarterly results, particularly new product sales, were impacted by the continuing economic crisis, budget delays now affecting the vast majority of state governments and the delay in distributing federal stimulus money earmarked for the U.S. higher education sector. As these issues resolve themselves, the company believes that its product and service offerings are very well aligned for the initiatives now taking place among these organizations, including helping state institutions address oversized classes, reduced teaching capacity and the need to re-educate an unemployed workforce.

Total services revenue was $2.4 million for the quarter, an increase of 17 percent from the third quarter of fiscal 2008. Services revenue includes Mediasite customer support contracts, as well as training, installation, rental, event and content hosting services. The increase was primarily due to event and content hosting services plus support contracts on new Mediasite Recorders and recurring renewals of support contracts entered into previous years.

During the third quarter, the company held its third annual User Conference, which was the largest to date. The conference was offered on-site in Madison, Wisconsin, as well as completely online via Mediasite for those conference attendees facing travel restrictions and budget constraints.

Other highlights of the quarter include: -- Webcasting Michelle Obama's only university commencement address from the University of California Merced -- Launching the webinar, "A Recommended IT Roadmap for Campus-wide Lecture Capture: Your Courses Online Now" with featured analyst firm Gartner -- The company's most successful year exhibiting at InfoComm 2009, the world's largest professional AV technology event -- Continued event webcasting partnerships with the leading higher education and training events, including EduComm, Sloan Consortium and the American Society for Training and Development

"We are very proud of the company's year-to-date growth, margin expansion and expense control, all in an unprecedented economic climate," said Rimas Buinevicius, chairman and CEO of Sonic Foundry. "We believe we have just gone through the worst portion of the recession and are beginning to re-emerge economically, with the technology sector leading the way. We believe this ultimate return to normalcy should help fuel future growth in all the business segments we serve, both domestically and internationally."

Sonic Foundry will host a corporate webcast today for analysts and investors to discuss its third quarter fiscal 2009 results at 3:30 p.m. CT / 4:30 p.m. ET. It will use its patented rich media communications system, Mediasite, to webcast the presentation for both live and on-demand viewing. To access the presentation, go to http://www.sonicfoundry.com/q3. To watch the presentation in the newest Mediasite Player (set for release late summer), go to http://www.sonicfoundry.com/q3silverlight. An archive of the webcast will be available for 30 days.

The company received notice from NASDAQ on October 22, 2008 that, in response to extraordinary market conditions, NASDAQ was suspending enforcement of the minimum bid price requirement of $1.00 per share for 90 days. Sonic Foundry received additional notices on December 23, 2008 and March 24, 2009 extending the suspension of the minimum bid price for an additional 90 days. On July 14, 2009, Sonic Foundry received notice from NASDAQ that enforcement of the minimum bid price requirement would be reinstated on August 3, 2009. Since the company had 141 calendar days remaining in its bid price compliance period when suspension began, Sonic Foundry has until December 21, 2009, to regain compliance.

EXPLANATION OF NON-GAAP MEASURES

To supplement our financial results presented on a GAAP basis, we use the measure of non-GAAP net income or loss in our financial presentation, which exclude certain non-cash costs and include certain cash billings not recognized as revenue for GAAP purposes. Our non-GAAP financial measure is not meant to be considered in isolation or as a substitute for comparable GAAP measures, and should be read only in conjunction with our consolidated financial statements prepared in accordance with GAAP. Our management regularly uses our supplemental non-GAAP financial measures internally to understand, manage and evaluate our business and make operating decisions. These non-GAAP measures are among the factors management uses in planning for and forecasting future periods. Our non-GAAP financial measures reflect adjustments based on the following items:

-- Billings not recorded as revenue: We have included the cash effect of billings not recorded as revenue, which are deferred for GAAP purposes, in arriving at non-GAAP net income or loss. Our services are typically billed and collected in advance of providing the service which requires minimal cost to perform in the future. Billings are a better indicator of customer activity and cash flow than revenue is, in management's opinion, and is therefore used by management as a key operational indicator. -- Depreciation and amortization of intangible and other assets expenses: We have excluded the effect of depreciation and amortization of assets from our non-GAAP net income or loss. Amortization of intangible assets expense varies in amount and frequency and it is significantly affected by the timing and size of our acquisitions. Depreciation and amortization of asset costs is a non-cash expense that includes the periodic write-off of tooling, product design and other assets that contributed to revenues earned during the periods presented and will contribute to future period revenues as well. -- Personnel and program reduction costs: We have excluded the additional costs incurred as a result of our cost reduction plan which was communicated in January 2008. These costs include severance costs associated with employee reductions as we better aligned ourselves with key vertical markets. Also excluded is a one time charge associated with an early extinguishment of a lease. -- Stock-based compensation expenses: We maintain an employee qualified stock option plan under which we grant options to acquire common stock to eligible employees. We also maintain an employee stock purchase plan under which common stock may be issued to eligible employees at a reduced price. Stock-based compensation expenses are recorded for these plans in accordance with Statement of Financial Accounting Standard No. 123R, Share-Based Payment - an Amendment of FASB Statement Nos. 123 and 95. Stock-based compensation expense is a non-cash expense. As a result, we have excluded the effect of stock-based compensation expenses from our non-GAAP net income or loss. About Sonic Foundry , Inc.

Sonic Foundry is the global leader for rich media webcasting and knowledge management, providing enterprise communication solutions for more than 1,500 customers in education, business and government. Powered by Mediasite, the patented webcasting platform which automates the capture, management, delivery and search of lectures, online training and briefings, Sonic Foundry empowers people to transform the way they communicate. Through the Mediasite platform and its Events Services group, the company helps customers connect a dynamic, evolving world of shared knowledge and envisions a future where learners and workers around the globe use webcasting to bridge time and distance, accelerate research and improve performance.

Certain statements contained in this news release regarding matters that are not historical facts may be forward-looking statements. Because such forward-looking statements include risks and uncertainties, actual results may differ materially from those expressed in or implied by such forward-looking statements. Factors that could cause actual results to differ materially include, but are not limited to, uncertainties pertaining to continued market acceptance for Sonic Foundry's products, its ability to succeed in capturing significant revenues from media services and/or systems, the effect of new competitors in its market, integration of acquired business and other risk factors identified from time to time in its filings with the Securities and Exchange Commission.

Sonic Foundry, Inc. Consolidated Balance Sheets (in thousands, except for share data) (Unaudited) June 30, September 30, 2009 2008 -------- ------------- Assets Current assets: Cash and cash equivalents $2,371 $3,560 Accounts receivable, net of allowance of $105 and $150 4,007 3,864 Inventories 335 330 Prepaid expenses and other current assets 570 429 --- --- Total current assets 7,283 8,183 Property and equipment: Leasehold improvements 980 980 Computer equipment 2,530 2,476 Furniture and fixtures 461 461 --- --- Total property and equipment 3,971 3,917 Less accumulated depreciation 2,548 2,223 ----- ----- Net property and equipment 1,423 1,694 Other assets: Goodwill 7,576 7,576 Other intangibles, net of amortization of $25 and $19 35 21 --- --- Total assets $16,317 $17,474 ======= ======= Liabilities and stockholders' equity Current liabilities: Line of credit $300 $ - Accounts payable 722 1,256 Accrued liabilities 775 1,113 Unearned revenue 4,697 4,661 Current portion of notes payable 330 333 Current portion of capital lease obligations 34 46 --- --- Total current liabilities 6,858 7,409 Long-term portion of notes payable 617 223 Long-term portion of capital lease obligations - 24 Other liabilities 191 255 --- --- Total liabilities 7,666 7,911 Stockholders' equity: Preferred stock, $.01 par value, authorized 5,000,000 shares; none issued and outstanding - - 5% preferred stock, Series B, voting, cumulative, convertible, $.01 par value (liquidation preference at par), authorized 10,000,000 shares, none issued and outstanding - - Common stock, $.01 par value, authorized 100,000,000 shares; 36,051,041 and 35,728,837 shares issued and 35,923,874 and 35,601,670 shares outstanding 361 357 Additional paid-in capital 184,842 184,204 Accumulated deficit (176,357) (174,803) Receivable for common stock issued (26) (26) Treasury stock, at cost, 127,167 shares (169) (169) --- --- Total stockholders' equity 8,651 9,563 ----- ----- Total liabilities and stockholders' equity $16,317 $17,474 ======= ======= See accompanying notes Sonic Foundry, Inc. Consolidated Statements of Operations (in thousands, except for share and per share data) (Unaudited) Three Months Nine Months Ended June 30, Ended June 30, 2009 2008 2009 2008 --------------- --------------- Revenue: Product $2,637 $3,022 $7,630 $6,146 Services 2,367 2,028 6,732 5,305 Other 23 37 87 85 --- --- --- --- Total revenue 5,027 5,087 14,449 11,536 Cost of revenue: Product 956 1,244 2,917 2,850 Services 139 60 399 230 --- --- --- --- Total cost of revenue 1,095 1,304 3,316 3,080 ----- ----- ----- ----- Gross margin 3,932 3,783 11,133 8,456 Operating expenses: Selling and marketing 2,586 3,295 7,856 10,171 General and administrative 652 530 2,168 2,244 Product development 845 778 2,635 2,706 --- --- ----- ----- Total operating expenses 4,083 4,603 12,659 15,121 ----- ----- ------ ------ Loss from operations (151) (820) (1,526) (6,665) Other income (expense), net (11) (9) (28) 18 --- --- --- --- Net loss $(162) $(829) $(1,554) $(6,647) ===== ===== ======= ======= Net loss per common share: - basic and diluted $(0.00) $(0.02) $(0.04) $(0.19) ====== ====== ====== ====== Weighted average common shares - basic and diluted 35,910,575 35,582,989 35,824,818 35,572,276 ========== ========== ========== ========== See accompanying notes Non-GAAP Consolidated Statements of Operations (in thousands) Fiscal Quarter Ended Fiscal Quarter Ended June 30, 2009 June 30, 2008 GAAP Adj(1) Non-GAAP GAAP Adj(1) Non-GAAP Revenues $5,027 $(25) $5,002 $5,087 $376 $5,463 Cost of revenue 1,095 - 1,095 1,304 - 1,304 Total Operating expenses 4,083 (278) 3,805 4,603 (663) 3,940 ----- --- ----- ----- --- ----- Loss from operations (151) 253 102 (820) 1,039 219 Other income (11) - (11) (9) - (9) --- --- --- --- --- --- Net income (loss) $(162) $253 $91 $(829) $1,039 $210 ===== ==== === ===== ====== ==== Diluted net income (loss) per common share $(0.00) $0.01 $0.00 $(0.02) $0.03 $0.01 ====== ===== ===== ====== ===== ===== (1) Adjustments consist of the following: Billings (25) 376 Depreciation (in G&A) 154 178 Personnel and program reductions - 296 Stock-based compensation(2) 124 189 --- --- Total non-GAAP adjustments 253 1,039 (2) Stock-based compensation is included in the following GAAP operating expenses: Selling and marketing 79 122 General and administrative 11 18 Research and development 34 49 --- --- Total stock-based compensation 124 189

Sonic Foundry, Inc.

CONTACT: Rob Schatz of Wolfe, Axelrod, Weinberger & Assoc., LLC,
+1-212-370-4500, rob@wolfeaxelrod.com, for Sonic Foundry, Inc.

Web Site: http://www.sonicfoundry.com/

Bankrate Announces Second Quarter Fiscal 2009 Results

NEW YORK, July 30 /PRNewswire-FirstCall/ -- Bankrate, Inc. today announced financial results for the second quarter of fiscal 2009 ended June 30, 2009.

(Logo: http://www.newscom.com/cgi-bin/prnh/20040122/FLTHLOGO )

Total revenue for the second quarter was $31.0 million compared to $40.2 million reported in the second quarter of 2008, a decrease of 23%. Net income was $1.9 million or $0.10 per fully diluted share in the second quarter of 2009, compared to $4.1 million, or $0.21 per fully diluted share in the second quarter of 2008. Earnings per fully diluted share, excluding share-based compensation expense ("Adjusted EPS"), was $0.19 for the second quarter of 2009, compared to Adjusted EPS of $0.33 for the second quarter of 2008.

Earnings before interest, taxes, depreciation, and amortization, excluding share-based compensation expense ("Adjusted EBITDA"), were $9.4 million in the second quarter of 2009 compared to $12.8 million in the second quarter of 2008, a decline of 26%. Earnings before interest, taxes, depreciation and amortization ("EBITDA") for the second quarter of 2009, including share-based compensation expense were $6.7 million compared to the $9.0 million reported in the second quarter of 2008.

"Macroeconomic conditions have continued to impact financial advertising, particularly in our banking, mortgage and credit card channels," said Thomas R. Evans, President and CEO of Bankrate, Inc. "The difficult environment in the financial service advertising sector has been a major contributor to our recent results," Mr. Evans added.

Total revenue for the six months ended June 30, 2009 was $69.4 million compared to $82.7 million in the comparable period in 2008, representing a $13.3 million, or 16%, decline. Net income was $6.6 million, or $0.34 per fully diluted share, in the first half of 2009 compared to $10.9 million, or $0.55 per fully diluted share, in the first half of 2008. Adjusted EPS was $0.50 for the six months ended June 30, 2009 compared to the Adjusted EPS of $0.78 for the same period in 2008.

Adjusted EBITDA were $22.5 million for the first half of 2009 compared to $28.9 million in the first half of 2008, a decline of 22%. EBITDA for the first half of 2009, including share-based compensation expense were $17.8 million compared to the $21.7 million reported in the first half of 2008.

As previously announced, on July 22, 2009, the Company entered into a definitive agreement to be acquired by funds advised by Apax Partners for $28.50 per share in cash, in part pursuant to the terms of a tender offer that commenced on July 28, 2009

Second Quarter 2009 Highlights -- Total revenue for the quarter was $31.0 million, a decrease of $9.2 million, or 23%, from the $40.2 million reported in the same quarter in 2008. -- Adjusted EBITDA for the second quarter was $9.4 million, a decrease of $3.4 million, or 26%, from the $12.8 million reported in the second quarter of 2008. -- Online revenue was $29.0 million in the second quarter, a decrease of $8.8 million, or 23%, from the $37.8 million reported in the same period in 2008. -- Graphic advertising and lead generation revenue was $20.9 million, a decrease of $6.2 million, or 23%, from the $27.1 million reported in the second quarter of 2008. -- Hyperlink revenue for the quarter was $8.1 million, a decrease of $2.6 million, or 24%, from the $10.7 million reported in the second quarter of 2008. -- Print publishing and licensing revenue for the second quarter was $2.0 million, a decrease of $375,000, or 16%, from the $2.4 million reported in the second quarter of 2008. July 30, 2009 Conference Call Interactive Dial-In and Webcast Information:

To participate in the teleconference please call: (877) 440-5791. International participants should dial: (719) 325-4864. Please access at least 10 minutes prior to the time the conference is set to begin. A Webcast of this call can be accessed at Bankrate's Web site: http://investor.bankrate.com/.

Replay Information:

A replay of the conference call will be available beginning July 30, 2009 at 7:30 p.m. ET/ 4:30 p.m. PT through August 6, 2009. To listen to the replay, call (888) 203-1112 and use the passcode: 4658504. International callers should dial (719) 457-0820 and use the passcode: 4658504.

Non-GAAP Measures

To supplement Bankrate's financial statements presented in accordance with generally accepted accounting principles ("GAAP"), Bankrate uses non-GAAP measures of certain components of financial performance, including EBITDA, Adjusted EBITDA, and Adjusted EPS, which are adjusted from results based on GAAP to exclude certain expenses, gains and losses. These non-GAAP measures are provided to enhance investors' overall understanding of Bankrate's current financial performance and its prospects for the future. Specifically, Bankrate believes the non-GAAP results provide useful information to both management and investors by excluding certain expenses, gains and losses that may not be indicative of its core operating results. In addition, because Bankrate has historically reported certain non-GAAP results to investors, Bankrate believes the inclusion of non-GAAP measures provides consistency in its financial reporting. These measures should be considered in addition to results prepared in accordance with GAAP, but should not be considered a substitute for, or superior to, GAAP results. The non-GAAP measures included in this press release have been reconciled to the nearest GAAP measure.

Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995

Certain matters included in the discussion above may be considered to be "forward-looking statements" within the meaning of the Securities Act of 1933 and the Securities Exchange Act of 1934, as amended by the Private Securities Litigation Reform Act of 1995. Those statements include statements regarding the intent, belief or current expectations of the Company and members of our management team. Such forward-looking statements include, without limitation, statements made with respect to future revenue, revenue growth, market acceptance of our products, and profitability. Investors and prospective investors are cautioned that any such forward-looking statements are not guarantees of future performance and involve risks and uncertainties, and that actual results may differ materially from those contemplated by such forward-looking statements. Important factors currently known to management that could cause actual results to differ materially from those in forward-looking statements include the following: the willingness of our advertisers to advertise on our web site, interest rate volatility, our ability to establish and maintain distribution arrangements, our ability to integrate the operations and realize the expected benefits of businesses that we have acquired and may acquire in the future, our ability to maintain the confidence of our advertisers by detecting click-through fraud or unscrupulous advertisers, the effect of unexpected liabilities we assume from our acquisitions, the effects of expanding our operations internationally, the ability of consumers to access our Online Network through non-PC devices, our ability to manage traffic on our Online Network and service interruptions, increased competition and its effect on traffic, advertising rates, margins and market share, our ability to protect our intellectual property, the effects of facing liability for content on our Online Network, the concentration of ownership of our common stock, the fluctuations of our results of operations from period to period, the accuracy of our financial statement estimates and assumptions, our ability to adapt to technological changes, the impact of legislative or regulatory changes affecting our business, changes in consumer spending and saving habits, changes in accounting principles, policies, practices or guidelines, effects of changes in the stock market and other capital markets, the strength of the United States economy in general, and risks to the consummation of Bankrate's pending acquisition by affiliates of Apax Partners, L.P., including the risk that a condition to closing of such transaction may not be satisfied. These and additional important factors to be considered are set forth under "Introductory Note," "Item 1A. Risk Factors,'' "Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations'' and in the other sections of our Annual Report on Form 10-K for the year ended December 31, 2008, and in our other filings with the Securities and Exchange Commission. We undertake no obligation to update or revise forward-looking statements to reflect changed assumptions, the occurrence of unanticipated events or changes to future operating results or expectations.

Additional information and where to find it

The statements in this press release regarding the tender offer initiated on July 28, 2009 is for informational purposes only and does not constitute an offer to purchase or a solicitation of an offer to sell Bankrate's common stock. Investors and stockholders are urged to read both the tender offer statement and the solicitation/recommendation statement regarding the tender offer, each filed with the SEC on July 28, 2009, and, if applicable and when it is filed with the SEC, the proxy statement regarding the merger, because they will contain important information. Investors and stockholders can obtain a free copy of these materials (when available) and other documents filed by Ben Merger Sub Inc. or Bankrate with the SEC at the website maintained by the SEC at http://www.sec.gov/. You may also read and copy any reports, statements and other information filed by Ben Merger Sub Inc. or Bankrate with the SEC at the SEC public reference room at 100 F Street N.E., Room 1580, Washington, D.C. 20549. Please call the SEC at (800) 732-0330 or visit the SEC's website for further information on its public reference room.

About Bankrate, Inc.

The Bankrate network of companies includes Bankrate.com, Interest.com, Mortgage-calc.com, Nationwide Card Services, Savingforcollege.com, Fee Disclosure, InsureMe, CreditCardGuide.com and Bankaholic.com. Each of these businesses helps consumers make informed decisions about their personal finance matters. The company's flagship brand, Bankrate.com is a destination site of personal finance channels, including banking, investing, taxes, debt management and college finance. Bankrate.com is the leading aggregator of rates and other information on more than 300 financial products, including mortgages, credit cards, new and used auto loans, money market accounts and CDs, checking and ATM fees, home equity loans and online banking fees. Bankrate.com reviews more than 4,800 financial institutions in 575 markets in 50 states. In 2008, Bankrate.com had nearly 72 million unique visitors. Bankrate.com provides financial applications and information to a network of more than 75 partners, including Yahoo! , America Online , The Wall Street Journal and The New York Times . Bankrate.com's information is also distributed through more than 500 newspapers.

Reminder -- Conference Call and Webcast Today at 4:30 P.M. Eastern Time

Interactive Dial-In: (877) 440-5791. International Callers (719) 325-4864 (10 minutes before the call)

Webcast: http://investor.bankrate.com/ - Financial Statements Follow - Bankrate, Inc. Condensed Consolidated Balance Sheets (Unaudited) (In thousands, except share and per share data) June 30, December 31, 2009 2008 ---- ---- Assets Cash and cash equivalents $55,089 $46,055 Accounts receivable, net of allowance for doubtful accounts of approximately $964 and $1,566 at June 30, 2009 and December 31, 2008, respectively 15,181 22,567 Deferred income taxes, current portion 816 816 Prepaid expenses and other current assets 1,614 1,608 ----- ----- Total current assets 72,700 71,046 Furniture, fixtures and equipment, net 6,939 2,521 Deferred income taxes 7,413 7,413 Intangible assets, net 78,077 83,347 Goodwill 101,886 101,856 Other assets 712 4,567 --- ----- Total assets $267,727 $270,750 ======== ======== Liabilities and Stockholders' Equity Liabilities: Accounts payable $2,993 $3,723 Accrued expenses 4,371 5,665 Acquisition earn-out liability - 11,750 Deferred revenue 953 1,018 Other current liabilities 5 16 --- ----- Total current liabilities 8,322 22,172 Other liabilities 153 148 --- --- Total liabilities 8,475 22,320 ----- ------ Stockholders' equity: Preferred stock, 10,000,000 shares authorized and undesignated - - Common stock, par value $.01 per share-- 100,000,000 shares authorized; 18,885,504 and 18,816,986 shares issued and outstanding at June 30, 2009 and December 31, 2008, respectively 189 188 Additional-paid in capital 224,122 219,294 Retained earnings 34,941 28,948 ------ ------ Total stockholders' equity 259,252 248,430 ------- ------- Total liabilities and stockholders' equity $267,727 $270,750 ======== ======== Bankrate, Inc. Condensed Consolidated Statements of Income (Unaudited) (In thousands, except share and per share data) Three Months Ended Six Months Ended June 30, June 30, 2009 2008 2009 2008 ---- ---- ---- ---- Revenue $31,027 $40,193 $69,364 $82,656 Cost of revenue (1) 12,907 17,359 27,902 33,766 ------ ------ ------ ------ Gross margin 18,120 22,834 41,462 48,890 ------ ------ ------ ------ Operating expenses (1): Sales 2,187 2,207 4,621 4,285 Marketing 2,170 3,115 4,647 5,943 Product development 1,837 1,890 3,654 3,591 General and administrative 5,259 6,580 10,772 13,370 Depreciation and amortization 3,344 2,246 6,327 4,043 ----- ----- ----- ----- 14,797 16,038 30,021 31,232 ------ ------ ------ ------ Income from operations 3,323 6,796 11,441 17,658 Interest income 16 360 26 1,206 -- --- -- ----- Income before income taxes 3,339 7,156 11,467 18,864 Income tax expense 1,409 3,077 4,822 7,951 ----- ----- ----- ----- Net income $1,930 $4,079 $6,645 $10,913 ====== ====== ====== ======= Basic and diluted net income per share: Basic $0.10 $0.22 $0.35 $0.58 ===== ===== ===== ===== Diluted $0.10 $0.21 $0.34 $0.55 ===== ===== ===== ===== Shares used in computing basic net income per share 18,824,428 18,907,321 18,816,667 18,893,682 Shares used in computing diluted net income per share 19,379,325 19,557,759 19,296,985 19,678,146 (1) Includes share-based compensation expense as follows: Cost of revenue $352 $618 $724 $1,221 Other expenses: Sales 533 525 1,112 1,020 Marketing 152 204 330 401 Product development 175 287 408 554 General and administrative 1,547 2,105 2,196 3,959 ----- ----- ----- ----- $2,759 $3,739 $4,770 $7,155 ====== ====== ====== ====== Bankrate, Inc. Non-GAAP Condensed Consolidated Statements of Income (Unaudited) (In thousands, except share and per share data) Three Months Ended Six Months Ended June 30, June 30, 2009 2008 2009 2008 ---- ---- ---- ---- Revenue $31,027 $40,193 $69,364 $82,656 Cost of revenue 12,555 16,741 27,178 32,545 ------ ------ ------ ------ 18,472 23,452 42,186 50,111 ------ ------ ------ ------ Operating expenses: Sales 1,654 1,682 3,509 3,265 Marketing 2,018 2,911 4,317 5,542 Product development 1,662 1,603 3,246 3,037 General and administrative 3,712 4,475 8,576 9,411 Share-based compensation expense (1) 2,759 3,739 4,770 7,155 Depreciation and amortization 3,344 2,246 6,327 4,043 ----- ----- ----- ----- 15,149 16,656 30,745 32,453 ------ ------ ------ ------ Income from operations 3,323 6,796 11,441 17,658 Interest income 16 360 26 1,206 -- --- -- ----- Income before income taxes 3,339 7,156 11,467 18,864 Income tax expense 1,409 3,077 4,822 7,951 ----- ----- ----- ----- Net income $1,930 $4,079 $6,645 $10,913 ====== ====== ====== ======= Basic and diluted net income per share: Basic $0.10 $0.22 $0.35 $0.58 ===== ===== ===== ===== Diluted $0.10 $0.21 $0.34 $0.55 ===== ===== ===== ===== $0.19 $0.33 $0.50 $0.78 ===== ===== ===== ===== Shares used in computing basic net income per share, GAAP basis 18,824,428 18,907,321 18,816,667 18,893,682 Shares used in computing diluted net income per share, GAAP basis 19,379,325 19,557,759 19,296,985 19,678,146 Shares used in computing diluted net income per share, Non-GAAP basis 19,658,662 19,909,843 19,623,275 19,898,715 (1)See reconciliation of GAAP to Non-GAAP Condensed Consolidated Statements of Income. Bankrate, Inc. Non-GAAP Measures Reconciliation (In thousands, except share and per share amounts) (Unaudited) Three Months Ended Six Months Ended June 30, June 30, 2009 2008 2009 2008 ---- ---- ---- ---- EBITDA- Income from operations, GAAP basis $3,323 $6,796 $11,441 $17,658 Depreciation and amortization 3,344 2,246 6,327 4,043 ----- ----- ----- ----- EBITDA $6,667 $9,042 $17,768 $21,701 ====== ====== ======= ======= Adjusted EBITDA- Income from operations, GAAP basis $3,323 $6,796 $11,441 $17,658 Share-based compensation expense 2,759 3,739 4,770 7,155 Depreciation and amortization 3,344 2,246 6,327 4,043 ----- ----- ----- ----- Adjusted EBITDA $9,426 $12,781 $22,538 $28,856 ====== ======= ======= ======= Adjusted EPS- Net income, GAAP basis $1,930 $4,079 $6,645 $10,913 Share-based compensation expense, net of tax 1,729 2,458 3,097 4,698 ----- ----- ----- ----- Net income excluding share-based compensation expense- $3,659 $6,537 $9,742 $15,611 ====== ====== ====== ======= Adjusted EPS $0.19 $0.33 $0.50 $0.78 ===== ===== ===== ===== Operating EPS- Net income, GAAP basis $1,930 $4,079 $6,645 $10,913 Share-based compensation expense, net of tax 1,729 2,458 3,097 4,698 Intangibles amortization, net of tax 1,571 1,173 3,163 2,045 Interest income, net of tax (10) (216) (16) (724) --- ---- --- ---- Net income excluding share-based compensation expense, intangibles amortization and interest income $5,221 $7,494 $12,890 $16,933 ====== ====== ======= ======= Operating EPS $0.27 $0.38 $0.66 $0.85 ===== ===== ===== ===== Shares used in computing basic net income per share, GAAP basis 18,824,428 18,907,321 18,816,667 18,893,682 ========== ========== ========== ========== Shares used in computing diluted net income per share, GAAP basis 19,379,325 19,557,759 19,296,985 19,678,146 Impact of applying SFAS No. 123R 279,337 352,084 326,290 220,569 ------- ------- ------- ------- Shares used in computing diluted net income per share, excluding the impact of applying SFAS No. 123R 19,658,662 19,909,843 19,623,275 19,898,715 ========== ========== ========== ========== Bankrate, Inc. Condensed Consolidated Statements of Income Reconciliation of GAAP to Non-GAAP Condensed Consolidated Statements of Income (Unaudited) (In thousands, except share and per share data) Three Months Ended June 30, 2009 GAAP Adjustments (1) Non-GAAP ---- --------------- -------- Revenue $31,027 $- $31,027 Cost of revenue: 12,907 (352) 12,555 ------ ---- ------ Gross margin 18,120 352 18,472 ------ --- ------ Operating expenses: Sales 2,187 (533) 1,654 Marketing 2,170 (152) 2,018 Product development 1,837 (175) 1,662 General and administrative 5,259 (1,547) 3,712 Share-based compensation expense - 2,759 2,759 Depreciation and amortization 3,344 - 3,344 ----- --- ----- 14,797 352 15,149 ------ --- ------ Income from operations 3,323 - 3,323 Interest income, net 16 - 16 -- - -- Income before income taxes 3,339 - 3,339 Provision for income taxes 1,409 - 1,409 ----- --- ----- Net income $1,930 $- $1,930 ====== == ====== Basic and diluted net income per share: Basic $0.10 $- $0.10 ===== == ===== Diluted $0.10 $- $0.10 ===== == ===== Shares used in computing basic net income per share 18,824,428 - 18,824,428 Shares used in computing diluted net income per share 19,379,325 279,337 19,658,662 Three Months Ended June 30, 2008 GAAP Adjustments (1) Non-GAAP ---- --------------- -------- Revenue $40,193 $- $40,193 Cost of revenue: 17,359 (618) 16,741 ------ ---- ------ Gross margin 22,834 618 23,452 ------ --- ------ Operating expenses: Sales 2,207 (525) 1,682 Marketing 3,115 (204) 2,911 Product development 1,890 (287) 1,603 General and administrative 6,580 (2,105) 4,475 Share-based compensation expense - 3,739 3,739 Depreciation and amortization 2,246 - 2,246 ----- --- ----- 16,038 618 16,656 ------ --- ------ Income from operations 6,796 - 6,796 Interest income, net 360 - 360 --- --- --- Income before income taxes 7,156 - 7,156 Provision for income taxes 3,077 - 3,077 ----- --- ----- Net income $4,079 $- $4,079 ====== == ====== Basic and diluted net income per share: Basic $0.22 $- $0.22 ===== == ===== Diluted $0.21 $- $0.21 ===== == ===== Shares used in computing basic net income per share 18,907,321 - 18,907,321 Shares used in computing diluted net income per share 19,557,759 352,084 19,909,843 Six Months Ended June 30, 2009 GAAP Adjustments (1) Non-GAAP ---- --------------- -------- Revenue $69,364 $- $69,364 Cost of revenue: 27,902 (724) 27,178 ------ ---- ------ Gross margin 41,462 724 42,186 ------ --- ------ Operating expenses: Sales 4,621 (1,112) 3,509 Marketing 4,647 (330) 4,317 Product development 3,654 (408) 3,246 General and administrative 10,772 (2,196) 8,576 Share-based compensation expense - 4,770 4,770 Depreciation and amortization 6,327 - 6,327 ----- --- ----- 30,021 724 30,745 ------ --- ------ Income from operations 11,441 - 11,441 Interest income, net 26 - 26 -- --- --- Income before income taxes 11,467 - 11,467 Provision for income taxes 4,822 - 4,822 ----- --- ----- Net income $6,645 $- $6,645 ====== == ====== Basic and diluted net income per share: Basic $0.35 $- $0.35 ===== == ===== Diluted $0.34 $- $0.34 ===== == ===== Shares used in computing basic net income per share 18,816,667 - 18,816,667 Shares used in computing diluted net income per share 19,296,985 326,290 19,623,275 Six Months Ended June 30, 2008 GAAP Adjustments (1) Non-GAAP ---- --------------- -------- Revenue $82,656 $- $82,656 Cost of revenue: 33,766 (1,221) 32,545 ------ ------ ------ Gross margin 48,890 1,221 50,111 ------ ----- ------ Operating expenses: Sales 4,285 (1,020) 3,265 Marketing 5,943 (401) 5,542 Product development 3,591 (554) 3,037 General and administrative 13,370 (3,959) 9,411 Share-based compensation expense - 7,155 7,155 Depreciation and amortization 4,043 - 4,043 ----- --- ----- 31,232 1,221 32,453 ------ ----- ------ Income from operations 17,658 - 17,658 Interest income, net 1,206 - 1,206 ----- --- ----- Income before income taxes 18,864 - 18,864 Provision for income taxes 7,951 - 7,951 ----- --- ----- Net income $10,913 $- $10,913 ======= == ======= Basic and diluted net income per share: Basic $0.58 $- $0.58 ===== == ===== Diluted $0.55 $- $0.55 ===== == ===== Shares used in computing basic net income per share 18,893,682 - 18,893,682 Shares used in computing diluted net income per share 19,678,146 220,569 19,898,715 (1) Adjustments for the impact of applying SFAS No. 123R For more information contact: Edward J. DiMaria SVP, Chief Financial Officer edimaria@bankrate.com (917) 368-8608 Bruce J. Zanca SVP, Chief Communications/Marketing Officer bzanca@bankrate.com (917) 368-8648

Photo: http://www.newscom.com/cgi-bin/prnh/20040122/FLTHLOGO Bankrate, Inc.

CONTACT: Edward J. DiMaria, SVP, Chief Financial Officer,
edimaria@bankrate.com, +1-917-368-8608; or Bruce J. Zanca, SVP, Chief
Communications/Marketing Officer, +1-917-368-8648, bzanca@bankrate.com

Web Site: http://www.bankrate.com/

Neustar Announces Results for Second Quarter 2009Reports Strong Profitability and Reaffirms Guidance for Full Year 2009

STERLING, Va., July 30 /PRNewswire-FirstCall/ -- Neustar, Inc. , a provider of essential clearinghouse services to the communications and Internet industries, today announced consolidated results for the quarter ended June 30, 2009, and reaffirmed its prior guidance for full year 2009 announced on January 28, 2009.

(Logo: http://www.newscom.com/cgi-bin/prnh/20090722/NSLOGO ) Summary of Second Quarter Results

Revenue for the quarter totaled $115.8 million, a 4% decrease from $120.2 million in the second quarter of 2008. Net income for the quarter totaled $24.5 million, or $0.32 per diluted share, compared to net income of $22.9 million, or $0.30 per diluted share, in the second quarter of 2008.

EBITDA for the quarter totaled $49.4 million, or $0.65 per diluted share, compared to $50.3 million, or $0.67 per diluted share, in the corresponding quarter of 2008.

Discussion of Second Quarter Results

As anticipated, Neustar's year-over-year quarterly revenue decline was driven primarily by previously announced amendments to the pricing terms of its contracts to provide telephone number portability services in the United States, which were effective as of January 1, 2009. This decline was partially offset by a year-over-year quarterly revenue increase from Ultra Services.

-- Addressing revenue decreased 2% to $31.5 million, primarily due to a decrease in revenue under our contracts to provide telephone number portability services in the United States, primarily offset by the growth from Ultra Services. -- Interoperability revenue decreased 16% to $13.9 million, primarily due to decreases in revenue from both Order Management Services and our contracts to provide telephone number portability services in the United States. -- Infrastructure and other revenue decreased 1% to $70.3 million, primarily due to a decrease in revenue under our contracts to provide telephone number portability services in the United States.

Total operating expense for the quarter decreased 6% to $75.7 million from $80.2 million for the second quarter of 2008.

As of June 30, 2009, cash, cash equivalents and short-term investments totaled $267.5 million, an increase of $105.9 million from December 31, 2008. This increase is partially due to a $41.3 million reclassification of certain investments from long-term to short-term.

Management Commentary

Jeff Ganek, Neustar's chairman and chief executive officer, said, "While the global economy struggles to recover, we have broadened our leadership in the marketplace. Building upon our long-term growth strategy, we have recently solidified our management team, expanded our innovative services to meet the market needs and brought our customers enhanced benefits."

Paul Lalljie, Neustar's chief financial officer, added, "Our second quarter results highlight the strength of our business model and our continuing focus on operating efficiencies. Despite unpredictable demand for some of our services and challenging markets, we have seen recent opportunities in many of the markets we serve and are managing the business to capture them. Our year-to-date performance meets our stated objectives and provides us with the momentum we need to reaffirm our prior guidance for the full year 2009."

Reconciliation of Non-GAAP Financial Measures

In this press release, Neustar presents certain non-GAAP financial data. To place this data in an appropriate context, the following is a reconciliation of net income to EBITDA for the three and six months ended June 30, 2008 and 2009:

Three Months Ended Six Months Ended June 30, June 30, -------- -------- 2008 2009 2008 2009 ---- ---- ---- ---- (in thousands, except per share data) (unaudited) Net income $22,856 $24,466 $18,396 $48,819 Add: Depreciation and amortization 10,286 9,332 20,406 18,577 Less: Other expense (income) 1,633 (297) 483 (1,532) Add: Provision for income taxes 15,499 15,873 32,138 31,534 ------ ------ ------ ------ EBITDA $50,274 $49,374 $71,423 $97,398 ======= ======= ======= ======= EBITDA per diluted share $0.67 $0.65 $0.93 $1.29 ===== ===== ===== ===== Weighted average diluted common shares outstanding 75,112 75,427 77,159 75,359

EBITDA and EBITDA per diluted share are not measures of financial performance under GAAP and have no standardized measurement prescribed by GAAP. Management believes that both measures enhance our investors' understanding of our financial performance and the comparability of the company's operating results to prior periods, as well as against the performance of other companies. However, these non-GAAP financial measures may not be comparable with similar non-GAAP financial measures used by other companies and should not be considered in isolation from, or as a substitute for, financial information prepared in accordance with GAAP. The company provides the foregoing historical reconciliations to the most directly comparable GAAP financial measures to allow investors to appropriately consider each non-GAAP financial measure.

In this press release and from time to time, Neustar describes what its net income, EBITDA and other financial measures would have been in the absence of the $29.0 million goodwill impairment charge recorded in the first quarter of 2008 related to the company's NGM business segment, as well as the resulting net income and EBITDA per diluted share amounts associated with those measures. Neustar has provided this information because the company believes that it gives investors a better understanding of the impact the goodwill impairment charge had on the company's results for the six months, and serves as useful data by which to compare the company's operational performance to the prior period in 2008 and future periods. Absent the $29.0 million goodwill impairment charge, net income for the six months ended June 30, 2008 would have been $47.4 million, or $0.61 per diluted share. Furthermore, absent the $29.0 million goodwill impairment charge, EBITDA for the six months ended June 30, 2008 would have been $100.4 million, or $1.30 per diluted share.

Conference Call

As announced on July 14, 2009, Neustar will conduct an investor conference call to discuss the company's results today at 4:30 p.m. (Eastern Time). Prior to the call, investors may access the conference call over the Internet via the Investor Relations tab of the company's website (http://www.neustar.biz/). Those listening via the Internet should go to the site 15 minutes early to register, download and install any necessary audio software.

The conference call is also accessible via telephone by dialing (888) 727-7637 (international callers dial (913) 312-1226). For those who cannot listen to the live broadcast, a replay will be available through Midnight (Eastern Time) Thursday, August 6, 2009 by dialing (888) 203-1112 (international callers dial (719) 457-0820) and entering replay PIN 9119340, or by going to the Investor Relations tab of the company's website (http://www.neustar.biz/).

Neustar will take live questions from securities analysts and institutional portfolio managers; the complete call is open to all other interested parties on a listen-only basis.

This press release and the financial tables, including the reconciliations of certain non-GAAP measures to their nearest comparable GAAP measures that may be used periodically by management when discussing the company's financial results with investors and analysts, are available on the company's website under the Investor Relations tab.

About Neustar:

Neustar solves complex communications challenges by making networks smarter(TM). We provide market-leading and innovative solutions and directory services that enable trusted communication across networks, applications and enterprises around the world. Visit Neustar online at http://www.neustar.biz/.

Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995

This press release includes information that constitutes forward-looking statements made pursuant to the safe harbor provision of the Private Securities Litigation Reform Act of 1995, including, without limitation, statements about our expectations, beliefs and business results in the future. We have attempted, whenever possible, to identify these forward-looking statements using words such as "may," "will," "should," "projects," "estimates," "expects," "plans," "intends," "anticipates," "believes" and variations of these words and similar expressions. Similarly, statements herein that describe our business strategy, prospects, opportunities, outlooks, objectives, plans, intentions or goals are also forward-looking statements. We cannot assure you that our expectations will be achieved or that any deviations will not be material. Forward-looking statements are subject to many assumptions, risks and uncertainties that may cause future results to differ materially from those anticipated. These potential risks and uncertainties include, among others, the uncertainty of future revenue and profitability and potential fluctuations in quarterly operating results due to such factors as disruptions to our clearinghouse operations, modifications to our material contracts, our ability to successfully integrate and support the operations of businesses we acquire, our ability to redeem auction rate securities, increasing competition, market acceptance of our existing services, our ability to successfully develop and market new services, the uncertainty of whether new services will achieve market acceptance or result in any revenue, and business, regulatory and statutory changes in the communications industry. More information about potential factors that could affect our business and financial results is included in our filings with the Securities and Exchange Commission, including, without limitation, our Annual Report on Form 10-K for the year ended December 31, 2008 and subsequent periodic and current reports. All forward-looking statements are based on information available to us on the date of this press release, and we undertake no obligation to update any of the forward-looking statements after the date of this press release.

NEUSTAR, INC. CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except per share data) Three Months Ended Six Months Ended June 30, June 30, -------- -------- 2008 2009 2008 2009 ---- ---- ---- ---- (unaudited) Revenue: Addressing $32,268 $31,527 $62,429 $64,018 Interoperability 16,551 13,889 32,991 28,196 Infrastructure and other 71,390 70,348 142,202 136,738 ------ ------ ------- ------- Total revenue 120,209 115,764 237,622 228,952 Operating expense: Cost of revenue (excluding depreciation and amortization shown separately below) 26,811 28,336 51,300 56,179 Sales and marketing 20,219 19,239 38,943 38,746 Research and development 7,754 4,514 15,302 8,827 General and administrative 15,151 14,301 31,633 27,802 Depreciation and amortization 10,286 9,332 20,406 18,577 Impairment of goodwill - - 29,021 - --- --- ------ --- 80,221 75,722 186,605 150,131 ------ ------ ------- ------- Income from operations 39,988 40,042 51,017 78,821 Other (expense) income: Interest and other expense (2,866) (427) (3,324) (1,651) Interest and other income 1,233 724 2,841 3,183 ----- --- ----- ----- Income before income taxes 38,355 40,339 50,534 80,353 Provision for income taxes 15,499 15,873 32,138 31,534 ------ ------ ------ ------ Net income $22,856 $24,466 $18,396 $48,819 ======= ======= ======= ======= Net income per common share: Basic $0.31 $0.33 $0.25 $0.66 ===== ===== ===== ===== Diluted $0.30 $0.32 $0.24 $0.65 ===== ===== ===== ===== Weighted average common shares outstanding: Basic 73,214 74,314 74,799 74,225 ====== ====== ====== ====== Diluted 75,112 75,427 77,159 75,359 ====== ====== ====== ====== NEUSTAR, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands) December 31, June 30, 2008 2009 ---- ---- ASSETS (audited) (unaudited) Current assets: Cash, cash equivalents and short-term investments $161,653 $267,547 Restricted cash 496 477 Accounts and unbilled receivables, net 72,635 63,907 Prepaid expenses and other current assets 18,205 17,759 Income taxes receivable 4,621 2,138 Deferred tax assets 11,079 10,589 ------ ------ Total current assets 268,689 362,417 Property and equipment, net 64,160 67,037 Goodwill and intangible assets, net 134,661 130,800 Other non-current assets 47,412 6,207 Deferred tax assets, long-term 4,244 5,042 ----- ----- Total assets $519,166 $571,503 ======== ======== LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable and accrued expenses $59,103 $51,396 Deferred revenue 32,530 38,398 Notes payable and capital lease obligations 10,123 10,826 Accrued restructuring reserve 1,867 595 Other liabilities 430 460 --- --- Total current liabilities 104,053 101,675 Deferred revenue, long-term 11,657 9,737 Notes payable and capital lease obligations, long-term 11,933 8,858 Accrued restructuring reserve, long-term 1,589 1,264 Other liabilities, long-term 3,281 4,090 ----- ----- Total liabilities 132,513 125,624 Total stockholders' equity 386,653 445,879 ------- ------- Total liabilities and stockholders' equity $519,166 $571,503 ======== ========

Photo: http://www.newscom.com/cgi-bin/prnh/20090722/NSLOGO
http://photoarchive.ap.org/
PRN Photo Desk, photodesk@prnewswire.com Neustar, Inc.

CONTACT: Investor Relations, Brandon Pugh, +1-571-434-5659,
brandon.pugh@neustar.biz, or Media Contact, John Schneidawind,
+1-571-434-5596, john.schneidawind@neustar.biz, both of NeuStar, Inc.

Web Site: http://www.neustar.biz/

Isilon Systems Announces 2009 Second Quarter Results

SEATTLE, July 30 /PRNewswire-FirstCall/ -- Isilon Systems , the leader in scale-out NAS, today announced its financial results for the second quarter ended June 30, 2009. Revenue for the quarter was $29.0 million, up 8 percent sequentially compared with $26.9 million in the first quarter of 2009 and up 3 percent compared with $28.2 million in the second quarter of 2008.

"Isilon's solid second quarter revenue growth and close management of operating expenses have enabled us to continue our steady progress toward profitability," said Sujal Patel, President and Chief Executive Officer, Isilon Systems. "Our strong gross margin in Q2 and improving EPS primarily reflect improvements in our supply chain and services management. They also reflect a growing awareness of the value that Isilon's scale-out NAS platform is creating for customers. At a time when enterprise IT buyers are required to meet ever-growing business demands with shrinking capital and operating budgets, Isilon's scale-out NAS solutions provide clear and compelling economic and business value."

Financial results for the second quarter of 2009 included the following: -- Gross margin for the second quarter of 2009 was 57.0%, compared with 40.3% in the first quarter of 2009 and 56.9% in the second quarter of 2008. Gross margin for the first quarter of 2009 was reduced by 14 percentage points due to a non-cash inventory write-down of $3.8 million. -- Net loss for the second quarter of 2009 was $3.7 million, or $0.06 per share, compared with net loss of $10.4 million, or $0.16 per share in the first quarter of 2009. Net loss in the second quarter of 2008 was $5.8 million, or $0.09 per share. Non-GAAP net loss for the second quarter was $2.0 million, or $0.03 per share, compared with non-GAAP net loss of $8.9 million, or $0.14 per share in the first quarter of 2009. Non-GAAP net loss in the second quarter of 2008 was $4.3 million, or $0.07 per share. GAAP and non-GAAP net loss for the first quarter of 2009 includes $3.8 million, or $0.06 per share, related to the non-cash inventory write-down. -- As of June 30, 2009, cash, cash equivalents and marketable securities were $75.5 million, compared with $76.3 million as of March 31, 2009. Conference Call

Isilon management will host a conference call today at 2:00 p.m. PT (5:00 p.m. ET) to discuss Isilon's financial results for the second quarter of 2009. The conference call will be webcast on the Investor Relations section of Isilon's website at http://www.isilon.com/company where it will be archived. In addition, the live conference call will be accessible by telephone at 866-202-4683 or 617-213-8846, passcode 64524444. A replay of the call will be available by telephone approximately two hours after the call ends until 9:00 p.m. PT (12:00 midnight ET), August 6, 2009, at 888-286-8010 or 617-801-6888. The replay passcode is 10730994.

About Isilon Systems

Isilon Systems is the proven market leader in scale-out NAS. Our clustered storage and data management solutions drive unique business and economic value for customers by maximizing the performance of their mission-critical applications, workflows and processes. Isilon enables enterprises and research organizations world-wide to manage large and rapidly growing amounts of file-based data in a highly scalable, easy-to-manage, and cost-effective way. Information about Isilon can be found at http://www.isilon.com/.

Use of Non-GAAP Financial Measures

To supplement our consolidated financial statements prepared in accordance with GAAP, this press release includes non-GAAP gross margin, non-GAAP loss from operations, non-GAAP net loss, and non-GAAP loss per share. Isilon provides non-GAAP information to enhance investors' overall understanding of the company's current financial performance and the company's prospects for the future and to aid in comparing current operating results with those of past periods. The company believes the non-GAAP measures provide useful information to management and investors by excluding certain items that may not be indicative of Isilon's core operating results and business outlook.

Non-GAAP gross margin, non-GAAP loss from operations, non-GAAP net loss, and non-GAAP loss per share exclude stock-based compensation expenses and restructuring charges. Isilon excludes stock-based compensation expenses from its non-GAAP measures primarily because they are non-cash expenses that Isilon does not believe reflect core operating results. Stock-based compensation expense is dependent on a number of factors over which management has limited control and is not a factor management utilizes in operating the business. Non-GAAP results also exclude a restructuring charge related to expenses incurred during the second quarter in connection with a reduction in the company's workforce.

These non-GAAP measures are not calculated in accordance with GAAP and should be considered supplemental to, and not a substitute for, measures prepared in accordance with GAAP and may be different from non-GAAP measures used by other companies. In addition, these non-GAAP measures are not based on any comprehensive set of accounting rules or principles. Isilon believes that non-GAAP measures have inherent limitations in that they do not reflect all of the amounts associated with Isilon's results of operations as determined in accordance with GAAP and that these measures should only be used to evaluate Isilon's results of operations in conjunction with the corresponding GAAP measures. We compensate for these limitations by analyzing current and future results on a GAAP basis as well as a non-GAAP basis, prominently disclosing GAAP results and providing reconciliations from GAAP results to operational measures. We expect to continue to incur expenses similar to the non-GAAP adjustments described above, and the exclusion or inclusion of these items from our non-GAAP financial measures should not be construed as an inference that these costs are unusual or infrequent.

A table following the financial statements provides a reconciliation of the most directly comparable GAAP measures to the non-GAAP measures used by management.

Safe Harbor for Forward Looking Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including, but not limited to, statements regarding Isilon's financial and operating results; the benefits of our products and services, and our ability to achieve our goals, plans and objectives; and steps designed to reduce Isilon's costs, improve efficiencies and continue to progress toward and attain profitability. These statements are not guarantees of future performance, but are based on management's expectations as of the date of this press release and assumptions that are inherently subject to uncertainties, risks and changes in circumstances that are difficult to predict. Forward-looking statements involve risks, uncertainties, and assumptions. If the risks or uncertainties ever materialize, or the assumptions prove incorrect, our actual results may differ materially from those expressed or implied by our forward-looking statements. There can be no assurances that forward-looking statements will be achieved. Important factors that could cause actual results to differ materially from those indicated in forward-looking statements include the following: risks associated with anticipated growth in the storage of file-based data and scale-out NAS category; demand for the Company's products and services; competitive factors, including changes in the competitive environment, pricing pressures, sales cycle time and increased competition; our ability to manage our supply chain and improve operational efficiency while building and expanding our direct sales, reseller and distribution channels; new product introductions and our ability to develop and deliver innovative products and provide high-quality service and support offerings; as well as U.S. and global macroeconomic and industry conditions, including expenditure trends for storage-related products. These and other important risk factors and assumptions are detailed in documents filed with the Securities and Exchange Commission, including our Annual Report on Form 10-K for the year ended December 31, 2008 filed February 20, 2009, subsequently filed Quarterly Reports on Form 10-Q and other filings with the Securities and Exchange Commission, and could cause actual results to vary from expectations. The Company makes no commitment to revise or update any forward-looking statements in order to reflect subsequent events or circumstances.

Isilon Systems, Inc. Condensed Consolidated Statements of Operations (unaudited) (in thousands, except per share data) Three Months Ended Six Months Ended -------------------- -------------------- June 30, June 30, June 30, June 30, 2009 2008 2009 2008 -------- -------- -------- -------- Revenue: Product $21,827 $22,657 $41,696 $42,409 Services 7,164 5,525 14,180 9,897 ----- ----- ------ ----- Total revenue 28,991 28,182 55,876 52,306 ------ ------ ------ ------ Cost of revenue: Product 8,877 9,155 20,060 17,564 Services (1) 3,588 2,993 8,462 5,813 ----- ----- ----- ----- Total cost of revenue 12,465 12,148 28,522 23,377 ------ ------ ------ ------ Gross profit 16,526 16,034 27,354 28,929 ------ ------ ------ ------ Operating expenses: Research and development (1) 5,837 5,980 12,246 11,470 Sales and marketing (1) 10,458 12,405 21,600 24,205 General and administrative (1) 3,725 4,064 7,618 10,460 Restructuring Charges 357 - 357 - --- --- --- --- Total operating expenses 20,377 22,449 41,821 46,135 ------ ------ ------ ------ Loss from operations (3,851) (6,415) (14,467) (17,206) ------ ------ ------- ------- Interest income and other 239 660 538 1,462 --- --- --- ----- Loss before income tax expense (3,612) (5,755) (13,929) (15,744) Income tax expense (122) (64) (218) (173) ---- --- ---- ---- Net loss $(3,734) $(5,819) $(14,147) $(15,917) ======= ======= ======== ======== Net loss per common share, basic and diluted $(0.06) $(0.09) $(0.22) $(0.25) ====== ====== ====== ====== Shares used in computing basic and diluted net loss per common share 64,085 63,147 63,998 62,947 ====== ====== ====== ====== (1) Includes stock-based compensation as follows: Cost of revenue $94 $18 $142 $78 Research and development 483 231 854 412 Sales and marketing 344 554 921 1,185 General and administrative 425 693 991 1,118 Isilon Systems, Inc. Condensed Consolidated Balance Sheets (unaudited) (in thousands) As of ------- June 30, December 31, 2009 2008 ------- ----------- ASSETS Current assets: Cash and cash equivalents $30,711 $34,342 Marketable securities 44,755 43,441 Trade receivables, net of allowances of $322 and $250, respectively 15,594 14,436 Inventories 6,028 12,433 Other current assets 4,288 4,243 ----- ----- Total current assets 101,376 108,895 Property and equipment, net 8,712 11,295 ----- ------ Total assets $110,088 $120,190 ======== ======== LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $7,177 $9,779 Accrued liabilities 4,282 4,188 Accrued compensation and related benefits 6,511 5,879 Deferred revenue 20,348 18,209 ------ ------ Total current liabilities 38,318 38,055 Deferred revenue, net of current portion 9,750 8,954 Deferred rent, net of current portion 2,963 3,158 ----- ----- Total liabilities 51,031 50,167 ------ ------ Commitments and contingencies Stockholders' equity: Common stock 1 1 Additional paid-in capital 201,054 197,685 Accumulated other comprehensive income (loss) (183) 5 Accumulated deficit (141,815) (127,668) -------- -------- Total stockholders' equity 59,057 70,023 ------ ------ Total liabilities and stockholders' equity $110,088 $120,190 ======== ======== Isilon Systems, Inc. Condensed Consolidated Statements of Cash Flows (unaudited) (in thousands) Three Months Ended Six Months Ended -------------------- -------------------- June 30, June 30, June 30, June 30, 2009 2008 2009 2008 -------- -------- -------- -------- Cash flows from operating activities Net loss $(3,734) $(5,819) $(14,147) $(15,917) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and amortization 1,537 1,573 3,184 3,091 Amortization (accretion) of discount (premium) on marketable securities 81 (43) 139 (122) Stock-based compensation expense 1,346 1,496 2,908 2,793 Changes in operating assets and liabilities: Accounts receivable, net (2,080) (1,066) (1,158) 1,288 Inventories 1,026 1,226 6,405 (2,164) Other current assets 227 (689) 31 (1,273) Accounts payable (1,830) 225 (2,003) (718) Accrued liabilities, compensation payable and deferred rent 1,438 (1,205) 473 (246) Deferred revenue 1,320 2,688 2,937 5,080 ----- ----- ----- ----- Net cash used in operating activities (669) (1,614) (1,231) (8,188) ---- ------ ------ ------ Cash flows from investing activities Purchases of property and equipment (247) (2,177) (1,271) (2,989) Purchases of marketable securities (21,481) (14,990) (25,982) (24,068) Proceeds from sales and maturities of marketable securities 11,525 23,820 24,325 39,870 ------ ------ ------ ------ Net cash provided by (used in) investing activities (10,203) 6,653 (2,928) 12,813 ------- ----- ------ ------ Cash flows from financing activities Proceeds from the exercise of stock options and purchases of stock under employee stock purchase plan 59 362 427 362 Repurchases of unvested common stock - - - (13) --- --- --- --- Net cash provided by financing activities 59 362 427 349 --- --- --- --- Effect of exchange rate changes on cash and cash equivalents 151 (11) 101 (3) --- --- --- --- Net increase (decrease) in cash and cash equivalents (10,662) 5,390 (3,631) 4,971 Cash and cash equivalents at beginning of period 41,373 38,580 34,342 38,999 ------ ------ ------ ------ Cash and cash equivalents at end of period $30,711 $43,970 $30,711 $43,970 ======= ======= ======= ======= Isilon Systems, Inc. Reconciliation of GAAP to non-GAAP results (in thousands, except percentages and per share data) Net loss per common share, Gross Operating Loss from basic and margin % Expenses operations Net loss diluted --------- --------- ----------- -------- --------- Three Months Ended June 30, 2009 GAAP 57.0% $20,377 $(3,851) $(3,734) $(0.06) Adjustments: Stock-based compensation 0.3 (1,252) 1,346 1,346 0.02 Restructuring Charges - (357) 357 357 0.01 --- ---- --- --- ---- Non-GAAP 57.3% $18,768 $(2,148) $(2,031) $(0.03) ==== ======= ======= ======= ====== March 31, 2009 GAAP 40.3% $21,444 $(10,616) $(10,413) $(0.16) Adjustments: Stock-based compensation 0.2 (1,514) 1,562 1,562 0.02 --- ------ ----- ----- ---- Non-GAAP 40.5% $19,930 $(9,054) $(8,851) $(0.14) ==== ======= ======= ======= ====== June 30, 2008 GAAP 56.9% $22,449 $(6,415) $(5,819) $(0.09) Adjustments: Stock-based compensation 0.1 (1,478) 1,496 1,496 0.02 --- ------ ----- ----- ---- Non-GAAP 57.0% $20,971 $(4,919) $(4,323) $(0.07) ==== ======= ======= ======= ====== Six Months Ended June 30, 2009 GAAP 49.0% $41,821 $(14,467) $(14,147) $(0.22) Adjustments: Stock-based compensation 0.2 (2,766) 2,908 2,908 0.05 Restructuring Charges - (357) 357 357 0.01 --- ---- --- --- ---- Non-GAAP 49.2% $38,698 $(11,202) $(10,882) $(0.16) ==== ======= ======== ======== ====== June 30, 2008 GAAP 55.3% $46,135 $(17,206) $(15,917) $(0.25) Adjustments: Stock-based compensation 0.2 (2,715) 2,793 2,793 0.04 --- ------ ----- ----- ---- Non-GAAP 55.5% $43,420 $(14,413) $(13,124) $(0.21) ==== ======= ======== ======== ======

Isilon Systems, Inc.

CONTACT: Press, Chris Blessington, Senior Director of Marketing and
Communications of Isilon Systems, +1-206-315-7500,
chris.blessington@isilon.com, or Investors, +1-206-315-7500,
investor-relations@isilon.com

Web Site: http://www.isilon.com/

Exar Corporation Reports Fiscal 2010 First Quarter Results

FREMONT, Calif., July 30 /PRNewswire-FirstCall/ -- Exar Corporation , today reported financial results for its fiscal 2010 first quarter ended June 28, 2009.

Net sales for the first quarter of fiscal 2010 were $30.9 million compared to net sales of $23.9 million for the prior quarter and $32.2 million for the first quarter of fiscal 2009.

The GAAP gross margin for the first quarter of fiscal 2010 was 41.6% compared to 42.2% for the prior quarter and 44.9% for the first quarter of fiscal 2009.

On a non-GAAP basis, the gross margin for the first quarter of fiscal 2010 was 52.1% compared to 44.5% for the prior quarter and 48.8% for the first quarter of fiscal 2009.

The GAAP net loss for the first quarter of fiscal 2010 was $12.9 million, or a net loss per share of $0.30, compared to a net loss of $4.6 million, or a net loss per share of $0.11, in the prior quarter, and a net loss of $2.5 million, or a net loss per share of $0.06, for the first quarter of fiscal 2009. These results include acquisition-related costs of $4.5 million in the first quarter of fiscal 2010 as compared to $0.8 million in the prior quarter and $0.7 million for the first quarter of fiscal 2009.

On a non-GAAP basis, the net loss was $3.1 million, or a net loss per share of $0.07, for the first quarter of fiscal 2010, compared to a net loss of $2.1 million, or a net loss per share of $0.05, in the previous quarter, and net income of $0.8 million, or net earnings per share of $0.02, for the first quarter of fiscal 2009.

The Company ended the first quarter of fiscal 2010 with cash, cash equivalents and short-term marketable securities of $221.5 million.

"The stability of our business has improved but we are still below our pre-downturn order levels," said Pete Rodriguez, the Company's president and chief executive officer. "In mid-June we completed the acquisition of Galazar Networks which strengthens and extends our solutions for the TDM and carrier Ethernet communications infrastructure markets. We are also on track with our integration and product plans for Hifn. I am encouraged by the addition of the high value solutions of these newly acquired teams to our growing list of design wins and winning product releases," stated Mr. Rodriguez.

Business Outlook

For the second quarter of fiscal 2010, the Company expects that net sales will be between $31.0 million and $33.0 million, non-GAAP gross margin will be between 50% and 52% and non-GAAP operating expenses will be between $20.0 million and $21.0 million.

The Company's statements about its future financial performance or operating plans are based on current information and expectations and the Company undertakes no duty to update such statements. These statements are forward-looking and actual results could differ materially due to various risks and uncertainties, some of which are described herein.

Results Conference Call

The Company invites investors, financial analysts, and the general public to listen to its conference call discussing the Company's financial results for the first quarter of fiscal 2010, today, Thursday, July 30, 2009 at 1:30 p.m. PDT. To access the conference call, please dial (800) 230-1085 by 1:20 p.m. PDT and use conference ID number 107238.

In addition, a live webcast will also be available. To access the webcast, please go to the Company's Investor Relations Homepage at: http://www.exar.com/news/investornews.aspx.

A taped replay of the conference call will be available starting at 5:00 p.m. PDT the day of the call until 11:59 p.m. PDT on August 6, 2009. To access the replay, please dial (800) 475-6701 and use conference ID number 107238.

Product Line Highlights Interface

Exar Launches Industry's Fastest Universal Asynchronous Receiver Transmitter (UART) Series with USB 2.0 Compliant Bus Interface

http://www.exar.com/Common/Content/News.aspx?id=4832 http://www.exar.com/Common/Content/News.aspx?id=5392

Power Management

Exar Adds High Speed 3.3V RS-485 and RS-422 Family to Expanding Serial Transceiver Portfolio--

http://www.exar.com/Common/Content/News.aspx?id=5190 Exar Provides Simplest Full Color Spectrum LED Lighting Solution http://www.exar.com/Common/Content/News.aspx?id=5314 Communications

Exar Adds Highly Integrated T1-E1-J1 Eight-Channel Devices to Communications Portfolio

http://www.exar.com/Common/Content/News.aspx?id=5352 Hifn Solutions Hifn Delivers Plug-and-Play Data Deduplication for Windows Servers http://www.exar.com/Common/Content/News.aspx?id=5016 Safe Harbor Statement

The Company's statements about its future financial performance, changes in gross margins, net sales and operating expenses, resource allocation and its impact on future performance and product development initiatives, design win conversion, distribution and OEM trends, supply chain issues among others, are forward-looking statements that involve risks and uncertainties. These risks and uncertainties include global financial volatility, economic recession, and industry and market conditions, such as customer and distributor relationships; limited visibility associated with customer or distributor demand for the Company's products; the possible loss of, or decrease in orders from, an important customer; adjustments in interest rates and cash balances; vendor capacity, quality or throughput constraints; successful integration of acquired businesses; possible disruption in commercial activities as a consequence of terrorist activity, natural disasters, armed conflict or health issues; successful development, market acceptance and demand for the Company's products, including those for which the Company has achieved design wins; competitive factors, such as pricing or competing solutions; customer ordering patterns; accounting considerations related to impairment analyses or acquisition related issues; the level of inventories maintained at the Company's OEMs and distributors; and the Company's successful execution of internal performance plans, as well as the other risks detailed from time to time in the Company's SEC reports, including the Annual Report on Form 10-K for the year ended March 29, 2009.

Generally Accepted Accounting Principles

The Company reports its financial results in accordance with GAAP. Additionally, the Company supplements reported GAAP financials with non-GAAP measures which are included in related press releases and reports furnished to the SEC, copies of which are available at the Company's website: http://www.exar.com/ or the SEC's website at: http://www.sec.gov/. For the periods presented, we are disclosing non-GAAP gross margin, non-GAAP research and development expenses, non-GAAP selling, general and administrative expenses, non-GAAP operating expenses, non-GAAP operating loss, non-GAAP net income (loss), and non-GAAP diluted earnings (loss) per share, which are adjusted to exclude from our GAAP results all stock-based compensation expense, amortization of acquired intangible assets, fair value adjustment of acquired inventories, acquisition-related costs, separation costs of executive officers, impairment charges on investments, and income tax effects. These non-GAAP measures are presented in part to enhance the understanding of the Company's historical financial performance and comparability between reporting periods. The Company believes the non-GAAP presentation, when shown in conjunction with the corresponding GAAP measures, provide relevant and useful information to analysts, investors, management and other interested parties following the semiconductor industry. For its internal purposes, the Company uses the foregoing non-GAAP measures to evaluate performance across reporting periods, determine certain employee benefits as well as plan for and forecast the Company's future periods. These non-GAAP measures are not in accordance with, or an alternative for measures prepared in accordance with GAAP, and may be different from non-GAAP measures used by other companies. In addition, these non-GAAP measures are not based on any comprehensive set of accounting rules or principles. The Company believes that non-GAAP measures have limitations in that they do not reflect all of the amounts associated with the Company's results of operations as determined in accordance with GAAP. These measures should only be used to evaluate the Company's results of operations in conjunction with the corresponding GAAP measures.

About Exar

Exar Corporation delivers highly differentiated silicon, software and subsystem solutions for industrial, consumer, and enterprise applications. For nearly 40 years, Exar's comprehensive knowledge of end-user markets along with the underlying analog/mixed signal and digital technologies has enabled innovative solutions that meet the needs of the evolving connected world. Exar's technology portfolio includes solutions for power management, serial interfaces, packet-based and TDM wireline communications, enterprise storage optimization, and data security. Exar has locations worldwide providing real-time customer support to drive rapid product development. For more information about Exar, visit: http://www.exar.com/.

EXAR CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands, except share amounts) (Unaudited) JUNE 28, MARCH 29, 2009 2009 ---- ---- ASSETS Current assets: Cash and cash equivalents $41,915 $89,002 Short-term marketable securities 179,553 167,341 Accounts receivable (net of allowances of $516 and $572) 11,894 7,452 Accounts receivable, related party (net of allowances of $356 and $736) 2,456 1,796 Inventories 15,584 15,678 Other current assets 4,836 3,274 Deferred income taxes, net 361 62 --- -- Total current assets 256,599 284,605 Property, plant and equipment, net 43,342 42,549 Goodwill 2,621 - Intangible assets, net 28,067 7,359 Other non-current assets 3,339 1,876 ----- ----- Total assets $333,968 $336,389 ======== ======== LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $5,233 $5,391 Accrued compensation and related benefits 5,425 4,773 Deferred income and allowances on sales to distributors 3,444 3,208 Deferred income and allowances on sales to distributors, related party 7,340 7,040 Other accrued expenses 11,675 7,014 ------ ----- Total current liabilities 33,117 27,426 Long-term lease financing obligations 15,217 15,633 Other non-current obligations 1,630 1,236 ----- ----- Total liabilities 49,964 44,295 ------ ------ Total stockholders' equity Preferred stock, $.0001 par value; 2,250,000 shares authorized; no shares outstanding - - Common stock, $.0001 par value; 100,000,000 shares authorized; 43,515,088 and 43,036,271 shares issued and outstanding at June 28, 2009 and March 29, 2009, respectively (net of treasury shares) 4 4 Additional paid-in capital 715,159 710,787 Accumulated other comprehensive income 1,215 802 Treasury stock at cost, 19,924,369 shares at June 28, 2009 and March 29, 2009, respectively (248,983) (248,983) Accumulated deficit (183,391) (170,516) -------- -------- Total stockholders' equity 284,004 292,094 ------- ------- Total liabilities and stockholders' equity $333,968 $336,389 ======== ======== EXAR CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except per share amounts) (Unaudited) THREE MONTHS ENDED ------------------ JUNE 28, MARCH 29, JUNE 29, 2009 2009 2008 ---- ---- ---- Net sales $23,110 $15,667 $20,171 Net sales, related party 7,752 8,187 12,040 ----- ----- ------ Total net sales 30,862 23,854 32,211 ------ ------ ------ Cost of sales: Cost of sales 12,889 8,472 10,939 Cost of sales, related party 3,788 4,880 5,847 Amortization of purchased intangible assets 1,340 436 955 ----- --- --- Total cost of sales 18,017 13,788 17,741 Gross profit 12,845 10,066 14,470 ------ ------ ------ Operating expenses: Research and development 12,294 7,512 8,092 Selling, general and administrative 15,112 8,816 11,301 ------ ----- ------ Total operating expenses 27,406 16,328 19,393 Loss from operations (14,561) (6,262) (4,923) Other income, net: Interest income and other, net 1,754 1,918 2,670 Interest expense (324) (326) (331) Impairment charges on investments (72) (301) - --- ---- - Total other income and expense, net 1,358 1,291 2,339 Loss before income taxes (13,203) (4,971) (2,584) Benefit from income taxes (328) (406) (123) ---- ---- ---- Net loss $(12,875) $(4,565) $(2,461) ======== ======= ======= Loss per share: Basic loss per share $(0.30) $(0.11) $(0.06) ====== ====== ====== Diluted loss per share $(0.30) $(0.11) $(0.06) ====== ====== ====== Shares used in the computation of loss per share: Basic 43,314 42,950 42,973 ====== ====== ====== Diluted 43,314 42,950 42,973 ====== ====== ====== EXAR CORPORATION AND SUBSIDIARIES SUPPLEMENTAL RECONCILIATION OF GAAP TO NON-GAAP RESULTS (In thousands, except per share amounts) (Unaudited) THREE MONTHS ENDED ------------------ JUNE 28, MARCH 29, JUNE 29, 2009 2009 2008 ---- ---- ---- GAAP gross margin 41.6% 42.2% 44.9% Stock-based compensation 0.4% 0.5% 0.6% Amortization of acquired intangible assets 4.3% 1.8% 3.0% Fair value adjustment of acquired inventories 5.8% - - Acquisition-related costs - - 0.4% -- -- --- Non-GAAP gross margin 52.1% 44.5% 48.8% ==== ==== ==== GAAP research and development expenses $12,294 $7,512 $8,092 Stock-based compensation 486 383 358 Amortization of acquired intangible assets 588 72 263 Acquisition-related costs 557 - - --- -- -- Non-GAAP research and development expenses $10,663 $7,057 $7,471 ======= ====== ====== GAAP selling, general and administrative expenses $15,112 $8,816 $11,301 Stock-based compensation 707 713 809 Amortization of acquired intangible assets 142 44 162 Acquisition-related costs 3,926 778 541 Separation costs of executive officers 162 - --- -- -- Non-GAAP selling, general and administrative expenses $10,175 $7,281 $9,789 ======= ====== ====== GAAP operating expenses $27,406 $16,328 $19,393 Stock-based compensation 1,193 1,096 1,167 Amortization of acquired intangible assets 730 116 425 Acquisition-related costs 4,483 778 541 Separation costs of executive officers 162 - - --- -- -- Non-GAAP operating expenses $20,838 $14,338 $17,260 ======= ======= ======= GAAP operating loss $(14,561) $(6,262) $(4,923) Stock-based compensation 1,309 1,207 1,359 Amortization of acquired intangible assets 2,070 552 1,380 Fair value adjustment of acquired inventories 1,787 - - Acquisition-related costs 4,489 778 656 Separation costs of executive officers 162 - - --- -- -- Non-GAAP operating loss $(4,744) $(3,725) $(1,528) ======== ======= ======== GAAP net loss $(12,875) $(4,565) $(2,461) Stock-based compensation 1,309 1,207 1,359 Amortization of acquired intangible assets 2,070 552 1,380 Fair value adjustment of acquired inventories 1,787 - - Acquisition-related costs 4,489 778 656 Separation costs of executive officers 162 - - Impairment charges on investments 72 301 - Income tax effects (152) (413) (161) ---- ---- ---- Non-GAAP net income (loss) $(3,138) $(2,140) $773 ======== ======= ==== GAAP loss per share $(0.30) $(0.11) $(0.06) Stock-based compensation 0.03 0.03 0.03 Amortization of acquired intangible assets 0.05 0.01 0.03 Fair value adjustment of acquired inventories 0.04 - - Acquisition-related costs 0.10 0.02 0.02 Separation costs of executive officers - - - Impairment charges on investments - 0.01 - Income tax effects - (0.01) - --- ----- --- Non-GAAP diluted earnings (loss) per share $(0.07) $(0.05) $0.02 ====== ====== ===== Shares used in earnings (loss) per share --- GAAP 43,314 42,950 42,973 The effect of dilutive potential common shares due to reporting Non-GAAP net income - - 260 The effect of removing stock-based compensation expense under SFAS 123R for Non-GAAP presentation purpose - - (81) --- --- --- Shares used in diluted earnings (loss) per share --- Non-GAAP 43,314 42,950 43,152 ====== ====== ====== Notes: Certain amounts may not total due to rounding. Certain amounts previously reported above have been reclassified to conform to the current periods' presentation.

Exar Corporation

CONTACT: Kevin S. Bauer, Vice President and CFO of Exar Corporation,
+1-510-668-7100

Web Site: http://www.exar.com/

Monolithic Power Systems Announces Second Quarter and Half Year 2009 Results

SAN JOSE, Calif., July 30 /PRNewswire-FirstCall/ -- Monolithic Power Systems (MPS) , a leading fabless manufacturer of high-performance analog and mixed-signal semiconductors, today announced financial results for the quarter and half year ended June 30, 2009.

The results for the quarter ended June 30, 2009 are as follows: -- Net revenues of $41.2 million, up 40.4% sequentially from $29.3 million in the first quarter of 2009 and down 0.8% from $41.5 million in the second quarter of 2008 -- Gross margin of 59.1%, compared to 57.6% in the first quarter of 2009 and 63.0% in the second quarter of 2008 -- GAAP operating expenses of $21.3 million, including $19.1 million for research and development and selling, general and administrative expenses, which includes $3.8 million for stock-based compensation, and $2.2 million for patent litigation expenses -- Non-GAAP(1) operating expenses of $17.5 million, excluding $3.8 million for stock-based compensation -- GAAP net income of $3.2 million, with GAAP earnings per share of $0.09 per diluted share -- Non-GAAP(1) net income of $6.1 million, or $0.17 per diluted share, excluding stock-based compensation and related tax effects The results for the half year ended June 30, 2009 are as follows: -- Net revenues of $70.5 million, compared to $76.9 million for the half year ended June 30, 2008, a decrease of 8.3% -- Gross margin of 58.5%, compared to 63.0% for the half year ended June 30, 2008 -- GAAP operating expenses of $39.3 million, including $35.0 million for research and development and selling, general and administrative expenses, which includes $7.1 million for stock-based compensation and $4.3 million for patent litigation expenses -- Non-GAAP(1) operating expenses of $32.1 million, excluding $7.1 million for stock-based compensation, compared to $32.9 million for the half year ended June 30, 2008, a decrease of 2.3%. -- GAAP net income of $2.5 million, with GAAP EPS of $0.07 per diluted share -- Non-GAAP(1) net income of $8.4 million, or $0.24 per diluted share, excluding stock-based compensation and related tax effects

"MPS saw a rebound in our business in the second quarter as our major end markets performed well after a slow first quarter" said Michael Hsing, chief executive officer and founder of MPS. "We are still cautious in the near term, but optimistic in the long term. With our slate of new products, we are winning business in many new geographic markets as well as new product segments."

Business Outlook

The following are MPS' financial targets for the third quarter ending September 30, 2009:

-- Revenues in the range of $42.0 million to $46.0 million. -- Gross margin at the lower end of the company's target range of 58% to 63%. -- Research and development and selling, general and administrative expenses between $18.6 million and $20.0 million. Non-GAAP(1) research and development and selling, general and administrative expenses between $15.3 million and $16.3 million. This excludes an estimate of stock-based compensation expense in the range of $3.3 million to $3.7 million. -- Litigation expense in the range of $1.8 million to $2.2 million.

(1) Non-GAAP net income, non-GAAP operating expenses and non-GAAP research and development and selling, general and administrative expense differ from net income, operating expenses, and research and development and selling, general and administrative expense determined in accordance with GAAP (Generally Accepted Accounting Principles in the United States). Non-GAAP net income for the quarter and half year ended June 30, 2009 and 2008 excludes the effect of stock-based compensation expense and their related tax effects. Non-GAAP operating expenses for the quarter and half year ended June 30, 2009 and 2008 exclude the effect of stock-based compensation expense. Projected non-GAAP research and development and selling, general and administrative expenses exclude the effect of stock-based compensation expense. A schedule reconciling these amounts is included in this news release. Non-GAAP financial measures should not be considered as a substitute for, or superior to, measures of financial performance prepared in accordance with GAAP. MPS utilizes both GAAP and non-GAAP financial measures to assess what it believes to be its core operating performance and to evaluate and manage its internal business and assist in making financial operating decisions. MPS believes that the inclusion of non-GAAP financial measures, together with GAAP measures, provides investors with an alternative presentation useful to investors' understanding of MPS' core operating results and trends. Additionally, MPS believes that the inclusion of non-GAAP measures, together with GAAP measures, provides investors with an additional dimension of comparability to similar companies. However, investors should be aware that non-GAAP financial measures utilized by other companies are not likely to be comparable in most cases to the non-GAAP financials measures used by MPS.

Conference Call

MPS plans to conduct a management teleconference covering its quarter ended June 30, 2009 results at 2:00 p.m. PT / 5:00 p.m. ET today, July 30, 2009. To access the conference call and following replay, go to http://ir.monolithicpower.com/ and click the webcast link. From this site, you can listen to the teleconference, assuming that your computer system is configured properly. In addition to the webcast replay, which will be archived for all investors for one year on the MPS website, a phone replay will be available for seven days after the live call at 617-801-6888, code number 73043206. This press release and any other information related to the call will also be posted on the website.

Safe Harbor Statement

This press release contains forward-looking statements regarding targeted revenues, gross margin, GAAP and non-GAAP research and development and selling, general and administrative expenses, stock-based compensation expense and litigation expense for the quarter ending September 30, 2009, and our outlook for the next quarter. These statements are not historical facts or guarantees of future performance or events, are based on current expectations, estimates, beliefs, assumptions, goals, and objectives, and involve known and unknown risks, uncertainties and other factors that may cause actual results to be materially different from the results expressed by these statements. Readers of this press release and listeners to the accompanying conference call are cautioned not to place undue reliance on any forward-looking statements. Factors that could cause actual results to differ include, but are not limited to, the risks, uncertainties and costs of litigation in which the company is involved; the outcome of any upcoming trials, hearings, motions, and appeals; any market disruptions or interruptions in MPS' schedule of new product release development; adverse changes in production and testing efficiency; adverse changes in government regulations in foreign countries where MPS has offices; acceptance of, or demand for, MPS' products being lower than expected; the adverse impact on MPS' financial performance if its tax and litigation provisions are inadequate; difficulty in predicting or budgeting for future expenses and financial contingencies; and other important risk factors identified in MPS' SEC filings, including, but not limited to, its Form 10-Q filed on April 28, 2009.

The forward-looking statements in this press release represent MPS' targets, not predictions of actual performance. MPS assumes no obligation to update the information in this press release or in the accompanying conference call.

About Monolithic Power Systems, Inc.

Monolithic Power Systems, Inc. (MPS) develops and markets proprietary, advanced analog and mixed-signal semiconductors. The company combines advanced process technology with its highly experienced analog designers to produce high-performance power management integrated circuits (ICs) for DC to DC converters, LED drivers, Cold Cathode Fluorescent Lamp (CCFL) backlight controllers, Class D audio amplifiers, and Linear ICs. MPS products are used extensively in computing and network communications products, LCD monitors and TVs, and a wide variety of consumer and portable electronics products. MPS partners with world-class manufacturing organizations to deliver top quality, ultra-compact, high-performance solutions through the most productive, cost-efficient channels. Founded in 1997 and headquartered in San Jose, California, the company has expanded its global presence with sales offices in Taiwan, China, Korea, Japan, and Europe, which operate under MPS International, Ltd.

Monolithic Power Systems, MPS, and the MPS logo are registered trademarks of Monolithic Power Systems, Inc. in the U.S. and trademarked in certain other countries.

Consolidated Balance Sheet (Unaudited, in thousands, except par value) June 30, December 31, 2009 2008 -------- ------------ ASSETS Current assets: Cash and cash equivalents $56,816 $83,266 Short-term investments 61,968 21,922 Accounts receivable, net of allowances of $7 and $0 in 2009 and 2008, respectively 12,448 9,115 Inventories 20,082 18,887 Deferred income tax assets, net - current 75 75 Prepaid expenses and other current assets 3,325 2,622 Restricted cash 7,350 7,360 ----- ----- Total current assets 162,064 143,247 ------- ------- Property and equipment, net 16,326 14,163 Long-term investments 37,635 37,425 Deferred income tax assets, net - long-term 19 19 Other assets 430 438 Restricted assets 7 7 --- --- Total assets $216,481 $195,299 ======== ======== LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $10,280 $4,674 Accrued compensation and related benefits 7,128 7,848 Accrued liabilities 14,262 13,360 ------ ------ Total current liabilities 31,670 25,882 ------ ------ Non-current income tax liability 4,785 4,762 Other long-term liabilities 9 10 --- --- Total liabilities 36,464 30,654 ------ ------ Stockholders' equity: Common stock, $0.001 par value, $34 and $34 in 2009 and 2008, respectively; shares authorized: 150,000,000; shares issued and outstanding: 34,256,923 and 33,646,821 in 2009 and 2008, respectively 159,845 147,298 Retained earnings 19,869 17,411 Accumulated other comprehensive income (loss) 303 (64) --- --- Total stockholders' equity 180,017 164,645 ------- ------- Total liabilities and stockholders' equity $216,481 $195,299 ======== ======== Consolidated Income Statement (Unaudited, in thousands, except per share amounts) Three months Six months ended June 30, ended June 30, --------------- --------------- 2009 2008 2009 2008 ---- ---- ---- ---- Revenue $41,173 $41,502 $70,495 $76,911 Cost of revenue* 16,823 15,375 29,254 28,419 ------ ------ ------ ------ Gross profit 24,350 26,127 41,241 48,492 ------ ------ ------ ------ Operating expenses: Research and development* 9,732 8,602 17,849 16,174 Selling, general and administrative* 9,321 8,912 17,129 17,640 Provision for litigation expense 2,233 4,294 4,279 5,030 ------ ------ ------ ------ Total operating expenses 21,286 21,808 39,257 38,844 ------ ------ ------ ------ Income from operations 3,064 4,319 1,984 9,648 Other income (expense): Interest and other income 281 810 666 2,244 Interest and other expense (185) (112) (279) (118) -- --- --- ----- Total other income, net 96 698 387 2,126 -- --- --- ----- Income before income taxes 3,160 5,017 2,371 11,774 Income tax provision (benefit) (26) 417 (87) 1,239 ------ ------ ------ ------- Net income $3,186 $4,600 $2,458 $10,535 ====== ====== ====== ======= Basic net income per share $0.09 $0.14 $0.07 $0.32 ===== ===== ===== ===== Diluted net income per share $0.09 $0.13 $0.07 $0.29 ===== ===== ===== ===== Weighted average common shares outstanding 34,070 33,229 33,842 33,287 Stock options and restricted stock 2,319 3,003 2,036 2,804 ----- ----- ----- ----- Diluted weighted-average common equivalent shares outstanding 36,389 36,232 35,878 36,091 ====== ====== ====== ====== * Stock-based compensation has been included in the following line items: Cost of revenue $67 $128 $148 $173 Research and development 1,687 1,396 3,247 2,603 Selling, general and administrative 2,098 1,819 3,870 3,354 ----- ----- ----- ----- Total $3,852 $3,343 $7,265 $6,130 ====== ====== ====== ====== RECONCILIATION OF NET INCOME TO NON-GAAP NET INCOME (in thousands, except per share amounts) ------ ------ ------ ------- Net income $3,186 $4,600 $2,458 $10,535 ====== ====== ====== ======= Adjustments to reconcile net income to non-GAAP net income Stock-based compensation $3,852 $3,343 $7,265 $6,130 Tax effect (903) (837) (1,292) (1,924) ---- ---- ------ ------ Non-GAAP net income $6,135 $7,106 $8,431 $14,741 ------ ------ ------ ------- Non-GAAP earnings per share, excluding stock-based compensation and related tax effects: Basic $0.18 $0.21 $0.25 $0.44 Diluted $0.17 $0.20 $0.24 $0.41 Shares used in the calculation of non-GAAP earnings per share: Basic 34,070 33,229 33,842 33,287 Diluted 36,389 36,232 35,878 36,091 RECONCILIATION OF OPERATING EXPENSES TO NON-GAAP OPERATING EXPENSES (in thousands, except per share amounts) ------- ------- ------- ------- Total operating expenses $21,286 $21,808 $39,257 $38,844 ======= ======= ======= ======= Adjustments to reconcile total operating expenses to non-GAAP total operating expenses Stock-based compensation $(3,785) $(3,215) $(7,117) $(5,957) -------- -------- -------- -------- Non-GAAP total operating expenses $17,501 $18,593 $32,140 $32,887 ------- ------- ------- ------- 2009 Third Quarter Outlook RECONCILIATION OF R&D AND SG&A EXPENSES TO NON-GAAP R&D AND SG&A EXPENSES (in thousands, except per share amounts) Three months ending September 30, 2009 Low High --- ---- R&D and SG&A $15,300 $16,300 ======= ======= Adjustments to reconcile R&D and SG&A to non-GAAP R&D and SG&A Stock-based compensation 3,300 3,700 ----- ----- Non-GAAP R&D and SG&A $18,600 $20,000 ------- -------

Monolithic Power Systems, Inc.

CONTACT: Rick Neely, Chief Financial Officer of Monolithic Power
Systems, Inc., +1-408-826-0777, investors@monolithicpower.com

Web Site: http://www.monolithicpower.com/

Zilog Announces First Quarter Fiscal 2010 Financial Results

SAN JOSE, Calif., July 30 /PRNewswire-FirstCall/ -- Zilog, Inc. , a trusted supplier of application specific, embedded system-on-chip (SoC) solutions for industrial and consumer markets, today reported financial results for its first quarter fiscal 2010 ended June 27, 2009.

Net sales from continuing operations for the fiscal 2010 first quarter were $7.2 million, a sequential increase of 3 percent and a year over year decrease of 25 percent. The sequential increase exceeded the previously announced guidance range and follows quarterly sequential declines in the December, 2008 and March, 2009 fiscal quarters. The sequential decline in the two previous quarters reflects the worldwide fall in demand for end products as a result of the global economic crisis. On February 18, 2009 the Company sold its universal remote control and secured transaction processor businesses. In accordance with FASB No. 144, the comparative financial statements for its first fiscal quarter ended June 28, 2008 have been restated to reflect these sold businesses as discontinued operations.

GAAP net income for the fiscal first quarter ended June 27, 2009 was $0.4 million, or 2 cents per share, as compared to GAAP net income of $12.1 million in the previous fiscal quarter, or 71 cents per share. Net income for the fiscal 2010 first quarter includes a credit to other income of $1.0 million, or 6 cents per share, reflecting the sale and assignment to a third party of five patents and their associated intellectual property rights. Net income for the fiscal 2009 fourth quarter ended March 31, 2009 included a gain on sale of the two businesses of $21.6 million, partially offset by certain special and one-time charges of $3.5 million. The GAAP net income for Q1 fiscal 2010 compares to a GAAP net loss of $1.7 million for the first quarter fiscal 2009 which included special charges of $0.6 million reflecting costs associated with consolidation and manufacturing outsource activities.

"Our opening quarter of the 2010 fiscal year highlighted profitability, sequential sales growth, increased cash and a positive book-to-bill ratio. Following the sale of the businesses in February, we have revitalized the company making it leaner with a significantly lower breakeven sales level. Coupled with a laser-focus on our new product development and our esteemed industry brand from 35 years of microcontroller history, we believe we are well positioned as the global economy recovers," said Darin G. Billerbeck, Zilog's president and chief executive officer.

"While the current global economy continues to pose challenges and uncertainties, we are excited by our continued development of solutions for power management and sensing applications including the use of wireless. We are also energized by our recently announced 3.3 volt Serial Communications Controller product, which extends further power saving capabilities to customers who have long been pleased with our classic SCC portfolio," stated Billerbeck.

The company reported cash, cash equivalents and long-term investments of $34.7 million at June 27, 2009, compared to $33.3 million at March 31, 2009. Net cash provided by continuing operating activities was $2.0 million for the fiscal 2010 first quarter, as compared to $1.4 million for the first quarter in the prior fiscal year and net cash used in continuing operating activities of $8.1 million in the prior fiscal quarter. On a non-GAAP basis, adjusted EBITDA from continuing operations, as defined below, was positive $0.7 million for the fiscal 2010 first quarter, as compared to negative $2.2 million in the first fiscal quarter a year ago and negative $1.5 million in the prior fiscal quarter.

"In our first fiscal quarter, we generated positive adjusted EBITDA and positive net income including the sale and assignment of certain patent rights. As the market rapidly deteriorated after September 2008, our quick and decisive actions to sell two businesses and resize our core business resulted in a significantly lower Adjusted EBITDA breakeven sales level, including a 25 percent sequential reduction this quarter," said Perry J. Grace, Zilog's executive vice President and chief financial officer.

"We have continued to diligently manage our working capital, resulting in a fiscal Q1 increase in cash, cash equivalents and long term investments of $1.4 million and an expectation of a further increase again this quarter. In addition, our balance sheet strength allows us to better determine our strategic options as we move forward, regardless of the direction the global economy may take," stated Grace.

The Company expects net sales for its fiscal 2010 second quarter ending September 26, 2009 to be consistent with or up to 5 percent higher than the fiscal quarter ended June 27, 2009. Additionally, the Company expects cash, cash equivalents and long-term investments to be approximately $36 million to $37 million at September 26, 2009. This includes $1.0 million in cash received in July, 2009 for the patent sale and assignment and the expected receipt in August, 2009 of $1.55 million or 50 percent of the escrow funds from the February sale of the two businesses.

NON-GAAP FINANCIAL INFORMATION (Unaudited)

The Company may make reference to certain Non-GAAP financial measures. Management believes that these Non-GAAP measures are useful measures of operating performance and liquidity because they may exclude the impact of certain items, such as amortization of intangible assets, stock-based compensation, depreciation, non-operating interest, income taxes and special charges. However, these Non-GAAP measures should be considered in addition to, not as a substitute for, or superior to, net income (loss) and net cash provided by (used in) operating activities, or other financial measures prepared in accordance with GAAP.

Three Months Ended Jun. 27, Mar. 31, Dec. 27, Sep. 27, Jun. 28, 2009 2009 2008 2008 2008 (in thousands) Reconciliation of Non-GAAP Net Loss to GAAP Net Loss Non-GAAP net income (loss) from continuing operations $394 ($1,776) ($2,871) ($2,563) ($2,397) Non-GAAP adjustments on Continuing operations: Special charges and credits 135 3,478 1,696 554 590 Amortization of intangible assets - 174 209 209 209 Non-cash stock-based compensation COS 19 21 44 30 42 Non-cash stock-based compensation R&D 24 (24) 126 47 72 Non-cash stock-based compensation SG&A 183 201 297 211 257 Total non-GAAP adjustments 361 3,850 2,372 1,051 1,170 GAAP Net loss from Continuing operations $33 ($5,626) ($5,243) ($3,614) ($3,567) Non-GAAP Net Income (Loss) from continuing operations (Unaudited)

Non-GAAP net income (loss) from continuing operations (Non-GAAP net income (loss)) excludes special charges and non-cash charges relating to the amortization of intangible assets and stock-based compensation. Following the sale of the two businesses in February, 2009, Non-GAAP net income (loss) was restated to exclude amounts related to the Company's discontinued operations. We believe that Non-GAAP net income (loss) is a useful measure as it excludes certain special charge items as well as certain non-cash charges, which facilitates a comparison of the Company's operating performance. However, this Non-GAAP measure should be considered in addition to, not as a substitute for, or superior to, the net loss measured in accordance with GAAP.

Three Months Ended Jun. 27, Mar. 31, Dec. 27, Sep. 27, Jun. 28, 2009 2009 2008 2008 2008 (in thousands) Reconciliation of Net Loss and Cash Flows From Operating Activities to EBITDA Reconciliation of net loss to EBITDA: Net income (loss) from continuing operations $33 ($5,626) ($5,243) ($3,614) ($3,567) Depreciation and amortization 318 452 466 478 436 Interest income (3) (4) (24) (49) (70) Provision (benefit) for income taxes 40 (2) 67 62 54 EBITDA from continuing operations $388 ($5,180) ($4,734) ($3,123) ($3,147) Reconciliation of EBITDA to net cash provided by (used in) continuing operating activities: EBITDA $388 ($5,180) ($4,734) ($3,123) ($3,147) Provision (benefit) for income taxes (40) 2 (67) (62) (54) Interest income 3 4 24 49 70 Non-cash stock-based compensation 226 198 467 288 371 Loss on disposition of operating assets - 986 11 - 35 Changes in other operating assets and liabilities 1,457 (4,119) (571) (577) 4,124 Net cash provided by (used in) continuing operating activities $2,034 ($8,109) ($4,870) ($3,425) $1,399 Non-GAAP EBITDA (Unaudited)

Management believes that Non-GAAP EBITDA ("EBITDA"), that is Earnings or loss Before Interest, Taxes, Depreciation and Amortization, is a useful measure of financial performance. Following the sale of the two businesses in February, 2009, EBITDA was restated to exclude amounts related to the Company's discontinued operations. We believe that the disclosure of EBITDA helps investors more meaningfully evaluate our liquidity position by the elimination of non-cash related items such as depreciation and amortization. We believe that our investors regularly use EBITDA as a measure of the liquidity of our business. Our management uses EBITDA as a supplement to cash flows from operations as a way to assess the cash generated from our business available for capital expenditures and the servicing of other requirements including working capital.

Three Months Ended Jun. 27, Mar. 31, Dec. 27, Sep. 27, Jun. 28, 2009 2009 2008 2008 2008 (in thousands) Reconciliation of Net Loss and Cash Flows From Operating Activities to Adjusted EBITDA Reconciliation of net income (loss)to Adjusted EBITDA: Net income (loss) from continued operations $33 ($5,626) ($5,243) ($3,614) ($3,567) Depreciation and amortization 318 452 466 478 436 Interest income (3) (4) (24) (49) (70) Provision (benefit) for income taxes 40 (2) 67 62 54 Special charges and credits 135 3,478 1,696 554 590 Non-cash stock-based compensation 226 198 467 288 371 Adjusted EBITDA $749 ($1,504) ($2,571) ($2,281) ($2,186) Reconciliation of Adjusted EBITDA to net cash provided by (used in) continuing operating activities: Adjusted EBITDA, continuing operations $749 ($1,504) ($2,571) ($2,281) ($2,186) Special charges and credits (135) (3,478) (1,696) (554) (590) Provision (benefit) for income taxes (40) 2 (67) (62) (54) Interest income 3 4 24 49 70 Loss on disposition of operating assets - 986 11 - 35 Changes in other operating assets and liabilities 1,457 (4,119) (571) (577) 4,124 Net cash provided by (used in) continuing operating activities $2,034 ($8,109) ($4,870) ($3,425) $1,399 Non-GAAP Adjusted EBITDA (Unaudited)

EBITDA reflects our Earnings or loss Before Interest, Taxes, Depreciation and Amortization. Additionally, management uses separate "Adjusted EBITDA" calculations for purposes of determining certain employees' incentive compensation and, subject to meeting specified Adjusted EBITDA amounts. Adjusted EBITDA, as we define it, excludes interest, income taxes, effects of changes in accounting principles and non-cash charges such as depreciation, amortization, in-process research and development, and stock-based compensation expense. It also excludes cash and non-cash charges associated with reorganization items and special charges and credits, which represent operational restructuring charges, including asset write-offs, employee termination costs, relocation costs and lease termination costs. Adjusted EBITDA also excludes changes in operating assets and liabilities, which are included in net cash provided by (used in) operating activities. Following the sale of the two businesses in February, 2009, Adjusted EBITDA was restated to exclude amounts related to the Company's discontinued operations. Our management uses Adjusted EBITDA as a supplement to cash flows from operations as a way to assess the cash generated from our business available for capital expenditures and the servicing of other requirements including working capital. This Non-GAAP Adjusted EBITDA measure allows management to monitor cash generated from the operations of the business. However, this Non-GAAP measure should be considered in addition to, not as a substitute for, or superior to, net loss and net cash provided or used in operating activities prepared in accordance with GAAP.

About Zilog, Inc.

Zilog is a trusted supplier of application specific, embedded system-on-chip (SoC) solutions for the industrial and consumer markets. From its roots as an award-winning architect in the microprocessor and microcontroller industry, Zilog has evolved its expertise beyond core silicon to include SoCs, single board computers, application specific software stacks and development tools that allow embedded designers quick time to market in areas such as energy management, monitoring and metering and motion detection. For more information, visit http://www.zilog.com/.

EZ80ACCLAIM!, Zilog, Z8, Z80, eZ80, Z8 ENCORE!, Encore!XP and Zneo are registered trademarks of Zilog, Inc. in the United States and in other countries.

Other product and or service names mentioned herein may be trademarks of the companies with which they are associated.

Cautionary Statements

This release contains forward-looking statements (including those related to our expectations for our September 2009 quarter and our position as the global economy recovers) relating to expectations, plans or prospects for Zilog, Inc. that are based upon the current expectations and beliefs of Zilog's management and are subject to certain risks and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. For example, weakness in our 8-bit classic or embedded flash products could negatively impact our September 2009 fiscal quarter. Non receipt of escrow amounts payable to us in our September 2009 fiscal quarter related to the February, 2009 sale of the two businesses could negatively impact our cash projections. Changes in requirements for supporting the Transition Services Agreement with Maxim Integrated Products, Inc. could impact our cash projections. Additionally, our ability to attract and retain technical employees may be negatively impacted by uncertainties relating to potential future changes in the ownership and control of the Company which may make it difficult to execute on our long-term strategy.

Design wins are defined as the projected one-year net sales for a customer's new product design for which the Company has received at least a $1,000 purchase order for its devices. Design win estimates are determined based on projections from customers and may or may not be realized. Whether or not Zilog achieves anticipated revenue from design wins can be dependent on the timeliness of customers to ramp and whether or not the project in question is as commercially successful as the customers anticipated. Notwithstanding changes that may occur with respect to customer matters relating to the forward-looking statements, Zilog does not expect to, and disclaims any obligation to update such statements until release of its next quarterly earnings announcement or in any other manner. Zilog, however, reserves the right to update such statement, or any portion thereof, at any time for any reason.

The financial information presented herein is unaudited and is subject to change as a result of subsequent events or adjustments, if any, arising prior to the filing of the Company's Form 10-Q for the period ended June 27, 2009.

For a detailed discussion of these and other cautionary statements, please refer to the risk factors discussed in filings with the U.S. Securities and Exchange Commission ("SEC"), including but not limited to, the Company's Annual Report on Form 10-K for the fiscal year ended March 31, 2009, and any subsequently filed reports. All documents also are available through the SEC's Electronic Data Gathering Analysis and Retrieval system (EDGAR) at http://www.sec.gov/ or from the Company's website at http://www.zilog.com/.

Contact: Daniel Francisco Francisco Group Zilog Communications (916) 812-8814 Zilog, Inc. UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands) June 27, March 31, 2009 2009 ASSETS Current assets: Cash and cash equivalents $33,826 $32,230 Accounts receivable, net 2,203 1,698 Receivables under transition services agreement 1,484 1,696 Escrow receivable, sold business 3,100 3,100 Patent assignment receivable 1,000 - Inventories 3,341 4,022 Deferred tax asset 10 10 Prepaid expenses and other current assets 949 1,199 Current assets associated with discontinued operations - 960 Total current assets 45,913 44,915 Long term investments 900 1,100 Property, plant and equipment, net 2,349 2,347 Goodwill 2,211 2,211 Other assets 1,126 1,079 Total assets $52,499 $51,652 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Short term debt $ - $346 Accounts payable 2,456 1,939 Payables under transition services agreement 3,401 275 Income taxes payable 196 195 Accrued compensation and employee benefits 1,433 1,349 Other accrued liabilities 3,094 3,828 Deferred income 6,853 8,024 Current liabilities associated with discontinued operations - 1,256 Total current liabilities 17,433 17,212 Deferred tax liability 10 10 Other non-current tax liabilities 2,826 2,804 Total liabilities 20,269 20,026 Stockholders' equity: Common stock 186 186 Additional paid-in capital 127,666 127,436 Treasury stock (7,563) (7,563) Other comprehensive income 195 173 Accumulated deficit (88,254) (88,606) Total stockholders' equity 32,230 31,626 Total liabilities and stockholders' equity $52,499 $51,652 Zilog, Inc. UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands except per share data and percentages) Three Months Ended Jun. 27, Jun. 28, 2009 2008 Net sales from continuing operations $7,235 $9,604 Cost of sales 4,520 5,259 Gross margin 2,715 4,345 Gross margin % 38% 45% Operating expenses: Research and development 1,031 1,733 Selling, general and administrative 2,481 5,492 Special charges 135 590 Amortization of intangible assets - 209 Total operating expenses 3,647 8,024 Operating loss from continuing operations (932) (3,679) Other income: Interest income 3 70 Other income, net 1,002 96 Income (loss) from continuing operations before provision for income taxes 73 (3,513) Provision for income taxes 40 54 Net income (loss) from continuing operations $33 $(3,567) Net income from discontinued operations 320 1,826 Net income (loss) $353 $(1,741) Basic and diluted net income (loss) from continuing operations per share 0.00 (0.21) Basic and diluted net income from discontinued operations per share 0.02 0.11 Basic and diluted net income (loss) per share $0.02 $(0.10) Weighted-average shares used in computing basic net income (loss) per share 17,230 16,948 Weighted-average shares used in computing diluted net income (loss) per share 17,230 16,972 Zilog, Inc. UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) Three Months Ended Jun. 27, Jun. 28, 2009 2008 CASH FLOWS FROM OPERATING ACTIVITIES: Net income (loss) from continuing operations $33 $(3,567) Adjustments to reconcile net income (loss) to net cash provided by operating activities: Depreciation and amortization 318 436 Disposition of operating assets - 34 Non-cash stock-based compensation 226 371 Amortization of fresh-start intangible assets - 208 Changes in operating assets and liabilities: Accounts receivable, net (505) 392 Receivable under transition services agreement 212 - Patent assignment receivable (1,000) - Inventories 681 344 Prepaid expenses and other current and non-current assets 225 (57) Accounts payable 517 1,688 Payable under transition services agreement 3,126 - Accrued compensation and employee benefits 84 736 Deferred income (1,171) (416) Accrued and other current and non-current liabilities (712) 1,230 Net cash provided by continuing operating activities 2,034 1,399 Net cash provided by (used in) discontinued operating activities 24 (972) CASH FLOWS FROM INVESTING ACTIVITIES: Redemption of long term investments 200 425 Investment in long term securities - - Capital expenditures (320) (359) Net cash provided by (used in) investing activities (120) 66 CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from short term debt - 665 Payments on short term debt (346) - Proceeds from issuance of common stock under employee stock purchase and stock option plans 4 45 Net cash provided by (used in) financing activities (342) 710 Net cash provided by discontinued financing activities - 1 Increase in cash and cash equivalents 1,596 1,204 Cash and cash equivalents at beginning of period 32,230 16,625 Cash and cash equivalents at end of period 33,826 17,829 Zilog, Inc. SELECTED UNAUDITED TRENDED FINANCIAL INFORMATION (Amounts in thousands except percentages, selected key metrics and per share amounts) Three Months Ended Jun. 27, Mar. 31, Dec. 27, Sep. 27, Jun. 28, 2009 2009 2008 2008 2008 Sales & Expenses Information: Net sales from continuing operations $7,235 $7,044 $9,035 $10,474 $9,604 Cost of sales 4,520 4,379 6,091 6,086 5,259 Gross margin 2,715 2,665 2,944 4,388 4,345 Gross margin % 38% 38% 33% 42% 45% Operating expenses: Research and development 1,031 1,118 1,657 1,757 1,733 Selling, general and administrative 2,481 3,442 4,696 5,723 5,492 Special charges and credits 135 3,478 1,696 554 590 Amortization of intangible assets - 174 209 209 209 Total operating expenses 3,647 8,212 8,258 8,243 8,024 Operating loss from Continuing operations (932) (5,547) (5,314) (3,855) (3,679) Interest income 3 4 24 49 70 Other income (expense) 1,002 (85) 114 254 96 Income (loss) from continuing operations before provision for income taxes 73 (5,628) (5,176) (3,552) (3,513) Provision (benefit) for income taxes 40 (2) 67 62 54 Net income (loss) from continuing operations 33 (5,626) (5,243) (3,614) (3,567) Net income (loss) from discontinued operatons 320 (3,831) (425) 2,058 1,826 Gain (loss) from sale of discontinued oprations, net of tax - 21,606 - - - Net income (loss) $353 $12,149 ($5,668) ($1,556) ($1,741) Basic and diluted net income (loss) from continuing operations per share - ($0.33) ($0.31) ($0.21) ($0.21) Basic and diluted net income (loss) from discontinued operations per share $0.02 ($0.22) ($0.02) $0.12 $0.11 Basic and diluted net income from gasin on sale of discontinued operations per share - $1.26 - - - Basic and diluted net income (loss) per share $0.02 $0.71 ($0.33) ($0.09) ($0.10) Weighted average basic shares 17,230 17,171 17,071 16,949 16,948 Weighted average diluted shares 17,230 17,171 17,071 16,949 16,972 Net Sales Information: Net Sales - by channel Direct $1,685 $1,849 $1,625 $2,404 $1,629 Distribution 5,550 5,195 7,410 8,070 7,975 Total net sales $7,235 $7,044 $9,035 $10,474 $9,604 Net Sales - by region Americas $2,840 $2,975 $3,569 $3,783 $3,961 Asia (including Japan) 3,349 2,571 4,046 4,899 3,563 Europe 1,046 1,498 1,420 1,792 2,080 Total net sales $7,235 $7,044 $9,035 $10,474 $9,604 Selected Key Metrics (as defined in our Form 10-Q and 10-K) Days sales outstanding 27 22 28 22 17 Net sales to inventory ratio (annualized) 8.7 7.0 8.0 7.5 5.9 Current ratio 2.6 2.6 1.5 1.6 1.5 Distributor weeks of inventory 12 18 13 12 12 Other Selected Financial Metrics Depreciation and amortization $318 $452 $466 $478 $436 Stock based compensation $226 $198 $467 $288 $371 Capital expenditures $320 $107 $82 $78 $359 Cash and cash equivalents $33,826 $32,230 $13,560 $16,899 $17,829 Long term investments $900 $1,100 $1,300 $1,450 $1,500 Cash and long term investments $34,726 $33,330 $14,860 $18,349 $19,329 Short term debt - $346 $693 $1,039 $1,385 Cash and long term investments, net of debt $34,726 $32,984 $14,168 $17,310 $17,944 EBITDA, adjusted $749 ($1,504) ($2,571) ($2,281) ($2,186)

Zilog, Inc.

CONTACT: Daniel Francisco of Francisco Group, +1-916-812-8814, for
Zilog, Inc.

Web Site: http://www.zilog.com/

RealNetworks Announces Second Quarter 2009 Results

SEATTLE, July 30 /PRNewswire-FirstCall/ -- Digital entertainment services company RealNetworks , Inc. today announced results for the second quarter ended June 30, 2009.

Quarterly Highlights: -- Revenue of $135.7 million -- Net loss of $(188.3) million or $(1.40) per share -- Adjusted EBITDA of $4.1 million -- Cash and short term investments of $362.8 million as of June 30, 2009

"In spite of a difficult consumer environment, our business remained relatively stable in the second quarter," said Rob Glaser, RealNetworks' Chairman and CEO. "Looking forward, even though we expect the economy to remain weak, we expect to show sequential improvement in the second half of the year, based in part on new products such as our innovative RealPlayer SP."

Second Quarter Results

For the second quarter of 2009, revenue was $135.7 million, a decrease of 11%, compared with $152.6 million in the second quarter of 2008. Foreign currency exchange rate fluctuations negatively affected 2009 second quarter revenue by approximately $6.3 million compared with the year-ago quarter. Excluding the effects of these foreign exchange rate changes, revenue declined 7% year over year. Revenue trends in each of Real's businesses in the second quarter of 2009, including the effects of foreign currency exchange rate changes, compared with the year-earlier quarter were: a 9% increase in Music revenue to $40.5 million, offset by a 10% decrease in Technology Products and Solutions revenue to $46.2 million, a 15% decrease in Games revenue to $29.8 million, and a 34% decrease in Media Software and Services revenue to $19.3 million.

Net loss for the second quarter of 2009 was $(188.3) million, or $(1.40) per share, compared with a net loss of $(1.3) million, or $(0.01) per share, in the second quarter of 2008. Included in the second quarter 2009 net loss were non-cash goodwill impairment charges of $175.6 million. Adjusted EBITDA for the second quarter of 2009 was $4.1 million compared with $17.4 million in the second quarter of 2008. A reconciliation of GAAP net income to adjusted EBITDA is provided in the financial tables that accompany this release.

Gross margin was 59% in the second quarter of 2009 compared with 64% in the second quarter of 2008. Income tax provision was $(1.2) million in the second quarter of 2009, compared with $(3.7) million in the year-earlier period. Interest income in the second quarter of 2009 was $754,000 compared with $3.4 million in the year-earlier period.

As of June 30, 2009, Real had approximately $362.8 million in unrestricted cash, cash equivalents and short-term investments, of which nearly 90% is located in the U.S. In addition, Real had approximately $37 million in restricted cash and equity investments at June 30, 2009.

Business Outlook

Due to the high level of uncertainty regarding consumer spending, global economic trends, foreign currency exchange rate fluctuations and credit markets, RealNetworks is not providing quantitative guidance. The company expects 2009 to continue to be a challenging year for consumer spending, online advertising and corporate infrastructure spending.

For the third quarter of 2009, Real expects overall revenue to increase sequentially but to decline year-over-year. Sequentially, the company expects revenue to be flat or increase in each of our segments. Compared with the year-ago third quarter, Real expects third-quarter Media Software and Services revenue to be flat, and revenue in Music, Games and Technology Products and Solutions to decline.

The foregoing forward-looking statements reflect Real's expectations as of July 30, 2009. It is not Real's general practice to update these forward-looking statements until its next quarterly results announcement.

Webcast and Conference Call Information

The company will host a webcast and conference call today at 5:00pm (Eastern)/ 2:00pm (Pacific). The live webcast featuring slides and audio will be available at http://investor.realnetworks.com/. Listeners must use RealPlayer to listen to the conference call, which can be downloaded for free at http://www.real.com/. The on-demand webcast will be available approximately two hours following the conclusion of the live webcast.

Conference Call Details 5:00 p.m. (Eastern) / 2:00 p.m. (Pacific) Dial In: 800-857-5305 Domestic 773-681-5857 International Passcode: Second Quarter Earnings Leader: Rob Glaser Telephonic replay will be available until 8:00 p.m. (Eastern), Aug. 13, 2009. Dial In: 866-873-2049 Domestic 402-220-5369 International RNWK-F For More Information Contact Press: Bill Hankes, (206) 892-6614, bhankes@real.com Financial: Marj Charlier, (206) 892-6718, mcharlier@real.com About Real Networks

RealNetworks, Inc. delivers digital entertainment services to consumers via PC, portable music player, home entertainment system and mobile phone. Real created the streaming media category in 1995 and has continued to lead the market with pioneering products and services, including: RealPlayer , the first mainstream media player to enable one-click downloading and recording of Internet video; the award-winning Rhapsody digital music service, which delivers more than 1 billion songs per year; RealArcade , one of the largest casual games destinations on the Web; and a variety of mobile entertainment services, such as ringback tones, offered to consumers through leading wireless carriers around the world. RealNetworks' corporate information is located at http://investor.realnetworks.com/.

About Non-GAAP Financial Measures

To supplement RealNetworks' condensed consolidated financial statements presented in accordance with GAAP in this press release, the company also discloses certain non-GAAP financial measures, including adjusted revenue, adjusted EBITDA excluding impairments, adjusted EBITDA, adjusted EBITDA by reporting segment, adjusted cost of revenue and adjusted operating expenses, which management believes provide investors with useful information.

In the financial tables of our earnings press release, RealNetworks has included reconciliations of GAAP net income (loss) to adjusted EBITDA, to adjusted EBITDA excluding impairments, and to adjusted EBITDA by reporting segment; GAAP cost of revenue to adjusted cost of revenue; and GAAP operating expenses to adjusted operating expenses for the relevant periods.

The rationale for management's use of non-GAAP measures is included in the supplementary materials presented with the second quarter earnings materials, available in Exhibit 99.2 ("Information Regarding Non-GAAP Financial Measures") to the company's report on Form 8-K, which is being submitted today to the SEC.

Forward-Looking Statements: This press release contains forward-looking statements that involve risks and uncertainties, including statements relating to Real's current expectations for future revenue and other financial results, future success of Real's new products, continued weakness of the economy, and future trends in consumer and corporate infrastructure spending and online advertising. All statements contained in this press release that do not relate to matters of historical fact should be considered forward-looking statements. Actual results may differ materially from the results predicted. Factors that could cause actual results to differ from the results predicted include: fluctuations in foreign currencies; the potential outcomes and effects of claims and legal proceedings, including those relating to Real DVD and the ongoing VeriSign arbitration, on Real's business prospects, financial condition or results of operations; development and consumer acceptance of legal online music distribution services generally and RealNetworks' content services in particular because these are relatively new and unproven business models and markets; the potential that Real will be unable to continue to enter into commercially attractive agreements with third parties for the provision of compelling content for its subscription service offerings and the distribution of Real's carrier application services; the emergence of new entrants and competition in the market for digital media subscription offerings, online music sales and downloadable casual games; competitive risks, including the emergence or growth of competing technologies, products and services; risks associated with business acquisitions and the introduction of new products and services; changes in consumer and advertising spending in response to disruptions in the global financial markets; risks inherent in strategic relationships, especially with competitors, and with respect to technology and service integration efforts; and risks relating to the ability of Real's strategic partners to generate subscribers for Real's digital content services. More information about potential risk factors that could affect RealNetworks' business and financial results is included in RealNetworks' annual report on Form 10-K for the most recent year ended December 31, its quarterly reports on Form 10-Q and in other reports and documents filed by RealNetworks from time to time with the Securities and Exchange Commission. The preparation of RealNetworks' financial statements and forward-looking financial guidance requires the company to make estimates and assumptions that affect the reported amount of assets and liabilities and the reported amounts of revenues and expenses during the reported period. Actual results may differ materially from these estimates under different assumptions or conditions. The company assumes no obligation to update any forward-looking statements or information, which are in effect as of their respective dates.

RealNetworks, Rhapsody, RealPlayer and RealArcade are trademarks or registered trademarks of RealNetworks, Inc. or its subsidiaries. All other companies or products listed herein are trademarks or registered trademarks of their respective owners.

RealNetworks, Inc. and Subsidiaries Condensed Consolidated Statements of Operations (Unaudited) Quarters Ended Six Months Ended June 30, June 30, -------------- --------------- 2009 2008 2009 2008 ---- ---- ---- ---- (in thousands, except per share data) Net revenue $135,725 $152,648 $276,498 $300,211 Cost of revenue 55,614 55,645 111,635 111,038 ------ ------ ------- ------- Gross profit 80,111 97,003 164,863 189,173 ------ ------ ------- ------- Operating expenses: Research and development 28,923 29,065 57,482 54,071 Sales and marketing 42,273 53,054 85,958 106,650 Advertising with related party (A) 6,865 9,240 14,288 16,580 General and administrative 19,338 18,337 42,169 35,421 Impairment of goodwill 175,583 - 175,583 - Restructuring and other charges - - 794 686 --- --- --- --- Total operating expenses 272,982 109,696 376,274 213,408 ------- ------- ------- ------- Operating loss (192,871) (12,693) (211,411) (24,235) -------- ------- -------- ------- Other income (expenses): Interest income, net 754 3,375 1,937 8,333 Equity in net loss of investments (269) (107) (924) (198) Gain on sale of equity investments, net 68 222 205 222 Gain on sale of interest in Rhapsody America (B) - 3,371 - 7,097 Other income (expense), net (449) 50 406 818 ---- --- --- --- Total other income (expense), net 104 6,911 1,624 16,272 --- ----- ----- ------ Loss before income taxes (192,767) (5,782) (209,787) (7,963) Income taxes (1,210) (3,700) (2,759) (7,708) ------ ------ ------ ------ Net loss (193,977) (9,482) (212,546) (15,671) Net loss attributable to the noncontrolling interest in Rhapsody America ( C ) 5,648 8,177 12,081 16,792 ----- ----- ------ ------ Net income (loss) attributable to common shareholders $(188,329) $(1,305) $(200,465) $1,121 ========= ======= ========= ====== Basic net income (loss) per share available to common shareholders $(1.40) $(0.01) $(1.51) $0.01 Diluted net income (loss) per share available to common shareholders $(1.40) $(0.01) $(1.51) $0.01 Shares used to compute basic net income (loss) per share available to common shareholders 134,420 142,905 134,394 142,946 Shares used to compute diluted net income (loss) per share available to common shareholders 134,420 142,905 134,394 156,000 (A) Consists of advertising purchased by Rhapsody America from MTV Networks (MTVN). MTVN has a 49% ownership interest in Rhapsody America. (B) Consists of gains realized from MTVN's note payments to Rhapsody America. Effective January 1, 2009, the Company adopted SFAS No. 160 Non-controlling Interests in Consolidated Financial Statements, an amendment to ARB No. 51 (SFAS 160) which requires the appreciation of gains on the sale of non-controlling interest to be recorded as an equity transaction. ( C ) Noncontrolling interest in Rhapsody America reflects MTVN's 49% ownership share in the losses of Rhapsody America. RealNetworks, Inc. and Subsidiaries Condensed Consolidated Balance Sheets (Unaudited) June 30, December 31, 2009 2008 ---- ---- (in thousands) ASSETS Current assets: Cash and cash equivalents $197,492 $232,968 Short-term investments 165,266 137,766 Trade accounts receivable, net 64,413 70,201 Deferred costs, current portion 6,111 4,026 Prepaid expenses and other current assets 36,699 34,599 ------ ------ Total current assets 469,981 479,560 ------- ------- Equipment, software, and leasehold improvements, at cost: Equipment and software 143,374 135,788 Leasehold improvements 30,954 30,719 ------ ------ Total equipment, software, and leasehold improvements 174,328 166,507 Less accumulated depreciation and amortization 114,109 103,500 ------- ------- Net equipment, software, and leasehold improvements 60,219 63,007 Restricted cash equivalents and investments 14,600 14,742 Equity investments 22,384 18,582 Other assets 3,782 3,775 Deferred costs, non-current portion 6,980 6,120 Deferred tax assets, net, non-current portion 9,442 9,236 Other intangible assets, net 14,268 18,727 Goodwill - 175,264 --- ------- Total assets $601,656 $789,013 ======== ======== LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Accounts payable $34,666 $36,575 Accrued and other liabilities 117,445 118,688 Deferred revenue, current portion 39,816 39,835 Related party payable (A) 6,930 13,155 Accrued loss on excess office facilities, current portion 4,214 4,317 ----- ----- Total current liabilities 203,071 212,570 ------- ------- Deferred revenue, non-current portion 2,003 1,961 Accrued loss on excess office facilities, non- current portion 1,010 2,893 Deferred rent 4,564 4,614 Deferred tax liabilities, net, non-current portion 811 1,379 Other long-term liabilities 11,475 11,660 ------ ------ Total liabilities 222,934 235,077 ------- ------- Noncontrolling interest in Rhapsody America (B) 3,627 378 Shareholders' equity 375,095 553,558 ------- ------- Total liabilities and shareholders' equity $601,656 $789,013 ======== ======== (A) Related party payable reflects amounts owed to MTVN. (B) Noncontrolling interest in Rhapsody America reflects MTVN's 49% ownership interest in the net assets of Rhapsody America. RealNetworks, Inc. and Subsidiaries Condensed Consolidated Statements of Cash Flows (Unaudited) Six Months Ended June 30, ----------------- 2009 2008 ---- ---- (in thousands) Cash flows from operating activities: Net loss $(212,546) $(15,671) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and amortization 15,522 25,701 Stock-based compensation 10,818 11,520 (Gain) loss on disposal of equipment, software, and leasehold improvements (34) 182 Equity in net loss of investments 924 198 Gain on sale of equity investment, net (205) (222) Excess tax benefit from stock option exercises (9) (88) Impairment of goodwill 175,583 - Accrued restructuring and other charges (3,675) - Accrued loss on excess office facilities (1,986) (1,592) Deferred income taxes, net (682) (2,138) Gain on sale of interest in Rhapsody America - (7,097) Other 24 89 Net change in certain operating assets and liabilities, net of acquisitions (1,975) (39,160) ------ ------- Net cash used in operating activities (18,241) (28,278) ------- ------- Cash flows from investing activities: Purchases of equipment, software, and leasehold improvements (7,608) (15,231) Purchases of short-term investments (66,192) (95,671) Proceeds from sales and maturities of short- term investments 38,692 68,741 Proceeds from the sales of equity investments 205 1,225 Purchases of equity investments (2,000) - Payment of acquisition costs, net of cash acquired (3,154) (10,164) Decrease in restricted cash equivalents and investments, net 141 839 --- --- Net cash used in investing activities (39,916) (50,261) ------- ------- Cash flows from financing activities: Net proceeds from sales of common stock under employee stock purchase plan and exercise of stock options 819 6,041 Net proceeds from sales of interest in Rhapsody America 19,537 14,607 Excess tax benefit from stock option exercises 9 88 Repurchases of common stock - (681) --- ---- Net cash provided by financing activities 20,365 20,055 ------ ------ Effect of exchange rate changes on cash and cash equivalents 2,316 (2,408) ----- ------ Net increase (decrease) in cash and cash equivalents (35,476) (60,892) Cash and cash equivalents, beginning of period 232,968 476,697 ------- ------- Cash and cash equivalents, end of period $197,492 $415,805 ======== ======== RealNetworks, Inc. and Subsidiaries Supplemental Financial Information (Unaudited) 2009 2008 ---- ---- Q2 Q1 Q4 Q3 Q2 Q1 ---- ---- ---- ---- ---- ---- (in thousands) Net Revenue by Line of Business: Consumer products and services (A) $89,517 $97,194 $100,282 $100,322 $101,353 $96,286 Technology products and solutions (B) 46,208 43,579 52,362 51,633 51,295 51,277 ------ ------ ------ ------ ------ ------ Total net revenue $135,725 $140,773 $152,644 $151,955 $152,648 $147,563 ======== ======== ======== ======== ======== ======== Consumer Products and Services: Subscriptions( C ) $54,446 $59,052 $57,853 $57,776 $55,658 $55,193 Media properties (D) 14,753 15,536 18,337 19,946 23,472 18,702 E-commerce and other (E) 20,318 22,606 24,092 22,600 22,223 22,391 ------ ------ ------ ------ ------ ------ Total consumer products and services revenue $89,517 $97,194 $100,282 $100,322 $101,353 $96,286 ======= ======= ======== ======== ======== ======= Consumer Products and Services: Music (F) $40,452 $44,053 $43,882 $41,591 $37,170 $38,079 Media software and services (G) 19,291 20,318 22,695 24,531 29,238 26,409 Games (H) 29,774 32,823 33,705 34,200 34,945 31,798 ------ ------ ------ ------ ------ ------ Total consumer products and services revenue $89,517 $97,194 $100,282 $100,322 $101,353 $96,286 ======= ======= ======== ======== ======== ======= Net Revenue by Geography: United States $90,685 $96,666 $101,369 $102,363 $100,898 $99,169 Rest of world 45,040 44,107 51,275 49,592 51,750 48,394 ------ ------ ------ ------ ------ ------ Total net revenue $135,725 $140,773 $152,644 $151,955 $152,648 $147,563 ======== ======== ======== ======== ======== ======== Subscribers (presented as greater than) *: Total subscribers (I) 37,700 36,450 34,100 32,650 35,000 32,200 Technology products and solutions application services subscribers (J) 36,300 33,850 31,500 29,950 32,450 29,500 Music subscribers: Consumer music subscribers: Rhapsody subscribers 750 800 775 750 600 600 Radio subscribers 75 1,200 1,225 1,250 1,225 1,275 -- ----- ----- ----- ----- ----- Total consumer music subscribers 825 2,000 2,000 2,000 1,825 1,875 Technology products and solutions application services music subscribers (K) 975 900 875 850 800 800 --- --- --- --- --- --- Total Music Subscribers** 1,800 2,900 2,875 2,850 2,625 2,675 * Total music subscribers includes subscribers from our technology products and solutions application subscription services, such as music- on-demand, as well as our consumer music services, such as Rhapsody and Premium Radio. Although music-on-demand subscribers are included in the technology products and solutions application services subscribers and total music subscribers, these subscribers are only counted once as part of our total subscribers. ** Prior periods have been changed to reflect current period presentation. Totals may not equal due to rounding convention. (A) Revenue is derived from consumer digital media subscription services, RealPlayer Plus and related products, sales and distribution of third party software products, content such as games and music and advertising. (B) The Technology Products and Solutions (TPS) segment includes revenue and related costs from: sales of ringback tones, music-on-demand, video-on-demand, messaging, and information services; sales of media delivery system software, including Helix system software and related authoring and publishing tools, both directly to customers and indirectly through original equipment manufacturer channels; support and maintenance services sold to customers who purchase software products; broadcast hosting services; and consulting and professional services that are offered to customers. ( C ) Revenue is derived from consumer digital media subscription services including: SuperPass, RadioPass, Rhapsody, GamePass and FunPass. (D) Revenue is derived from advertising and through the distribution of third party products. (E) Revenue is derived from RealPlayer Plus and related products, sales of third party software products, and content such as games and music. (F) The Music segment primarily includes revenue and related costs from: Rhapsody America's Rhapsody and Radiopass subscription services; sales of digital music content through the Rhapsody service and the RealPlayer music store; and advertising from music websites. (G) The Media Software and Services (MSS) segment primarily includes revenue and related costs from: the SuperPass premium subscription service; RealPlayer Plus and related products; sales and distribution of third-party software products; and all advertising other than that related directly to our Music and Games businesses. (H) The Games segment primarily includes revenue and related costs from: the sale of individual games on our websites RealArcade.com, GameHouse.com and Zylom.com; the sales of games subscription services; advertising through our games websites; the sale of games through the syndication on partner sites, and sales of games through wireless carriers. (I) Total subscribers include technology products and solutions application services and consumer subscription services including: ringback tones, music-on-demand, video-on-demand, Rhapsody, Rhapsody-to-Go, RadioPass, SuperPass, and GamePass. (J) Technology products and solutions application service subscribers include: ringback tones, music-on-demand and video-on-demand. (K) Technology products and solutions application services music subscribers include music-on-demand. RealNetworks, Inc. and Subsidiaries Supplemental Financial Information (Unaudited) Reconciliation of GAAP net income (loss) attributable to common shareholders to adjusted EBITDA excluding impairments and adjusted EBITDA is as follows: Quarters Ended ---------------- June 30, March 31, Dec. 31, Sept. 30, June 30, March 31, 2009 2009 2008 2008 2008 2008 ---- ---- ---- ---- ---- ---- (in thousands) Net income (loss) attributable to common shareholders $(188,329) $(12,136) $(240,499) $(4,500) $(1,305) $2,426 Interest income, net (754) (1,183) (2,255) (2,865) (3,375) (4,958) Stock-based compensation 5,596 5,222 6,056 5,955 6,031 5,489 Loss (gain) on equity investments, net (68) (137) 12 - (222) - Conversion of WiderThan stock options to a cash equivalent 3 17 11 16 26 89 Depreciation and amortization (net of noncontrolling interest effect) 5,815 5,726 5,784 6,165 6,186 6,282 Acquisitions related intangible asset amortization (net of noncontrolling interest effect) 1,649 1,768 1,872 5,752 6,171 6,315 Impairment of goodwill and long-lived assets 175,583 - 190,347 - - - Impairment of deferred costs and prepaid royalties - - 19,666 - - - Restructuring and other charges - 794 6,147 - - 686 Pro forma gain on sale of interest in Rhapsody America 3,444 4,010 6,568 - - - Expenses related to antitrust litigation - - 179 174 202 202 Income taxes 1,210 1,549 17,392 728 3,700 4,008 ----- ----- ------ --- ----- ----- Adjusted EBITDA excluding impairments $4,149 $5,630 $11,280 $11,425 $17,414 $20,539 ------ ------ ------- ------- ------- ------- Impairments: Impairment of deferred costs and prepaid royalties - - (19,666) - - - Restructuring and other charges - (794) (6,147) - - (686) --- ---- ------ --- --- --- Adjusted EBITDA $4,149 $4,836 $(14,533) $11,425 $17,414 $19,853 ====== ====== ======== ======= ======= ======= RealNetworks, Inc. and Subsidiaries Segment Results of Operations (Unaudited) Quarter Ended June 30, 2009 --------------------------- Grand Music (A) MSS (B) Games( C ) TPS (D) Other Total --------- ------- -------- ------- ----- ------ (in thousands) Net revenue $40,452 $19,291 $29,774 $46,208 $- $135,725 Cost of revenue 24,945 2,590 8,801 19,278 - 55,614 ------ ----- ----- ------ --- ------ Gross profit 15,507 16,701 20,973 26,930 - 80,111 ------ ------ ------ ------ --- ------ Gross margin 38% 87% 70% 58% - 59% Operating expenses: Advertising with related party 6,865 - - - - 6,865 Impairment of goodwill 37,029 46,776 41,247 50,531 - 175,583 Other operating expenses 19,808 18,417 26,761 25,512 36 90,534 ------ ------ ------ ------ --- ------ Total operating expenses 63,702 65,193 68,008 76,043 36 272,982 ------ ------ ------ ------ --- ------- Income (loss) from operations (48,195) (48,492) (47,035) (49,113) (36) (192,871) ------- ------- ------- ------- --- -------- Other income (expenses): Interest income, net - - - - 754 754 Equity in net loss of investments - - - - (269) (269) Gain on sale of equity investments, net - - - - 68 68 Other income (expenses), net - - - - (449) (449) --- --- --- --- ---- ---- Total other income (expenses), net - - - - 104 104 --- --- --- --- --- --- Income (loss) before income taxes (48,195) (48,492) (47,035) (49,113) 68 (192,767) Income taxes - - - - (1,210) (1,210) --- --- --- --- ------ ------ Net income (loss) (48,195) (48,492) (47,035) (49,113) (1,142) (193,977) Net income (loss) attributable to noncontrolling interest in Rhapsody America 5,648 - - - - 5,648 ----- --- --- --- --- ----- Net income (loss) attributable to common shareholders $(42,547) $(48,492) $(47,035) $(49,113) $(1,142) $(188,329) ======== ======== ======== ======== ======= ========= Reconciliation of segment GAAP net income (loss) attributable to common shareholders to segment adjusted EBITDA is as follows: Net income (loss) attributable to common shareholders $(42,547) $(48,492) $(47,035) $(49,113) $(1,142) $(188,329) Income taxes - - - - 1,210 1,210 Interest income, net - - - - (754) (754) Stock-based compensation 738 798 1,596 2,464 - 5,596 Conversion of WiderThan stock options to a cash equivalent - - - 3 - 3 Acquisitions related intangible asset amortization (F) 278 - 101 1,270 - 1,649 Pro forma gain on sale of interest in Rhapsody America 3,444 - - - - 3,444 Impairment of goodwill 37,029 46,776 41,247 50,531 - 175,583 Gain on sale of equity investments, net - - - - (68) (68) Depreciation and amortization (F) 1,071 856 1,041 2,847 - 5,815 ----- --- ----- ----- --- ----- Adjusted EBITDA $13 $(62) $(3,050) $8,002 $(754) $4,149 === ==== ======= ====== ===== ====== Quarter Ended June 30, 2008 --------------------------- Grand Music (A) MSS (B) Games( C ) TPS (D) Other Total --------- ------- -------- ------- ----- ------ (in thousands) Net revenue $37,170 $29,238 $34,945 $51,295 - $152,648 Cost of revenue 20,693 3,707 10,655 20,590 - 55,645 ------ ----- ------ ------ --- ------ Gross profit 16,477 25,531 24,290 30,705 - 97,003 ------ ------ ------ ------ --- ------ Gross margin 44% 87% 70% 60% - 64% Operating expenses: Advertising with related party 9,240 - - - - 9,240 Other operating expenses 23,412 15,605 28,424 32,778 237 100,456 ------ ------ ------ ------ --- ------- Total operating expenses 32,652 15,605 28,424 32,778 237 109,696 ------ ------ ------ ------ --- ------- Income (loss) from operations (16,175) 9,926 (4,134) (2,073) (237) (12,693) ------- ----- ------ ------ ---- ------- Other income (expenses): Interest income, net - - - - 3,375 3,375 Equity in net loss of investments - - - - (107) (107) Gain on sale of equity investments, net - - - - 222 222 Gain on sale of interest in Rhapsody America (E) 3,371 - - - - 3,371 Other income (expenses), net - - - - 50 50 --- --- --- --- --- --- Total other income (expenses), net 3,371 - - - 3,540 6,911 ----- --- --- --- ----- ----- Income (loss) before income taxes (12,804) 9,926 (4,134) (2,073) 3,303 (5,782) Income taxes - - - - (3,700) (3,700) --- --- --- --- ------ ------ Net income (loss) (12,804) 9,926 (4,134) (2,073) (397) (9,482) Net income (loss) attributable to noncontrolling interest in Rhapsody America 8,177 - - - - 8,177 ----- --- --- --- --- ----- Net income (loss) attributable to common shareholders $(4,627) $9,926 $(4,134) $(2,073) $(397) $(1,305) ======= ====== ======= ======= ===== ======= Reconciliation of segment GAAP net income (loss) attributable to common shareholders to segment adjusted EBITDA is as follows: Net income (loss) attributable to common shareholders $(4,627) $9,926 $(4,134) $(2,073) $(397) $(1,305) Income taxes - - - - 3,700 3,700 Interest income, net - - - - (3,375) (3,375) Stock-based compensation 1,089 801 1,530 2,611 - 6,031 Conversion of WiderThan stock options to a cash equivalent - - - 26 - 26 Acquisitions related intangible asset amortization (F) 384 - 914 4,873 - 6,171 Gain on sale of equity investments, net - - - - (222) (222) Depreciation and amortization (F) 1,262 897 918 3,109 - 6,186 Expenses (benefit) related to antitrust litigation: Income - - - - - - Expenses - - - - 202 202 Charitable contributions - - - - - - --- --- --- --- --- --- Adjusted EBITDA $(1,892) $11,624 $(772) $8,546 $(92) $17,414 ======= ======= ===== ====== ==== ======= Note: Cost of revenue and operating expenses of the segments shown above include costs directly attributable to those segments and an allocation of general and administrative and other common or shared costs. (A) The Music segment primarily includes revenue and related costs from: Rhapsody America's Rhapsody and Radiopass subscription services; sales of digital music content through the Rhapsody service and the RealPlayer music store; and advertising from music websites. (B) The Media Software and Services (MSS) segment primarily includes revenue and related costs from: the SuperPass premium subscription service; RealPlayer Plus and related products; sales and distribution of third-party software products; and all advertising other than that related directly to our Music and Games businesses. ( C ) The Games segment primarily includes revenue and related costs from: the sale of individual games on our websites RealArcade.com, GameHouse.com and Zylom.com; the sales of games subscription services; advertising through our games websites; the sale of games through the syndication on partner sites, and sales of games through wireless carriers. (D) The Technology Products and Solutions (TPS) segment includes revenue and related costs from: sales of ringback tones, music-on-demand, video-on-demand, messaging, and information services; sales of media delivery system software, including Helix system software and related authoring and publishing tools, both directly to customers and indirectly through original equipment manufacturer channels; support and maintenance services sold to customers who purchase software products; broadcast hosting services; and consulting and professional services that are offered to customers. (E) Comprises gains realized from MTVN's note payments to Rhapsody America. Effective January 1, 2009, the Company adopted SFAS 160 which requires the appreciation of gains on the sale of non- controlling interest to be recorded as an equity transaction. (F) Net of noncontrolling interest effect. RealNetworks, Inc. and Subsidiaries Supplemental Financial Information (Unaudited) Quarter Ended June 30, 2009 ----------------------------- Acquis- WiderThan itions Options Related Converted Anti- Stock- Intangible to a trust Based Asset Cash Litiga- As Compen- Amorti- Equiv- tion Reported sation zation (A) alent Related Adjusted ----------------------------------------------------------- (in thousands) Expenses in accordance with GAAP Cost of revenue $55,614 $(363) $(553) $- $- $54,698 Operating expenses: Research and development $28,923 $(2,234) $- $(3) $- $26,686 Sales and marketing 42,273 (1,199) (1,096) - - 39,978 General and administrative 19,338 (1,800) - - - 17,538 ------ ------ --- --- --- ------ Adjusted operating expenses, net $90,534 $(5,233) $(1,096) $(3) $- $84,202 ======= ======= ======= === === ======= Quarter Ended June 30, 2008 ----------------------------- Acquis- WiderThan itions Options Related Converted Anti- Stock- Intangible to a trust Based Asset Cash Litiga- As Compen- Amorti- Equiv- tion Reported sation zation (A) alent Related Adjusted ----------------------------------------------------------- (in thousands) Expenses in accordance with GAAP Cost of revenue $55,645 $(662) $(2,282) $(1) $- $52,700 Operating expenses: Research and development $29,065 $(2,146) $- $- $- $26,919 Sales and marketing 53,054 (1,433) (3,889) (7) - 47,725 General and administrative 18,337 (1,790) - (18) (202) 16,327 ------ ------ --- --- ---- ------ Adjusted operating expenses, net $100,456 $(5,369) $(3,889) $(25) $(202) $90,971 ======== ======= ======= ==== ===== ======= Six Months Ended June 30, 2009 -------------------------------- Acquis- WiderThan itions Options Related Converted Anti- Stock- Intangible to a trust Based Asset Cash Litiga- As Compen- Amorti- Equiv- tion Reported sation zation (A) alent Related Adjusted ----------------------------------------------------------- (in thousands) Expenses in accordance with GAAP Cost of revenue $111,635 $(993) $(1,099) $(1) $- $109,542 Operating expenses: Research and development $57,482 $(4,058) $- $(8) $- $53,416 Sales and marketing 85,958 (2,265) (2,318) (11) - 81,364 General and administrative 42,169 (3,502) - - - 38,667 ------ ------ --- --- --- ------ Adjusted operating expenses, net $185,609 $(9,825) $(2,318) $(19) $- $173,447 ======== ======= ======= ==== === ======== Six Months Ended June 30, 2008 -------------------------------- Acquis- WiderThan itions Options Related Converted Anti- Stock- Intangible to a trust Based Asset Cash Litiga- As Compen- Amorti- Equiv- tion Reported sation zation (A) alent Related Adjusted ----------------------------------------------------------- (in thousands) Expenses in accordance with GAAP Cost of revenue $111,038 $(896) $(4,597) $(22) $- $105,523 Operating expenses: Research and development $54,071 $(4,059) $- $(46) $- $49,966 Sales and marketing 106,650 (3,341) (7,889) (29) - 95,391 General and administrative 35,421 (3,224) - (18) (404) 31,775 ------ ------ --- --- ---- ------ Adjusted operating expenses, net $196,142 $(10,624) $(7,889) $(93) $(404) $177,132 ======== ======= ======= ==== ===== ======== (A) - Net of noncontrolling interest effect. RealNetworks, Inc. and Subsidiaries Earnings Per Share Reconciliation (Unaudited) Quarters Ended Six Months Ended June 30, June 30, --------------- ---------------- 2009 2008 2009 2008 ---- ---- ---- ---- (in thousands, except per share data) Net income (loss) attributable to common shareholders $(188,329) $(1,305) $(200,465) $1,121 Less accretion of MTVN's preferred return in Rhapsody America (416) - (1,850) - ---- --- ------ --- Net income (loss) available to common shareholders $(188,745) $(1,305) $(202,315) $1,121 ========= ======= ========= ====== Shares used to compute basic net income (loss) per share available to common shareholders 134,420 142,905 134,394 142,946 Dilutive potential common shares: Stock options and restricted stock - - - 2,304 Convertible debt - - - 10,750 --- --- --- ------ Shares used to compute diluted net income (loss) per share available to common shareholders 134,420 142,905 134,394 156,000 Basic net income (loss) per share available to common shareholders $(1.40) $(0.01) $(1.51) $0.01 Diluted net income (loss) per share available to common shareholders $(1.40) $(0.01) $(1.51) $0.01

RealNetworks, Inc.

CONTACT: Press, Bill Hankes, +1-206-892-6614, bhankes@real.com, or
Financial, Marj Charlier, +1-206-892-6718, mcharlier@real.com, both of
RealNetworks, Inc.

Web Site: http://www.realnetworks.com/

WebMD Announces Second Quarter Financial ResultsTotal Revenue Increased 15%; Advertising Revenue Increased 18% WebMD Achieves Strong Traffic Growth: Unique Monthly Users Grow 24% to 59.8 Million and Quarterly Page Views Grow 31% to 1.4 Billion

NEW YORK, July 30 /PRNewswire-FirstCall/ -- WebMD Health Corp. today announced financial results for the three months ended June 30, 2009.

"We are pleased to deliver strong results again this quarter. WebMD's advertising revenue grew by 18% as we see continuing demand from both pharmaceutical as well as consumer products companies in the health and wellness markets," said Wayne Gattinella, President and CEO. "I am enthusiastic about the momentum we are gaining in our business as our customers are shifting more of their marketing spend online."

Financial Summary

Revenue for the second quarter was $98.6 million, compared to $86.0 million in the prior year period, an increase of 15%. Earnings before interest, taxes, non-cash and other items ("Adjusted EBITDA") for the second quarter was $23.2 million or $0.40 per share, compared to $18.4 million or $0.31 per share in the prior year period, an increase of 26%.

Income from continuing operations for the second quarter was $7.0 million or $0.12 per share, compared to $5.7 million or $0.10 per share in the prior year period. Loss from discontinued operations was $(4.9) million in the second quarter, compared to income from discontinued operations of $663 thousand in the prior year. Net income for the second quarter was $2.1 million or $0.04 per share, compared to $6.4 million or $0.11 per share in the prior year period.

WebMD's financial results present Little Blue Book, its print directory business, as discontinued operations for current and prior periods reflecting the ongoing process to divest Little Blue Book. The loss from discontinued operations and net income for the second quarter of 2009 include a non-cash, after-tax impairment charge of $5 million or $0.09 per share related to the carrying value of WebMD's Little Blue Book physician directory business.

WebMD had approximately $373 million in cash and investments at June 30, 2009.

Operating Highlights

Public portal advertising and sponsorship revenue was $76.0 million for the second quarter, compared to $64.1 million in the prior year period, an increase of 18%. Traffic to the WebMD Health Network continued to grow strongly, reaching an average of 59.8 million unique users per month and total traffic of 1.4 billion page views during the second quarter, increases of 24% and 31%, respectively, from a year ago. In the second quarter, 1.6 million continuing medical education (CME) programs were completed on the WebMD Professional Network, an increase of 25% from the prior year period.

Private portal services revenue was $22.6 million for the second quarter compared to $21.9 million in the prior year period, an increase of 4%. The base of large employers and health plans utilizing WebMD's private Health and Benefits portals during the second quarter was 137 as compared to 123 a year ago. During the quarter, WebMD launched integrated platform services for Blue Cross and Blue Shield of Florida, Inc.

Merger with HLTH Corporation

As previously announced, HLTH and WebMD entered into a definitive merger agreement on June 17, 2009. On July 10, 2009, WebMD filed a Registration Statement with the SEC containing a preliminary joint proxy statement/prospectus relating to the merger. HLTH and WebMD have scheduled stockholders meetings for September 25, 2009 to seek the necessary stockholder approvals.

Financial Guidance

WebMD reaffirmed its financial guidance for 2009 today and narrowed the ranges for its anticipated revenue and Adjusted EBITDA by raising the low end of those ranges.

For 2009, WebMD expects: -- Total revenue to be $420 million to $440 million, an increase of 12% to 18% over 2008; -- Adjusted EBITDA to be $110 million to $120 million, an increase of 17% to 28% over 2008; -- Income from continuing operations to be approximately $31 million to $41 million, or $0.51 to $0.66 per share, an increase of 21% to 58% over 2008.

For the quarter ending September 30, 2009, WebMD expects revenue to be in the range of $109 million to $112 million with Adjusted EBITDA representing approximately 28% of revenue. These amounts represent growth of approximately 18% to 19% in public portal advertising and sponsorship revenue and 4% in private portal services revenue. Income from continuing operations is estimated to be 10% of revenue for the third quarter of 2009.

Additional detail is provided in a schedule attached to this release. Analyst and Investor Conference Call

As previously announced, WebMD will hold a conference call with investors and analysts to discuss its second quarter results at 4:45 pm (eastern) today. The call can be accessed at http://www.wbmd.com/ (in the Investor Relations section). A replay of the audio webcast will be available at the same web address.

About WebMD

WebMD Health Corp. is the leading provider of health information services, serving consumers, physicians, healthcare professionals, employers and health plans through our public and private online portals and health-focused publications. WebMD Health Corp. is a subsidiary of HLTH Corporation .

The WebMD Health Network includes WebMD Health, Medscape, MedicineNet, eMedicine, eMedicine Health, RxList and theHeart.org.

All statements contained in this press release and the related analyst and investor conference call, other than statements of historical fact, are forward-looking statements, including those regarding: guidance on WebMD's future financial results and other projections or measures of WebMD's future performance; market opportunities and WebMD's ability to capitalize on them; the benefits expected from new or updated products or services and from other potential sources of additional revenue; expectations regarding the market for WebMD's investments in auction rate securities (ARS); the merger transaction between HLTH and WebMD (the "Merger Transaction"); and the potential sale of Porex by HLTH (the "Potential Sale Transaction"). These statements speak only as of the date of this press release, are based on our current plans and expectations, and involve risks and uncertainties that could cause actual future events or results to be different than those described in or implied by such forward-looking statements. These risks and uncertainties include those relating to: market acceptance of WebMD's products and services; WebMD's relationships with customers and strategic partners; changes in the markets for ARS; and changes in economic, political or regulatory conditions or other trends affecting the healthcare, Internet and information technology industries. Further information about these matters can be found in our Securities and Exchange Commission filings. In addition, there can be no assurances regarding: whether HLTH and WebMD will be able to complete the Merger Transaction or as to the timing of such transaction; or whether HLTH will be able to complete the Potential Sale Transaction or as to the timing or terms of such transaction. Except as required by applicable law or regulation, we do not undertake any obligation to update our forward-looking statements to reflect future events or circumstances.

This press release, and the accompanying tables, include both financial measures in accordance with accounting principles generally accepted in the United States of America, or GAAP, as well as certain non-GAAP financial measures. The tables attached to this press release include reconciliations of these non-GAAP financial measures to GAAP financial measures. In addition, an "Explanation of Non-GAAP Financial Measures" is attached to this press release as Annex A.

WebMD , Medscape , eMedicine , MedicineNet , RxList , Subimo , Medsite , The Little Blue Book and Summex , are trademarks of WebMD Health Corp. or its subsidiaries.

WEBMD HEALTH CORP. CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except per share data, unaudited) Three Months Six Months Ended Ended June 30, June 30, -------- -------- 2009 2008 2009 2008 ------- ------- ------- ------- Revenue $98,631 $86,004 $188,895 $166,654 Cost of operations 39,229 31,968 75,794 62,895 Sales and marketing 26,797 24,898 54,358 50,047 General and administrative 15,139 14,211 29,865 27,691 Depreciation and amortization 6,804 7,087 13,741 13,759 Interest income 924 2,350 1,899 5,803 Impairment of auction rate securities - - - 27,406 ------- ------- ------- ------- Income (loss) from continuing operations before income tax provision 11,586 10,190 17,036 (9,341) Income tax provision 4,636 4,501 6,847 7,933 ------- ------- ------- ------- Income (loss) from continuing operations 6,950 5,689 10,189 (17,274) (Loss) income from discontinued operations, net of tax (4,867) 663 (5,290) 291 ------- ------- ------- ------- Net income (loss) $2,083 $6,352 $4,899 $(16,983) ======= ======= ======= ======= Basic income (loss) per common share: Income (loss) from continuing operations $0.12 $0.10 $0.18 $(0.30) (Loss) income from discontinued operations (0.08) 0.01 (0.09) 0.01 ------- ------- ------- ------- Net income (loss) $0.04 $0.11 $0.09 $(0.29) ======= ======= ======= ======= Diluted income (loss) per common share: Income (loss) from continuing operations $0.12 $0.10 $0.17 $(0.30) (Loss) income from discontinued operations (0.08) 0.01 (0.09) 0.01 ------- ------- ------- ------- Net income (loss) $0.04 $0.11 $0.08 $(0.29) ======= ======= ======= ======= Weighted-average shares outstanding used in computing basic and diluted net income (loss) per common share: Basic 57,675 57,693 57,625 57,664 ======= ======= ======= ======= Diluted 58,632 59,061 58,370 57,664 ======= ======= ======= ======= WEBMD HEALTH CORP. CONSOLIDATED SUPPLEMENTAL FINANCIAL INFORMATION (In thousands, except per share data, unaudited) Three Months Ended Six Months Ended June 30, June 30, -------- -------- 2009 2008 2009 2008 ---- ---- ---- ---- Revenue Public portal advertising and sponsorship $75,992 $64,138 $143,281 $122,865 Private portal services 22,639 21,866 45,614 43,789 ------- ------- ------- ------- $98,631 $86,004 $188,895 $166,654 ======= ======= ======= ======= Earnings before interest, taxes, non-cash and other items ("Adjusted EBITDA") (a) $23,218 $18,392 $41,906 $34,724 ------- ------- ------- ------- Adjusted EBITDA per basic common share $0.40 $0.32 $0.73 $0.60 ------- ------- ------- ------- Adjusted EBITDA per diluted common share $0.40 $0.31 $0.72 $0.60 ------- ------- ------- ------- Interest, taxes, non-cash and other items (b) Interest income 924 2,350 1,899 5,803 Depreciation and amortization (6,804) (7,087) (13,741) (13,759) Non-cash advertising - - (1,753) (1,558) Non-cash stock-based compensation (5,752) (3,465) (11,275) (7,145) Impairment of auction rate securities - - - (27,406) Income tax provision (4,636) (4,501) (6,847) (7,933) ------- ------- ------- ------- Income (loss) from continuing operations 6,950 5,689 10,189 (17,274) (Loss) income from discontinued operations, net of tax (4,867) 663 (5,290) 291 ------- ------- ------- ------- Net income (loss) $2,083 $6,352 $4,899 $(16,983) ======= ======= ======= ======= Basic income (loss) per common share: Income (loss) from continuing operations $0.12 $0.10 $0.18 $(0.30) (Loss) income from discontinued operations (0.08) 0.01 (0.09) 0.01 ------- ------- ------- ------- Net income (loss) $0.04 $0.11 $0.09 $(0.29) ======= ======= ======= ======= Diluted income (loss) per common share: Income (loss) from continuing operations $0.12 $0.10 $0.17 $(0.30) (Loss) income from discontinued operations (0.08) 0.01 (0.09) 0.01 ------- ------- ------- ------- Net income (loss) $0.04 $0.11 $0.08 $(0.29) ======= ======= ======= ======= Weighted-average shares outstanding used in computing per share amounts: Basic 57,675 57,693 57,625 57,664 ======= ======= ======= ======= Diluted 58,632 59,061 58,370 57,664 ======= ======= ======= ======= (a) See Annex A - Explanation of Non-GAAP Financial Measures (b) Reconciliation of Adjusted EBITDA to net income (loss) WEBMD HEALTH CORP. CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands, unaudited) June 30, 2009 December 31, 2008 ------------- ----------------- ASSETS Current assets: Cash and cash equivalents $246,878 $191,659 Accounts receivable, net 78,674 93,082 Current portion of prepaid advertising - 1,753 Other current assets 11,147 11,358 Assets of discontinued operations 5,111 12,575 ----- ------ Total current assets 341,810 310,427 Investments 126,330 133,563 Property and equipment, net 54,513 54,165 Goodwill 208,967 208,967 Intangible assets, net 22,878 26,237 Other assets 17,956 22,573 ------ ------ $772,454 $755,932 ======== ======== LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accrued expenses $29,273 $31,241 Deferred revenue 86,261 79,613 Due to HLTH 736 427 Liabilities of discontinued operations 792 2,599 --- ----- Total current liabilities 117,062 113,880 Other long-term liabilities 7,803 8,334 Stockholders' equity 647,589 633,718 ------- ------- $772,454 $755,932 ======== ======== WEBMD HEALTH CORP. CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands, unaudited) Six Months Ended June 30, ----------------- 2009 2008 ------- ------- Cash flows from operating activities: Net income (loss) $4,899 $(16,983) Adjustments to reconcile net income (loss) to net cash provided by operating activities: Loss (income) from discontinued operations, net of tax 5,290 (291) Depreciation and amortization 13,741 13,759 Non-cash advertising 1,753 1,558 Non-cash stock-based compensation 11,275 7,145 Deferred and other income taxes 6,545 6,568 Impairment of auction rate securities - 27,406 Changes in operating assets and liabilities: Accounts receivable 14,408 15,249 Other assets (1,139) (1,393) Accrued expenses and other long-term liabilities (2,499) (5,056) Due to HLTH 309 1,246 Deferred revenue 6,648 10,195 ------- ------- Net cash provided by continuing operations 61,230 59,403 Net cash provided by discontinued operations 506 3,355 ------- ------- Net cash provided by operating activities 61,736 62,758 Cash flows from investing activities: Proceeds from maturities and sales of available-for-sale securities 900 41,300 Purchases of available-for-sale securities - (127,900) Purchases of property and equipment (10,833) (6,906) Cash received from sale of business, net of fees 250 1,133 ------- ------- Net cash used in continuing operations (9,683) (92,373) Net cash used in discontinued operations (7) (40) ------- ------- Net cash used in investing activities (9,690) (92,413) Cash flows from financing activities: Proceeds from issuance of common stock 3,173 2,392 ------- ------- Net cash provided by financing activities 3,173 2,392 Net increase (decrease) in cash and cash equivalents 55,219 (27,263) Cash and cash equivalents at beginning of period 191,659 213,753 ------- ------- Cash and cash equivalents at end of period $246,878 $186,490 ======= ======= FINANCIAL GUIDANCE SUMMARY WEBMD HEALTH CORP. 2009 Financial Guidance (in millions, except per share amounts) Year Ending December 31, 2009 Range (c) --------- Revenue $420.0 $440.0 ======= ======= Earnings before interest, taxes, non- cash and other items ("Adjusted EBITDA") (a) $110.0 $120.0 Adjusted EBITDA per diluted common share $1.77 $1.94 ------- ------- Interest, taxes, non-cash and other items (b) Interest income 4.0 4.0 Depreciation and amortization (33.0) (30.0) Non-cash advertising (1.8) (1.8) Non-cash stock-based compensation (26.0) (23.0) Impairment of auction rate securities - - Restructuring - - Income tax provision (21.8) (28.4) ------- ------- Income from continuing operations $31.4 $40.8 ======= ======= Income from continuing operations per common share: Basic $0.53 $0.69 ======= ======= Diluted $0.51 $0.66 ======= ======= Weighted-average shares outstanding used in computing income from continuing operations per common share: Basic 59.0 59.0 Diluted 62.0 62.0 (a) See Annex A - Explanation of Non-GAAP Financial Measures. (b) Reconciliation of Adjusted EBITDA to income from continuing operations. (c) The guidance for the year ending December 31, 2009 has been adjusted to exclude the discontinued operations of the Little Blue Book print directory business. Additional information regarding guidance for third quarter of 2009: - Revenue is forecasted to be approximately $109 to $112 in the quarter ending September 30, 2009 - Adjusted EBITDA as a percentage of revenue is forecasted to be approximately 28% in the quarter ending September 30, 2009 - Income from continuing operations as a percentage of revenue is forecasted to be approximately 10% in the quarter ending September 30, 2009 Additional information regarding full year guidance: - Income tax rate for 2009 is forecasted to be approximately 41% of pretax income. The income tax provision excludes any benefit relating to any reversal in 2009 of the valuation allowance against deferred tax assets. - The distribution of the annual revenue is expected to be approximately 78.5% public portal advertising and sponsorship and 21.5% private portal services. Quarterly revenue distributions may vary from this annual estimate. - Excludes the impact of the pending merger of WebMD and HLTH. ANNEX A Explanation of Non-GAAP Financial Measures (All dollar amounts in thousands)

The accompanying WebMD Health Corp. press release and financial tables include both financial measures in accordance with U.S. generally accepted accounting principles, or GAAP, as well as non-GAAP financial measures. The non-GAAP financial measures represent earnings before interest, taxes, non-cash and other items (which we refer to as "Adjusted EBITDA") and related per share amounts. Adjusted EBITDA should be viewed as supplemental to, and not as an alternative for, "income (loss) from continuing operations" or "net income (loss)" calculated in accordance with GAAP. The tables attached to the accompanying press release include reconciliations of non-GAAP financial measures to GAAP financial measures.

Adjusted EBITDA is used by WebMD's management as an additional measure of WebMD's performance for purposes of business decision-making, including developing budgets, managing expenditures, and evaluating potential acquisitions or divestitures. Period-to-period comparisons of Adjusted EBITDA help WebMD's management identify additional trends in WebMD's financial results that may not be shown solely by period-to-period comparisons of income (loss) from continuing operations or net income (loss). In addition, WebMD uses Adjusted EBITDA in the incentive compensation programs applicable to many of its employees in order to evaluate WebMD's performance. WebMD management recognizes that Adjusted EBITDA has inherent limitations because of the excluded items, particularly those items that are recurring in nature. In order to compensate for those limitations, management also reviews the specific items that are excluded from Adjusted EBITDA, but included in income (loss) from continuing operations or net income (loss), as well as trends in those items. The amounts of those items are set forth, for the applicable periods, in the reconciliations of Adjusted EBITDA to income (loss) from continuing operations or to net income (loss) that accompany our press releases containing non-GAAP financial measures, including the reconciliations contained in the tables attached to the accompanying press release.

WebMD believes that the presentation of Adjusted EBITDA is useful to investors in their analysis of WebMD's results for reasons similar to the reasons why WebMD's management finds it useful and because it helps facilitate investor understanding of decisions made by WebMD's management in light of the performance metrics used in making those decisions. In addition, as more fully described below, WebMD believes that providing Adjusted EBITDA, together with a reconciliation of Adjusted EBITDA to income (loss) from continuing operations or to net income (loss), helps investors make comparisons between WebMD and other companies that may have different capital structures, different effective income tax rates and tax attributes, different capitalized asset values and/or different forms of employee compensation. However, Adjusted EBITDA is intended to provide a supplemental way of comparing WebMD with other public companies and is not intended as a substitute for comparisons based on "income (loss) from continuing operations" or "net income (loss)" calculated in accordance with GAAP. In making any comparisons to other companies, investors need to be aware that companies use different non-GAAP measures to evaluate their financial performance. Investors should pay close attention to the specific definition being used and to the reconciliation between such measures and the corresponding GAAP measures provided by each company under applicable SEC rules.

The following is an explanation of the items excluded by WebMD from Adjusted EBITDA but included in income (loss) from continuing operations:

-- Depreciation and Amortization. Depreciation and amortization expense is a non-cash expense relating to capital expenditures and intangible assets arising from acquisitions that are expensed on a straight-line basis over the estimated useful life of the related assets. WebMD excludes depreciation and amortization expense from Adjusted EBITDA because it believes (i) the amount of such expenses in any specific period may not directly correlate to the underlying performance of WebMD's business operations and (ii) such expenses can vary significantly between periods as a result of new acquisitions and full amortization of previously acquired tangible and intangible assets. Accordingly, WebMD believes this exclusion assists management and investors in making period-to-period comparisons of operating performance. Investors should note that use of tangible and intangible assets contributed to revenue in the periods presented and will contribute to future revenue generation and should also note that such expenses will recur in future periods -- Stock-Based Compensation Expense. Stock-based compensation expense is a non-cash expense arising from the grant of stock-based awards to employees. WebMD believes that excluding the effect of stock-based compensation from Adjusted EBITDA assists management and investors in making period-to-period comparisons in its operating performance because it believes (i) the amount of such expenses in any specific period may not directly correlate to the underlying performance of WebMD's business operations and (ii) such expenses can vary significantly between periods as a result of the timing of grants of new stock-based awards, including grants in connection with acquisitions. Additionally, WebMD believes that excluding stock-based compensation from Adjusted EBITDA assists management and investors in making meaningful comparisons between WebMD's operating performance and the operating performance of other companies that may use different forms of employee compensation or different valuation methodologies for their stock-based compensation. Investors should note that stock-based compensation is a key incentive offered to employees whose efforts contributed to the operating results in the periods presented and are expected to contribute to operating results in future periods. Investors should also note that such expenses will recur in the future. Stock-based compensation expenses included in the Statement of Operations are summarized as follows: Three Months Ended Six Months Ended June 30, June 30, 2009 2008 2009 2008 Non-cash stock-based compensation included in: Cost of operations $(1,555) $(817) $(3,178) $(1,933) Sales and marketing $(2,001) $(1,261) $(3,551) $(2,387) General and administrative $(2,196) $(1,387) $(4,546) $(2,825) (Loss) income from discontinued operations $(43) $(23) $(174) $(55) -- Non-Cash Advertising Expense. This expense relates to the usage of non-cash advertising obtained from News Corporation ("Newscorp") in exchange for equity securities issued by our parent, HLTH Corporation in 2000. The advertising was available only on various Newscorp properties, primarily its television network and cable channels, without any cash cost to WebMD and expired this year. WebMD excludes this expense from Adjusted EBITDA (i) because it is a non-cash expense, (ii) because it is incremental to other non-television cash advertising expense that WebMD otherwise incurs and (iii) to assist management and investors in comparing its operating results over multiple periods. Investors should note that it is likely that WebMD derives some benefit from such advertising. Non-cash advertising expenses included in the Consolidated Statement of Operations in Sales and Marketing expense were $1,753 and $1,558 for the six months ended June 30, 2009 and 2008, respectively. There were no non-cash advertising expenses for the three months ended June 30, 2009 and 2008. -- Interest Income. Interest income is associated with the level of marketable debt securities and other interest bearing accounts in which WebMD invests. Interest income varies over time due to varying levels of securities available for investment. Transactions that WebMD has entered into in recent periods that have impacted securities available for investment include the initial public offering of equity in WebMD and acquisitions of other companies for varying amounts of cash since our initial public offering. Additional financing transactions as well as potential acquisitions that WebMD may enter into in the future could impact the levels and timing of securities available for investment. WebMD excludes interest income from Adjusted EBITDA (i) because it is not directly attributable to the performance of WebMD's business operations and, accordingly, its exclusion assists management and investors in making period-to-period comparisons of operating performance and (ii) to assist management and investors in making comparisons to companies with different capital structures. Investors should note that interest income will recur in future periods. -- Income Tax Provision (Benefit). WebMD maintains a valuation allowance on a portion of its net operating loss carryforwards, the amount of which may change from quarter to quarter based on factors that are not directly related to WebMD's results for the quarter. The valuation allowance is either reversed through the statement of operations or additional paid-in capital. The timing of such reversals has not been consistent and as a result, WebMD's income tax expense can fluctuate significantly from period to period in a manner not directly related to WebMD's operating performance. WebMD excludes the income tax provision (benefit) from Adjusted EBITDA (i) because it believes that the income tax provision (benefit) is not directly attributable to the underlying performance of WebMD's business operations and, accordingly, its exclusion assists management and investors in making period-to-period comparisons of operating performance and (ii) to assist management and investors in making comparisons to companies with different tax attributes. Investors should note that income tax provision (benefit) will recur in future periods. -- Other Items. WebMD engages in other activities and transactions that can impact WebMD's overall income (loss) from continuing operations. WebMD excludes these other items from Adjusted EBITDA when it believes these activities or transactions are not directly attributable to the performance of WebMD's business operations and, accordingly, their exclusion assists management and investors in making period-to-period comparisons of operating performance. Investors should note that these other items may recur in future periods. In the accompanying press release and financial tables, WebMD has excluded loss on the impairment of auction rate securities from Adjusted EBITDA.

WebMD

CONTACT: Investors, Risa Fisher, rfisher@webmd.net, +1-212-624-3817, or
Media, Kate Hahn, khahn@webmd.net, +1-212-624-3760

Web Site: http://www.webmd.com/

Ingram Micro Reports Second Quarter 2009 ResultsGross margins hit highest second-quarter level in 11 years Record cash balance exceeds debt by nearly $1 billion

SANTA ANA, Calif., July 30 /PRNewswire-FirstCall/ -- Ingram Micro Inc. , the world's largest technology distributor, today announced financial results for the second quarter of 2009, ended July 4, 2009.

"The company's focus on return on invested capital, sustainable profitability and productivity has served us well," said Gregory Spierkel, chief executive officer. "We ended the quarter with a record cash balance and the highest second-quarter gross margin in 11 years, providing a solid foundation for the future."

Worldwide sales for the second quarter were $6.58 billion, a 25-percent decrease from $8.82 billion in the prior-year period, primarily attributable to weaker demand caused by the worldwide economic downturn. The translation impact of the relatively weaker foreign currencies had an approximate seven-percentage-point negative effect on the year-over-year comparison. Sequentially, sales declined two percent from the first quarter, which is relatively consistent with historical seasonal norms over the last several years.

Net income for the second quarter was $25.3 million, or $0.15 per diluted share, which includes costs of approximately $0.05 per diluted share related to expense-reduction programs and a goodwill impairment charge. In the 2008 second quarter, net income was $58.9 million, or $0.35 per diluted share, which also included costs related to expense-reduction programs totaling $0.03 per diluted share.

"I continue to be pleased with our performance in this difficult economic environment," added Spierkel. "Since we first experienced the effects of the downturn early last year, we have focused on operational improvements directly within our control - such as managing working capital and expenses, shedding underperforming operations and enhancing gross margins - which are generating visible results. With many of the improvements behind us, we are now in a position to leverage our strong balance sheet and improved infrastructure to begin driving towards pre-recession operating levels."

Additional Second Quarter Highlights

For additional detail regarding the results outlined below, please refer to the financial statements and schedules attached to this news release or visit http://www.ingrammicro.com/.

Regional Sales: -- North American sales were $2.74 billion (41 percent of total revenues), a decrease of 22 percent versus the $3.52 billion reported a year ago, reflecting the impact of the region's weakened economy and the company's focus on more profitable sales opportunities during the quarter. -- Sales in the EMEA region were $2.01 billion (31 percent of total revenues), a decrease of 32 percent compared to the prior-year quarter. The translation impact of the relatively weaker European currencies had an approximate 12-percentage-point negative effect on comparisons to the $2.96 billion in sales reported in 2008. The year-over-year sales decline is primarily attributable to soft demand caused by the weakened European economies, the exit of unprofitable businesses during the prior 12 months and a focus on more profitable sales opportunities. -- Asia-Pacific sales were $1.50 billion (23 percent of total revenues), a decrease of 21 percent versus the $1.90 billion reported in the second quarter of 2008. The translation impact of the relatively weaker regional currencies had an approximate 9-percentage-point negative effect on comparisons to the prior year. The year-over-year decline is primarily attributable to weaker demand caused by the softer regional economies. -- Latin American sales were $322 million (5 percent of total revenues), a decrease of 27 percent compared to the $438 million reported a year ago. The translation impact of the relatively weaker regional currencies had an approximate 13-percentage-point negative effect on comparisons to 2008's second quarter. Weaker economies also dampened sales in most of the region's markets. Gross margin

Gross margin was 5.87 percent, an improvement of 34 basis points compared to the prior-year quarter, driven by the company's recent efforts to shed underperforming businesses, pursue an improved mix of higher-margin accounts and products, control margin leakage and enhance its service-based revenues.

Operating expenses

Total operating expenses were $345.1 million or 5.25 percent of revenues, which included $7.4 million (0.11 percent of revenues) in severance and other costs associated with the company's expense-reduction programs and $2.5 million (or 0.04 percent of revenues) in impairment of goodwill associated with the company's acquisitions in Asia-Pacific during the second quarter. In the year-ago quarter, operating expenses were $394.2 million or 4.47 percent of revenues, which included $7.7 million (0.09 percent of revenues) in expense-reduction program costs. Contributing to the $49.1 million year-over-year decline is the translation effect of weaker foreign currencies, which had an approximate $27 million favorable impact on operating expenses relative to the prior year, as well as the benefit of the company's expense-reduction initiatives implemented over the past five quarters. The increase in operating expenses as a percent of revenues is primarily a result of sales declining at a more rapid pace than expense reductions.

Operating income

Worldwide operating income was $41.0 million or 0.62 percent of revenues, which included a combined charge of $9.9 million (0.15 percent of revenues) in expense-reduction program costs and goodwill impairment, as noted above. In the prior-year quarter, operating income was $93.2 million or 1.06 percent of revenues, which included $7.7 million (0.09 percent of revenues) in expense-reduction program costs.

-- North America operating income was $9.1 million or 0.33 percent of revenues, which included $5.3 million (0.19 percent of revenues) in expense-reduction program costs. In the year-ago quarter, operating income was $44.4 million or 1.26 percent of revenues, which included $0.9 million (0.03 percent of revenues) in expense-reduction program costs. The region's operating income was negatively impacted by revenue declining at a greater rate than expense reductions, as well as losses in the region's consumer electronics units. -- EMEA operating income was $10.2 million or 0.51 percent of revenues, which included $1.5 million (0.07 percent of revenues) in expense-reduction program costs. In the year ago quarter, operating income was $15.7 million or 0.53 percent of revenues, which included $6.8 million (0.23 percent of revenues) in expense-reduction program costs. While weak European economies continue to dampen sales, the region has mitigated the impact on profitability through targeted cost reduction actions, pricing discipline and a focus on a more profitable business mix. -- Asia-Pacific operating income was $22.8 million, or 1.52 percent of revenues, which included $0.5 million (0.04 percent of revenues) in expense-reduction program costs and goodwill impairment of $2.5 million (0.17 percent of revenues), compared to operating income of $32.7 million or 1.72 percent of revenues in the year-ago quarter. The region was able to reduce expenses in advance of the economic downturn, maintaining strong profitability. -- Latin America operating income was $5.2 million, or 1.60 percent of revenues, which includes $0.1 million (0.02 percent of revenues) in expense-reduction program costs. In the year-ago quarter, operating income was $7.2 million or 1.65 percent of revenues. Like the Asia Pacific region, Latin America was able to maintain profitability by adjusting expenses before sales were affected by the weak economy. -- Stock-based compensation expense, which amounted to $6.3 million in the current quarter and $6.7 million in the prior year quarter, is presented as a separate reconciling amount in the company's segment reporting in both periods. As such, these expenses are not included in the regional operating results, but are included in the worldwide operating results. -- Other income and expense for the quarter was $6.7 million versus $10.8 million in the year-ago period, primarily driven by higher net cash levels (cash less debt outstanding) and lower average interest rates. -- The effective tax rate for the quarter was 26 percent, compared to an effective tax rate of 28.5 percent in the year-ago quarter. -- Total depreciation and amortization was $17.3 million. -- Capital expenditures were $15.5 million. Balance Sheet -- The balance of cash and cash equivalents at the end of the quarter was slightly more than $1.3 billion, an increase of $553 million over the year-end balance. -- Total debt was $335 million, a decrease of $144 million from year-end. Debt-to-capitalization was 11 percent versus 15 percent at the end of 2008. -- Inventory was $1.86 billion or 27 days on hand compared to $2.31 billion or 28 days on hand at the end of the year. -- Working capital days were 19, a 3-day improvement compared to year-end 2008 and a 4-day improvement versus the second quarter of last year.

"The continued discipline of our operating units in this environment is a priority," said William Humes, senior executive vice president and chief financial officer. "Despite weak demand, gross margin was at the highest second quarter level since the late 1990s. Our expense-reduction efforts are on track and we're beginning to see some of the benefits of these actions. All our regions remain profitable, with Latin America delivering operating margins close to last year's level. We managed working capital days to near-record low levels, which we expect will return to our normal range of 22 to 26 days in the coming quarters. Our record cash balance exceeds debt by nearly $1 billion, providing the flexibility to pursue a variety of opportunities in the months ahead."

Six-Month Period

For the six months ended July 4, 2009, worldwide sales were $13.32 billion, a 23-percent decrease from the $17.39 billion reported a year ago, reflecting the weaker economic environment and an approximate seven-percentage-point unfavorable translation impact of weaker foreign currencies. Regional sales were $5.51 billion for North America (a 19-percent decrease versus the prior-year period); $4.28 billion for Europe (a decrease of 29 percent); $2.89 billion for Asia-Pacific (a decrease of 22 percent); and $643 million for Latin America (a 24-percent decrease).

Worldwide operating income for the six-month period was $86.2 million, or 0.65 percent of revenues, which included expense-reduction program costs of $21.6 million (approximately 0.16 percent of revenues) and a goodwill impairment charge totaling of $2.5 million (approximately 0.02 percent of revenues). In the year-ago period, operating income was $192.5 million, or 1.11 percent of revenues, which included expense-reduction program costs of $7.7 million (approximately 0.04 percent of revenues).

Six-month net income was $52.8 million, or $0.32 per diluted share, which included expense-reduction program costs and a goodwill impairment charge totaling $17.6 million after tax or $0.11 per diluted share. In the year-ago period, net income was $123.0 million, or $0.71 per diluted share, which included expense-reduction program costs of $5.5 million after tax or $0.03 per diluted share.

Outlook

"Looking to the third quarter," said Spierkel, "we expect the overall demand environment to follow historical seasonal patterns. While we do not anticipate an economic rebound in the near term, our larger regions will begin to leverage some of the benefits of our recent cost-reduction and operational-improvement actions. Our efforts to protect return on invested capital and improve our business mix have delivered industry-leading balance sheet metrics and solid gross-margin performance but have also contributed to the sales decline in recent quarters. We now plan to place a greater emphasis on securing incremental sales while maintaining our focus on operational excellence and profitability.

"In addition, we will continue to see progress on our expense-reduction efforts. Last year's expense-reduction program is realizing benefits of approximately $5 million per quarter, while our current program, which began in the fourth quarter of 2008, has realized about half of the quarterly savings of $25 million to $30 million expected by year-end. Costs-to-date related to the current program are $28.4 million, and we expect total costs to be towards the low end of our previously announced range of $45 million to $65 million, with the remainder incurred by the end of the year.

"While the demand picture is not deteriorating, we believe that the road to recovery will be protracted over a number of quarters as unemployment weighs on the confidence levels of consumers and small businesses. Our customers are fundamentally sound, but they remain understandably cautious until more economic indicators turn positive. We believe we're making the right moves to navigate this recovery period successfully and create a foundation for a more prosperous future."

Conference Call and Webcast

Additional information about Ingram Micro's financial results will be presented in a conference call with presentation slides today at 5 p.m. ET. To listen to the conference call Web cast and view the accompanying presentation slides, visit the company's Web site at http://www.ingrammicro.com/ (Investor Relations section). The conference call is also accessible by telephone at (888) 455-0750 (toll-free within the United States and Canada) or (210) 839-8501 (other countries).

The replay of the conference call with presentation slides will be available for one week at http://www.ingrammicro.com/ (Investor Relations section) or by calling (800) 678-3180 or (402) 220-3063 outside the United States and Canada.

Cautionary Statement for the Purpose of the Safe Harbor Provisions of the Private Securities Litigation Reform Act of 1995

The matters in this press release that are forward-looking statements, including but not limited to statements about economic conditions, capital resources, cost reduction actions, revenues, operating income, margins, expenses, integration costs, operating efficiencies, profitability, market share and rates of return, are based on current management expectations. Certain risks may cause such expectations to not be achieved and, in turn, may have a material adverse effect on Ingram Micro's business, financial condition and results of operations. Ingram Micro disclaims any duty to update any forward-looking statements. Important risk factors that could cause actual results to differ materially from those discussed in the forward-looking statements include, without limitation: (1) difficult conditions in the global economy in general have affected our business and results of operations and these conditions are not expected to improve in the near future and may worsen; (2) changes in our credit rating or other market factors such as continued adverse capital and credit market conditions may significantly affect our ability to meet liquidity needs through reduced access to capital, or it may increase our cost of borrowing; (3) our failure to adequately adapt to economic and industry changes and to manage prolonged contractions could negatively impact our future operating results; (4) if our business does not perform well, we may be required to recognize further impairments of our intangible or other long-lived assets or establish a valuation allowance against our deferred income tax assets, which could adversely affect our results of operations or financial condition; (5) we continually experience intense competition across all markets for our products and services, which may intensify in a more difficult global economy; (6) we operate a global business that exposes us to risks associated with international activities; (7) we have made and expect to continue to make investments in new business strategies and initiatives, including acquisitions and continued enhancements to information systems, processes and procedures and infrastructure on a global basis, which could disrupt our business and have an adverse effect on our operating results; (8) we are dependent on a variety of information systems and a failure of these systems could disrupt our business and harm our reputation and net sales; (9) terminations of a supply or services agreement or a significant change in supplier terms or conditions of sale could negatively affect our operating margins, revenue or the level of capital required to fund our operations; (10) changes in, or interpretations of, tax rules and regulations may adversely affect our effective tax rates or operating margins and we may be required to pay additional tax assessments; (11) we cannot predict with certainty what loss we might incur as a result of other litigation matters and contingencies that we may be involved with from time to time; (12) we may incur material litigation, regulatory or operating costs or expenses, and may be frustrated in our marketing efforts, as a result of new environmental regulations or private intellectual property enforcement disputes; (13) future terrorist or military actions could result in disruption to our operations or loss of assets, in certain markets or globally; (14) the loss of a key executive officer or other key employees, or changes affecting the work force such as government regulations, collective bargaining agreements or the limited availability of qualified personnel, could disrupt operations or increase our cost structure; (15) we face a variety of risks with outsourcing arrangements; (16) changes in accounting rules could adversely affect our future operating results; (17) our quarterly results have fluctuated significantly; and (18) we are dependent on third-party shipping companies for the delivery of our products.

Ingram Micro has instituted in the past and continues to institute changes to its strategies, operations and processes intended to address these risk factors and to mitigate their impact on Ingram Micro's results of operations and financial condition. However, no assurances can be given that Ingram Micro will be successful in these efforts. For a further discussion of significant factors to consider in connection with forward-looking statements concerning Ingram Micro, reference is made to Item 1A Risk Factors of Ingram Micro's Annual Report on Form 10-K for the year ended January 3, 2009; other risks or uncertainties may be detailed from time to time in Ingram Micro's future SEC filings.

About Ingram Micro Inc.

As a vital link in the technology value chain, Ingram Micro creates sales and profitability opportunities for vendors and resellers through unique marketing programs, outsourced logistics services, technical support, financial services, and product aggregation and distribution. The company serves approximately 150 countries and is the only global broad-based IT distributor with operations in Asia. Visit http://www.ingrammicro.com/.

2009 Ingram Micro Inc. All rights reserved. Ingram Micro and the registered Ingram Micro logo are trademarks used under license by Ingram Micro Inc.

Ingram Micro Inc. Consolidated Balance Sheet (Dollars in 000s) (Unaudited) July 4, January 3, 2009 2009 ---------- ---------- ASSETS Current assets: Cash $1,315,771 $763,495 Trade accounts receivable, net 2,835,919 3,179,455 Inventory 1,855,466 2,306,617 Other current assets 352,966 425,270 ---------- ---------- Total current assets 6,360,122 6,674,837 Property and equipment, net 214,230 202,142 Other assets 228,294 206,494 ---------- ---------- Total assets $6,802,646 $7,083,473 ========== ========== LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $3,252,276 $3,427,362 Accrued expenses 386,956 485,573 Current maturities of long-term debt 77,003 121,724 ---------- ---------- Total current liabilities 3,716,235 4,034,659 Long-term debt, less current maturities 257,637 356,664 Other liabilities 57,170 36,305 ---------- ---------- Total liabilities 4,031,042 4,427,628 Stockholders' equity 2,771,604 2,655,845 ---------- ---------- Total liabilities and stockholders' equity $6,802,646 $7,083,473 ========== ========== Ingram Micro Inc. Consolidated Statement of Income (Dollars in 000s, except per share data) (Unaudited) Thirteen Weeks Ended ------------------------------ July 4, 2009 June 28, 2008 ------------ ------------- Net sales $6,578,598 $8,816,615 Cost of sales 6,192,493 8,329,193 ------------ ------------- Gross profit 386,105 487,422 ------------ ------------- Operating expenses: Selling, general and administrative 336,288 (a) 387,578 (a) Impairment of goodwill 2,490 (a) - Reorganization costs 6,334 (a) 6,613 (a) ------------ ------------- 345,112 394,191 ------------ ------------- Income from operations 40,993 93,231 Interest and other 6,745 10,755 ------------ ------------- Income before income taxes 34,248 82,476 Provision for income taxes 8,904 23,541 ------------ ------------- Net income $25,344 $58,935 ============ ============= Diluted earnings per share $0.15 $0.35 ============ ============= Diluted weighted average shares outstanding 164,888,168 170,239,703 ============ ============= (a) See related footnotes on the succeeding schedule of supplementary information for the thirteen weeks ended July 4, 2009 and June 28, 2008. Ingram Micro Inc. Consolidated Statement of Income (Dollars in 000s, except per share data) (Unaudited) Twenty-six Weeks Ended ------------------------------ July 4, 2009 June 28, 2008 ------------ ------------- Net sales $13,323,682 $17,393,932 Cost of sales 12,556,573 16,421,003 ------------ ------------- Gross profit 767,109 972,929 ------------ ------------- Operating expenses: Selling, general and administrative 658,260 (a) 773,801 (a) Impairment of goodwill 2,490 (a) - Reorganization costs 20,120 (a) 6,613 (a) ------------ ------------- 680,870 780,414 ------------ ------------- Income from operations 86,239 192,515 Interest and other 14,366 23,478 ------------ ------------- Income before income taxes 71,873 169,037 Provision for income taxes 19,063 46,047 ------------ ------------- Net income $52,810 $122,990 ============ ============= Diluted earnings per share $0.32 $0.71 ============ ============= Diluted weighted average shares outstanding 163,537,398 172,343,947 ============ ============= (a) See related footnotes on the succeeding schedule of supplementary information for the twenty-six weeks ended July 4, 2009 and June 28, 2008. Ingram Micro Inc. Supplementary Information Income from Operations (Dollars in 000s) (Unaudited) Thirteen Weeks Ended July 4, 2009 -------------------------------------- Operating Operating Net Sales Income Margin ---------- ---------- --------- North America $2,743,815 $9,121 (a) 0.33% EMEA 2,011,605 10,228 (a) 0.51% Asia-Pacific 1,501,178 22,794 (a)(b) 1.52% Latin America 322,000 5,162 (a) 1.60% Reconciling amount (stock-based compensation under SFAS 123R) - (6,312) - ---------- ---------- Consolidated Total $6,578,598 $40,993 (a)(b) 0.62% ========== ========== Thirteen Weeks Ended June 28, 2008 --------------------------------------- Operating Operating Net Sales Income Margin ---------- ---------- ---------- North America $3,518,983 $44,380 (c) 1.26% EMEA 2,955,209 15,669 (c) 0.53% Asia-Pacific 1,904,144 32,699 1.72% Latin America 438,279 7,232 1.65% Reconciling amount (stock-based compensation under SFAS 123R) - (6,749) - ---------- ---------- Consolidated Total $8,816,615 $93,231 (c) 1.06% ========== ========== (a) The thirteen weeks ended July 4, 2009 includes charges of $7,353 (0.11% of consolidated net sales) to operating expenses comprised of the following: (1) net charges of $5,275 in North America (0.19% of North America net sales), which included reorganization costs of $4,456 primarily related to employee termination benefits for workforce reductions and facility exit costs, and $819 charged to selling, general and administrative, or SG&A, expenses, for retention costs related to the reorganization program and accelerated depreciation of fixed assets associated with the exit of facilities; (2) net charges of $1,493 in EMEA (0.07% of EMEA net sales), which included reorganization costs of $1,293 related to employee termination benefits for workforce reductions and facility exit costs, and $200 primarily for consulting costs associated with the reorganization program charged to SG&A expenses; and (3) reorganization costs of $531 in Asia-Pacific (0.04% of Asia-Pacific net sales) and $54 in Latin America (0.02% of Latin America net sales) both related to employee termination benefits for workforce reductions. (b) The thirteen weeks ended July 4, 2009 also includes impairment of goodwill of $2,490 (0.04% of consolidated net sales and 0.17% of Asia-Pacific net sales) recorded to SG&A expenses related to the acquisitions of Value Added Distributors Limited, or VAD, and Vantex Technology Distribution Limited, or Vantex, during the thirteen weeks ended July 4, 2009. (c) The thirteen weeks ended June 28, 2008 includes charges of $7,707 (0.09% of consolidated net sales) to operating expenses comprised of the following: (1) net charges of $877 in North America (0.03% of North America net sales), which included reorganization costs of $1,407 for severance associated with the Company's targeted reduction of administrative and back-office positions in North America, and a credit adjustment of $530 for lower than expected costs to settle lease obligations related to previous actions; and (2) charges of $6,830 in EMEA (0.23% of EMEA net sales), which included reorganization costs of $5,736 related to employee termination benefits for workforce reductions associated with restructuring the regional headquarters in EMEA, and $1,094 for consulting and other costs related to the reorganization program charged to SG&A. Ingram Micro Inc. Supplementary Information Income from Operations (Dollars in 000s) (Unaudited) Twenty-six Weeks Ended July 4, 2009 --------------------------------------- Operating Operating Net Sales Income Margin ----------- ---------- ---------- North America $5,516,621 $21,912 (a) 0.40% EMEA 4,277,774 25,346 (a) 0.59% Asia-Pacific 2,885,824 36,624 (a)(b) 1.27% Latin America 643,463 10,215 (a) 1.59% Reconciling amount (stock-based compensation under SFAS 123R) - (7,858) - ----------- ---------- Consolidated Total $13,323,682 $86,239 (a)(b) 0.65% =========== ========== Twenty-six Weeks Ended June 28, 2008 --------------------------------------- Operating Operating Net Sales Income Margin ----------- ---------- ---------- North America $6,809,164 $84,969 (c) 1.25% EMEA 6,021,578 42,448 (c) 0.70% Asia-Pacific 3,717,573 65,240 1.75% Latin America 845,617 15,055 1.78% Reconciling amount (stock-based compensation under SFAS 123R) - (15,197) - ----------- ---------- Consolidated Total $17,393,932 $192,515 (c) 1.11% =========== ========== (a) The twenty-six weeks ended July 4, 2009 includes charges of $21,577 (0.16% of consolidated net sales) to operating expenses comprised of the following: (1) net charges of $11,470 in North America (0.21% of North America net sales), which included reorganization costs of $10,324 primarily related to employee termination benefits for workforce reductions and facility exit costs, and $1,146 charged to SG&A expenses for retention costs related to the reorganization program and accelerated depreciation of fixed assets associated with the exit of facilities; (2) net charges of $7,605 in EMEA (0.18% of EMEA net sales), which included reorganization costs of $7,294 related to employee termination benefits for workforce reductions and facility exit costs, and $311 primarily for consulting costs associated with the reorganization program charged to SG&A expenses; and (3) reorganization costs of $2,266 in Asia-Pacific (0.08% of Asia-Pacific net sales) and $236 in Latin America (0.04% of Latin America net sales) both related to employee termination benefits for workforce reductions. (b) The twenty-six weeks ended July 4, 2009 also includes impairment of goodwill of $2,490 (0.02% of consolidated net sales and 0.09% of Asia-Pacific net sales) recorded to SG&A expenses related to the acquisitions of VAD and Vantex during the second quarter of 2009. (c) The twenty-six weeks ended June 28, 2008 includes charges of $7,707 (0.04% of consolidated net sales) to operating expenses comprised of the following: (1) net charges of $877 in North America (0.01% of North America net sales), which included reorganization costs of $1,407 for severance associated with the Company's targeted reduction of administrative and back-office positions in North America, and a credit adjustment of $530 for lower than expected costs to settle lease obligations related to previous actions; and (2) charges of $6,830 in EMEA (0.11% of EMEA net sales), which included reorganization costs of $5,736 related to employee termination benefits for workforce reductions associated with restructuring the regional headquarters in EMEA, and $1,094 for consulting and other costs associated with the reorganization program charged to SG&A.

Ingram Micro

CONTACT: Investor Relations, Ria Marie Carlson, +1-714-382-4400,
ria.carlson@ingrammicro.com, or Kay Leyba, +1-714-382-4175,
kay.leyba@ingrammicro.com, or Media, Rekha Parthasarathy, +1-714-382-1319,
rekha@ingrammicro.com, all of Ingram Micro Inc.

Web Site: http://www.ingrammicro.com/

Baldor Electric Company Announces Second Quarter 2009 Results

FORT SMITH, Ark., July 30 /PRNewswire-FirstCall/ -- Baldor Electric Company markets, designs and manufactures industrial electric motors, mechanical power transmission products, drives and generators. Today, Baldor announced unaudited results for second quarter 2009.

John McFarland, Chairman and CEO, commented on the Company's results. "For the second quarter of 2009, we had sales of $384.7 million, net earnings of $7.8 million, and diluted earnings per share of $0.17. This compares to second quarter 2008 sales of $504.0 million, net earnings of $29.4 million, and diluted earnings per share of $0.63. During the second quarter of 2009, we improved our operating margin to 11.5% from 11.2% in first quarter 2009 when sales were $17.8 million higher. We also reduced our debt by $44.6 million during the quarter. In June, we increased our 2009 cost reduction goal to $92 million, and we are on track to achieve this goal."

2nd Quarter Year-To-Date 2009 2008 2009 2008 --------------------- --------------------- (in thousands except per Jul 4, Jun 28, % Jul 4, Jun 28, % share data) 2009 2008 Chg 2009 2008 Chg --------------------------- -------------------------- Net sales $384,678 $503,973 (24%) $787,211 $974,499 (19%) Cost of sales 275,456 351,127 561,886 677,929 --------------------- --------------------- Gross profit 109,222 152,846 (29%) 225,325 296,570 (24%) SG&A 64,964 83,920 136,064 160,992 --------------------- --------------------- Operating profit 44,258 68,926 (36%) 89,261 135,578 (34%) Other income (expense), net (1,114) 1,603 (333) 1,604 Gain on debt modification - - 35,740 - Debt discount amortization (2,484) - (2,484) - Interest expense (28,376) (24,630) (50,859) (51,222) --------------------- --------------------- Income before income taxes 12,284 45,899 (73%) 71,325 85,960 (17%) Income taxes 4,489 16,527 27,109 30,949 --------------------- --------------------- Net income $ 7,795 $29,372 (73%) $44,216 $55,011 (20%) ===================== ===================== Net earnings per share - diluted $0.17 $0.63 (73%) $0.95 $1.19 (20%) Less net gain on debt modification - - 0.47 - --------------------- --------------------- Net earnings per share - diluted excluding gain on debt modification(1) $0.17 $0.63 (73%) $0.48 $1.19 (60%) ===================== ===================== Dividends per share $0.17 $0.17 0% $0.34 $0.34 0% Avg shares outstanding - diluted 46,821 46,453 46,619 46,241

McFarland added, "While we were disappointed by a 24% sales decline this quarter, sales trends during May and June lead us to believe second quarter will be our most challenging quarter of the year. We believe third quarter sales will be down approximately 20% from record levels in third quarter 2008. Our sales initiatives, including Bounty Hunt and the introduction of new products, are beginning to have a slightly positive impact on our incoming orders. We are also encouraged by our productivity improvements and cost reduction efforts this year. As a result, we believe our operating margin will continue to improve throughout the balance of the year."

Selected Financial Data (unaudited) --------------------------------------------------------- (in thousands) Q2 2009 Q1 2009 ------- ------- Cash $13,724 $6,876 Net receivables 260,908 259,537 Inventories 311,249 344,945 Total outstanding debt 1,274,557 1,319,205 Shareholders' equity 903,139 884,123 Q2 2009 Q2 2008 ------- ------- YTD Cash flows from operations $104,523 $71,652 (Photo: http://www.newscom.com/cgi-bin/prnh/20090730/DA54534) Q. . . How was business during the quarter?

For the quarter, sales of industrial motors were $248 million, down 24%, and sales of mechanical power transmission products were $115 million, down 20%. Sales to domestic distributors were down 29%, while sales to domestic OEMs were down 26%. April was the weakest month of the quarter and the year. Incoming orders began to improve slightly during May, and June's order rates improved slightly over May. International sales of $70 million comprised 18% of sales for the quarter and were down 12% from last year. Sales in the Asia Pacific region increased 28% for the quarter, and shipments and earnings from our plants in China were an all-time record.

Q. . . How were sales of your Super-E premium efficient motors?

Sales of our Super-E motors increased 12% for the quarter and 20% for the year. Our Super-E motors consume less electricity than standard motors, thereby reducing their users' electricity bills. Legislation introduced during the past few years has increased industry's awareness of the cost of operating electric motors. This legislation will require a broader use of premium efficient motors like our Super-E motors. Therefore, we expect sales of these motors to continue growing as we move closer to the implementation of the 2007 Energy Bill on December 19, 2010.

Q. . . How important is the development of new products to Baldor?

New product development is a significant part of our long-term growth strategy. During the first half of 2009, over 25% of the products we sold were products introduced within the past five years. We have developed many products for our Dodge customers in the past year, including MagnaGear(TM) reducers for large material handling needs and E-Z Kleen wash down bearings for food and pharmaceutical applications. Our cooling tower motor and drive system, currently being introduced, provides 10-15% energy savings and lower maintenance costs over traditional cooling tower technologies. In the United States alone, there are tens of thousands of cooling towers that could be retrofitted to operate more efficiently with this new technology.

Q. . . How effective has your Bounty Hunt program been this year?

Bounty Hunt is a program which gives special incentives to our sales force for earning new business from targeted accounts during 2009. This program has begun to generate sales, and we believe the success of this program will be more evident later this year and in 2010.

Q. . . Do you believe distributors are finished reducing their inventories?

With sales to distributors down 29% during the quarter, we think significant amounts of destocking occurred. We expect this destocking to diminish over the balance of the year.

Q. . . Did you reduce Baldor's inventories during the quarter?

During the second quarter, our inventories declined by $34 million primarily due to a reduction in raw material and work-in-process inventories. Having the appropriate mix and quantity of finished goods inventory is a competitive advantage for us, particularly as our customers reduce their inventory. While we expect to further reduce inventories in the third quarter, we will manage the reduction in a way that will not negatively affect our customers. Effective management of our inventories allows us to take advantage of sales opportunities and cash flow generation for debt reduction.

Q. . . In June, you increased your 2009 cost savings target to $92 million from $80 million. Is this still an achievable goal?

Yes, it is. Since we have eliminated almost all overtime, we are on target to reach our $35 million overtime savings goal. We continue to have a hiring freeze in place, and as a result of our productivity improvements, we do not expect to add any new employees during the next 6-12 months. This will allow us to meet our payroll savings goal of $33.5 million. In addition, we are slightly ahead of our goal to achieve $23.5 million of savings in discretionary spending.

As previously announced, we expected to incur $4.5 million of expense related to manufacturing consolidations. The second quarter was impacted by approximately $3.0 million of this expense. Third quarter 2009 will be impacted by the remaining $1.5 million of consolidation expense. Beginning in the second half of 2009, these consolidations will provide an annual cost savings of approximately $9.0 million.

Q. . . How much debt reduction did you make during the quarter?

During the quarter, we reduced debt by $44.6 million. This brings our total net debt repayment for the first half of the year to more than $52 million. Since we took on the debt 29 months ago, we have repaid $275 million. Debt reduction remains the priority for free cash flow. We expect to reduce our debt by at least $100 million this year.

Q. . . What is your outlook for the balance of 2009?

We expect the second half of 2009 to continue to be challenging, with sales declining from one year ago. Even with these sales declines, we believe our operating margin will continue to improve during the next two quarters.

Q. . . When is your next public update?

A conference call will be held Friday, July 31, at 10:00 a.m. central time. Participants may listen to the discussion through the Company's website at http://www.baldor.com/ or by calling 877-440-5791. A replay will be available through August 7, 2009 and can be accessed by calling 888-203-1112 (passcode 5293645).

On August 11, 2009, the Company will meet with institutional investors at the Jefferies CEO Summit in Chicago. On August 12, 2009, management will make a presentation at the Canaccord Adams Global Growth Conference in Boston. The Company will also attend the Sidoti Institutional Investor Forum on September 11, 2009, in San Francisco and the Sterne Agee Best Ideas Conference on September 16, 2009, in Milwaukee.

(1) Non-GAAP Financial Measures. Baldor reports its financial results in accordance with generally accepted accounting principles ("GAAP"). However, management believes that certain non-GAAP performance measures provide financial statement users meaningful comparisons between current and prior period results, as well as important information regarding performance trends. Certain items discussed in this press release are considered non-GAAP measures. Non-GAAP financial measure should be viewed in addition to, and not as an alternative for, the Company's reported results.

Forward-Looking Statement

This document contains statements that are forward-looking, i.e. not historical facts. The forward-looking statements contained in this document (including "estimate", "believe", "think", "will", "intend", "expect", "may", "could", "plan", "anticipate", "would", "depend", "predict", "can", 'if", "assume", "continue", "ongoing" or any grammatical forms of these words or other similar words) are based on the Company's current expectations and some of them are subject to risks and uncertainties. Accordingly, you are cautioned that any such forward-looking statements are not guarantees of future performance and involve risks and uncertainties, and that actual results may differ materially from those projected in the forward-looking statements as a result of various factors. The factors that might cause such differences include, among others, the following: (i) changes in economic conditions, (ii) developments or new initiatives by our competitors in the markets in which we compete, (iii) fluctuations in the costs of select raw materials, (iv) the success in increasing sales and maintaining or improving the operating margins of the Company, and (v) other factors including those identified in the Company's filings made from time-to-time with the Securities and Exchange Commission. These statements should be read in conjunction with Baldor's most recent annual report (as well as the Company's Form 10-K and other reports filed with the Securities and Exchange Commission) containing a discussion of the Company's business and of various factors that may affect it.

BEZ-G

Photo: http://www.newscom.com/cgi-bin/prnh/20090730/DA54534
http://photoarchive.ap.org/
AP PhotoExpress Network: PRN15
PRN Photo Desk, photodesk@prnewswire.com Baldor Electric Company

CONTACT: John McFarland, Chairman and CEO, or Ron Tucker, President and
COO, or Tracy Long, Vice President Investor Relations, all of Baldor Electric
Company, +1-479-648-5769, Investorinfo@baldor.com

Web Site: http://www.baldor.com/

ARRIS Announces Preliminary and Unaudited Second Quarter 2009 Results

SUWANEE, Ga., July 30 /PRNewswire-FirstCall/ -- ARRIS Group, Inc. , a global technology leader in the development of advanced cable telephony, next generation high-speed data, demand driven video solutions, operations software and broadband access equipment, today announced preliminary and unaudited financial results for the second quarter 2009.

Revenues in the second quarter 2009 were $278.5 million, up 9.9% as compared to first quarter 2009 revenues of $253.5 million, and down 0.9% compared to second quarter 2008 revenues of $281.1 million. First half 2009 revenues were $532.0 million, down 4.1% as compared to $554.6 million for the same period in 2008.

Adjusted net income (a non GAAP measure) in the second quarter 2009 was $0.27 per diluted share, up 50% from $0.18 per diluted share in the first quarter 2009 and up 80% from $0.15 per diluted share in the second quarter of 2008.

GAAP net income in the second quarter 2009 was $0.18 per diluted share, up 80% as compared to the first quarter 2009 of $0.10 per diluted share, and up 200% as compared to the second quarter 2008 of $0.06 per diluted share. Significant GAAP items in the second quarter 2009 that have been excluded in computing adjusted net income and earnings per shares include: amortization of intangibles, equity compensation expense, and non-cash interest related to convertible debt. A reconciliation of adjusted earnings to GAAP earnings per share is attached to this release and also can be found on the Company's website (http://www.arrisi.com/).

Gross margin in the second quarter 2009 was 42.1%, up significantly from both the first quarter 2009 of 37.7% and the second quarter 2008 of 33.0%. The improvement reflects strong CMTS and MCS product sales.

The Company ended the second quarter 2009 with $524 million of cash and short-term investments, up approximately $100 million from the end of the first quarter 2009 as a result of both strong earnings and lower working capital, in particular accounts receivable. The Company generated $94.3 million of cash from operating activities in the second quarter 2009, and $108.2 million through the first half of 2009. This amount compares to cash generated from operating activities of $40.9 million during the first half of 2008.

Order backlog at the end of the second quarter 2009 was $165.7 million and the Company's book to bill ratio in the second quarter was 1.04. These amounts compare to order backlog of $155.0 million and book to bill ratio of 1.16 in the first quarter of 2009.

"I deeply appreciate the trust that our customers have placed in ARRIS as their technology partner in today's challenging market. Our impressive second quarter performance speaks volumes as to the success of our new products and the value we bring to our customers," said Bob Stanzione, ARRIS Chairman & CEO. "Continual increases in worldwide internet traffic and the resultant customer need to augment network capacity to meet both consumer demand and competitive threats continue to cause me to be optimistic about our business. ARRIS is a healthy company operating in a healthy industry segment and we are well positioned for further growth as the general economy improves."

During the quarter the Company demonstrated its broad range of ARRIS wideband data and on-demand video products at the Japan Cable Show in Tokyo. The Japanese telecommunications market continues to be driven by intense bandwidth and data speed competition between cable operators, telcos and other access providers. Also during the quarter, the Company announced that it had concluded a series of interoperability test activities of its newest Video on Demand and Ad Insertion products with several technology companies. These products will help accelerate advertising revenue services for the cable industry.

"I am very pleased with our second quarter 2009 results, most notably our strong gross margins and cash generation. Our profitability has improved significantly. First half 2009 adjusted earnings were $0.45 per diluted share, up 67% or $0.18 per diluted share from the first half of 2008," said David Potts, ARRIS EVP & CFO. "With respect to the third quarter 2009, we now project that revenues for the Company will be in the range of $260 to $280 million with adjusted net income per diluted share in the range of $0.22 to $0.26 and GAAP net income per diluted share, in the range of $0.14 to $0.18."

ARRIS management will conduct a conference call at 5:00pm EDT, today, Thursday, July 30, 2009, to discuss these results in detail. You may participate in this conference call by dialing 888-713-4217 or 617-213-4869 for international calls prior to the start of the call and providing the ARRIS Group, Inc. name, conference passcode 14472969 and Jim Bauer as the moderator. Please note that ARRIS will not accept any calls related to this earnings release until after the conclusion of the 5:00pm EDT conference call. A replay of the conference call can be accessed approximately two hours after the call through Tuesday, August 4, 2009 by dialing 888-286-8010 or 617-801-6888 for international calls and using the passcode 48051208. A replay also will be made available for a period of 12 months following the conference call on ARRIS' website at http://www.arrisi.com/.

ARRIS is a global communications technology company specializing in the design, engineering and supply of technology supporting triple and quad-play broadband services for residential and business customers around the world. The Company supplies broadband operators with the tools and platforms they need to deliver reliable telephony, demand driven video, next-generation advertising and high-speed data services. ARRIS products expand and help grow network capacity with access and outside plant construction equipment, reliably deliver voice, video and data services and assure optimal service delivery for end customers. Headquartered in Atlanta, Georgia, USA, ARRIS has R&D centers in Atlanta; Chicago; Beaverton, Oregon; State College, Pennsylvania; Wallingford, Connecticut; Ireland and China, and operates support and sales offices throughout the world. Information about ARRIS products and services can be found at http://www.arrisi.com/.

Forward-looking statements: Statements made in this press release, including those related to: -- growth expectations and business prospects; -- third quarter and 2009 revenues and net income; -- expected sales levels and acceptance of new ARRIS products; -- the general market outlook and industry trends

are forward-looking statements. These statements involve risks and uncertainties that may cause actual results to differ materially from those set forth in these statements. Among other things,

-- projected results for the third quarter as well as the general outlook for 2009 and beyond are based on preliminary estimates, assumptions and projections that management believes to be reasonable at this time, but are beyond management's control; -- our customers operate in a capital intensive consumer based industry, and the current disruptions in the capital markets or changes in customer spending may adversely impact their ability or willingness to purchase the products that we offer; and -- because the market in which ARRIS operates is volatile, actions taken and contemplated may not achieve the desired impact relative to changing market conditions and the success of these strategies will be dependent on the effective implementation of those plans while minimizing organizational disruption.

In addition to the factors set forth elsewhere in this release, other factors that could cause results to differ from current expectations include: the uncertain current economic climate and its impact on our customers' plans and access to capital; the impact of rapidly changing technologies; the impact of competition on product development and pricing; the ability of ARRIS to react to changes in general industry and market conditions including regulatory developments; rights to intellectual property, market trends and the adoption of industry standards; and consolidations within the telecommunications industry of both the customer and supplier base. These factors are not intended to be an all-encompassing list of risks and uncertainties that may affect the Company's business. Additional information regarding these and other factors can be found in ARRIS' reports filed with the Securities and Exchange Commission, including its Form 10-Q for the quarter ended March 31, 2009. In providing forward-looking statements, the Company expressly disclaims any obligation to update publicly or otherwise these statements, whether as a result of new information, future events or otherwise.

ARRIS GROUP, INC. PRELIMINARY CONSOLIDATED BALANCE SHEETS (in thousands) (unaudited) June 30, March 31, Dec. 31, Sept. 30, June 30, 2009 2009 2008 2008 2008 ---- ---- ---- ---- ---- ASSETS Current assets: Cash and cash equivalents $476,846 $398,938 $409,894 $305,987 $290,266 Short-term investments, at fair value 47,195 25,494 17,371 23,571 7,503 ------ ------ ------ ------ ----- Total cash, cash equivalents and short-term investments 524,041 424,432 427,265 329,558 297,769 Restricted cash 4,552 4,550 5,673 5,768 7,051 Accounts receivable, net 128,482 155,792 159,443 180,367 178,178 Other receivables 5,904 6,636 4,749 5,180 9,067 Inventories, net 115,944 120,774 129,752 139,598 144,507 Prepaids 7,700 6,994 8,004 5,156 5,305 Current deferred income tax assets 41,166 49,027 44,004 42,714 47,412 Other current assets 12,361 18,315 19,782 22,132 18,916 ------ ------ ------ ------ ------ Total current Assets 840,150 786,520 798,672 730,473 708,205 Property, plant and equipment, net 60,048 59,438 59,204 60,268 60,823 Goodwill 231,684 231,684 231,684 449,418 452,398 Intangible assets, net 208,822 218,085 227,348 236,689 244,575 Investments 10,317 14,593 14,681 15,086 9,937 Noncurrent deferred income tax assets 3,870 3,771 12,157 3,988 4,256 Other assets 6,251 5,483 6,576 7,173 9,488 ----- ----- ----- ----- ----- $1,361,142 $1,319,574 $1,350,322 $1,503,095 $1,489,682 ========== ========== ========== ========== ========== LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $48,859 $44,422 $75,863 $54,304 $68,476 Accrued compensation, benefits and related taxes 20,753 15,583 27,024 21,831 18,072 Accrued warranty 5,185 5,306 5,652 6,354 7,566 Deferred revenue 43,727 44,006 44,461 35,986 37,614 Current portion of long-term debt 148 147 146 234 314 Current deferred income tax liability 248 241 1,059 - - Other accrued liabilities 35,852 31,922 25,410 30,205 26,884 ------ ------ ------ ------ ------ Total current liabilities 154,772 141,627 179,615 148,914 158,926 Long-term debt, net of current portion 205,710 203,080 211,870 209,340 206,865 Accrued pension 19,665 19,289 18,820 10,622 11,362 Noncurrent income tax payable 12,386 12,441 9,607 10,128 6,250 Noncurrent deferred income tax liability 33,999 42,530 41,598 67,403 74,805 Other noncurrent liabilities 15,094 14,391 15,343 18,088 18,694 ------ ------ ------ ------ ------ Total liabilities 441,626 433,358 476,853 464,495 476,902 Stockholders' equity: Preferred stock - - - - - Common stock 1,379 1,368 1,362 1,360 1,358 Capital in excess of par value 1,169,223 1,159,054 1,159,097 1,155,211 1,151,680 Treasury stock at cost (75,960) (75,960) (75,960) (75,960) (76,007) Unrealized gain (loss) on marketable securities (161) (372) (274) (128) 66 Unfunded pension liability (8,070) (8,070) (8,070) (3,358) (3,358) Accumulated deficit (166,711) (189,620) (202,502) (38,341) (60,775) Cumulative translation adjustments (184) (184) (184) (184) (184) ---- ---- ---- ---- ---- Total stockholders' equity 919,516 886,216 873,469 1,038,600 1,012,780 ------- ------- ------- --------- --------- $1,361,142 $1,319,574 $1,350,322 $1,503,095 $1,489,682 ========== ========== ========== ========== ========== ARRIS GROUP, INC. PRELIMINARY CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except per share data) (unaudited) For the Three Months For the Six Months Ended June 30, Ended June 30, -------------- -------------- 2009 2008 2009 2008 ---- ---- ---- ---- Net sales $278,521 $281,110 $532,039 $554,616 Cost of sales 161,241 188,226 319,249 376,484 ------- ------- ------- ------- Gross margin 117,280 92,884 212,790 178,132 Gross margin % 42.1% 33.0% 40.0% 32.1% Operating expenses: Selling, general, and administrative expenses 39,128 37,046 74,471 74,028 Research and development expenses 30,143 27,662 58,538 55,784 Restructuring charges 592 175 712 580 Amortization of intangible assets 9,263 12,454 18,526 25,708 ----- ------ ------ ------ 79,126 77,337 152,247 156,100 ------ ------ ------- ------- Operating income 38,154 15,547 60,543 22,032 Other expense (income): Interest expense 4,278 4,291 8,765 8,312 Loss (gain) on investments (512) 171 (215) 173 Loss (gain) on foreign currency 1,570 350 2,528 (640) Interest income (363) (1,702) (748) (4,387) Gain on debt retirement - - (4,151) - Other (income) expense, net (522) 65 (625) 29 ---- -- ---- -- Income from continuing operations before income taxes 33,703 12,372 54,989 18,545 Income tax expense 10,794 4,543 19,198 6,887 ------ ----- ------ ----- Net income $22,909 $7,829 $35,791 $11,658 ======= ====== ======= ======= Net income per common share Basic $0.18 $0.06 $0.29 $0.09 ===== ===== ===== ===== Diluted $0.18 $0.06 $0.28 $0.09 ===== ===== ===== ===== Weighted average common shares: Basic 124,412 122,741 123,849 126,752 ======= ======= ======= ======= Diluted 128,054 124,651 126,482 128,190 ======= ======= ======= ======= ARRIS GROUP, INC. PRELIMINARY CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) (unaudited) For the Three Months For the Six Months Ended June 30, Ended June 30, -------------- -------------- 2009 2008 2009 2008 ---- ---- ---- ---- Operating Activities: Net income $22,909 $7,829 $35,791 $11,658 Depreciation 5,135 5,132 9,962 10,095 Amortization of intangible assets 9,263 12,454 18,526 25,708 Stock compensation expense 4,053 2,840 7,454 5,391 Deferred income tax provision (benefit) (762) 5,396 3,927 (993) Amortization of deferred finance fees 179 190 368 381 Provision for doubtful accounts (16) 9 (10) 214 Loss (gain) on investments (512) 171 (215) 173 Loss (gain) on disposal of fixed assets 30 (2) 30 (2) Non-cash interest expense 2,718 2,657 5,536 5,262 Gain on debt retirement - - (4,152) - Excess tax benefits from stock-based compensation plans (125) - (556) - Changes in operating assets & liabilities, net of effects of acquisitions and disposals: Accounts receivable 27,326 (4,948) 30,971 (10,284) Other receivables 212 (2,993) (1,820) (4,737) Inventory 4,830 (21,455) 13,808 (11,210) Income taxes payable 3,055 (3,895) 1,932 (5,629) Accounts payable and accrued liabilities 12,926 11,010 (22,863) 20,310 Other, net 3,088 (3,975) 9,465 (5,402) ----- ------ ----- ------ Net cash provided by operating activities 94,309 10,420 108,154 40,935 Investing Activities: Purchases of property, plant, and equipment (5,802) (5,363) (10,868) (11,792) Cash paid for acquisition, net of cash acquired - (227) (200) (4,419) Cash proceeds from sale of property, plant & equipment 1 13 1 237 Purchases of short-term- investments (34,896) - (58,766) (16,887) Disposals of short-term- investments 18,131 41,980 33,937 72,480 ------ ------ ------ ------ Net cash provided by (used in) investing activities (22,566) 36,403 (35,896) 39,619 Financing Activities: Payment of debt and capital lease obligations (36) (99) (10,628) (35,196) Repurchase of common stock - - - (75,960) Excess tax benefits from stock-based compensation plans 125 - 556 - Repurchase of shares to satisfy minimum tax withholdings (373) (796) (2,180) (1,035) Fees and proceeds from issuance of common stock, net 6,449 823 6,946 (1,894) ----- --- ----- ------ Net cash provided by (used in) financing activities 6,165 (72) (5,306) (114,085) Net increase (decrease) in cash and cash equivalents 77,908 46,751 66,952 (33,531) Cash and cash equivalents at beginning of period 398,938 243,515 409,894 323,797 ------- ------- ------- ------- Cash and cash equivalents at end of period $476,846 $290,266 $476,846 $290,266 ======== ======== ======== ======== ARRIS GROUP, INC. PRELIMINARY SUPPLEMENTAL NET INCOME RECONCILIATION (in thousands, except per share data) (unaudited) Q1 2009 Q2 2009 ------- ------- Per Diluted Per Diluted Amount Share Amount Share ------ ----- ------ ----- Net income $12,882 $0.10 $22,909 $0.18 Highlighted items: Impacting gross margin: Stock compensation expense 303 - 366 - Impacting operating expenses: Restructuring charges 120 - 592 - Amortization of intangible assets 9,263 0.07 9,263 0.07 Stock compensation expense 3,098 0.02 3,687 0.03 Impacting other (income) / expense: Non-cash interest expense 2,818 0.02 2,718 0.02 Gain on repurchase of debt (4,152) (0.03) - - Impacting income tax expense: Adjustments of income tax valuation allowances and research & development credits and other 1,455 0.01 - - Tax related to highlighted items above (3,646) (0.03) (5,322) (0.04) ----- ---- ------ ---- Total highlighted items 9,259 0.07 11,304 0.09 ----- ---- ------ ---- Net income excluding highlighted items $22,141 $0.18 $34,213 $0.27 ======= ===== ======= ===== Weighted average common shares - diluted 124,920 128,054 ======= ======= First Half 2009 --------------- Per Diluted Amount Share ------ ----- Net income $35,791 $0.28 Highlighted items: Impacting gross margin: Stock compensation expense 669 0.01 Impacting operating expenses: Restructuring charges 712 0.01 Amortization of intangible assets 18,526 0.15 Stock compensation expense 6,785 0.05 Impacting other (income) / expense: Non-cash interest expense 5,536 0.04 Gain on repurchase of debt (4,152) (0.03) Impacting income tax expense: Adjustments of income tax valuation allowances and research & development credits and other 1,455 0.01 Tax related to highlighted items above (8,968) (0.07) ------ ---- Total highlighted items 20,563 0.16 ------ ---- Net income excluding highlighted items $56,354 $0.45 ======= ===== Weighted average common shares - diluted 126,482 ======= Q1 2008 Q2 2008 ------- ------- Per Diluted Per Diluted Amount Share Amount Share ------ ----- ------ ----- Net income $3,829 $0.03 $7,829 $0.06 Highlighted items: Impacting gross margin: Stock compensation expense 201 - 245 - Impacting operating expenses: Integration costs 427 - - - Restructuring charges 405 - 175 - Amortization of intangible assets 13,254 0.10 12,454 0.10 Stock compensation expense 2,350 0.02 2,595 0.02 Impacting other (income) / expense: Non-cash interest expense 2,605 0.02 2,657 0.02 Impacting income tax expense: Tax related to highlighted items above (7,268) (0.06) (6,726) (0.05) ------ ---- ------ ---- Total highlighted items 11,974 0.09 11,400 0.09 ------ ---- ------ ---- Net income excluding highlighted items $15,803 $0.12 $19,229 $0.15 ======= ===== ======= ===== Weighted average common shares - diluted 131,981 124,651 ======= ======= First Half 2008 --------------- Per Diluted Amount Share (1) ------ --------- Net income $11,658 $0.09 Highlighted items: Impacting gross margin: Stock compensation expense 446 - Impacting operating expenses: Integration costs 427 - Restructuring charges 580 - Amortization of intangible assets 25,708 0.20 Stock compensation expense 4,945 0.04 Impacting other (income) / expense: Non-cash interest expense 5,262 0.04 Impacting income tax expense: Tax related to highlighted items above (13,994) (0.11) ------ ---- Total highlighted items 23,374 0.18 ------ ---- Net income excluding highlighted items $35,032 $0.27 ======= ===== Weighted average common shares - diluted 128,190 ======= With respect to stock compensation expense, ARRIS records non-cash compensation expense related to grants of options and restricted stock. Depending upon the size, timing and the terms of the grants, this non-cash compensation expense may vary significantly. With respect to amortization of intangibles, the intangibles being amortized relate to our recent acquisition of C-COR. The restructuring charge adjustments reflect items that, although they or similar items might recur, are of a nature and magnitude that identifying them separately provides investors with a greater ability to project ARRIS' future performance. With respect to the convertible debt non-cash interest, ARRIS records non-cash interest expense related to the 2013 convertible debt as a result of the adoption of FSP ABP 14-1 on January 1, 2009. Disclosing the non-cash piece provides investors with the information regarding interest that will not be paid out in cash. During the first quarter of 2009, ARRIS repurchased a portion of their convertible debt and recognized a gain of approximately $4.2 million. In the first quarter of 2009, a tax expense of approximately $1.5 million was recorded for state valuation allowances and research and development tax credits. During the first quarter of 2008, ARRIS recorded incremental costs of $0.4 million as a result of the C-COR integration. In assessing operating performance and preparing budgets and forecasts, ARRIS' management considers performance after making these adjustments and believes that providing investors with the same information provides greater transparency and insight into management's analysis. ARRIS GROUP, INC. Net Income Reconciliation (unaudited) Q3 EPS 2009 Guidance Estimated GAAP EPS - diluted $0.14 - $0.18 Reconciling Items: Amortization of intangibles, after tax 0.05 Stock compensation expense, after tax 0.02 Non-cash interest expense, after tax 0.01 ---- Subtotal 0.08 ---- Estimated adjusted (non-GAAP) EPS - diluted $0.22 - $0.26 ================== See the Supplemental Net Income Reconciliation for a discussion regarding management's reasoning for providing this adjusted financial measure

ARRIS

CONTACT: Jim Bauer, Investor Relations of ARRIS, +1-678-473-2647,
jim.bauer@arrisi.com

Web Site: http://www.arrisi.com/

Integral Systems Announces Final Settlement with the Securities and Exchange Commission

COLUMBIA, Md., July 30 /PRNewswire-FirstCall/ -- Integral Systems, Inc., today announced that it has reached a settlement with the Securities and Exchange Commission ("SEC") concerning the SEC's previously disclosed investigation, as more fully described in the Company's 2008 Form 10-K and other periodic filings.

Under the settlement, the Company consented to a "cease and desist" order requiring future compliance with certain provisions of Federal securities laws and regulations. The settlement does not require the Company to pay a monetary penalty and concludes the SEC's investigation into these matters with respect to the Company. In the order, the SEC stated that in determining to accept the settlement, it considered both remediation efforts undertaken by and cooperation from the Company.

"We are pleased with the resolution of the SEC investigation as it relates to Integral Systems," said Integral Systems CEO, John Higginbotham. "We are putting this matter behind us and are focused on the Company's future growth and success."

About Integral Systems

Integral Systems, Inc., applies more than 25 years experience to provide integrated technology solutions for SATCOM-interfaced networks. Customers have relied on the Integral Systems family of companies (Integral Systems Europe, Lumistar, Inc., Newpoint Technologies, Inc., RT Logic, and SAT Corporation) to deliver on time and on budget for more than 250 satellite missions. Our dedication to customer service has solidified long-term relationships with the US Air Force, NASA, NOAA, and nearly every satellite operator in the world. Integral Systems is listed in Forbes' Top 200 Small Companies in America for 2008. For more information, visit http://www.integ.com/.

Company Contact: Media Contact: Kathryn Herr Andrew Miller Vice President, Marketing and Zeno Group for Integral Systems Communications Phone: 707.386.1193 Integral Systems, Inc. andrew.miller@zenogroup.com Phone: 443.539.5118 kherr@integ.com

Integral Systems, Inc.

CONTACT: Kathryn Herr, Vice President, Marketing and Communications of
Integral Systems, Inc., +1-443-539-5118, kherr@integ.com; or Media, Andrew
Miller of Zeno Group for Integral Systems, +1-707-386-1193,
andrew.miller@zenogroup.com

Web Site: http://www.integ.com/

SouthernLINC Wireless Launches Motorola Clutch(TM) i465First iDEN Phone with a QWERTY keyboard in high demand

ATLANTA, July 30 /PRNewswire-FirstCall/ -- SouthernLINC Wireless, a Southern Company , today announced the availability of the Motorola Clutch(TM) i465. The much-anticipated Clutch i465 is the first Motorola Integrated Digital Enhancement Network (iDEN) device that combines the power of Push To Talk two-way radio and the convenience of a QWERTY keyboard.

(Logo: http://www.newscom.com/cgi-bin/prnh/20090507/CL13145LOGO ) (Photo: http://www.newscom.com/cgi-bin/prnh/20090730/CL54442 )

With a familiar candy-bar design and military-tough durability, the Clutch i465 blends function and style into a 3.4-ounce package. Despite its compact size, this phone features a large color display screen, shortcut buttons, mobile Web accessibility and specially designed keys that make texting and POP3 or Internet e-mailing easy. Additionally, the Clutch i465 features Bluetooth technology, an integrated digital camera with zoom, GPS capabilities and 20 megabytes of available memory.

"Text messaging is on the rise," said Rodney Johnson, vice president of sales and distribution for SouthernLINC Wireless. "In fact, according to CTIA - The Wireless Association , American subscribers sent about 3.5 billion text messages per day last year.

"That's why the Clutch i465 is such a great addition to the SouthernLINC Wireless product portfolio. Typing on the QWERTY keyboard is fast and easy, which makes the Clutch i465 the perfect phone for text-messaging enthusiasts."

The Motorola Clutch i465 is now available for just $49.99 with a qualifying service agreement at all SouthernLINC Wireless Sales and Service Centers, through authorized SouthernLINC Wireless dealers or online at http://www.southernlinc.com/phones.asp. And, through Sept. 30, pair a new Clutch i465 activation with an $11.99 per month unlimited text messaging package and receive the first month of text messaging at no charge. In-stock availability may vary by location. Visit http://www.southernlinc.com/promoinfo for more information about this offer.

About SouthernLINC Wireless

SouthernLINC Wireless, a Southern Company , is an Atlanta-based regional wireless carrier with network coverage in the major metro and rural areas of Alabama, Georgia, southeast Mississippi and northwest Florida. SouthernLINC Wireless bundles multiple communication options, including Push To Talk two-way radio, cellular service, text messaging, wireless Internet access and wireless data, into one hand-held device. For more information, please call 1-800-818-LINC (5462) or visit http://www.southernlinc.com/.

About Southern Company

With 4.4 million customers and more than 42,000 megawatts of generating capacity, Atlanta-based Southern Company is the premier energy company serving the Southeast. A leading U.S. producer of electricity, Southern Company owns electric utilities in four states and a growing competitive generation company, as well as fiber optics and wireless communications. Southern Company brands are known for excellent customer service, high reliability and retail electric prices that are below the national average. Southern Company is consistently listed among the top U.S. electric service providers in customer satisfaction by the American Customer Satisfaction Index. Visit our Web site at http://www.southerncompany.com/.

Photo: http://www.newscom.com/cgi-bin/prnh/20090507/CL13145LOGO
http://www.newscom.com/cgi-bin/prnh/20090730/CL54442 SouthernLINC Wireless

CONTACT: Jamie Schaff of SouthernLINC Wireless, +1-678-443-1527,
jschaff@southernco.com; Lindsey Ford of Edelman, +1-404-262-3000,
Lindsey.Ford@edelman.com, for SouthernLINC Wireless

Web Site: http://www.southernlinc.com/

Claimsnet.com Reports Second Quarter 2009 ResultsIncluding a 6% Increase in Revenues

DALLAS, July 30 /PRNewswire-FirstCall/ -- Claimsnet.com inc. (OTC Bulletin Board: CLAI), a leading provider of Internet-based claims processing solutions for the healthcare industry, today reported its results for the second quarter of 2009, which ended June 30, 2009.

For the quarter ended June 30, 2009, Claimsnet reported revenues of $563,000, a 6% increase compared to the $529,000 reported for the second quarter of 2008. Revenues for the six months ended June 30, 2009 were $1,082,000, a 6% increase compared to the $1,018,000 reported for the six months of 2008.

Cost of revenues for the second quarter of 2009 was $419,000 compared to $422,000 for the second quarter of 2008, a 1% decrease. Cost of revenues for the six months of 2009 was $832,000 compared to $810,000 for the six months of 2008, a 3% increase. Selling, general and administrative expenses of $221,000 were reported for the second quarter of 2009 compared to $281,000 reported for the second quarter of 2008, a 21% decrease. Selling, general and administrative expenses of $472,000 were reported for the six months of 2009 compared to $487,000 reported for the six months of 2008, a 3% decrease.

Claimsnet reported a gross profit of $144,000 for the second quarter of 2009, compared with a gross profit of $107,000 for the second quarter of 2008, a 35% increase. Claimsnet reported a gross profit of $250,000 for the six months of 2009, compared with a gross profit of $208,000 for the six months of 2008, a 20% increase.

The loss from operations for the second quarter of 2009 was $(77,000) compared to $(174,000) reported for the second quarter of 2008, a decrease of 56%. The loss from operations for the six months of 2009 was $(222,000) compared to $(279,000) reported for the six months of 2008, a decrease of 20%. The net loss for the second quarter of 2009 was $(87,000), or $(0.00) per share, compared to net loss of ($200,000), or $(0.01) per share, for the second quarter of 2008. The net loss for the six months of 2009 was $(244,000), or $(0.01) per share, compared to net loss of ($333,000), or $(0.01) per share, for the six months of 2008.

In a comparison with the first quarter of 2009, sales increased 8%, the loss from operations decreased 47% and gross margins improved by 5% to 26%.

"We are pleased, in the current economic environment, with the 6% growth in sales. Our loss from operations in the second quarter decreased compared to last year by 56%. This decrease in loss resulted from both the increase in sales and a decrease in overall costs associated with actions the Company took in April 2009, as it focused on moving towards profitability over the next several quarters. This resulted in significant improvements in both May and June of the quarter. New customer implementations and increased business from the more than 70 direct payer customers and 35 clearinghouse business relationships are adding to the top line sales. Our expectation is that over the next two quarters we will see continued benefits of these efforts in operating profitability and cash flow," commented Don Crosbie, Chief Executive Officer of Claimsnet. "Also, the Company reached a milestone in the second quarter with more than a million transactions processed in each month. This was the first time that this volume level has been reached in a quarter."

Claimsnet.com inc. is a leading provider of Internet-based claim processing solutions for the healthcare payer industry, including distinctive, advanced ASP technology. Headquartered in Dallas, Texas, Claimsnet offers systems that are distinguished by ease of use, customer care, security and measurable cost advantages. More information on Claimsnet can be found at the company's web site at http://www.claimsnet.com/.

Safe Harbor Statement Under the Private Securities Litigation Act 1995 - With the exception of historical information, the matters discussed in this press release are forward looking statements that involve a number of risks and uncertainties. The actual future results of the company could differ significantly from those statements. Factors that could cause or contribute to such differences include, but are not limited to, maintaining access to external sources of capital, regulatory actions, success of marketing strategies, actions of the company's competitors, dependence on suppliers and distribution channels, and continued use of the internet. Further information on the company's risk factors is contained in the company's quarterly, annual, and other periodic reports as filed with the Securities and Exchange Commission.

(Table to Follow) CLAIMSNET.COM INC. AND SUBSIDIARIES SUMMARY OPERATIONS STATEMENT INFORMATION (In thousands except per share data) (unaudited) (unaudited) Quarter Ended Six Months Ended June 30, June 30, --------------------- ----------------------- 2009 2008 2009 2008 ---------- --------- ---------- ---------- REVENUES $563 $529 $1,082 $1,018 COST OF REVENUES $419 $422 $832 $810 GROSS PROFIT $144 $107 $250 $208 SELLING, GENERAL AND ADMINISTRATIVE $221 $281 $472 $487 LOSS FROM OPERATIONS $(77) $(174) $(222) $(279) INTEREST EXPENSE $(10) $(26) $(22) $(54) NET LOSS $(87) $(200) $(244) $(333) NET LOSS PER COMMON SHARE - BASIC AND DILUTED $(0.00) $(0.01) $(0.01) $(0.01) WEIGHTED AVERAGE COMMON SHARES OUTSTANDING - BASIC AND DILUTED 34,078 28,344 33,352 27,611

Claimsnet.com

CONTACT: Don Crosbie of Claimsnet.com, +1-972-458-1701, ext. 112,
dcrosbie@claimsnet.com

Web Site: http://www.claimsnet.com/

Puerto Rico's Telecom Market to Double its Data Revenue by 2014 despite Economic Contraction, finds Pyramid

CAMBRIDGE, Mass., July 30 /PRNewswire/ -- With the voice market shrinking, telecom operators face an opportunity to expand data services in Puerto Rico, as data revenue is expected to more than double by 2014 despite the deep economic contraction, according to the latest report from Pyramid Research (http://www.pyr.com/), the telecom research arm of the Light Reading Communications Network (http://www.lightreading.com/).

Communications Markets in Puerto Rico offers a precise profile of the country's converged telecommunications, media, and technology sectors based on proprietary data from our research in the Puerto Rican market. The 28-page report provides detailed competitive analysis of both the fixed and mobile sectors, tracks the market shares of technologies and services, and monitors the introduction and spread of new technologies such as WiMax, IPTV, and VoIP. The executive study provides a comprehensive view of the Puerto Rican communications market by analyzing key trends, evaluating near-term opportunities and assessing upcoming risk factors. Download an excerpt of this report here: http://www.pyr.com/downloads.htm?id=18&sc=PR073009_CIRPR

Despite the deep economic contraction that Puerto Rico is facing, we see interesting opportunities in mobile data services, mobile content, and prepaid fixed services, notes Jose Magana, analyst at Pyramid Research and author of the report. "Several years of economic contraction and operators focusing on the more lucrative postpaid segment have constrained subscription's growth, but Pyramid expects penetration to advance to 84 percent by 2014," says Magana.

The recent incursion of big telecom operators, such as AT&T and T-Mobile, looking to expand beyond the U.S. in the mobile market may also put additional pressure on tariffs but will spur offerings in data services, such as mobile Internet and infotainment content. "Pyramid forecasts infotainment content to gain share in the total data market at the expense of messaging while connectivity revenue grows thanks to uptake in mobile Internet and datacards," says Magana. "Data as a percentage of ARPS will advance to more than 30 percent by 2014 from 18 percent in 2009," he adds.

In the fixed segment, Pyramid expects broadband to expand at a CAGR of 16.7 percent to generate $390 million by 2014. "Broadband will also encourage subscribers to migrate to cheaper VoIP plans and will hasten a decline in PSTN lines," Magana explains.

Communications Markets in Puerto Rico is part of Pyramid Research's Latin America Country Intelligence Report Series. Pyramid Research's premium Country Intelligence Reports are the industry's best available analysis on market trends, regulatory environments, and competitive dynamics for 60 countries worldwide. Download an excerpt of this report here: http://www.pyr.com/downloads.htm?id=18&sc=PR073009_CIRPR

Communications Markets in Puerto Rico is priced at $990 and can be purchased online here: http://www.pyramidresearch.com/store/CIRPUERTORICO.htm?sc=PR073009_CIRPR or through Amalia Vega via email at avega@pyr.com or telephone at +1 809 330 4520.

For more information about Pyramid Research's products and services, please visit http://www.pyr.com/ or contact us at info@pyr.com.

About Pyramid Research

Pyramid Research (http://www.pyr.com/) offers practical solutions to the complex demands our clients face in the telecommunications, media and technology industries. Our analysis is uniquely positioned at the intersection of emerging markets, emerging technologies and emerging business models, powered by the bottom-up methodology of our market forecasts for over 100 countries-a distinction that has remained unmatched for more than 25 years. As the telecom research arm of the Light Reading Communications Network, Pyramid Research works with Heavy Reading, providing the communications industry's most comprehensive market data, trusted research and insightful technology analysis.

About Light Reading

Founded in 2000, Light Reading (http://www.lightreading.com/) is the leading online media, research, and focused event company serving the $3 trillion worldwide communications market. Lightreading.com is the ultimate source for technology and financial analysis of the communications industry, leading the media sector in terms of traffic, content, and reputation. Light Reading's research arms, Heavy Reading and Pyramid Research, provide the most comprehensive communications research, market data, and technology analysis in close to 100 markets around the world. Light Reading produces nearly 20 targeted communications events including TelcoTV, Ethernet Expo New York and Ethernet Expo London, The Tower Summit @ CTIA, and Optical Expo, as well as focused one-day events tailored for cable, mobile, and wireline executives. Light Reading was acquired by United Business Media in August 2005 and operates as a unit of TechWeb.

About TechWeb

TechWeb (http://techweb.com/aboutus), the global leader in business technology media, is an innovative business focused on serving the needs of technology decision-makers and marketers worldwide. TechWeb produces the most respected and consumed media brands in the business technology market. Today, more than 13.3 million* business technology professionals actively engage in our communities created around our global face-to-face events, Interop, Web 2.0, Black Hat, and VoiceCon; online resources such as the TechWeb Network, Light Reading, Intelligent Enterprise, InformationWeek.com, bMighty.com, and The Financial Technology Network; and the market leading, award-winning InformationWeek, TechNet Magazine, MSDN Magazine, and Wall Street & Technology magazines. TechWeb also provides end-to-end services including next-generation performance marketing, integrated media, research, and analyst services. TechWeb is a division of United Business Media, a global provider of news distribution and specialist information services with a market capitalization of more than $2.5 billion.

*13.3 million business decision-makers: based on number of monthly connections

About United Business Media Limited

UBM (UBM.L) focuses on two principal activities: worldwide information distribution, targeting and monitoring; and, the development and monetization of B2B communities and markets. UBM's businesses inform markets and serve professional commercial communities - from doctors to game developers, from journalists to jewelry traders, from farmers to pharmacists - with integrated events, online, print and business information products. Our 6,500 staff in more than 30 countries are organized into specialist teams that serve these communities, bringing buyers and sellers together, helping them to do business and their markets to work effectively and efficiently. For more information, go to http://www.unitedbusinessmedia.com/.

Press contact: Jennifer Baker +1 617 871-1910 jbaker@pyr.com

Pyramid Research

CONTACT: Jennifer Baker, +1-617-871-1910, jbaker@pyr.com

Web Site: http://www.pyr.com/

Comcast Launches New Technologies for Colorado CustomersUniversal Caller ID(TM) and Free iPhone(TM) Application Integrate Digital Cable, High-Speed Internet and Digital Voice; Technologies Available Free to Triple Play Customers

DENVER, July 30 /PRNewswire-FirstCall/ -- Comcast, the nation's leading provider of entertainment, information and communications, today announced new technologies to bring together the company's digital cable, high-speed Internet and digital voice offerings with the launch of Universal Caller ID(TM) and a mobile application for the iPhone(TM) or iPod touch .

Colorado Triple Play customers can now view incoming caller information on their TV and computer screens with the Universal Caller ID(TM) service. The recently launched Comcast iPhone mobile application, or "app" for short, allows users to access services such as email, voicemail, movie trailers, TV listings and more.

"We are excited to launch new products that provide our Colorado Customers with easy access to the services that they use every day while they are in their home or away," said Scott Binder, Senior Vice President of Comcast's Colorado Region. "New features like Universal Caller ID and our iPhone app are just more ways of providing our customers with more value at no extra cost."

Universal Caller ID

Universal Caller ID will be available to Triple Play customers this week, giving them more control and convenience than ever before. Customers can now see who is calling while watching a movie or surfing the Internet and decide to answer the phone or ignore the call without having to rush to the handset.

The Universal Caller ID feature displays the caller's name and phone number on a pop-up banner on the TV or computer screen, and the customer can answer the phone or select "exit" and go back to their favorite TV show or online activity.

The Universal Caller ID to the TV feature will activate automatically, so incoming caller information will appear on customers' televisions as the service becomes available to their home. If they choose, customers can turn the feature off or set it to snooze while watching their favorite show or movie. The Caller ID to the PC feature can be easily downloaded and installed at http://www.comcast.net/callerid.

Comcast Mobile App

Comcast's first ever mobile app - which is available as a free download for Triple Play and SmartZone customers - gives users the ability to:

-- Check Comcast email and listen to home voice mail in one combined inbox. -- Read, reply, forward and compose email as well as read attachments supported by the iPhone. -- Manage voice mail messages and call logs, view voice mail in any preferred order as well as "touch" to call. -- Forward home phone calls to the iPhone from the iPhone, view call history and manage home phone settings. -- See what's on TV tonight, tomorrow or next week, including program details. -- Watch Video On Demand movie trailers. -- Synch all Universal Address Book contacts to an iPhone or iPod touch as well as the ability to add pictures to favorite contacts.

More than 100,000 customers have already downloaded Comcast's mobile app. To download, visit http://www.comcast.net/iphone. Some of the same features are also accessible on any Web-enabled mobile device by using a browser to go to http://m.comcast.net/.

For more information on Comcast's products and services, visit http://www.comcast.com/ or call 1-800-COMCAST.

Note: To receive the Universal Caller ID feature, customers must have the digital Triple Play and a digital set-top box that supports the feature.

About Comcast Corporation

Comcast Corporation (http://www.comcast.com/) is the nation's leading provider of entertainment, information and communication products and services. With 24.1 million cable customers, 15.3 million high-speed Internet customers and 6.8 million Comcast Digital Voice customers, Comcast is principally involved in the development, management and operation of cable systems and in the delivery of programming content.

Comcast's content networks and investments include E! Entertainment Television, Style Network, Golf Channel, VERSUS, G4, PBS KIDS Sprout, TV One, ten sports networks operated by Comcast Sports Group and Comcast Interactive Media, which develops and operates Comcast's Internet businesses, including Comcast.net (http://www.comcast.net/). Comcast also has a majority ownership in Comcast-Spectacor, whose major holdings include the Philadelphia Flyers NHL hockey team, the Philadelphia 76ers NBA basketball team and two large multipurpose arenas in Philadelphia.

Comcast

CONTACT: Cindy Parsons of Comcast, +1-303-603-2125,
cindy_parsons@cable.comcast.com

Web Site: http://www.comcast.com/

GVI Security Solutions Samsung Electronics Cameras Selected for Large New Jersey University Video Surveillance Project

CARROLLTON, Texas, July 30 /PRNewswire-FirstCall/ -- GVI Security Solutions, Inc. (BULLETIN BOARD: GVSS) , a leading provider of video security surveillance solutions featuring the complete Samsung Electronics line of products, announced that their Samsung Electronics cameras have been selected for a video surveillance project by a large New Jersey University.

The GVI Samsung Electronics color cameras with Day/Night capability and Digital Noise Reduction were selected for interior and exterior locations at the University as a result of their low-light performance.

"Universities and educational institutions increasingly need to provide 24 hour security to protect their facilities, students, administrators and faculty," said Joseph Restivo, GVI Chief Operating Officer/CFO. "The capability of our technology to deliver clear, high quality images in difficult lighting conditions is an important factor contributing to our success in the educational video security vertical."

About GVI Security Solutions, Inc.

GVI Security Solutions, Inc. (BULLETIN BOARD: GVSS) is a leading provider of video surveillance and security solutions, with sales and service representation throughout North, Central and South America. The company provides Samsung Electronics and GVI branded products, software and services to the homeland security and commercial markets. Their customers include governments, major retail chains, leading financial institutions and public and private school systems.

Forward-Looking Statements:

Some of the statements made by GVI Security Solutions, Inc. in this press release are forward looking in nature. Forward-looking statements in this press release are not promises or guarantees and are subject to risks and uncertainties that could cause our actual results to differ materially from those anticipated. These statements are based on management's current expectations and assumptions and are naturally subject to uncertainty and changes in circumstances. We caution you not to place undue reliance upon any such forward-looking statements. Actual results may differ materially from those expressed or implied by the statements herein. GVI Security Solutions, Inc. believes that its primary risk factors include, but are not limited to: reliance on primary supplier; concentration of customers; credit limits imposed by primary supplier; effective integration of recently acquired operations and personnel; expansion risks; effective internal processes and systems; the ability to attract and retain high quality employees; changes in the overall economy; rapid change in technology; the number and size of competitors in its markets; outstanding indebtedness; control of the Company by principal stockholders; law and regulatory policy; the mix of products and services offered in the company's target markets; and other factors detailed in the Company's filings with the Securities and Exchange Commission, including the Annual Report on Form 10-K for the year ended December 31, 2008 currently on file, as well as the risk that projected business opportunities will fail to materialize or will be delayed.

GVI Security Solutions, Inc.

CONTACT: Investors, Leon Hamerling, Investor Media Group,
+1-877-725-2500; or Esra Pope of GVI Security Solutions, +1-972-245-7353

Web Site: http://www.gviss.com/

Continental Airlines Revolutionizes Customer Support With Online Virtual ExpertFirst network carrier to utilize online human emulation technology

HOUSTON, July 30 /PRNewswire-FirstCall/ -- Continental Airlines today launched Virtual Expert technology, a new feature at continental.com, offering customers 24-hour support on the Web for all their travel needs. "Alex," the airline's Virtual Expert, interacts with customers to easily and effectively interpret requests and provide accurate answers to travel needs. Continental is the first network carrier to offer human emulation technology.

From booking a flight, to helping customers understand visa requirements for international travel, Alex allows Continental to provide the same high-touch service available within the call center environment, for customers on the Web.

"Continental.com is our one-stop shop for travel planning and information and Alex quickly and accurately guides our customers to the answers they're looking for," said Mark Bergsrud, senior vice president of marketing programs and distribution at Continental Airlines. "We are constantly looking for ways to improve our ability to deliver the best customer experience, and Alex will be an invaluable resource to our customers."

Developed by Next IT, the new technology emulates not only the look and voice of a human, but also the ability to understand the intent of phrases and dialog, guiding customers to information and making continental.com a one-stop shop for travel planning and information.

Customers visiting continental.com can click the Alex icon to open a chat window where they can enter a question. Alex responds with both a written and spoken response. The customer is then automatically navigated to the specific place on continental.com that answers the question and provides other helpful links in the chat window.

Prior to launching the technology, Continental tested the product with 3,000 of the airline's most frequent flyers and with reservations agents at Continental's call center in Salt Lake City.

Reservations agents at Continental are using the Virtual Expert technology to answer customer questions and improve the customer experience during calls. The Virtual Expert helps agents locate information quickly.

Continental's Virtual Expert is one of the many services that the airline has introduced to improve the overall customer travel experience. Continental was one of the first carriers to offer customer-driven technology that allows passengers to take control of the check-in process through kiosk self check-in. As a result, Continental customers enjoy one of the shortest line waits of any major airline and employees are better equipped to offer more personalized service. Continental's paperless boarding pass program allows travelers to receive boarding passes electronically on cell phones or PDAs when traveling from more than a dozen airports throughout its system, its EliteAccess program provides qualified customers priority check-in, security screening, boarding and baggage handling, and its corps of more than 300 specially selected and trained concierges provide individualized pre-and post-flight services for its BusinessFirst customers worldwide.

Continental Airlines is the world's fifth largest airline. Continental, together with Continental Express and Continental Connection, has more than 2,750 daily departures throughout the Americas, Europe and Asia, serving 133 domestic and 132 international destinations.

More than 750 additional points are served via current alliance partners. With more than 43,000 employees, Continental has hubs serving New York, Houston, Cleveland and Guam, and together with its regional partners, carries approximately 63 million passengers per year.

Celebrating its 75th anniversary this year, Continental consistently earns awards and critical acclaim for both its operation and its corporate culture. For the sixth consecutive year, FORTUNE magazine named Continental the No. 1 World's Most Admired Airline on its 2009 list of World's Most Admired Companies. For more company information, go to continental.com.

Continental Airlines

CONTACT: Corporate Communications of Continental Airlines,
+1-713-324-5080, corpcomm@coair.com

Web Site: http://www.continental.com/
http://www.continental.com/company/news

SouthernLINC Wireless Launches Motorola Clutch(TM) i465First iDEN Phone with a QWERTY keyboard in high demand

ATLANTA, July 30 /PRNewswire-FirstCall/ -- SouthernLINC Wireless, a Southern Company , today announced the availability of the Motorola Clutch(TM) i465. The much-anticipated Clutch i465 is the first Motorola Integrated Digital Enhancement Network (iDEN) device that combines the power of Push To Talk two-way radio and the convenience of a QWERTY keyboard.

(Logo: http://www.newscom.com/cgi-bin/prnh/20090507/CL13145LOGO ) (Photo: http://www.newscom.com/cgi-bin/prnh/20090730/CL54442 )

With a familiar candy-bar design and military-tough durability, the Clutch i465 blends function and style into a 3.4-ounce package. Despite its compact size, this phone features a large color display screen, shortcut buttons, mobile Web accessibility and specially designed keys that make texting and POP3 or Internet e-mailing easy. Additionally, the Clutch i465 features Bluetooth technology, an integrated digital camera with zoom, GPS capabilities and 20 megabytes of available memory.

"Text messaging is on the rise," said Rodney Johnson, vice president of sales and distribution for SouthernLINC Wireless. "In fact, according to CTIA - The Wireless Association , American subscribers sent about 3.5 billion text messages per day last year.

"That's why the Clutch i465 is such a great addition to the SouthernLINC Wireless product portfolio. Typing on the QWERTY keyboard is fast and easy, which makes the Clutch i465 the perfect phone for text-messaging enthusiasts."

The Motorola Clutch i465 is now available for just $49.99 with a qualifying service agreement at all SouthernLINC Wireless Sales and Service Centers, through authorized SouthernLINC Wireless dealers or online at http://www.southernlinc.com/phones.asp. And, through Sept. 30, pair a new Clutch i465 activation with an $11.99 per month unlimited text messaging package and receive the first month of text messaging at no charge. In-stock availability may vary by location. Visit http://www.southernlinc.com/promoinfo for more information about this offer.

About SouthernLINC Wireless

SouthernLINC Wireless, a Southern Company , is an Atlanta-based regional wireless carrier with network coverage in the major metro and rural areas of Alabama, Georgia, southeast Mississippi and northwest Florida. SouthernLINC Wireless bundles multiple communication options, including Push To Talk two-way radio, cellular service, text messaging, wireless Internet access and wireless data, into one hand-held device. For more information, please call 1-800-818-LINC (5462) or visit http://www.southernlinc.com/.

About Southern Company

With 4.4 million customers and more than 42,000 megawatts of generating capacity, Atlanta-based Southern Company is the premier energy company serving the Southeast. A leading U.S. producer of electricity, Southern Company owns electric utilities in four states and a growing competitive generation company, as well as fiber optics and wireless communications. Southern Company brands are known for excellent customer service, high reliability and retail electric prices that are below the national average. Southern Company is consistently listed among the top U.S. electric service providers in customer satisfaction by the American Customer Satisfaction Index. Visit our Web site at http://www.southerncompany.com/.

Photo: http://www.newscom.com/cgi-bin/prnh/20090507/CL13145LOGO
http://www.newscom.com/cgi-bin/prnh/20090730/CL54442 SouthernLINC Wireless

CONTACT: Jamie Schaff of SouthernLINC Wireless, +1-678-443-1527,
jschaff@southernco.com; Lindsey Ford of Edelman, +1-404-262-3000,
Lindsey.Ford@edelman.com, for SouthernLINC Wireless

Web Site: http://www.southernlinc.com/

Growing Midwestern Clinical Research Organization Selects OmniComm Systems to Provide eClinical Solutions for Phase IV Studies

FT. LAUDERDALE, Fla., July 30 /PRNewswire-FirstCall/ -- OmniComm Systems, Inc. (BULLETIN BOARD: OMCM) , a leader in integrated electronic data capture (EDC) solutions for clinical trials announced today that a growing US Clinical Research Organization (CRO) has selected OmniComm to provide eClinical solutions in connection with two of the CRO's Phase IV studies covering approximately 27 sites and more than 700 subjects. Additional details were not disclosed. Phase IV studies take place after a drug has been approved for marketing and are designed to provide broader experience in evaluating the safety and effectiveness of the new medicine in larger numbers of patients, subpopulations of patients, and to compare and/or combine it with other available treatments.

"We are pleased to have been selected by this CRO to provide eClinical solutions for these important Phase IV studies," said Cornelis F. Wit, OmniComm's President and CEO. "We believe the broad scope of our integrated eClinical solutions, enhanced by the recent acquisition of eResearch Technology's data capture unit, positions us well to offer a broad array of solutions, especially for CRO's, pharmaceutical, biotech and medical device companies seeking cost-effective tools to capture and track outcomes of clinical trials conducted at multiple locations. We look forward to expanding the range of services we provide for companies seeking to increase efficiencies in their clinical activities."

About OmniComm

OmniComm Systems, Inc. (http://www.omnicomm.com/) provides customer-driven Internet solutions to pharmaceutical, biotechnology, research and medical device organizations that conduct life changing clinical trial research. OmniComm's growing base of satisfied customers is a direct result of the company's commitment to deliver products and services that ensure ease of use, faster study build, ease of integration and better performance. OmniComm's client intuitive pricing model allows companies that range from small, to mid-size to large scale institutions to safely and efficiently capitalize on their clinical research investments. OmniComm Systems, Inc. has corporate headquarters in Ft. Lauderdale, Florida and offices in Bonn, Germany, Tula, Russia, California, Connecticut, Georgia, Illinois, New Jersey, New York, North Carolina and Tennessee.

Safe Harbor Disclaimer

Statements made by OmniComm included in this release may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements involve a number of risks and uncertainties such as the Company's ability to obtain new contracts and accurately estimate net revenues due to uncertain regulatory guidance, variability in size, scope and duration of projects, and internal issues at the sponsoring client, integration of acquisitions, competitive factors, technological development, and market demand. As a result, actual results may differ materially from any financial outlooks stated herein. Further information on potential factors that could affect the Company's financial results can be found in the Company's Reports on Form 10-K and 10-Q filed with the Securities and Exchange Commission. The Company undertakes no obligation to publicly update any forward-looking statement, whether as a result of new information, future events, or otherwise.

OmniComm Systems, Inc.

CONTACT: Catherine Lemercier of OmniComm Systems, Inc, +1-954-473-1254
Extension 283, clemercier@omnicomm.com; or Gary Nash, CEOcast, Inc. for
OmniComm, +1-212-732-4300, gnash@ceocast.com; or Stephen Johnson,
+1-954-377-1726

Web Site: http://www.omnicomm.com/

Correction: Alpha1 Security Gets Contract, in Principle, for $75 Million Over Five Years

WASHINGTON, July 30 /PRNewswire-FirstCall/ -- Alpha1 Security Inc. has agreed in principle with George Karam, Chairman of Karamco Inc., to provide secure communications to the government of Saudi Arabia. The contract has a potential value of $15 million a year for five years. As previously announced Alpha1 Security Inc. has entered into an acquisition agreement with Global Holdings, Inc. (BULLETIN BOARD: GOHG) .

Alpha1 provides Internet based (IP) data security services as well as develops and markets software and microprocessor-based products. Alpha1's primary data security products use an advanced form of computer security technology referred to as public key infrastructure (PKI) which enables Alpha1's products to integrate. Alpha1 is an approved NSA C-2 classified contractor.

Contact: Mark McCloy, President alpha1security.net (410)643-1016 Disclaimer: Disclaimer for forward-looking statements for press releases

This Press release includes and is based, inter alia, on forward-looking information and statements that are subject to risks and uncertainties that could cause actual results to differ. Such forward-looking information and statements are based on current expectations, estimates and projections about global economic conditions, the economic conditions of the regions and industries that are major markets for Alpha1 Security Inc. and its subsidiaries and affiliates (the "Alpha1") lines of business. These expectations, estimates and projections are generally identifiable by statements containing words such as "expects", "believes", "estimates" or similar expressions. Important factors that could cause actual results to differ materially from those expectations include, among others, economic and market conditions in the geographic areas and industries that are or will be major markets for the Alpha1 Security Inc. businesses, market acceptance of new products and services, changes in governmental regulations, interest rates, fluctuations in currency exchange rates and such other factors as may be discussed from time to time. Although Alpha1 Security Inc. believes that its expectations and the information in this press release were based upon reasonable assumptions at the time when they were made, it can give no assurance that those expectations will be achieved or that the actual results will be as set out in this press release. Neither Alpha1 Security Inc. nor any other company within the Alpha1 Security Inc. is making any representation or warranty, expressed or implied, as to the accuracy, reliability or completeness of the information in the press release, and neither Alpha1 Security Inc., any other company within the Alpha1 Security nor any of their directors, officers or employees will have any liability to you or any other persons resulting from your use of the information in the press release.

Alpha1 Security Inc.

CONTACT: Mark McCloy, President of Alpha1 Security Inc.,
+1-410-643-1016

Web Site: http://alpha1security.intuitebsites.com/

Pomeroy IT Solutions Hosts Job Fair For 70 Service Desk Positions in Hebron, Ky

HEBRON, Ky., July 30 /PRNewswire-FirstCall/ -- Pomeroy IT Solutions , a technology and services solutions provider, announced today that they will be hosting a job fair at their US Headquarters at 1020 Petersburg Road, Hebron, Kentucky, on Wednesday, August 26, from 1 - 7 pm.

(Logo: http://www.newscom.com/cgi-bin/prnh/20090213/POMEROYLOGO)

Pomeroy will be adding approximately 70 local Service Desk positions in support of two new multi-year outsourcing contracts which will commence in the fourth quarter of 2009. These will be regular full-time positions offering a competitive pay and benefits package and a professional work environment. The Company is specifically looking to hire Service Desk analysts with Microsoft Office skills, a strong customer service orientation and technical knowledge of computer hardware, software and warranty experience. Technical certifications are a plus.

"In an environment where many companies are laying off employees or sending jobs off-shore, we are pleased that our clients have found value in our domestic capabilities, and these new positions will be a boost to our local economy," said Chris Froman, Pomeroy IT Solutions President and CEO.

Additional details about this job fair and other career opportunities can be found on our website at http://www.pomeroy.com/ under 'News and Events.'

About Pomeroy IT Solutions, Inc.

Pomeroy IT Solutions, Inc. is a leading provider of IT infrastructure solutions focused on enterprise, network and end-user technologies. Leveraging its core competencies in IT Outsourcing and Professional Services, Pomeroy delivers consulting, deployment, operational, staffing and product sourcing solutions through the disciplines of Six-Sigma, program and project management, and industry best practices. Pomeroy's consultative approach and adaptive methodology enables Fortune 2000 corporations, government entities, and mid-market clients to realize their business goals and objectives by leveraging information technology to simplify complexities, increase productivity, reduce costs, and improve profitability. For more information, go to http://www.pomeroy.com/.

Forward-Looking Statements

Certain of the statements in the preceding paragraphs regarding financial results constitute forward-looking statements. These statements are related to future events or to our future financial performance and involve known and unknown risks, uncertainties and other factors that may cause our markets' actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by such forward looking statements. These risks and other factors you should specifically consider include but are not limited to: changes in customer demands or industry standards; existing market and competitive conditions, including the overall demand for IT products and services; the nature and volume of products and services anticipated to be delivered; the mix of the products and services businesses; the type of services delivered; the ability to successfully attract and retain customers and to sell additional products and service to existing customers; the ability to timely bill and collect receivables; the ability to maintain a broad customer base to avoid dependence on any single customer; the need to successfully attract and retain outside consulting services; the ability to identify and successfully integrate new acquisitions by the Company; terms of vendor agreements and certification programs and the assumptions regarding the ability to perform there under; the ability to implement the Company's best practices strategies; the ability to manage risks associated with customer projects; adverse or uncertain economic conditions; loss of key personnel; litigation; and the ability to attract and retain technical and other highly skilled personnel. In some cases, you can identify forward-looking statements by such terminology such as "may", "should", "expects", "plans", "anticipates", "believes", "estimates", "predicts", "potential", "continue", "projects", "intends", "prospects", "priorities", or negative of such terms or other comparable terminology. These statements are only predictions. Actual events or results may differ materially.

Photo: http://www.newscom.com/cgi-bin/prnh/20090213/POMEROYLOGO Pomeroy IT Solutions

CONTACT: Christopher C. Froman, President and Chief Executive Officer of
Pomeroy IT Solutions, Inc., +1-859-586-0600 x1419 office, 1-800-860-0327 fax,
cfroman@pomeroy.com

Web Site: http://www.pomeroy.com/

Correction: Alpha1 Security Gets Contract, in Principle, for $75 Million Over Five Years

WASHINGTON, July 30 /PRNewswire-FirstCall/ -- Alpha1 Security Inc. has agreed in principle with George Karam, Chairman of Karamco Inc., to provide secure communications to the government of Saudi Arabia. The contract has a potential value of $15 million a year for five years. As previously announced Alpha1 Security Inc. has entered into an acquisition agreement with Global Holdings, Inc. (BULLETIN BOARD: GOHG) .

Alpha1 provides Internet based (IP) data security services as well as develops and markets software and microprocessor-based products. Alpha1's primary data security products use an advanced form of computer security technology referred to as public key infrastructure (PKI) which enables Alpha1's products to integrate. Alpha1 is an approved NSA C-2 classified contractor.

Contact: Mark McCloy, President alpha1security.net (410)643-1016 Disclaimer: Disclaimer for forward-looking statements for press releases

This Press release includes and is based, inter alia, on forward-looking information and statements that are subject to risks and uncertainties that could cause actual results to differ. Such forward-looking information and statements are based on current expectations, estimates and projections about global economic conditions, the economic conditions of the regions and industries that are major markets for Alpha1 Security Inc. and its subsidiaries and affiliates (the "Alpha1") lines of business. These expectations, estimates and projections are generally identifiable by statements containing words such as "expects", "believes", "estimates" or similar expressions. Important factors that could cause actual results to differ materially from those expectations include, among others, economic and market conditions in the geographic areas and industries that are or will be major markets for the Alpha1 Security Inc. businesses, market acceptance of new products and services, changes in governmental regulations, interest rates, fluctuations in currency exchange rates and such other factors as may be discussed from time to time. Although Alpha1 Security Inc. believes that its expectations and the information in this press release were based upon reasonable assumptions at the time when they were made, it can give no assurance that those expectations will be achieved or that the actual results will be as set out in this press release. Neither Alpha1 Security Inc. nor any other company within the Alpha1 Security Inc. is making any representation or warranty, expressed or implied, as to the accuracy, reliability or completeness of the information in the press release, and neither Alpha1 Security Inc., any other company within the Alpha1 Security Global Holdings nor any of their directors, officers or employees will have any liability to you or any other persons resulting from your use of the information in the press release.

Alpha1 Security Inc.

CONTACT: Mark McCloy, President of Alpha1 Security Inc.,
+1-410-643-1016

Web Site: http://alpha1security.intuitebsites.com/

802.11n Finalization Feeding Frenzy Fascinating Folks From Fairbanks to Florida

PLEASANTON, California, July 30 /PRNewswire/ --

- LBAC Launch Learning Leap Too

Earlier this month, Matthew Gast, chief strategist in the office of the Chief Technology Officer of Trapeze Networks (http://www.trapezenetworks.com/) (NYSE: BDC), sparked a news feeding frenzy on his blog (http://blog.matthewgast.com/2009/07/20/80211n-is-almost-done/) when he wrote that the final vote to ratify 802.11n could take place as early as September 11, 2009, exactly seven years after the initiative began.

As of this writing Google has tracked more than 78 stories from around the world. And the most influential blog for wireless networking professionals, Certified Wireless Networks Professionals (http://www.cwnp.com/community), even featured a video interview with Gast. (Video now available here : http://blog.trapezenetworks.com/trapeze_networks_news_and/2009/07/matthew-gast-office-of-cto-on-september-ratification-of-80211n.html.)

In the interview, Gast says, "The importance that having a standard gives you is it fosters interoperability. When everybody has the same set of rules and customers and users have access to those rules ... it's possible to hold people's feet to the fire and ensure they're making interoperable equipment for you."

Introduction of LBAC / RF Firewall Prompts Similar Massive Interest

In June, Trapeze Networks introduced new location-based equipment and an RF Firewall (http://www.trapezenetworks.com/news_events/press_releases/215/). This introduction, like Gast's comments, have sparked wide-spread interest. To help meet the demand for more information, Tash Hepting, a member of the office of the CTO, made a video to help explain how location-based access control and the RF Firewall fit into Trapeze Networks' overall security strategy. That video has been posted here (http://blog.trapezenetworks.com/trapeze_networks_news_and/2009/07/tash-hepting-office-of-cto-on-role-of-lbac-in-network-security-management.html).

In the interview, Hepting says, "Real Time Location Systems is just one piece of the puzzle. We've been working on an authentication system, location being one of them, that allows you to improve your security in a variety of different, interesting and dynamic ways specific to your application."

About Trapeze Networks

Trapeze Networks, a Belden Brand, is a leader in enterprise wireless LAN equipment and management software. Trapeze was the first company to introduce NonStop Wireless - delivering unmatched reliability to the enterprise wireless LAN and its solutions are optimized for companies requiring mobility and high bandwidth such as healthcare, education, and hospitality. Trapeze delivers Smart Mobile(TM) providing scalable wireless LANs for applications such as Voice over Wi-Fi, location services, and indoor/outdoor connectivity.

Trapeze Networks

Brian D. Johnson of Trapeze Networks, +1-925-337-8911, bjohnson@trapezenetworks.com

Decho Reports Triple-Digit Growth in New Customers from Accounting and Financial Services MarketsMozyPro helps firms save 80+ percent in backup costs

SEATTLE, July 30 /PRNewswire/ -- Decho Corporation, an EMC Company , today announced triple-digit growth in new Mozy(TM) customers from the accounting and financial services markets over the past 12 months. As these firms look to protect irreplaceable business data, they're turning to MozyPro , the industry's most trusted online business backup service.

"Contrary to past experience, small and medium-size business IT spending will decline more than enterprise IT spending as small businesses bear more of the pain from the housing sector collapse and the financial crisis," said analyst Andrew Bartels in a May 2009 Forrester Research Inc report titled "US Enterprises Versus SMB IT Budgets in 2009." In addition, Gartner recently reported the loss of intellectual property or customer data was the number one concern of North American organizations surveyed by Gartner in 2007 and 2008.

Tostevin Accountancy, an accounting, tax, fiduciary, financial planning, and business consulting firm headquartered in Monterey, CA, had been using a tape backup system that it found unreliable and consumed too much valuable office space. It also needed a solution that would work automatically and support Microsoft Exchange. Tostevin reduced its corporate backup costs by 84 percent after they switched from a tape backup provider to MozyPro.

"Our previous solution required a significant investment upfront for both hardware and software, plus costs associated with required maintenance," said Dennis Forest, CPA at Tostevin Accountancy Corporation. "MozyPro's inexpensive price and minimal management times made it the natural choice for us."

MozyPro's benefits are also being realized by banks. The State Bank of Geneva was spending several hours per week managing on-premise data backups and moving backup media off-site. "The simplicity of Mozy is great for a small business," said Rick Razum, IT Director for the State Bank of Geneva. "However, its features are so enabling and well-designed that Mozy is ideal for larger companies as well. The quality of product for an affordable rate is unmatched."

"In addition to the significant cost savings that can be achieved with MozyPro, accounting and financial firms recognize Mozy's market leadership in data protection," said Daniel Royer, MozyPro manager at Decho Corp. "These firms can now focus on their business knowing that their important digital information is secure."

For additional information about how Mozy helps accounting and financial services professionals protect valuable data and perform an accounting backup for an affordable price, visit http://www.mozy.com/accounting. Mozy, the most trusted online backup solution for consumers and businesses, serves more than 40,000 business customers and more than 1 million users. Mozy customers back up more than 15 petabytes of data to Decho's professionally managed world-class data centers.

About Decho

Decho is dedicated to helping people protect, manage and enrich their "digital echo" -- the valuable and ever-growing body of personal, digital information that reverberates through their lives. Mozy, the company's flagship offering, is the leading online backup service for both consumers and businesses, and Decho is actively developing other services. Decho is headquartered in Seattle and is an EMC company. For more information, please go to http://www.decho.com/.

MozyPro is a registered trademark, and Mozy is a trademark of Decho Corporation. All other trademarks are the property of their respective owners.

EMC Corporation

CONTACT: Devin Knighton of Decho Corp., +1-801-722-8187,
devink@decho.com

Web Site: http://www.emc.com/

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