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Noront Resources to Present at key Retail and Industry Conferences

TORONTO, November 4 /PRNewswire/ --

Symbol: NOT:TSX-V Shares Outstanding: 163,631,957 Fully Diluted: 173,461,957

Noront Resources Ltd. ("Noront" or the "Company") (TSX Venture: NOT) is pleased to announce that it will be presenting and or exhibiting at the following retail and industry conferences:

November 6-7 Cambridge Montreal Resource Investment Conference Palais des Congres Montreal 1001 place Jean-Paul Riopelle Montreal, Quebec Exhibiting Booth No. 103 Speaking Time: November 6th at 3:00pm Montreal local time November 8-10 25th International Ferro-Alloys Conference Speaking Time: November 9th at 2:30pm Monte Carlo local time

Noront's CEO Mr. Wes Hanson will be attending Cambridge's Montreal Conference on Friday, November 6, 2009 and will be speaking later that day, he will be available during the day to answer all shareholder questions. Mr. Hanson will also be presenting at the 25th Annual Ferro Alloy Conference in Monte Carlo on November 9, 2009. For further information on the above conferences, please contact the Investor Relations Department. All presentations given at the conferences will be available on the Noront website at http://www.norontresources.com. For a full list of all future conferences the company will be attending, please visit our website.

Regarding the Freewest Offer:

Noront's offer (the "Offer") for Freewest Resources Canada Inc. ("Freewest") remains the only offer to date. Our offer of 0.25 of a Noront share for every one (1) Freewest share remains outstanding and continues to represent a full and fair offer for Freewest.

Noront continues to believe that the consolidation of the Ring of Fire will result in the use of mutual infrastructure to allow for prudent management of shareholder equity, which will in turn, create value for all stakeholders in the Ring of Fire.

We urge Freewest shareholders to tender their shares prior to the expiry date of November 18, 2009. Noront strongly encourages shareholders of Freewest to read the Take-Over Bid Circular, which contains the full terms and conditions of the Offer as well as detailed instructions on how Freewest shareholders can tender their common shares to the Offer. Copies of the Take-Over Bid Circular and related documents are available at http://www.norontresources.com or on SEDAR at http://www.sedar.com.

Freewest shareholders electing to tender their common shares to the Offer must complete the letter of transmittal or, if necessary, the notice of guaranteed delivery (both of which accompany the Take-Over Bid Circular) and return the appropriate documents in accordance with the terms and conditions more fully set out under "Manner of Acceptance" in Section 3 of the Offer. If common shares of Freewest are held in the name of a nominee, such as a broker, investment bank, bank or trust company, the shareholder should contact such nominee for instructions on how to deposit their common shares to the Offer.

For assistance in tendering shares to the Noront Offer, Freewest shareholders are encouraged to contact Laurel Hill Advisory Group at the following contact number: +1-877-304-0211.

About Noront

Noront Resources Ltd. is focused on its significant and multiple, high-grade nickel-copper-platinum-palladium, chromite, gold and vanadium discoveries in an area known as the "Ring of Fire", an emerging multi-metals district located in the James Bay Lowlands of Ontario, Canada. Noront is the dominant land holder at the Ring of Fire and continues to delineate and prove up its discoveries with NI 43-101 technical and economic reports and an aggressive and well financed drill plan for the remainder of 2009 and 2010. All material information on Noront can be found on the Company's website at http://www.norontresources.com or at SEDAR at http://www.sedar.com

Wesley (Wes) Hanson President & Chief Executive Officer

FORWARD LOOKING STATEMENTS

This release contains "forward-looking statements" within the meaning of applicable Canadian securities legislation, including predictions, projections and forecasts. Forward-looking statements include, but are not limited to, statements that address activities, events or developments that the Company expects or anticipates will or may occur in the future, including such things as future business strategy, competitive strengths, goals, expansion, growth of the Company's businesses, operations, plans and with respect to exploration results, the timing and success of exploration activities generally, permitting time lines, government regulation of exploration and mining operations, environmental risks, title disputes or claims, limitations on insurance coverage, timing and possible outcome of any pending litigation and timing and results of future resource estimates or future economic studies. Often, but not always, forward-looking statements can be identified by the use of words such as "plans", "planning", "planned", "expects" or "looking forward", "does not expect", "continues", "scheduled", "estimates", "forecasts", "intends", "potential", "anticipates", "does not anticipate", or "belief", or describes a "goal", or variation of such words and phrases or state that certain actions, events or results "may", "could", "would", "might" or "will" be taken, occur or be achieved. Forward-looking statements are based on a number of material factors and assumptions, including, the result of drilling and exploration activities, that contracted parties provide goods and/or services on the agreed timeframes, that equipment necessary for exploration is available as scheduled and does not incur unforeseen break downs, that no labour shortages or delays are incurred, that plant and equipment function as specified, that no unusual geological or technical problems occur, and that laboratory and other related services are available and perform as contracted. Forward-looking statements involve known and unknown risks, future events, conditions, uncertainties and other factors which may cause the actual results, performance or achievements to be materially different from any future results, prediction, projection, forecast, performance or achievements expressed or implied by the forward-looking statements. Such factors include, among others, the interpretation and actual results of current exploration activities; changes in project parameters as plans continue to be refined; future prices of gold; possible variations in grade or recovery rates; failure of equipment or processes to operate as anticipated; the failure of contracted parties to perform; labour disputes and other risks of the mining industry; delays in obtaining governmental approvals or financing or in the completion of exploration, as well as those factors disclosed in the company's publicly filed documents. Although Noront has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other factors that cause actions, events or results not to be as anticipated, estimated or intended. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

For further information: Joanne Jobin, Vice President Corporate Communications at +1(416)367-1444, or visit Noront's website at: http://www.norontresources.com.

Noront Resources Ltd.

For further information: Joanne Jobin, Vice President Corporate Communications at +1(416)367-1444, or visit Noront's website at: http://www.norontresources.com.

Sanmina-SCI Announces Fourth Quarter and Fiscal Year End Results

SAN JOSE, Calif., Nov. 4 /PRNewswire-FirstCall/ -- Sanmina-SCI Corporation (the "Company") , a leading global Electronics Manufacturing Services (EMS) company, today reported financial results for the fourth quarter and fiscal year ended October 3, 2009.

Fourth Quarter Fiscal 2009 Highlights -- Revenue of $1.35 billion, exceeded outlook of $1.2 - $1.3 billion -- GAAP gross margin of 7 percent, 70 basis point sequential improvement -- Non-GAAP gross margin of 7.1 percent, 70 basis point sequential improvement -- Cash flow from operations was $45.8 million -- Ending cash balance of $899.2 million

Revenue for the fourth quarter was $1.35 billion, up 12 percent, compared to $1.21 billion in the prior quarter ended June 27, 2009. Revenue for the fiscal year ended October 3, 2009 was $5.18 billion, compared to $7.20 billion for the year ended September 27, 2008.

GAAP Financial Results(1)(3)

GAAP net loss in the fourth quarter was $32.3 million, a diluted loss per share of $0.41, compared to a net loss of $41.1 million and a diluted loss per share of $0.51 in the prior quarter. GAAP net loss for the full year was $136.2 million, a diluted loss per share of $1.65, compared to net loss of $511.3 million, a diluted loss per share of $5.78 in fiscal 2008.

Non-GAAP Financial Results(1)(2)(3)

Non-GAAP gross profit in the fourth quarter was $96.4 million, or 7.1 percent of revenue, up 70 basis points, compared to gross profit of $77.1 million, or 6.4 percent of revenue in the third quarter. Non-GAAP gross profit for the fiscal year 2009 was $339.9 million, or 6.6 percent of revenue, compared to gross profit of $531.2 million, or 7.4 percent for the fiscal year 2008.

Non-GAAP operating income was $34.5 million, or 2.6 percent of revenue, up 120 basis points, compared to $17.1 million, or 1.4 percent of revenue in the prior quarter. Non-GAAP operating income for fiscal 2009 was $94.3 million, or 1.8 percent of revenue, compared to $205.6 million, or 2.9 percent of revenue for fiscal 2008.

Non-GAAP net income in the fourth quarter was $94 thousand, a diluted earnings per share of $0.00, compared to a net loss of $10.9 million and $0.14 diluted loss per share in the prior quarter. Non-GAAP net loss for the full year was $42.5 million, $0.52 diluted loss per share, compared to net income of $69.6 million, a diluted earnings per share of $0.79 in fiscal 2008.

Three Month Twelve Month Periods Periods ------- ------- (In millions, Q4: Q3: Q4: FY: FY: except per 2009 2009 2008(3) 2009 2008(3) share data) ---- ---- ---- ---- ---- ---------- GAAP: ----- Revenue $1,354.0 $1,209.2 $1,703.6 $5,177.5 $7,202.4 Net income (loss) $(32.3) $(41.1) $(473.9) $(136.2) $(511.3) Earnings (loss) per share(1) $(0.41) $(0.51) $(5.35) $(1.65) $(5.78) Non-GAAP(2): Revenue $1,354.0 $1,209.2 $1,703.6 $5,182.5 $7,202.4 Gross profit $96.4 $77.1 $132.8 $339.9 $531.2 Gross margin 7.1% 6.4% 7.8% 6.6% 7.4% Operating income $34.5 $17.1 $59.3 $94.3 $205.6 Operating margin 2.6% 1.4% 3.5% 1.8% 2.9% Net income (loss) $0.1 $(10.9) $24.0 $(42.5) $69.6 Earnings (loss) per share(1) $0.00 $(0.14) $0.27 $(0.52) $0.79 --------------------- ----- ------ ----- ------ -----

"I am pleased with Sanmina-SCI's progress despite a challenging economy and optimistic that the worst is now behind us. We delivered solid results for the quarter with 12 percent growth in revenue and 70 basis point improvement in gross margin over the prior quarter. We expect to further expand margins through our diversified end-markets, efficient manufacturing processes and increase in demand. Our new business strategy and lean cost structure offer distinct advantages to our customers that differentiate us from the competition and position us for future profitable growth," stated Jure Sola, Chairman and Chief Executive Officer.

Debt Redemption

On October 15, 2009 the Company called for redemption on November 16, 2009 of all of its outstanding Senior Floating Rate Notes due 2010. The aggregate principal amount of the Notes currently outstanding is $175.7 million. Upon redemption, holders of the Notes will receive the principal amount of the Notes plus accrued and unpaid interest thereon to but excluding the redemption date. The Company plans to fund the redemption using existing cash resources. The Company's next debt maturity is 2013.

First Quarter Fiscal 2010 Outlook

The following forecast is for the first fiscal quarter ending January 2, 2010. These statements are forward-looking and actual results may differ materially.

-- Revenue between $1.35 billion to $1.45 billion -- Non-GAAP diluted earnings per share between $0.10 to $0.15 (1) Earnings Per Share Calculation

The Company completed a reverse split of its common stock at a ratio of one for six, effective August 14, 2009. Earnings per share data contained in this release for periods prior to such date have been calculated on a post split basis.

(2) Non-GAAP Financial Information

In the commentary set forth above and/or in the financial statements included in this earnings release, we present the following non-GAAP financial measures: revenue, gross profit, gross margin, operating income, operating margin, net income (loss) and earnings (loss) per share. In computing each of these non-GAAP financial measures, we exclude charges or gains relating to: stock-based compensation expenses, restructuring costs (including employee severance and benefits costs and charges related to excess facilities and assets), integration costs (consisting of costs associated with the integration of acquired businesses into our operations), impairment charges for goodwill and intangible assets, amortization expense and other infrequent or unusual items (including charges for customer bankruptcy reorganizations), to the extent material or which we consider to be of a non-operational nature in the applicable period. See Schedule 1 below for more information regarding our use of non-GAAP financial measures, including the economic substance behind each exclusion, the manner in which management uses non-GAAP measures to conduct and evaluate the business, the material limitations associated with using such measures and the manner in which management compensates for such limitations. A reconciliation from GAAP to non-GAAP results is included in the financial statements contained in this release and is also available on the Investor Relations section of our website at http://www.sanmina-sci.com/. Sanmina-SCI provides first quarter outlook information only on a non-GAAP basis due to the inherent uncertainties associated with forecasting the timing and amount of restructuring, impairment and other unusual and infrequent items.

(3) Basis of Presentation for Continuing Operations

The Company completed the sale of the assets of its personal computing business and associated logistics services in two transactions that closed on June 2, 2008 and July 7, 2008, respectively. The Company has reported this line of business as a discontinued operation in the financial statements that accompany this press release. Therefore, results for fiscal 2008 are based on continuing operations.

Company Conference Call Information

Sanmina-SCI will hold a conference call regarding this announcement on Wednesday, November 4, 2009 at 5:00 p.m. ET (2:00 p.m. PT). The access numbers are: domestic 877-273-6760 and international 706-634-6605. The conference will also be broadcast live over the Internet. You can log on to the live webcast at http://www.sanmina-sci.com/. Additional information in the form of a slide presentation is available by logging onto Sanmina-SCI's website at http://www.sanmina-sci.com/. A replay of today's conference call will be available for 48-hours. The access numbers are: domestic 800-642-1687 and international 706-645-9291, access code is 35607075.

About Sanmina-SCI

Sanmina-SCI Corporation is a leading electronics contract manufacturer serving the fastest-growing segments of the global Electronics Manufacturing Services (EMS) market. Recognized as a technology leader, Sanmina-SCI provides end-to-end manufacturing solutions, delivering superior quality and support to OEMs primarily in the communications, defense and aerospace, industrial and medical instrumentation, multimedia, enterprise computing and storage, renewable energy and automotive technology sectors. Sanmina-SCI has facilities strategically located in key regions throughout the world. More information regarding the company is available at http://www.sanmina-sci.com/.

Sanmina-SCI Safe Harbor Statement

Certain statements contained in this press release, including the Company's expectations for future revenue, earnings per share and continued margin improvement constitute forward-looking statements within the meaning of the safe harbor provisions of Section 21E of the Securities Exchange Act of 1934. Actual results could differ materially from those projected in these statements as a result of a number of factors, including continued deterioration of the market for the Company's customers' products and the global economy as a whole, which could negatively impact the Company's revenue and the Company's customers' ability to pay for the Company's products; customer bankruptcy filings; the sufficiency of the Company's cash position and other sources of liquidity to operate and expand its business; impact of the restrictions contained in the Company's credit agreements and indentures upon the Company's ability to operate and expand its business; competition negatively impacting the Company's revenues and margins; any failure of the Company to effectively assimilate acquired businesses and achieve the anticipated benefits of its acquisitions; the need to adopt future restructuring plans as a result of changes in the Company's business; and the other factors set forth in the Company's quarterly reports for fiscal 2009 and annual report for fiscal 2008 filed with the Securities Exchange Commission ("SEC").

The Company is under no obligation to (and expressly disclaims any such obligation to) update or alter any of the forward-looking statements made in this earnings release, the conference call or the Investor Relations section of our website whether as a result of new information, future events or otherwise, unless otherwise required by law.

SANMF Sanmina-SCI Corporation Condensed Consolidated Balance Sheets (In thousands) (GAAP) October September 3, 27, 2009 2008 ---- ---- (Unaudited) ASSETS ------ Current assets: Cash and cash equivalents $899,151 $869,801 Accounts receivable, net 668,474 986,312 Inventories 761,391 813,359 Prepaid expenses and other current assets 78,128 100,399 Assets held for sale 68,902 43,163 ------ ------ Total current assets 2,476,046 2,813,034 --------- --------- Property, plant and equipment, net 543,497 599,908 Other non-current assets 104,354 117,785 ------- ------- Total assets $3,123,897 $3,530,727 ========== ========== LIABILITIES AND STOCKHOLDERS' EQUITY ------------------------------------ Current liabilities: Accounts payable $780,876 $908,151 Accrued liabilities 140,926 191,022 Accrued payroll and related benefits 98,408 139,522 Current portion of long-term debt 175,700 - ------- --- Total current liabilities 1,195,910 1,238,695 --------- --------- Long-term liabilities: Long-term debt 1,262,014 1,481,985 Other 122,833 114,089 ------- ------- Total long-term liabilities 1,384,847 1,596,074 --------- --------- Total stockholders' equity 543,140 695,958 ------- ------- Total liabilities and stockholders' equity $3,123,897 $3,530,727 ========== ========== Sanmina-SCI Corporation Condensed Consolidated Statements of Operations (In thousands, except per share amounts) (GAAP) (Unaudited) Three Months Twelve Months Ended Ended ------------ ------------- October September October September 3, 27, 3, 27, 2009 2008 2009 2008 ------- --------- ------- --------- Net sales $1,353,960 $1,703,579 $5,177,481 $7,202,403 Cost of sales 1,259,630 1,572,688 4,855,003 6,678,297 --------- --------- --------- --------- Gross profit 94,330 130,891 322,478 524,106 ------ ------- ------- ------- Operating expenses: Selling, general and administrative 60,315 71,206 238,194 317,045 Research and development 3,962 4,815 16,685 19,546 Amortization of intangible assets 1,072 1,650 4,817 6,600 Restructuring and integration costs 18,316 13,322 57,260 81,376 Impairment of goodwill and other assets 2,944 481,999 10,178 483,699 ----- ------- ------ ------- Total operating expenses 86,609 572,992 327,134 908,266 ------ ------- ------- ------- Operating income (loss) 7,721 (442,101) (4,656) (384,160) Interest income 459 4,726 6,499 19,744 Interest expense (30,302) (30,296) (116,988) (127,231) Other income (expense), net (5,609) (4,211) 2,575 1,316 ------ ------ ----- ----- Interest and other expense, net (35,452) (29,781) (107,914) (106,171) ------- ------- -------- -------- Loss from continuing operations before income taxes (27,731) (471,882) (112,570) (490,331) Provision for income taxes 4,554 2,033 23,652 21,005 ----- ----- ------ ------ Net loss from continuing operations (32,285) (473,915) (136,222) (511,336) Net income (loss) from discontinued operations, net of tax - (11,264) - 24,987 --- ------- --- ------ Net loss $(32,285) $(485,179) $(136,222) $(486,349) ======== ========= ========= ========= Basic and diluted income (loss) per share from: Continuing operations $(0.41) $(5.35) $(1.65) $(5.78) Discontinued operations $- $(0.13) $- $0.28 Net loss $(0.41) $(5.48) $(1.65) $(5.50) Weighted-average shares used in computing basic and diluted per share amounts: 78,604 88,537 82,528 88,454 Sanmina-SCI Corporation Reconciliation of GAAP to Non-GAAP Measures (in thousands, except per share amounts) (Unaudited) Three Months Twelve Months Ended Ended ------- ------- October 3, June 27, September 27, October 3, September 27, 2009 2009 2008 2009 2008 ------- -------- --------- ------- --------- GAAP Revenue $1,353,960 $1,209,150 $1,703,579 $5,177,481 $7,202,403 Adjustments Customer bankruptcy reorganization(1) - - - 5,000 - --- --- --- ----- --- Non-GAAP Revenue $1,353,960 $1,209,150 $1,703,579 $5,182,481 $7,202,403 ========== ========== ========== ========== ========== GAAP Gross Profit $94,330 $75,760 $130,891 $322,478 $524,106 GAAP gross margin 7.0% 6.3% 7.7% 6.2% 7.3% Adjustments Stock compensation expense (2) 2,028 1,316 1,704 7,209 6,556 Amortization of intangible assets 24 - 233 257 970 Stock option investigation costs - - - - (408) Customer bankruptcy reorganization(1) - - - 10,000 - --- --- --- ------ --- Non-GAAP Gross Profit $96,382 $77,076 $132,828 $339,944 $531,224 ======= ======= ======== ======== ======== Non-GAAP gross margin 7.1% 6.4% 7.8% 6.6% 7.4% GAAP operating income (loss) $7,721 $(1,147) $(442,101) $(4,656) $(384,160) GAAP operating margin 0.6% -0.1% -26.0% -0.1% -5.3% Adjustments Stock compensation expense (2) 4,470 3,036 3,735 15,994 13,936 Amortization of intangible assets 1,096 1,072 1,883 5,074 7,570 Stock option investigation - - 467 450 3,152 Customer bankruptcy reorganization(1) - - - 10,000 - Restructuring and integration costs 18,316 14,135 13,322 57,260 81,376 Impairment of goodwill and other assets 2,944 52 481,999 10,178 483,699 ----- -- ------- ------ ------- Non-GAAP operating income $34,547 $17,148 $59,305 $94,300 $205,573 ======= ======= ======= ======= ======== Non-GAAP operating margin 2.6% 1.4% 3.5% 1.8% 2.9% GAAP net loss $(32,285) $(41,126) $(485,179) $(136,222) $(486,349) Adjustments Net loss (income) from discontinued operations, net of tax - - 11,264 - (24,987) --- --- ------ --- ------- GAAP net loss - continuing operations (32,285) (41,126) (473,915) (136,222) (511,336) Adjustments - continuing operations: Operating income adjustments (see above) 26,826 18,295 501,406 98,956 589,733 Net gain on derivative financial instruments and other(3) - - - (4,993) - Impairment of long-term investment 825 2,706 - 4,531 - Gain on sale of assets - - - - (2,622) (Gain) / loss on repurchase of debt (4) 4,945 - - (8,545) 2,237 Discrete tax item (5) - 10,146 - 10,146 - Nonrecurring tax items (217) (919) (3,464) (6,394) (8,418) ---- ---- ------ ------ ------ Non-GAAP net income (loss) - continuing operations $94 $(10,898) $24,027 $(42,521) $69,594 === ======== ======= ======== ======= Non-GAAP Basic Income (Loss) Per Share: Continuing operations $0.00 $(0.14) $0.27 $(0.52) $0.79 Non-GAAP Diluted Income (Loss) Per Share: Continuing operations $0.00 $(0.14) $0.27 $(0.52) $0.79 Weighted-average shares used in computing Non- GAAP per share amounts: Basic 78,604 80,051 88,537 82,528 88,454 Diluted 79,209 80,051 88,609 82,528 88,504 (1) Relates to revenue reversal and inventory reserves associated with a customer's bankruptcy reorganization announcement. (2) Stock compensation expense was as follows: Three Months Twelve Months Ended Ended ------- ------- October 3, June 27, September 27, October 3, September 27, 2009 2009 2008 2009 2008 ------- -------- --------- ------- --------- Cost of sales $2,028 $1,316 $1,704 $7,209 $6,556 Selling, general and administrative 2,324 1,673 1,951 8,446 7,073 Research and development 118 47 80 339 307 --- -- -- --- --- Stock compensation expense - continuing operations 4,470 3,036 3,735 15,994 13,936 Discontinued operations - - 51 - 401 --- --- -- --- --- Stock compensation expense -total company $4,470 $3,036 $3,786 $15,994 $14,337 ====== ====== ====== ======= ======= (3) Relates primarily to a gain on interest rate swaps not accounted for as hedging instruments during a portion of Q1 FY09 due to termination of a swap. (4) Includes write-off of unamortized debt issuance costs and OCI on dedesignated portion of interest rate swap in Q4 FY09. (5) Represents the establishment of a reserve related to a disputed tax position. Schedule I

The tables contained above include non-GAAP measures of revenue, gross profit, gross margin, operating income, operating margin, net income and earnings per share. Management excludes from these measures stock-based compensation, restructuring and integration expenses, impairment charges, amortization charges and other infrequent items, including customer bankruptcy impacts, to the extent material or which we consider to be of a non-operational nature in the applicable period.

Management excludes these items principally because such charges are not directly related to the Company's ongoing core business operations. We use such non-GAAP measures in order to (1) make more meaningful period-to-period comparisons of Company's operations, both internally and externally, (2) guide management in assessing performance of the business, internally allocating resources and making decisions in furtherance of Company's strategic plan, (3) provide investors with a better understanding of how management plans and measures the business and (4) provide investors with a better understanding of the ongoing, core business. The material limitations to management's approach include the fact that the charges and expenses excluded are nonetheless charges required to be recognized under GAAP. Management compensates for these limitations primarily by using GAAP results to obtain a complete picture of the Company's performance and by including a reconciliation of non-GAAP results back to GAAP in its earnings releases.

Additional information regarding the economic substance of each exclusion, management's use of the resultant non-GAAP measures, the material limitations of management's approach and management's methods for compensating for such limitations is provided below.

Stock-based Compensation Expense, which consists of non-cash charges for the estimated fair value of stock options and unvested restricted stock units granted to employees, is excluded in order to permit more meaningful period-to-period comparisons of the Company's results since the Company grants different amounts and value of stock options in each quarter. In addition, given the fact that competitors grant different amounts and types of equity award and may use different option valuation assumptions, excluding stock-based compensation permits more accurate comparisons of the Company's core results with those of its competitors.

Restructuring and Integration Costs, which consist of severance, lease termination, exit costs and other charges primarily related to closing and consolidating manufacturing facilities and those associated with the integration of acquired businesses into our operations, are excluded because such charges (1) can be driven by the timing of acquisitions which are difficult to predict, (2) are not directly related to ongoing business results and (3) do not reflect expected future operating expenses. In addition, given the fact that the Company's competitors complete acquisitions and adopt restructuring plans at different times and in different amounts than the Company, excluding these charges permits more accurate comparisons of the Company's core results with those of its competitors. Items excluded by the Company may be different from those excluded by the Company's competitors and restructuring and integration expenses include both cash and non-cash expenses. Cash expenses reduce the Company's liquidity. Therefore, management also reviews GAAP results including these amounts.

Impairment Charges, which consist of non-cash charges resulting primarily from the Company's net book value exceeding its market capitalization due to weak macroeconomic conditions, are excluded because such charges are non-recurring and do not reduce the Company's liquidity. In addition, given the fact that the Company's competitors may record impairment charges at different times, excluding these charges permits more accurate comparisons of the Company's core results with those of its competitors.

Amortization Charges, which consist of non-cash charges impacted by the timing and magnitude of acquisitions of businesses or assets, are also excluded because such charges do not reduce the Company's liquidity or availability under its credit facilities. In addition, such charges can be driven by the timing of acquisitions, which is difficult to predict. Excluding these charges permits more accurate comparisons of the Company's core results with those of its competitors because the Company's competitors complete acquisitions at different times and for different amounts than the Company.

Other Items, which consist of other infrequent or unusual items (including charges for customer bankruptcy reorganizations and discrete tax events), to the extent material or non-operational in nature, are excluded because such items are typically non-recurring, difficult to predict and generally not directly related to the Company's ongoing core operations. However, items excluded by the Company may be different from those excluded by the Company's competitors. In addition, these expenses include both cash and non-cash expenses. Cash expenses reduce the Company's liquidity. Management compensates for these limitations by reviewing GAAP results including these amounts.

Sanmina-SCI Corporation

CONTACT: Paige Bombino, Director, Investor Relations of Sanmina-SCI
Corporation, +1-408-964-3610

Web Site: http://www.sanmina-sci.com/

NetSuite Announces Third Quarter 2009 Results- Posts Fourth Consecutive Quarter of Non-GAAP Operating Income and Non-GAAP Net Income - Generates Operating Cash Flow of $2.0 million, an Improvement of $5.4 Million Versus the Third Quarter of 2008 - Highest Number of Sales of NetSuite OneWorld in a Single Quarter

SAN MATEO, Calif., Nov. 4 /PRNewswire-FirstCall/ -- NetSuite Inc. , a leading vendor of cloud computing business management software suites, today announced operating results for its third quarter ended September 30, 2009.

Total revenue for the third quarter of 2009 was $41.7 million. Revenue from the Americas for the third quarter of 2009 was $34.7 million, while revenue from international regions was $7.0 million.

On a GAAP basis, net loss for the third quarter of 2009 was $8.0 million, or $(0.13) per share, as compared to a net loss of $6.2 million, or $(0.10) per share, for the third quarter of 2008.

Non-GAAP net income for the third quarter of 2009 was $348,000, or $0.01 per share, as compared to a non-GAAP net loss of $1.7 million, or $(0.03) per share, for the third quarter of 2008.

Items presented on a non-GAAP basis exclude expenses related to stock-based compensation, the amortization of intangible assets, and transaction costs for business combinations. A reconciliation of GAAP net income/(loss) to non-GAAP net income/(loss) is provided below in a table immediately following the Condensed Consolidated Statements of Operations, along with an explanation of why these non-GAAP financial measures are useful to investors and how they are used by management.

"We are very pleased to report record revenue and record cash flow, and to report our highest number of NetSuite OneWorld customer wins in any quarter," said NetSuite CEO Zach Nelson. "Our customer wins and new SuiteCloud partnerships indicate customers are running from legacy applications like SAP and Microsoft Great Plains to NetSuite's cloud computing offerings."

NetSuite's Third Quarter 2009 Highlights Include: -- Announced that three technology companies that recently completed IPOs have chosen NetSuite to run key business processes: LogMeIn, OpenTable and SolarWinds. -- Announced that Jollibee, one of the world's largest fast-food chains, chose NetSuite OneWorld to manage subsidiaries and divisions across China, Vietnam and the U.S. -- Partnered with Fujitsu to distribute, resell, and support NetSuite Release J, Japan's first and only fully-localized, Software as a Service business management suite. -- Launched NetSuite on the iPhone with support for dashboards, sales order records, customer records, click-to-call and more. -- Integrated United States Postal Service shipping services with NetSuite, providing instant access to key USPS services, including price quotes, shipping label generation, package tracking numbers and customs documentation. Conference Call

In conjunction with this announcement, NetSuite will host a conference call at 2:00 p.m. PST (5:00 p.m. EST) today to discuss the company's third quarter financial results. A live audio webcast and replay of the call, together with detailed financial information, will be available in the Investor Relations section of NetSuite's Web site at http://www.netsuite.com/investors. The live call can be accessed by dialing 800-227-9428 (U.S.) or 785-830-1925 (outside the U.S.) and referencing passcode: 385-8094. A replay of the call can also be accessed by dialing 888-203-1112 (U.S.) or 719-457-0820 (outside the U.S.), and referencing passcode: 385-8094.

About NetSuite

NetSuite Inc. is a leading vendor of cloud computing business management software suites for mid-sized businesses and divisions of large companies. NetSuite enables companies to manage core business operations in a single system, which includes accounting/ERP, customer relationship management (CRM), and Ecommerce. NetSuite's patent-pending "real-time dashboard" technology provides an easy-to-use view into up-to-date, role-specific business information. For more information about NetSuite, please visit http://www.netsuite.com/.

Cautionary Note Regarding Forward-Looking Statements

NetSuite's scheduled conference call will contain forward-looking statements relating to expectations, plans, prospects and financial results for NetSuite, including our stated expectation for future earnings, revenue and market share growth. These forward-looking statements are based upon the current expectations and beliefs of NetSuite's management as of the date of this conference call, and are subject to certain risks and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. All forward-looking statements made during the conference call will be based on information available to the Company as of the date thereof, and NetSuite disclaims any obligation to update these forward-looking statements.

In particular, the following factors, among others, could cause results to differ materially from those expressed or implied by such forward-looking statements: the market for on-demand services may develop more slowly than expected or than it has in the past; continued adverse and unpredictable macro-economic conditions or reduced investments in on-demand applications and information technology spending; quarterly operating results may fluctuate more than expected; unexpected disruptions of service at the Company's data center may occur; a security breach may impact operations; risks associated with material defects or errors in the Company's software or the effect of undetected computer viruses could impact operations; the risk of technological developments and innovations by others; our ability to successfully identify other businesses and technologies for acquisition that will complement our business and the ability to successfully acquire and integrate those businesses and technologies; the risk of loss of power or disruption in Internet service; failure to manage growth; failure to protect and enforce our intellectual property rights; the ability to manage operations when faced with competitive pricing and marketing strategies by competitors or changing macro-economic conditions; the risk of losing key employees; increased demands on employees and costs associated with operating as a public company; evolving government regulation of the Internet and Ecommerce; changes to current accounting rules; and general political or destabilizing events, including war, conflict or acts of terrorism; and other risks and uncertainties.

Customers who purchase our service should make sure the decisions are based on features that are currently available. Please be advised that any unreleased services or features from NetSuite referenced in today's discussion or other public statements are not currently available and may not be delivered on time or at all.

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 filed on March 13, 2009, and any subsequently filed reports on Forms 10-Q and 8-K. All documents are available through the SEC's Electronic Data Gathering Analysis and Retrieval system ("EDGAR") at http://www.sec.gov/ or NetSuite's Web site at http://www.netsuite.com/.

Non-GAAP Financial Measures

The Company's stated results include certain non-GAAP financial measures, including non-GAAP operating income/(loss), net income/(loss), weighted average shares outstanding, and net income/(loss) per share. Non-GAAP net income/(loss) excludes expenses related to stock-based compensation expense, amortization of intangible assets and transaction costs for business combinations. Non-GAAP net income/(loss) excludes these expenses as they are often excluded by other companies to help investors understand the operational performance of their business, and in the case of stock-based compensation, can be difficult to predict. The Company considers these events to be non-routine, and believes these adjustments provide useful comparative information to investors.

The Company considers these non-GAAP financial measures to be important because they provide useful measures of the operating performance of the Company and are used by the Company's management for that purpose. In addition, investors often use measures such as these to evaluate the financial performance of a company. Non-GAAP results are presented for supplemental informational purposes only for understanding the Company's operating results. The non-GAAP results should not be considered a substitute for financial information presented in accordance with generally accepted accounting principles, and may be different from non-GAAP measures used by other companies.

A copy of this press release can be found on the Company's Investor Relations Web site at http://www.netsuite.com/investors. The contents of the Web site are not incorporated by reference into this press release.

Click here to download the press release, financial tables and non-GAAP reconciliation.

NetSuite and the NetSuite logo are registered service marks of NetSuite Inc.

NetSuite Inc. Condensed Consolidated Balance Sheets (dollars in thousands) (unaudited) December 31, September 30, 2008 2009 ---- ---- Assets Current assets: Cash and cash equivalents $123,638 $97,768 Accounts receivable, net of allowances of $589 and $652 as of December 31, 2008 and September 30, 2009, respectively 26,675 24,975 Deferred commissions 11,363 10,205 Other current assets 2,385 3,672 ----- ----- Total current assets 164,061 136,620 Property and equipment, net 15,413 15,302 Deferred commissions, non-current 1,688 1,044 Goodwill 17,824 26,739 Other intangible assets, net 8,712 18,638 Other assets 2,636 2,469 ----- ----- Total assets $210,334 $200,812 ======== ======== Liabilities and equity Current liabilities: Accounts payable $2,893 $2,149 Deferred revenue 66,667 63,461 Accrued compensation 10,863 9,963 Accrued expenses 5,758 4,799 Other current liabilities 4,363 4,825 ----- ----- Total current liabilities 90,544 85,197 Long-term liabilities: Deferred revenue, non-current 7,204 6,006 Other long-term liabilities 3,199 2,382 ----- ----- Total long-term liabilities 10,403 8,388 ------ ----- Total liabilities 100,947 93,585 ------- ------ Equity: NetSuite Inc. stockholders' equity 108,992 107,499 Noncontrolling interest 395 (272) --- ---- Total equity 109,387 107,227 ------- ------- Total liabilities and equity $210,334 $200,812 ======== ======== NetSuite Inc. Condensed Consolidated Statements of Operations (Dollars and shares in thousands, except per share amounts) (unaudited) Three months ended ------------------ September December March June September 30, 2008 31, 2008 31, 2009 30, 2009 30, 2009 -------- -------- -------- -------- -------- Revenue $40,404 $41,401 $41,567 $40,304 $41,705 Cost of revenue (1) 13,733 13,069 13,035 13,556 14,493 ------ ------ ------ ------ ------ Gross profit 26,671 28,332 28,532 26,748 27,212 ------ ------ ------ ------ ------ Operating expenses: Product development (1) 6,056 6,926 6,788 6,770 7,369 Sales and marketing (1) 20,221 19,516 18,797 18,264 19,478 General and administrative (1) 6,426 6,766 6,910 6,717 8,323 ----- ----- ----- ----- ----- Total operating expenses 32,703 33,208 32,495 31,751 35,170 ------ ------ ------ ------ ------ Operating loss (6,032) (4,876) (3,963) (5,003) (7,958) Other income / (expenses) and income taxes, net (411) 166 17 (169) (318) ---- --- -- ---- ---- Net loss (6,443) (4,710) (3,946) (5,172) (8,276) Less: Net loss attributable to the noncontrolling interest 201 245 201 182 247 --- --- --- --- --- Net loss attributable to NetSuite Inc. $(6,242) $(4,465) $(3,745) $(4,990) $(8,029) ======= ======= ======= ======= ======= Net loss per share attributable to NetSuite Inc. common shareholders $(0.10) $(0.07) $(0.06) $(0.08) $(0.13) ====== ====== ====== ====== ====== Weighted average number of shares used in computing net loss per common share 60,436 60,838 61,248 61,853 62,100 ====== ====== ====== ====== ====== ---------------------------- (1) Includes stock-based compensation expense, amortization of intangible assets and transaction costs for business combinations as follows: Three months ended ------------------ September December March June September 30, 2008 31, 2008 31, 2009 30, 2009 30, 2009 -------- -------- -------- -------- -------- Cost of revenue $1,113 $1,056 $1,044 $1,238 $1,373 Product development 1,147 1,451 1,350 1,443 1,709 Sales and marketing 1,234 1,239 1,204 1,462 2,242 General and administrative 1,048 1,253 1,155 1,534 3,053 ----- ----- ----- ----- ----- Total stock-based compensation expense, amortization of intangible assets and transaction costs for business combinations $4,542 $4,999 $4,753 $5,677 $8,377 ====== ====== ====== ====== ====== NetSuite Inc. Reconciliation of Net Loss Per Share to Non-GAAP Net Income / (Loss) Per Share (Dollars and shares in thousands, except per share amounts) (unaudited) Three months ended ------------------ September December March June September 30, 2008 31, 2008 31, 2009 30, 2009 30, 2009 -------- -------- -------- -------- ------- Numerator: Reconciliation between GAAP and non-GAAP net loss: Net loss attributable to NetSuite Inc. $(6,242) $(4,465) $(3,745) $(4,990) $(8,029) Reversal of stock-based compensation expense, amortization of intangible assets and transaction costs for business combinations (a) 4,542 4,999 4,753 5,677 8,377 ----- ----- ----- ----- ----- Non-GAAP net income / (loss) attributable to : NetSuite Inc. $(1,700) $534 $1,008 $687 $348 ======= ==== ====== ==== ==== Denominator: Reconciliation between GAAP and non-GAAP weighted average shares used in computing basic and diluted net income / (loss) per common share: Weighted average number of shares used in computing net loss per common share 60,436 60,838 61,248 61,853 62,100 Effect of dilutive securities (stock options, restricted stock awards and warrants) (b) - 2,976 2,710 2,520 2,874 --- ----- ----- ----- ----- Non-GAAP weighted average shares used in computing non-GAAP net income / (loss) per common share 60,436 63,814 63,958 64,373 64,974 ====== ====== ====== ====== ====== GAAP net loss per share attributable to NetSuite Inc. common shareholders $(0.10) $(0.07) $(0.06) $(0.08) $(0.13) ====== ====== ====== ====== ====== Non-GAAP net income / (loss) per share attributable to NetSuite Inc. common shareholders $(0.03) $0.01 $0.02 $0.01 $0.01 ====== ===== ===== ===== ===== Use of Non-GAAP Financial Measures To supplement our condensed consolidated financial statements presented on a GAAP basis, NetSuite uses non-GAAP measures of net income / (loss), weighted average shares outstanding and net income / (loss) per share, which are adjusted to exclude stock-based compensation expense, amortization of acquisition-related intangible assets and transaction costs for business combinations to include dilutive shares where applicable. We believe these adjustments are appropriate to enhance an overall understanding of our past financial performance and also our prospects for the future. These adjustments to our current period GAAP results are made with the intent of providing both management and investors a more complete understanding of NetSuite's underlying operating results and trends and our marketplace performance. The non-GAAP results are an indication of our baseline performance that are considered by management for the purpose of making operational decisions. In addition, these non-GAAP results are the primary ind (a) Stock-based compensation is a non-cash expense accounted for in accordance with Statement of Financial Accounting Standards No. 123(R) for options granted after January 1, 2006, and Accounting Principles Board Opinion No. 25 for options granted before January 1, 2006. Amortization of intangible assets and transaction costs related to business combinations resulted principally from mergers and acquisitions. While a large component of our expense in certain periods, we believe investors may want to exclude the effects of these items in order to compare our financial performance with that of other companies and between time periods. (b) These securities are anti-dilutive on a GAAP basis as a result of the Company's net loss, but are considered dilutive on a non-GAAP basis in periods where the Company has reported positive non-GAAP earnings. NetSuite Inc. Condensed Consolidated Statements of Cash Flows (dollars in thousands) (unaudited) Nine months ended September 30, ------------- 2008 2009 ---- ---- Cash flows from operating activities: Net loss attributable to NetSuite Inc. $(11,399) $(16,764) Adjustments to reconcile net loss to net cash provided by / (used in) operating activities: Depreciation and amortization 3,823 5,171 Amortization of other intangible assets 967 2,413 Provision for accounts receivable allowances 507 1,309 Stock-based compensation 7,411 14,335 Amortization of deferred commissions 17,112 14,719 Loss on disposal of property and equipment 43 33 Noncontrolling interests (851) (629) Changes in operating assets and liabilities, net of acquired assets and liabilities: Accounts receivable (4,410) 1,766 Deferred commissions (15,242) (12,913) Other current assets (366) (1,211) Other assets (342) 198 Accounts payable (285) (574) Accrued compensation 926 (1,179) Deferred revenue (800) (4,992) Other current liabilities (972) (218) Other long-term liabilities 186 (241) --- ---- Net cash provided by / (used in) operating activities (3,692) 1,223 ------ ----- Cash flows from investing activities: Proceeds from disposal of property and equipment 18 - Purchases of property and equipment (4,496) (4,113) Capitalized internal use software (184) (188) Advances on line of credit - (70) Business combinations, net of cash received (28,221) (21,930) Acquisition of other intangible assets - (275) --- ---- Net cash used in investing activities (32,883) (26,576) ------- ------- Cash flows from financing activities: Payment of stock offering costs (950) - Payments under capital leases and long-term debt (1,182) (1,191) Proceeds from issuance of common stock 1,897 715 ----- --- Net cash used in financing activities (235) (476) ---- ---- Effect of exchange rate changes on cash and cash equivalents 438 (41) --- --- Net change in cash and cash equivalents (36,372) (25,870) Cash and cash equivalents at beginning of period 169,408 123,638 ------- ------- Cash and cash equivalents at end of period $133,036 $97,768 ======== ======= (Logo: http://www.newscom.com/cgi-bin/prnh/20090924/SF81218LOGO-b)

Photo: http://www.newscom.com/cgi-bin/prnh/20090924/SF81218LOGO-b
http://photoarchive.ap.org/
PRN Photo Desk photodesk@prnewswire.com NetSuite Inc.

CONTACT: Investors, Carolyn Bass of Market Street Partners ,
+1-415-445-3232, ir@netsuite.com, or Media, Mei Li of NetSuite Inc.,
+1-650-627-1063, meili@netsuite.com

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

Geeknet Reports Third Quarter 2009 Financial Results

MOUNTAIN VIEW, Calif., Nov. 4 /PRNewswire-FirstCall/ -- Geeknet, Inc. , formerly known as SourceForge, Inc., today announced financial results for its third quarter ended September 30, 2009.

(Logo: http://www.newscom.com/cgi-bin/prnh/20091104/SF04925LOGO)

Total revenue for the third quarter of 2009 was $10.8 million compared to $11.5 million of revenue for the third quarter of 2008. Net loss for the third quarter of 2009 was $4.5 million or $0.08 per share compared to a net loss of $2.7 million or $0.04 per share, for the same period a year ago.

Adjusted EBITDA loss for the third quarter of 2009 was $3.4 million, compared to adjusted EBITDA loss of $1.4 million for the same period a year ago. A reconciliation of our net loss as reported to adjusted EBITDA is included in this release.

"Today's announcement that we have renamed our company Geeknet is the latest development in the rapid transformation of our business," said Scott L. Kauffman, President & CEO, Geeknet. "While I am disappointed in our media results this quarter, I am pleased with the continued growth of ThinkGeek. And with Geeknet as our calling card on Madison Avenue, we are now able to craft a more holistic and compelling story for the advertising community that will clearly define our audience and lead to more media revenue."

Third Quarter Highlights: -- Media revenue was $3.7 million for the third quarter of 2009, compared to $5.1 million for the third quarter of 2008. Revenue for the third quarter of 2009 included $1.6 million from our premium advertising products compared to $0.8 million of premium revenue for the same period last year. -- E-commerce revenue was $7.1 million for the third quarter of 2009, compared to $6.4 million for the third quarter of 2008. -- Total cash and investments balance, including restricted cash, at the end of the third quarter of 2009 was $35.6 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 nine months ended September 30, 2009 are available on the Company's web site at geek.net/cyresults.

A conference call and audio webcast will be held at 2:00 p.m. PT or 5:00 p.m. ET on November 4, 2009 and may be accessed by calling 877-407-8035 or 201-689-8035 or by visiting geek.net. 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 334637.

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, we have historically reported Adjusted EBITDA or non-GAAP earnings, from which adjusted EBITDA can be derived, to the investment community. 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 Geeknet, Inc.

Geeknet is the online network for the global geek community. Our sites include: SourceForge, Slashdot, ThinkGeek, Ohloh and freshmeat. We serve an audience of more than 40 million users* each month and provide the tech-obsessed with content, culture, connections, commerce, and all the things that geeks crave. Want to learn more? Check out geek.net. (*October 2009 Unique Visitors 42M. Source: Google Analytics and Omniture)

Geeknet is a trademark of Geeknet, Inc. SourceForge, Slashdot, ThinkGeek, Ohloh, and freshmeat are registered trademarks of Geeknet, 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 our current expectations, and involve risks and uncertainties. Forward-looking statements contained herein include statements regarding the potential benefits of our corporate rebranding for us and the advertising community, and growth strategies and prospects for our 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: our 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; our effectiveness at planning and managing our e-commerce inventory; our ability to achieve and sustain higher levels of revenue; our ability to protect and defend our intellectual property rights; rapid technological and market change; unforeseen expenses that we may incur in future quarters; and competition with, and pricing pressures from larger and/or more established competitors. Investors should consult our filings with the Securities and Exchange Commission, sec.gov, including the risk factors section of our Annual Report on Form 10-K for the year ended July 31, 2008, and our Quarterly Report on Form 10-Q for the quarter ended June 30, 2009, for further information regarding these and other risks of our business. All forward-looking statements included in this press release are based upon information available to us as of the date hereof, and we do not assume any obligations to update such statements or the reasons why actual results could differ materially from those projected in such statements.

GEEKNET, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except per share data) (unaudited) Three Months Nine Months Ended September Ended September 30, 30, ---------------- ---------------- 2009 2008 2009 2008 ---- ---- ---- ---- Online Media revenue $3,683 $5,055 $11,801 $14,658 E-commerce revenue 7,104 6,417 21,142 20,000 ----- ----- ------ ------ Net revenue 10,787 11,472 32,943 34,658 ------ ------ ------ ------ Online Media cost of revenue 1,630 2,140 5,255 6,061 E-commerce cost of revenue 6,053 5,104 17,815 16,084 ----- ----- ------ ------ Cost of revenue 7,683 7,244 23,070 22,145 ----- ----- ------ ------ Gross margin 3,104 4,228 9,873 12,513 ----- ----- ----- ------ Operating expenses: Sales and marketing 3,201 2,304 7,468 6,518 Research and development 2,144 1,472 5,816 3,854 General and administrative 2,238 2,977 6,587 9,018 Amortization of intangible assets 83 - 110 - Restructuring costs - - - 765 --- --- --- --- Total operating expenses 7,666 6,753 19,981 20,155 ----- ----- ------ ------ Operating loss (4,562) (2,525) (10,108) (7,642) Interest and other income (expense), net 18 (277) (5,543) 197 --- ---- ------ --- Loss before income taxes (4,544) (2,802) (15,651) (7,445) Benefit for income taxes (7) (138) (102) (112) --- ---- ---- ---- Net loss $(4,537) $(2,664) $(15,549) $(7,333) ======= ======= ======== ======= Earnings per share: Basic and diluted $(0.08) $(0.04) $(0.25) $(0.11) ====== ====== ====== ====== Shares used in computing earnings per share: Basic and diluted 59,909 67,670 61,042 67,548 ====== ====== ====== ====== Reconciliation of net loss as reported to adjusted EBITDA: Net loss - as reported $(4,537) $(2,664) $(15,549) $(7,333) Reconciling items: Interest and other income (expense), net (18) 277 5,543 (197) Income taxes (7) (138) (102) (112) Stock-based compensation expense included in COGS 92 71 246 205 Stock-based compensation expense included in Op Ex. 609 518 1,763 2,776 Restructuring costs - - - 765 Depreciation and amortization 479 560 1,637 1,500 --- --- ----- ----- Adjusted EBITDA $(3,382) $(1,376) $(6,462) $(2,396) ======= ======= ======= ======= GEEKNET, INC. CONDENSED CONSOLIDATED BALANCE SHEET (In thousands) (unaudited) September 30, December 31, 2009 2008 ------------- ------------ ASSETS Current assets: Cash and cash equivalents $25,128 $40,511 Short-term investments, including restricted cash 10,472 563 Accounts receivable, net 3,091 4,418 Inventories 4,868 3,264 Prepaid expenses and other current assets 4,079 1,841 ----- ----- Total current assets 47,638 50,597 Property and equipment, net 2,736 4,748 Long-term investments, including long-term restricted cash - 9,947 Other assets 5,053 8,874 ----- ----- Total assets $55,427 $74,166 ======= ======= LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $4,012 $4,021 Accrued restructuring liabilities 2,027 2,862 Deferred revenue 770 591 Accrued liabilities and other 2,326 2,702 ----- ----- Total current liabilities 9,135 10,176 Other long-term liabilities 197 1,423 --- ----- Total liabilities 9,332 11,599 ----- ------ Stockholders' equity: Common stock 61 65 Treasury stock (492) (331) Additional paid-in capital 798,275 799,037 Accumulated other comprehensive income 13 9 Accumulated deficit (751,762) (736,213) -------- -------- Total stockholders' equity 46,095 62,567 ------ ------ Total liabilities and stockholders' equity $55,427 $74,166 ======= ======= GEEKNET, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) (unaudited) Nine months ended September 30, ------------- 2009 2008 ---- ---- Cash flows from operating activities: Net loss $(15,549) $(7,333) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and amortization 1,637 1,500 Stock-based compensation expense 2,009 2,981 Provision for bad debts 97 80 Provision for excess and obsolete inventory 34 103 Loss on disposal of assets 1,020 3 Loss on sale of investments - 308 Impairment of investments 4,585 108 Non-cash restructuring expense - 765 Changes in assets and liabilities: Accounts receivable 1,235 (743) Inventories (1,638) (598) Prepaid expenses and other assets (841) (1,336) Accounts payable (16) (1,819) Accrued restructuring liabilities (2,089) (2,150) Deferred revenue 179 (89) Accrued liabilities and other (412) 35 Other long-term liabilities 28 14 --- --- Net cash used in operating activities (9,721) (8,171) ------ ------ Cash flows from investing activities: Purchase of property and equipment (738) (1,902) Purchases of marketable securities - (26,441) Maturities or sale of marketable securities 559 49,926 Acquisitions (2,613) - Proceeds from sale of intangible assets, net 172 - Purchases of intangible assets (106) - ---- --- Net cash (used in) provided by investing activities (2,726) 21,583 ------ ------ Cash flows from financing activities: Proceeds from issuance of common stock 259 18 Repurchase of common stock (3,195) (242) ------ ---- Net cash used in financing activities (2,936) (224) ------ ---- 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 (15,383) 13,230 ------- ------ Cash and cash equivalents, beginning of period 40,511 25,037 ------ ------ Cash and cash equivalents, end of period $25,128 $38,267 ======= =======

Photo: http://www.newscom.com/cgi-bin/prnh/20091104/SF04925LOGO
http://photoarchive.ap.org/
PRN Photo Desk, photodesk@prnewswire.com Geeknet, Inc.

CONTACT: Todd Friedman or Stacie Bosinoff, both of The BlueShirt Group,
+1-415-217-5868, ir@geek.net, for Geeknet, Inc.

Web Site: http://www.geek.net/

Entravision Communications Corporation Reports Third Quarter 2009 Results

SANTA MONICA, Calif., Nov. 4 /PRNewswire-FirstCall/ -- Entravision Communications Corporation today reported financial results for the three- and nine-month periods ended September 30, 2009.

Historical results, which are attached, are in thousands of U.S. dollars (except share and per share data). The results of our outdoor operations are presented in discontinued operations within the statements of operations in accordance with ASC 360-10-45, "Impairment or Disposal of Long-Lived Assets". This press release contains certain non-GAAP financial measures as defined by SEC Regulation G. The GAAP financial measure most directly comparable to each of these non-GAAP financial measures, and a table reconciling each of these non-GAAP financial measures to its most directly comparable GAAP financial measure, is included below. Unaudited financial highlights are as follows:

Three-Month Period Nine-Month Period Ended September 30, Ended September 30, --------------------------- ------------------------- 2009 2008 % Change 2009 2008 % Change ------- ------- ------- ------- ------- ------- Net revenue $50,754 $60,988 (17)% $141,165 $179,573 (21)% Operating expenses(1) 30,572 36,977 (17)% 92,031 109,284 (16)% Corporate expenses(2) 3,351 3,772 (11)% 10,602 12,703 (17)% Consolidated adjusted EBITDA(3) 17,268 21,122 (18)% 40,307 60,156 (33)% Free cash flow(4) $5,058 $8,756 (42)% $9,176 $23,042 (60)% Free cash flow per share, basic and diluted(4) $0.06 $0.10 (40)% $0.11 $0.25 (56)% Net income (loss) from continuing operations $673 $(354,491) NM $(15,648) $(349,881) (96)% Net income (loss) applicable to common stockholders $673 $(354,491) NM $(15,648) $(351,454) (96)% Net income (loss) per share from continuing operations applicable to common stockholders, basic and diluted $0.01 $(3.98) NM $(0.19) $(3.80) (95)% Net income (loss) per share applicable to common stockholders, basic and diluted $0.01 $(3.98) NM $(0.19) $(3.82) (95)% Weighted average common shares outstanding, basic 83,683,908 89,130,413 84,049,423 92,029,671 Weighted average common shares outstanding, diluted 83,935,319 89,130,413 84,049,423 92,029,671 1. Operating expenses include direct operating, selling, general and administrative expenses. Included in operating expenses are $0.4 million and $0.4 million of non-cash stock-based compensation for the three-month periods ended September 30, 2009 and 2008, respectively and $1.1 million and $1.0 million of non-cash stock-based compensation for the nine-month periods ended September 30, 2009 and 2008, respectively. Operating expenses do not include corporate expenses, depreciation and amortization, impairment charge, gain (loss) on sale of assets and loss on debt extinguishment. 2. Corporate expenses include $0.3 million and $0.5 million of non-cash stock-based compensation for the three-month periods ended September 30, 2009 and 2008, respectively and $1.1 million and $1.4 million of non-cash stock-based compensation for the nine-month periods ended September 30, 2009 and 2008, respectively. 3. Consolidated adjusted EBITDA means net income (loss) plus loss (gain) on sale of assets, depreciation and amortization, non-cash impairment charge, non-cash stock-based compensation included in operating and corporate expenses, net interest expense, loss on debt extinguishment, loss from discontinued operations, income tax expense (benefit), equity in net income (loss) of nonconsolidated affiliate and syndication programming amortization less syndication programming payments. We use the term consolidated adjusted EBITDA because that measure is defined in our syndicated bank credit facility and does not include loss (gain) on sale of assets, depreciation and amortization, non-cash impairment charge, non-cash stock-based compensation, net interest expense, loss on debt extinguishment, loss from discontinued operations, income tax expense (benefit), equity in net income (loss) of nonconsolidated affiliate and syndication programming amortization and does include syndication programming payments. While many in the financial community and we consider consolidated adjusted EBITDA to be important, it should be considered in addition to, but not as a substitute for or superior to, other measures of liquidity and financial performance prepared in accordance with accounting principles generally accepted in the United States of America, such as cash flows from operating activities, operating income and net income. As consolidated adjusted EBITDA excludes non-cash (gain) loss on sale of assets, non-cash depreciation and amortization, non-cash impairment charge, non-cash stock-based compensation expense, net interest expense, loss on debt extinguishment, loss from discontinued operations, income tax expense (benefit), equity in net income (loss) of nonconsolidated affiliate and syndication programming amortization and includes syndication programming payments, consolidated adjusted EBITDA has certain limitations because it excludes and includes several important non-cash financial line items. Therefore, we consider both non-GAAP and GAAP measures when evaluating our business. Consolidated adjusted EBITDA is also used to make executive compensation decisions. 4. Free cash flow is defined as consolidated adjusted EBITDA less cash paid for income taxes, net interest expense and capital expenditures. Net interest expense is defined as interest expense, less non-cash interest expense relating to amortization of debt finance costs, less interest income less the change in the fair value of our interest rate swaps. Free cash flow per share is defined as free cash flow divided by the diluted weighted average common shares outstanding.

Commenting on the Company's earnings results, Walter F. Ulloa, Chairman and Chief Executive Officer, said, "Our third quarter financial results continue to be impacted by the recession and the challenging advertising environment. We remain focused on managing our costs and maximizing our cash flows. Our television and radio operations continue to deliver solid ratings in the nation's most densely-populated Hispanic markets. We believe that we are well positioned to benefit when the economy recovers, given the strength of our brands and our ability to deliver the valuable Hispanic audience to advertisers."

Financial Results Three Months Ended September 30, 2009 Compared to Three Months Ended September 30, 2008 (Unaudited) Three-Month Period Ended September 30, ------------------------------ 2009 2008 % Change ------- ------- ------- Net revenue $50,754 $60,988 (17)% Operating expenses(1) 30,572 36,977 (17)% Corporate expenses(1) 3,351 3,772 (11)% Depreciation and amortization 5,272 5,998 (12)% Impairment charge - 440,020 NM ------- ------- Operating income (loss) 11,559 (425,779) NM Interest expense, net (8,157) (7,550) 8% ------- ------- Income (loss) before income taxes 3,402 (433,329) NM Income tax (expense) benefit (2,802) 78,847 NM ------- ------- Net income (loss) before equity in net income (loss) of nonconsolidated affiliates and discontinued operations 600 (354,482) NM Equity in net income (loss) of nonconsolidated affiliates, net of tax 73 (9) NM ------- ------- Net income (loss) $673 $(354,491) NM ======= ======= (1) Operating expenses and corporate expenses are defined above.

Net revenue decreased to $50.8 million for the three-month period ended September 30, 2009 from $61.0 million for the three-month period ended September 30, 2008, a decrease of $10.2 million. Of the overall decrease, $5.4 million came from our television segment and was primarily attributable to a decrease in local and national advertising rates, which in turn was primarily due to the continuing weak economy, partially offset by an increase in retransmission consent revenue. Additionally, $4.8 million of the overall decrease came from our radio segment and was primarily attributable to a decrease in local and national advertising rates, which in turn was primarily due to the continuing weak economy.

Operating expenses decreased to $30.6 million for the three-month period ended September 30, 2009 from $37.0 million for the three-month period ended September 30, 2008, a decrease of $6.4 million. The decrease was primarily attributable to decreases in expenses associated with the decrease in net revenue and salary expense due to reductions of personnel and salary reductions.

Corporate expenses decreased to $3.4 million for the three-month period ended September 30, 2009 from $3.8 million for the three-month period ended September 30, 2008, a decrease of $0.4 million. The decrease was primarily attributable to the decrease in salary expense due to salary reductions and a decrease in employee benefits.

Nine Months Ended September 30, 2009 Compared to Nine Months Ended September 30, 2008 (Unaudited) Nine-Month Period Ended September 30, ------------------------------- 2009 2008 % Change ------- ------- ------- Net revenue $141,165 $179,573 (21)% Operating expenses(1) 92,031 109,284 (16)% Corporate expenses(1) 10,602 12,703 (17)% Depreciation and amortization 15,893 17,185 (8)% Impairment charge 2,720 440,020 (99)% ------- ------- Operating income (loss) 19,919 (399,619) NM Interest expense, net (21,374) (26,256) (19)% Loss on debt extinguishment (4,716) - NM ------- ------- Loss before income taxes (6,171) (425,875) (99)% Income tax (expense) benefit (9,311) 76,167 NM ------- ------- Net loss before equity in net loss of nonconsolidated affiliates and discontinued operations (15,482) (349,708) (96)% Equity in net loss of nonconsolidated affiliates, net of tax (166) (173) (4)% ------- ------- Loss from continuing operations (15,648) (349,881) (96)% Loss from discontinued operations, net of tax - (1,573) NM ------- ------- Net loss $(15,648) $(351,454) (96)% ======= ======= (1) Operating expenses and corporate expenses are defined above.

Net revenue decreased to $141.2 million for the nine-month period ended September 30, 2009 from $179.6 million for the nine-month period ended September 30, 2008, a decrease of $38.4 million. Of the overall decrease, $20.5 million came from our television segment and was primarily attributable to a decrease in local and national advertising rates, which in turn was primarily due to the continuing weak economy, partially offset by an increase in retransmission consent revenue. Additionally, $17.9 million of the overall decrease came from our radio segment and was primarily attributable to a decrease in local and national advertising sales and advertising rates, which in turn was primarily due to the continuing weak economy.

Operating expenses decreased to $92.0 million for the nine-month period ended September 30, 2009 from $109.3 million for the nine-month period ended September 30, 2008, a decrease of $17.3 million. The decrease was primarily attributable to decreases in expenses associated with the decrease in net revenue and salary expense due to reductions of personnel and salary reductions.

Corporate expenses decreased to $10.6 million for the nine-month period ended September 30, 2009 from $12.7 million for the nine-month period ended September 30, 2008, a decrease of $2.1 million. The decrease was primarily attributable to the elimination of bonuses paid to executive officers, a decrease in salary expense due to salary reductions and a decrease in employee benefits.

Segment Results The following represents selected unaudited segment information: Three-Month Period Ended September 30, -------------------------------- 2009 2008 % Change -------- -------- -------- Net Revenue Television $32,019 $37,479 (15)% Radio 18,735 23,509 (20)% -------- -------- Total $50,754 $60,988 (17)% Operating Expenses (1) Television $17,601 $21,908 (20)% Radio 12,971 15,069 (14)% -------- -------- Total $30,572 $36,977 (17)% Corporate Expenses(1) $3,351 $3,772 (11)% Consolidated adjusted EBITDA(1) $17,268 $21,122 (18)% (1) Operating expenses, Corporate expenses, and Consolidated adjusted EBITDA are defined above.

Entravision Communications Corporation will hold a conference call to discuss its 2009 third quarter results on November 4, 2009 at 5 p.m. Eastern Time. To access the conference call, please dial 412-858-4600 ten minutes prior to the start time. The call will be webcast live and archived for replay at http://www.entravision.com/.

Entravision Communications Corporation is a diversified Spanish-language media company utilizing a combination of television and radio operations to reach Hispanic consumers across the United States, as well as the border markets of Mexico. Entravision is the largest affiliate group of both the top-ranked Univision television network and Univision's TeleFutura network, with television stations in 20 of the nation's top 50 Hispanic markets. The Company also operates one of the nation's largest groups of primarily Spanish-language radio stations, consisting of 48 owned and operated radio stations. Entravision shares of Class A Common Stock are traded on The New York Stock Exchange under the symbol: EVC.

This press release contains certain forward-looking statements. These forward-looking statements, which are included in accordance with the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, may involve known and unknown risks, uncertainties and other factors that may cause the Company's actual results and performance in future periods to be materially different from any future results or performance suggested by the forward-looking statements in this press release. Although the Company believes the expectations reflected in such forward-looking statements are based upon reasonable assumptions, it can give no assurance that actual results will not differ materially from these expectations, and the Company disclaims any duty to update any forward-looking statements made by the Company. From time to time, these risks, uncertainties and other factors are discussed in the Company's filings with the Securities and Exchange Commission.

Entravision Communications Corporation Consolidated Statements of Operations (In thousands, except share and per share data) (Unaudited) Three-Month Period Nine-Month Period Ended September 30, Ended September 30, ------------------------ ------------------- 2009 2008 2009 2008 ---------- ---------- ---------- ---------- Net revenue $50,754 $60,988 $141,165 $179,573 ---------- ---------- ---------- ---------- Expenses: Direct operating expenses 21,030 25,583 63,690 76,258 Selling, general and administrative expenses 9,542 11,394 28,341 33,026 Corporate expenses 3,351 3,772 10,602 12,703 Depreciation and amortization 5,272 5,998 15,893 17,185 Impairment charge - 440,020 2,720 440,020 ---------- ---------- ---------- ---------- 39,195 486,767 121,246 579,192 ---------- ---------- ---------- ---------- Operating income (loss) 11,559 (425,779) 19,919 (399,619) Interest expense (8,227) (8,172) (21,762) (27,595) Interest income 70 622 388 1,339 Loss on debt extinguishment - - (4,716) - ---------- ---------- ---------- ---------- Income (loss) before income taxes 3,402 (433,329) (6,171) (425,875) Income tax (expense) benefit (2,802) 78,847 (9,311) 76,167 ---------- ---------- ---------- ---------- Income (loss) before equity in net income (loss) of nonconsolidated affiliate and discontinued operations 600 (354,482) (15,482) (349,708) Equity in net income (loss) of nonconsolidated affiliate, net of tax 73 (9) (166) (173) ---------- ---------- ---------- ---------- Income (loss) from continuing operations 673 (354,491) (15,648) (349,881) Loss from discontinued operations, net of tax - - - (1,573) ---------- ---------- ---------- ---------- Net income (loss) applicable to common stockholders $673 $(354,491) $(15,648) $(351,454) ========== ========== ========== ========== Basic and diluted earnings per share: Net income (loss) per share from continuing operations applicable to common stockholders, basic and diluted $0.01 $(3.98) $(0.19) $(3.80) ========== ========== ========== ========== Net loss per share from discontinued operations, basic and diluted $- $- $- $(0.02) ========== ========== ========== ========== Net income (loss) per share applicable to common stockholders, basic and diluted $0.01 $(3.98) $(0.19) $(3.82) ========== ========== ========== ========== Weighted average common shares outstanding, basic 83,683,908 89,130,413 84,049,423 92,029,671 ========== ========== ========== ========== Weighted average common shares outstanding, diluted 83,935,319 89,130,413 84,049,423 92,029,671 ========== ========== ========== ========== Entravision Communications Corporation Consolidated Statements of Cash Flows (Unaudited; in thousands) Three-Month Period Nine-Month Period Ended September 30, Ended September 30, ------------------------------------------- 2009 2008 2009 2008 ---------- ---------- ---------- ---------- Cash flows from operating activities: Net income (loss) $673 $(354,491) $(15,648) $(351,454) Adjustments to reconcile net income (loss) to net cash provided by operating activities: Depreciation and amortization 5,272 5,998 15,893 17,185 Impairment charge - 440,020 2,720 440,020 Deferred income taxes 2,548 (79,198) 8,534 (77,537) Amortization of debt issue costs 104 100 298 302 Amortization of syndication contracts 441 700 1,689 2,255 Payments on syndication contracts (706) (713) (2,119) (2,135) Equity in net (income) loss of nonconsolidated affiliate (73) 9 166 173 Non-cash stock-based compensation 702 896 2,205 2,450 Gain on sale of media properties and other assets - - (102) - Non-cash expenses related to debt extinguishment - - 945 - Change in fair value of interest rate swap agreements (1,314) 436 (3,850) 3,647 Changes in assets and liabilities, net of effect of acquisitions and dispositions: (Increase) decrease in accounts receivable (1,828) 3,490 (3,100) 3,648 Increase in prepaid expenses and other assets (810) (178) (621) (100) Increase (decrease) in accounts payable, accrued expenses and other liabilities 1,085 (1,445) 3,187 (3,205) Effect of discontinued operations - - - (2,230) ---------- ---------- ---------- ---------- Net cash provided by operating activities 6,094 15,624 10,197 33,019 ---------- ---------- ---------- ---------- Cash flows from investing activities: Proceeds from sale of property and equipment and intangibles - - 114 101,498 Purchases of property and equipment and intangibles (2,589) (5,007) (9,207) (13,415) Purchase of a business - - - (22,885) Deposits on acquisitions - (200) - (200) Effect of discontinued operations - - - (194) ---------- ---------- ---------- ---------- Net cash provided by (used in) investing activities (2,589) (5,207) (9,093) 64,804 ---------- ---------- ---------- ---------- Cash flows from financing activities: Proceeds from issuance of common stock 53 299 255 785 Payments on long-term debt (1,572) (2) (42,572) (11,036) Repurchase of Class U common stock - - - (10,380) Repurchase of Class A common stock - (10,245) (1,075) (46,538) Excess tax benefits from exercise of stock options - - - (25) Payments of deferred debt and offering costs - - (1,182) - ---------- ---------- ---------- ---------- Net cash used in financing activities (1,519) (9,948) (44,574) (67,194) ---------- ---------- ---------- ---------- Net increase (decrease) in cash and cash equivalents 1,986 469 (43,470) 30,629 Cash and cash equivalents: Beginning 18,838 117,105 64,294 86,945 ---------- ---------- ---------- ---------- Ending $20,824 $117,574 $20,824 $117,574 ========== ========== ========== ========== Entravision Communications Corporation Reconciliation of Consolidated Adjusted EBITDA to Cash Flows From Operating Activities (Unaudited; in thousands) The most directly comparable GAAP financial measure is operating cash flow. A reconciliation of this non-GAAP measure to cash flows from operating activities for each of the periods presented is as follows: Three-Month Period Nine-Month Period Ended September 30, Ended September 30, -------------------------------------- 2009 2008 2009 2008 -------- -------- -------- -------- Consolidated adjusted EBITDA (1) $17,268 $21,122 $40,307 $60,156 Interest expense (8,227) (8,172) (21,762) (27,595) Interest income 70 622 388 1,339 Loss on debt extinguishment - - (4,716) - Income tax (expense) benefit (2,802) 78,847 (9,311) 76,167 Amortization of syndication contracts (441) (700) (1,689) (2,255) Payments on syndication contracts 706 713 2,119 2,135 Non-cash stock-based compensation included in direct operating expenses (159) (173) (489) (462) Non-cash stock-based compensation included in selling, general and administrative expenses (204) (217) (618) (579) Non-cash stock-based compensation included in corporate expenses (339) (506) (1,098) (1,409) Depreciation and amortization (5,272) (5,998) (15,893) (17,185) Impairment charge - (440,020) (2,720) (440,020) Equity in net income (loss) of nonconsolidated affiliates 73 (9) (166) (173) Loss from discontinued operations - - - (1,573) -------- -------- -------- -------- Net income (loss) 673 (354,491) (15,648) (351,454) Depreciation and amortization 5,272 5,998 15,893 17,185 Impairment charge - 440,020 2,720 440,020 Deferred income taxes 2,548 (79,198) 8,534 (77,537) Amortization of debt issue costs 104 100 298 302 Amortization of syndication contracts 441 700 1,689 2,255 Payments on syndication contracts (706) (713) (2,119) (2,135) Equity in net (income) loss of nonconsolidated affiliate (73) 9 166 173 Non-cash stock-based compensation 702 896 2,205 2,450 Gain on sale of media properties and other assets - - (102) - Non-cash expenses related to debt extinguishment - - 945 - Change in fair value of interest rate swap agreements (1,314) 436 (3,850) 3,647 Changes in assets and liabilities, net of effect of acquisitions and dispositions: (Increase) decrease in accounts receivable (1,828) 3,490 (3,100) 3,648 Increase in prepaid expenses and other assets (810) (178) (621) (100) Increase (decrease) in accounts payable, accrued expenses and other liabilities 1,085 (1,445) 3,187 (3,205) Effect of discontinued operations - - - (2,230) -------- -------- -------- -------- Cash flows from operating activities $6,094 $15,624 $10,197 $33,019 ======== ======== ======== ======== (1) Consolidated adjusted EBITDA is defined above. Entravision Communications Corporation Reconciliation of Free Cash Flow to Net Income (Loss) (Unaudited; in thousands) The most directly comparable GAAP financial measure is net income (loss). A reconciliation of this non-GAAP measure to net income (loss) for each of the periods presented is as follows: Three-Month Period Nine-Month Period Ended September 30, Ended September 30, --------------------------------------- 2009 2008 2009 2008 -------- -------- -------- -------- Consolidated adjusted EBITDA(1) $17,268 $21,122 $40,307 $60,156 Net interest expense(1) 9,367 7,013 24,926 22,306 Cash paid for income taxes 254 350 777 1,394 Capital expenditures(2) 2,589 5,003 5,428 13,414 -------- -------- -------- -------- Free cash flow(1) 5,058 8,756 9,176 23,042 Capital expenditures(2) 2,589 5,003 5,428 13,414 Non-cash interest expense relating to amortization of debt finance costs and interest rate swap agreements 1,210 (537) 3,552 (3,950) Loss on debt extinguishment - - (4,716) - Non-cash income tax (expense) benefit (2,548) 79,197 (8,534) 77,561 Amortization of syndication contracts (441) (700) (1,689) (2,255) Payments on syndication contracts 706 713 2,119 2,135 Non-cash stock-based compensation included in direct operating expenses (159) (173) (489) (462) Non-cash stock-based compensation included in selling, general and administrative expenses (204) (217) (618) (579) Non-cash stock-based compensation included in corporate expenses (339) (506) (1,098) (1,409) Depreciation and amortization (5,272) (5,998) (15,893) (17,185) Impairment charge - (440,020) (2,720) (440,020) Equity in net income (loss) of nonconsolidated affiliates 73 (9) (166) (173) Loss from discontinued operations - - - (1,573) -------- -------- -------- -------- Net income (loss) $673 $(354,491)$(15,648) $(351,454) ======== ======== ======== ======== (1) Consolidated adjusted EBITDA, net interest expense and free cash flow are defined above. (2) Capital expenditures is not part of the consolidated statement of operations.

Entravision Communications Corporation

CONTACT: Christopher T. Young, Chief Financial Officer, Entravision
Communications Corporation, +1-310-447-3870; or Mike Smargiassi, or Christian
Nery, both of Brainerd Communicators, Inc., +1-212-986-6667

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

Dialysis Corporation of America Reports Third Quarter 2009 Results

LINTHICUM, Md., Nov. 4 /PRNewswire-FirstCall/ -- Dialysis Corporation of America announced its financial results for the third quarter of 2009.

-- Quarter end patient census was approximately 2,050. -- Quarterly Results included: -- Operating revenues were $25.1 million compared to $21.9 million for the same period last year, a 15% increase. -- Operating income was $2.0 million compared to $1.5 million for the same period last year, a 30% increase. -- Net income was $940,000 or $0.10 per basic and diluted share compared to $875,000 or $0.09 per basic and diluted share for the same period last year. -- Results for the first nine months of 2009 included: -- Operating revenues were $73.3 million compared to $63.2 million for the same period last year, a 16% increase. -- Operating income was $4.5 million compared to $4.0 million for the same period last year, a 13% increase. -- Net income was $1.8 million or $0.19 per basic and diluted share compared to $2.0 million or $0.21 per basic and diluted share for the same period last year.

Stephen Everett, President and Chief Executive Officer, commented, "Our third quarter results were as we had expected, with very solid performances on all financial fronts. Our two newest centers in Ohio remain on track for opening within the next few months, subject to state licensure timing. On the corporate support front, our clinical information system is slightly ahead of schedule with expectations of completing our rollout close to this year's end, nearly four months ahead of plan. Finally, our development activities are active, with certain of those opportunities with physician partners being well advanced."

Financial results for the period included: -- Pre-tax costs associated with opening new centers were $10,000 for the 3rd quarter of 2009 compared to $339,000 for the same period last year, and $204,000 for the first nine months of 2009 compared to $577,000 for the same period last year. -- Non-cash stock compensation expense was $70,000 for the third quarter of 2009 compared to $82,000 for the same period last year, and $217,000 for the first nine months of 2009 compared to $239,000 for the same period last year.

Dialysis Corporation of America will be hosting a conference call in conjunction with its earnings release for the third quarter of 2009. The conference call will be held on Thursday, November 5, 2009 at 10:00 a.m. EST. The call is accessible either by dialing 1-866-814-8476 (enter attendee code: 1405582), or through simulcast on the internet at http://www.startconference.com/, using conference ID 2135668. Participants may be asked to provide the title of the conference call, which is "Dialysis Corporation of America Third Quarter Earnings." A replay of the conference call will be available on the company's website, http://www.dialysiscorporation.com/, for a period of thirty days following the conference call.

Dialysis Corporation of America owns and operates freestanding kidney hemodialysis centers located in Georgia, Maryland, New Jersey, Ohio, Pennsylvania, South Carolina, and Virginia, and provides in-hospital dialysis services on a contract basis to certain hospitals located in the those states. The company provides patients with their choice of a full range of quality in-center, acute or at-home hemodialysis services.

This release contains forward-looking statements that are subject to risks and uncertainties that could affect the business and prospects of the company and cause actual results and plans to differ materially from those anticipated. Those factors include, but are not limited to, increases in interest rates, the possible need for and availability of additional financing, the company satisfying the covenants and conditions of its credit facility, certain delays beyond the company's control with respect to future business events, the highly competitive environment in the establishment and operation of dialysis centers, the ability to develop or acquire additional dialysis facilities, whether patient bases of the company's dialysis facilities can mature to provide profitability, the extensive regulation of dialysis operations, government rate determination for Medicare reimbursement, pricing pressure from private payors, and other risks detailed in the company's filings with the SEC, particularly as described in the company's annual report on Form 10-K for the fiscal year ended December 31, 2008. The historical results contained in this press release are not necessarily indicative of future performance of the company.

Other Dialysis Corporation of America press releases, corporate profile, corporate governance materials, quarterly and current reports, and other filings with the Securities and Exchange Commission are available on Dialysis Corporation of America's internet home page: http://www.dialysiscorporation.com/.

CONTACT: For additional information, you may contact Dialysis Corporation of America, 1302 Concourse Drive, Suite 204, Linthicum, MD 21090; Telephone Number (410) 694-0500; Attention: Investor Relations.

DIALYSIS CORPORATION OF AMERICA AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME (unaudited) (dollars in thousands, except share and per share amounts) Three Months Ended Nine Months Ended September 30, September 30, ----------------------- --------------------- 2009 2008 2009 2008 ---- ---- ---- ---- Operating revenues: Sales: Medical services revenue $24,798 $21,586 $72,427 $62,300 Product sales 323 274 864 881 --- --- --- --- Total sales revenues 25,121 21,860 73,291 63,181 ------ ------ ------ ------ Operating costs and expenses: Cost of sales revenues: Cost of medical services 15,315 12,805 44,839 37,825 Cost of product sales 175 158 490 493 --- --- --- --- Total cost of sales revenues 15,490 12,963 45,329 38,318 Selling, general and administrative expenses: Corporate 2,631 2,764 8,517 7,602 Facility 3,446 3,312 10,525 9,390 ----- ----- ------ ----- Total 6,077 6,076 19,042 16,992 Stock compensation expense 70 82 217 239 Depreciation and amortization 759 709 2,241 2,050 Provision for doubtful accounts 738 500 1,952 1,579 --- --- ----- ----- 23,134 20,330 68,781 59,178 ------ ------ ------ ------ Operating income 1,987 1,530 4,510 4,003 Other (expense) income, net 3 - (22) (28) --- --- ---- ---- Income before income taxes 1,990 1,530 4,488 3,975 Income tax provision 631 511 1,531 1,196 --- --- ----- ----- Net income 1,359 1,019 2,957 2,779 Less: net income attributable to noncontrolling interests 419 144 1,129 792 --- --- ----- --- Net income attributable to the company $940 $875 $1,828 $1,987 ==== ==== ====== ====== Earnings per share: Basic $.10 $.09 $.19 $.21 ==== ==== ==== ==== Diluted $.10 $.09 $.19 $.21 ==== ==== ==== ==== Weighted average shares outstanding: Basic 9,600,433 9,579,743 9,596,030 9,579,868 ========= ========= ========= ========= Diluted 9,626,308 9,614,084 9,618,833 9,614,162 ========= ========= ========= ========= DIALYSIS CORPORATION OF AMERICA AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (dollars in thousands) September 30, December 31, 2009 2008 ---- ---- (unaudited) Assets Current assets: Cash and cash equivalents $3,035 $6,543 Accounts receivable, net 21,997 21,494 Inventories, net 2,947 2,919 Deferred income tax asset 1,185 1,185 Other current assets 2,333 2,978 ----- ----- Total current assets 31,497 35,119 ------ ------ Property and equipment 33,687 32,987 Less: accumulated depreciation and amortization 15,657 14,452 ------ ------ 18,030 18,535 ------ ------ Goodwill 16,492 16,492 Other assets 851 933 --- --- Total other assets 17,343 17,425 ------ ------ $66,870 $71,079 ======= ======= Liabilities and Stockholders' Equity Current liabilities: Accounts payable and accrued expenses $12,902 $14,717 Income taxes payable 313 61 Current portion of long-term debt 76 74 --- --- Total current liabilities 13,291 14,852 Deferred income taxes 1,275 1,275 Long-term debt, less current portion 9,718 14,276 ----- ------ Total liabilities 24,284 30,403 ------ ------ Commitments and Contingencies Equity: Common stock 96 96 Additional paid-in capital 16,238 16,001 Retained earnings 20,995 19,167 Treasury stock at cost (14) - ---- --- Total company stockholders' equity 37,315 35,264 Noncontrolling interests 5,271 5,412 ----- ----- Total equity 42,586 40,676 ------ ------ $66,870 $71,079 ======= ======= DIALYSIS CORPORATION OF AMERICA AND SUBSIDIARIES SUPPLEMENTAL OPERATING DATA (Unaudited) Three Months Ended September 30, Period-to-Period 2009 2008 Change % ---- ---- -------- Operating data: Treatments 75,985 68,925 10.2% Patient revenue per treatment $326.34 $313.18 4.2% Same center growth data: Same center treatment growth 3% 6% Same center revenue per treatment change 6% 5% Same center patient revenue growth 9% 11% Nine Months Ended September 30, Period-to-Period 2009 2008 Change % ---- ---- -------- Operating data: Treatments 221,402 202,176 9.5% Patient revenue per treatment $327.13 $308.15 6.2% Same center growth data: Same center treatment growth 3% 6% Same center revenue per treatment change 10% 3% Same center patient revenue growth 13% 9% 3rd Quarter 2nd Quarter 2009 2009 ---- ---- Key clinical metrics: Treatment adequacy (% of pts with Kt/V 97% 98% greater than 1.2) Anemia management (% of pts with Hgb 79% 81% greater than 11) Venous access (% of pts with AVF) 61% 60%

Dialysis Corporation of America

CONTACT: Dialysis Corporation of America, +1-410-694-0500, Attention:
Investor Relations.

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

Whole Foods Market Reports Fourth Quarter ResultsCompany Produces $0.20 of Diluted EPS and Generates $113 Million of Operating Cash Flow and $51 Million of Free Cash Flow; Company Provides Outlook for Fiscal Year 2010

AUSTIN, Texas, Nov. 4 /PRNewswire-FirstCall/ -- Whole Foods Market, Inc. today reported results for the 12-week fourth quarter and 52-week fiscal year ended September 27, 2009.

Sales for the quarter increased 2.3% to $1.8 billion. Comparable store sales decreased 0.9% versus a 0.4% increase in the prior year. Identical store sales, excluding eight relocations and two major expansions, decreased 2.3% versus a 0.5% decrease in the prior year. Excluding the negative impact of foreign currency translation, comparable store sales decreased 0.7%, and identical store sales decreased 2.0%.

For the fourth quarter, income available to common shareholders was $28.7 million, or $0.20 per diluted share, compared to $1.5 million, or $0.01 per diluted share, for the fourth quarter last year. Results in the current quarter included a LIFO credit of $3.4 million, or $0.01 per diluted share.

Results in the fourth quarter last year included: a LIFO charge of $4.7 million, or $0.02 per diluted share; non-cash asset impairment charges related to two Wild Oats locations of $1.5 million, or $0.01 per diluted share; FTC-related legal expenses of $2.5 million, or $0.01 per diluted share; charges related to lease terminations of Whole Foods Market stores in development and store closure reserve adjustments related to idle Wild Oats properties of $20.2 million, or $0.07 per diluted share; and tax charges resulting from the repatriation of $60 million in cash from the Company's Canadian subsidiary of $6.1 million, or $0.04 per diluted share.

"We believe our sales have stabilized and officially turned the corner. Our comparable store and identical store sales trends improved for the second quarter in a row and, after five quarters of year-over-year declines, so far in the first quarter are up 1.6% and 0.4%, respectively," said John Mackey, chairman, chief executive officer, and co-founder of Whole Foods Market. "We are very pleased with the $273 million of free cash flow we generated this year along with the significant year-over-year improvements we produced in our balance sheet. Our total cash increased $470 million to $501 million, and total debt decreased $190 million to $739 million. From where we stand today, we believe we are well positioned to meet our long-term debt maturities in 2012."

Adjusted earnings before interest, taxes, depreciation and amortization ("Adjusted EBITDA") increased 46% to $133.5 million, and earnings before interest, taxes, depreciation and other non-cash expenses ("EBITANCE") increased 34% to $142.8 million. Approximately $74.0 million relating to depreciation and amortization, asset impairments, LIFO, share-based payments, and deferred rent was expensed for accounting purposes but was non-cash in the current quarter.

During the quarter, the Company produced $113.0 million in cash flow from operations and invested $62.5 million in capital expenditures, of which $51.1 million related to new stores. This resulted in free cash flow of $50.5 million. Cash and cash equivalents, including restricted cash, increased to $501.2 million, and the Company had $335.2 million available on its credit line, net of $14.8 million in outstanding letters of credit. The Company's total debt was $739.2 million.

For the 52-week period ended September 27, 2009, sales increased 1.0% to $8.0 billion. Comparable store sales decreased 3.1% versus a 4.9% increase in the prior year, and identical store sales, excluding 12 relocations and three major expansions, decreased 4.3% versus a 3.6% increase in the prior year. Excluding the negative impact of foreign currency translation, comparable store sales decreased 2.6%, and identical store sales decreased 3.7%.

For the fiscal year, the tax rate was 41.5%, income available to common shareholders was $118.8 million, and diluted earnings per share were $0.85. These results included:

-- a LIFO credit of $5.6 million, or $0.02 per diluted share; -- non-cash asset impairment charges related to operating stores of $14.8 million, or $0.06 per diluted share; -- FTC-related legal costs of $14.7 million, and non-cash impairment charges related to the FTC settlement agreement of $4.8 million, or $0.08 per diluted share; and -- store closure reserve adjustments primarily related to changes in certain sub-tenant income estimates driven by the outlook for the commercial real estate market of $12.9 million, or $0.05 per diluted share.

For the fiscal year, adjusted EBITDA increased 16% to $575.6 million, and EBITANCE increased 12% to $619.8 million. The Company produced $587.7 million in cash flow from operations and invested $314.6 million in capital expenditures, of which $248.0 million related to new stores. This resulted in free cash flow of $273.1 million. In addition, the Company paid cash dividends to preferred stockholders of $19.8 million during the fiscal year.

The Company's results for the last five fiscal quarters and comparable and identical store sales results for the current quarter to date are shown in the following table. Where applicable, percentages have been adjusted to exclude asset impairment charges and FTC-related legal costs.

QTD 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 ---- ---- ---- ---- ---- ---- Sales growth 15.5% 0.4% -0.5% 2.0% 2.3% 5.4% Comparable store sales growth 0.4% -4.0% -4.8% -2.5% -0.9% 1.6% Excluding foreign currency 0.4% -3.4% -4.1% -2.0% -0.7% 1.4% Two-year comps (sum of two years) 8.6% 5.3% 1.9% 0.1% -0.6% -0.5% Excluding foreign currency 8.4% 5.6% 2.5% 0.5% -0.2% 0.0% Identical store sales growth -0.5% -4.9% -5.8% -3.8% -2.3% 0.4% Excluding foreign currency -0.4% -4.2% -5.1% -3.3% -2.0% 0.3% Two-year idents (sum of two years) 5.6% 2.2% -0.7% -1.9% -2.8% -2.9% Excluding foreign currency 5.5% 2.6% -0.1% -1.5% -2.4% -2.4% Gross profit 33.3% 33.4% 34.7% 35.2% 34.2% Gross profit excluding LIFO 33.6% 33.5% 34.7% 34.8% 34.0% Direct store expenses 26.6% 26.4% 26.2%(1) 26.6% 26.9% Store contribution 6.8% 6.9% 8.5% 8.5% 7.3% Store contribution excluding LIFO 7.0% 7.1% 8.5% 8.2% 7.2% G&A expenses 2.9% 2.9% 2.9% 2.8% 2.8% (1) Unusually low number of workers' compensation claims and average cost per claim in the quarter

For the quarter, gross profit, excluding LIFO, increased 46 basis points to 34.0% of sales, with an improvement in cost of goods sold more than offsetting higher occupancy costs as a percentage of sales. The LIFO adjustment was a $3.4 million credit versus a $4.7 million charge last year, a positive impact of 45 basis points. Excluding asset impairment charges of $1.5 million last year, direct store expenses increased 32 basis points to 26.9% of sales driven by increases in health care and depreciation which were partially offset by an improvement in workers' compensation expense as a percentage of sales. As a result, store contribution, excluding LIFO and asset impairment charges, improved 13 basis points to 7.2% of sales.

For stores in the identical store base, gross profit, excluding LIFO, improved 47 basis points to 34.1% of sales, direct store expenses improved 11 basis points to 26.5% of sales, and store contribution improved 58 basis points to 7.6% of sales.

G&A expenses, excluding FTC-related legal costs, improved 12 basis points to 2.8% of sales. FTC-related legal costs totaled $0.5 million in the fourth quarter versus $2.5 million in the prior year.

Pre-opening expenses were $10.6 million versus $15.2 million in the prior year.

Relocation, store closure and lease termination costs were $3.2 million versus $27.2 million last year. Results in the prior year included $5.5 million in charges related to lease terminations of Whole Foods Market stores in development and $14.7 million in store closure adjustments related to idle Wild Oats properties.

Additional information on the quarter for comparable stores and all stores is provided in the following table.

NOPAT # of Average Total Comparable Stores Comps ROIC(1) Stores Size Square Feet ----------------- ----- ------- ------ ------- ----------- Over 11 years old (15.6 years old, s.f. weighted) -2.1% 68% 97 26,900 2,612,800 Between eight and 11 years old -2.2% 43% 56 32,000 1,792,800 Between five and eight years old -4.5% 41% 43 37,300 1,603,700 Between two and five years old -0.1% 9% 53 50,800 2,694,000 Less than two years old (including eight relocations) 13.8% -2% 25 54,100 1,352,300 ----------------------- ----- --- -- ------ --------- All comparable stores (7.8 years old, s.f. weighted) -0.9% 24% 274 36,700 10,055,600 All stores (7.4 years old, s.f. weighted) 21% 284 37,200 10,565,800 (1) Reflects store-level capital and net operating profit after taxes ("NOPAT"), including pre-opening expense Growth and Development

The Company opened three stores in the fourth quarter. So far in the first quarter of fiscal year 2010, the Company has opened three stores in San Francisco, CA; Santa Barbara, CA; and Seattle, WA and closed one former Wild Oats store in Littleton, CO. The Company currently has 286 stores totaling 10.6 million square feet. Two additional stores are expected to open in the first quarter.

Since the Company's third quarter earnings release, the Company has reduced the size of two stores in development by an average of 16,200 square feet each. The Company also recently signed three new leases in Huntington Beach, CA; Columbus, OH; and Pittsburgh, PA averaging 33,000 square feet in size, all currently scheduled to open after fiscal year 2010.

The following table provides additional information about the Company's store openings in fiscal years 2008 and 2009, leases currently tendered but not opened, and total development pipeline for stores scheduled to open through fiscal year 2013. For accounting purposes, a store is considered tendered on the date the Company takes possession of the space for construction and other purposes, which is typically when the shell of the store is complete or nearing completion. The average tender period, or length of time between tender date and opening date, will vary depending on several factors, one of which is the number of acquired leases, ground leases and owned properties in development, all of which generally have longer tender periods than standard operating leases.

Stores Stores Current Current Opened Opened Leases Leases New Store Information FY08 FY09 Tendered Signed(1) --------------------- ------ ------ -------- --------- Number of stores (including relocations) 20 15 18 53 Number of relocations 6 6 1 8 Number of lease acquisitions, ground leases and owned properties 4 4 4 4 New markets 3 1 4 7 Average store size (gross square feet) 53,000 53,500 43,500 44,800 Total square footage 1,060,700 801,800 783,800 2,409,700 Average tender period in months 9.7 12.6 Average pre-opening expense per store (incl. rent) $2.5 mil $3.0 mil Average pre-opening rent per store $1.1 mil $1.3 mil (1) Includes leases tendered FTC Update

As previously announced on June 1, 2009, the FTC approved a settlement agreement resolving its antitrust challenge to the Company's acquisition of Wild Oats Markets, Inc. Under the terms of the agreement, a third-party divestiture trustee was appointed to market for sale until September 8, 2009: leases and related assets for 19 non-operating former Wild Oats stores; leases and related fixed assets (excluding inventory) for 12 operating acquired Wild Oats stores and one operating Whole Foods Market store; and Wild Oats® trademarks and other intellectual property associated with the Wild Oats stores.

The divestiture period has been extended by the FTC until March 8, 2010 for six operating and two non-operating former Wild Oats stores as well as Wild Oats® trademarks and other intellectual property associated with the Wild Oats stores. The divestiture period for those eight stores may be extended further only to allow the FTC to approve any previously submitted purchase agreements. The seven remaining operating stores have been retained by the Company without further obligation to attempt to divest.

Pursuant to the FTC's approval of the final consent order in the third quarter, the Company recorded non-cash impairment charges to adjust the carrying value of leases and fixed assets to fair value relating to the potential sales of certain operating stores. Cash expenses relating to legal and trustee fees are not expected to be material. No additional material charges are expected related to the potential sale of the six operating stores, the two non-operating properties for which a lease liability reserve is already recorded, or the trademarks which have been fully amortized.

Redemption of Series A Preferred Stock

On October 23, 2009, the Company announced that it exercised its right to redeem the $425 million of Series A Preferred Stock issued to Leonard Green & Partners last year. Under the terms of the agreement, the Company has the option to redeem the preferred stock upon 30 days written notice if its common stock closes at or above $28.50 for 20 consecutive trading days. Also under the terms of the agreement, Leonard Green & Partners has the right to convert its preferred stock into common stock prior to redemption.

Based on the conversion rate and the current trading price of its common stock, the Company anticipates that Leonard Green & Partners will choose to convert the preferred stock into common stock prior to the November 27, 2009 redemption date. The conversion of the preferred stock will save the Company approximately $34 million in preferred cash dividends per year. If the preferred stock is converted as expected, the Company's common stock outstanding will increase by approximately 29.7 million shares. The net impact on future diluted earnings per share should not be material.

Assumptions for Fiscal Year 2010

For the first five weeks of the first quarter of fiscal year 2010, total sales increased 5%. Comparable store sales increased 1.6% versus a 2.1% decrease in the prior year, and identical store sales increased 0.4% versus a 3.3% decrease in the prior year.

The Company is pleased with its sales trends quarter to date; however, increased price investments could negatively impact our sales going forward, and with no anticipated positive change in the economy over the short term, the Company believes it is reasonable to expect sales results for the fiscal year in line with or slightly better than these quarter-to-date results. For the fiscal year, the Company expects sales growth of 5% to 8%, comparable store sales growth of 1% to 4%, and identical store sales growth of 0% to 3%. The Company expects to open 16 new stores, 10 of which are expected to open in the first half of the year.

While sales comparisons will be easier in the first half of the year, the Company will have difficult expense comparisons due to the cost savings realized in fiscal year 2009. In addition, with 0% to 3% identical store sales growth, the Company does not expect to realize the same year-over-year operating margin improvement in its younger stores as has been produced in the past. For these reasons, and given the likelihood of continued selective, strategic price investments, the Company expects operating margin to be in line with the 4.1% produced in fiscal year 2009 excluding non-cash asset impairment charges, FTC-related legal and settlement costs, and store closure reserve adjustments.

The Company expects total pre-opening and relocation costs in the range of $55 million to $60 million.

The Company expects net interest expense of $28 million to $32 million.

The Company expects an annualized effective tax rate in the range of 41% to 42%.

Based on these assumptions, the Company estimates EBITDA in the range of $625 million to $650 million and EBITANCE in the range of $675 million to $700 million.

The Company estimates diluted earnings per share, based on approximately 170 million weighted average shares outstanding, in the range of $1.05 to $1.10.

Capital expenditures for the fiscal year are expected to be in the range of $350 million to $400 million. Of this amount, approximately 60% to 65% relates to new stores opening in fiscal year 2010 and beyond.

The following table provides information about the Company's estimated store openings in fiscal years 2010 through 2013 based on the current development pipeline. These openings reflect estimated tender dates, which are subject to change, and do not incorporate any potential new leases, terminations or square footage reductions.

The Company is committed to producing positive free cash flow on an annual basis and is confident it will produce operating cash flow in excess of the capital expenditures needed to open the stores in its current development pipeline.

Average Ending Square Ending Square Total Feet per Square Footage Openings Relocations Store Footage(1) Growth FY10 remaining stores in development 13 0 44,600 11,216,100 6.2% FY11 stores in development 17 4 39,600 11,772,300 5.0% FY12 stores in development 15 2 46,900 12,426,600 5.6% FY13 stores in development 8 2 52,300 12,781,200 Total 53 8 44,800 (1) Reflects year-to-date openings/closures in fiscal year 2010 and one expansion in development in fiscal year 2011 About Whole Foods Market

Founded in 1980 in Austin, Texas, Whole Foods Market (http://www.wholefoodsmarket.com/) is the leading natural and organic foods supermarket, America's first national certified organic grocer, and was named "America's Healthiest Grocery Store" in 2008 by Health magazine. In fiscal year 2008, the Company had sales of approximately $8 billion and currently has 286 stores in the United States, Canada, and the United Kingdom. Whole Foods Market employs more than 52,000 Team Members and has been ranked for 12 consecutive years as one of the "100 Best Companies to Work For" in America by Fortune magazine.

Forward-looking statements

The following constitutes a "Safe Harbor" statement under the Private Securities Litigation Reform Act of 1995. Except for the historical information contained herein, the matters discussed in this press release are forward-looking statements that involve risks and uncertainties, which could cause our actual results to differ materially from those described in the forward-looking statements. These risks include but are not limited to general business conditions, the successful integration of acquired businesses into our operations, changes in overall economic conditions that impact consumer spending, including fuel prices and housing market trends, the impact of competition, changes in the Company's access to available capital, and other risks detailed from time to time in the SEC reports of Whole Foods Market, including Whole Foods Market's report on Form 10-K for the fiscal year ended September 28, 2008. Whole Foods Market undertakes no obligation to update forward-looking statements.

The Company will host a conference call today to discuss this earnings announcement at 4:00 p.m. CT. The dial-in number is 1-800-862-9098, and the conference ID is "Whole Foods." A simultaneous audio webcast will be available at http://www.wholefoodsmarket.com/.

Whole Foods Market, Inc. Consolidated Statements of Operations (unaudited) (In thousands, except per share amounts) Twelve weeks ended Fifty-two weeks ended September 27, September 28, September 27, September 28, 2009 2008 2009 2008 ----- ------------- ------------- ------------- ------------- Sales $1,829,229 $1,788,919 $8,031,620 $7,953,912 Cost of goods sold and occupancy costs 1,203,263 1,192,917 5,277,310 5,247,207 ------------------ --------- --------- --------- --------- Gross profit 625,966 596,002 2,754,310 2,706,705 Direct store expenses 491,593 474,983 2,130,982 2,106,449 Asset impairments from continuing locations 20 1,491 14,827 1,491 ----------------- --- ----- ------ ----- Store contribution 134,353 119,528 608,501 598,765 General and administrative expenses 51,725 54,669 243,749 270,428 --------------- ------ ------ ------- ------- Operating income before pre- opening and store closure 82,628 64,859 364,752 328,337 Pre-opening expenses 10,602 15,151 49,218 55,554 Relocation, store closure and lease termination costs 3,248 27,159 31,185 36,545 ------------------ ----- ------ ------ ------ Operating income 68,778 22,549 284,349 236,238 Interest expense (7,892) (8,303) (36,856) (36,416) Investment and other income 921 1,267 3,449 6,697 -------------- --- ----- ----- ----- Income before income taxes 61,807 15,513 250,942 206,519 Provision for income taxes 25,397 14,011 104,138 91,995 ------------- ------ ------ ------- ------ Net income 36,410 1,502 146,804 114,524 ------------ ------ ----- ------- ------- Preferred stock dividends 7,744 - 28,050 - --------------- ----- --- ------ --- Income available to common shareholders $28,666 $1,502 $118,754 $114,524 ---------------- ------- ------ -------- -------- Basic earnings per share $0.20 $0.01 $0.85 $0.82 ------------------ ----- ----- ----- ----- Weighted average shares outstanding 140,510 140,286 140,414 139,886 ---------------- ------- ------- ------- ------- Diluted earnings per share $0.20 $0.01 $0.85 $0.82 ---------------- ----- ----- ----- ----- Weighted average shares outstanding, diluted basis 140,510 140,286 140,414 140,011 ---------------- ------- ------- ------- ------- Dividends declared per common share $- $- $- $0.60 ------------------ --- --- --- ----- Whole Foods Market, Inc. Condensed Consolidated Balance Sheets (unaudited) September 27, 2009 and September 28, 2008 (In thousands) Assets 2009 2008 ------ ---- ---- Current assets: Cash and cash equivalents $430,130 $30,534 Restricted cash 71,023 617 Accounts receivable 104,731 115,424 Merchandise inventories 310,602 327,452 Prepaid expenses and other current assets 51,137 68,150 Deferred income taxes 87,757 80,429 --------------------- ------ ------ Total current assets 1,055,380 622,606 Property and equipment, net of accumulated depreciation and amortization 1,897,853 1,900,117 Goodwill 658,254 659,559 Intangible assets, net of accumulated amortization 73,035 78,499 Deferred income taxes 91,000 109,002 Other assets 7,866 10,953 ------------ ----- ------ Total assets $3,783,388 $3,380,736 ------------ ---------- ---------- Liabilities and Shareholders' Equity 2009 2008 ------------------------------------ ---- ---- Current liabilities: Current installments of long-term debt and capital lease obligations $389 $380 Accounts payable 189,597 183,134 Accrued payroll, bonus and other benefits due team members 207,983 196,233 Dividends payable 8,217 - Other current liabilities 277,838 286,430 ------------------------- ------- ------- Total current liabilities 684,024 666,177 Long-term debt and capital lease obligations, less current installments 738,848 928,790 Deferred lease liabilities 250,326 199,635 Other long-term liabilities 69,262 80,110 --------------------------- ------ ------ Total liabilities 1,742,460 1,874,712 ----------------- --------- --------- Series A redeemable preferred stock, $0.01 par value, 425 and no shares authorized, issued and outstanding in 2009 and 2008, respectively 413,052 - Shareholders' equity 1,627,876 1,506,024 -------------------- --------- --------- Commitments and contingencies ----------------------------- ---------- ---------- Total liabilities and shareholders' equity $3,783,388 $3,380,736 ------------------------------------------ ---------- ---------- Whole Foods Market, Inc. Consolidated Statements of Cash Flows (unaudited) (In thousands) Fifty-two weeks ended September 27, September 28, 2009 2008 ------------------------- ---- ---- Cash flows from operating activities: Net income $146,804 $114,524 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 266,695 249,213 Loss on disposition of fixed assets 3,012 3,754 Impairment of long-lived assets 24,508 9,195 Share-based payments expense 12,795 10,505 LIFO expense (benefit) (5,598) 12,683 Deferred income tax expense (benefit) 14,076 (9,993) Excess tax benefit related to exercise of team member stock options (42) (5,686) Deferred lease liabilities 48,029 44,167 Other 2,800 (65) Net change in current assets and liabilities: Accounts receivable 10,408 (10,468) Merchandise inventories 21,732 (52,630) Prepaid expenses and other current assets 21,415 (27,833) Accounts payable 6,527 (45,378) Accrued payroll, bonus and other benefits due team members 11,985 14,413 Other current liabilities 14,696 14,350 Net change in other long-term liabilities (12,121) 14,241 --------------------------------------------- ------- ------ Net cash provided by operating activities 587,721 334,992 --------------------- ------- ------- Cash flows from investing activities: Development costs of new locations (247,999) (357,520) Other property and equipment expenditures (66,616) (171,952) Acquisition of intangible assets (1,604) (1,630) Purchase of available-for- sale securities - (194,316) Sale of available-for-sale securities - 194,316 Decrease (increase) in restricted cash (70,406) 1,693 Payment for purchase of acquired entities, net of cash acquired - (5,480) Proceeds from divestiture, net - 163,913 Other investing activities 342 (1,745) ---------------------------- --- ------ Net cash used in investing activities (386,283) (372,721) ------------------------------------- -------- -------- Cash flows from financing activities: Common stock dividends paid - (109,072) Preferred stock dividends paid (19,833) - Issuance of common stock 4,286 18,019 Excess tax benefit related to exercise of team member stock options 42 5,686 Proceeds from issuance of redeemable preferred stock, net 413,052 - Proceeds from long-term borrowings 123,000 317,000 Payments on long-term debt and capital lease obligations (321,092) (161,151) Other financing activities - (652) ---------------------------- --- ---- Net cash provided by financing activities 199,455 69,830 ----------------------------------------- ------- ------ Effect of exchange rate changes on cash and cash equivalents (1,297) (1,567) ------------------------------------- ------ ------ Net change in cash and cash equivalents 399,596 30,534 Cash and cash equivalents at beginning of period 30,534 - ---------------------------- ------ --- Cash and cash equivalents at end of period $430,130 $30,534 ---------------------------- -------- ------- ------------------------------- Supplemental disclosure of cash flow information: ------- -------- Interest paid $43,685 $36,155 Federal and state income taxes paid $69,701 $118,366 ------------------------------------- ------- -------- Whole Foods Market, Inc. Non-GAAP Financial Measures (unaudited) (In thousands) In addition to reporting financial results in accordance with generally accepted accounting principles, or GAAP, the Company provides information regarding Economic Value Added ("EVA"), Earnings before interest, taxes and non-cash expenses ("EBITANCE"), Earnings before interest, taxes, depreciation and amortization ("EBITDA"), Adjusted EBITDA and Free Cash Flow in the press release as additional information about its operating results. These measures are not in accordance with, or an alternative to, GAAP. The Company's management believes that these presentations provide useful information to management, analysts and investors regarding certain additional financial and business trends relating to its results of operations and financial condition. In addition, management uses these measures for reviewing the financial results of the Company as well as for incentive compensation and capital planning purposes. Management believes EBITANCE is a useful non-GAAP measure of financial performance, helping investors more meaningfully evaluate the Company's cash flow results by adjusting for certain non-cash expenses. These expenses include depreciation, amortization, fixed asset impairment charges, non-cash share-based payments expense, deferred rent, and LIFO charge. Similar to EBITDA, this measure goes further by including other non-cash expenses, primarily those which have arisen since the use of EBITDA became common practice and because of accounting changes due to recent accounting pronouncements. Management uses EBITANCE as a supplement to cash flows from operations to assess the cash generated from our business available for capital expenditures and the servicing of other requirements including working capital. The Company defines Adjusted EBITDA as EBITDA plus non- cash asset impairment charges. The Company defines Free Cash Flow as net cash provided by operating activities less capital expenditures. The following is a tabular reconciliation of the EVA non-GAAP financial measure to GAAP net income, which the Company believes to be the most directly comparable GAAP financial measure. Twelve weeks ended Fifty-two weeks ended September 27, September 28, September 27, September 28, EVA 2009 2008 2009 2008 --- ---- ---- ---- ---- Net income $36,410 $1,502 $146,804 $114,524 Provision for income taxes 25,397 14,011 104,138 91,995 Interest expense and other 15,397 22,336 58,528 64,276 ------------ ------ ------ ------ ------ NOPBT 77,204 37,849 309,470 270,795 Income taxes (40%) 30,882 15,140 123,788 108,318 ------------ ------ ------ ------- ------- NOPAT 46,322 22,709 185,682 162,477 Capital charge 64,324 55,249 265,869 231,049 -------------- ------ ------ ------- ------- EVA $(18,002) $(32,540) $(80,187) $(68,572) ----- -------- -------- -------- -------- The following is a tabular presentation of the non-GAAP financial measures, EBITDA, Adjusted EBITDA and EBITANCE including a reconciliation to GAAP net income, which the Company believes to be the most directly comparable GAAP financial measure. Twelve weeks ended Fifty-two weeks ended EBITDA and September 27, September 28, September 27, September 28, EBITANCE 2009 2008 2009 2008 ---------- ---- ---- ---- ---- Net income $36,410 $1,502 $146,804 $114,524 Provision for income taxes 25,397 14,011 104,138 91,995 Interest expense, net 6,971 7,036 33,407 29,719 ------------- ----- ----- ------ ------ Operating income 68,778 22,549 284,349 236,238 Depreciation and amortization 62,404 59,827 266,695 249,213 ---------------- ------ ------ ------- ------- Earnings before interest, taxes, depreciation & amortization (EBITDA) 131,182 82,376 551,044 485,451 Impairment of assets 2,344 9,096 24,508 9,195 ------------- ----- ----- ------ ----- Adjusted EBITDA 133,526 91,472 575,552 494,646 Non-cash expenses: Share-based payments expense 3,966 2,906 12,795 10,505 LIFO expense (benefit) (3,421) 4,651 (5,598) 12,683 Deferred rent 8,732 7,290 37,079 34,874 -------- ----- ----- ------ ------ Total other non-cash expenses 9,277 14,847 44,276 58,062 ------------- ----- ------ ------ ------ Earnings before interest, taxes, and non-cash expenses (EBITANCE) $142,803 $106,319 $619,828 $552,708 ----------- -------- -------- -------- -------- The following is a tabular reconciliation of the Free Cash Flow non-GAAP financial measure. Twelve weeks ended Fifty-two weeks ended Free Cash September 27, September 28, September 27, September 28, Flow 2009 2008 2009 2008 --------- ---- ---- ---- ---- Net cash provided by operating activities $113,000 $63,613 $587,721 $334,992 Development costs of new locations (51,050) (73,495) (247,999) (357,520) Other property and equipment expenditures (11,434) (61,139) (66,616) (171,952) -------------- ------- ------- ------- -------- Free cash flow $50,516 $(71,021) $273,106 $(194,480) ----------- ------- -------- -------- --------- Contact: Cindy McCann VP of Investor Relations 512.542.0204

Whole Foods Market

CONTACT: Cindy McCann, VP of Investor Relations of Whole Foods Market,
Inc., +1-512-542-0204

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

Education Management Corporation Reports Fiscal 2010 First Quarter Results

PITTSBURGH, Nov. 4 /PRNewswire-FirstCall/ -- Education Management Corporation , one of the largest providers of post-secondary education in North America, today reported its financial results for the three months ended September 30, 2009. For the first quarter of fiscal 2010, net income was $15.8 million, or $0.13 per diluted share, an increase of $19.1 million from the quarter ended September 30, 2008. Net revenues rose 23.1% to $534.4 million from the first quarter of fiscal 2009.

Todd S. Nelson, Chief Executive Officer of Education Management, commented, "We are reporting record student, revenue and EBITDA results for our first fiscal quarter. We are pleased with the successful completion in October 2009 of our initial public offering where we raised proceeds, net of underwriting fees, of $389.2 million and bond tender offer where we paid off $316.0 million of our 10-1/4% Senior Subordinated Notes due 2016. We believe that the completion of these transactions will increase our financial flexibility and provide a strong foundation to support our long term growth plans."

Financial Highlights -- Net revenues for the three months ended September 30, 2009 increased 23.1% to $534.4 million, compared to $434.2 million for the same period a year ago. This increase was primarily driven by a 23.1% increase in July student enrollment. -- For the first quarter of fiscal 2010, net income for the quarter grew to $15.8 million, or $0.13 per fully diluted share, compared to a net loss of $(3.3) million, or $(0.03) per fully diluted share, for the same period a year ago. Earnings before interest, taxes, depreciation and amortization (EBITDA) increased 52.6% from $59.4 million in the first quarter of fiscal 2009 to $90.6 million in the first quarter of fiscal 2010 primarily due to higher student enrollment. -- At September 30, 2009, cash and cash equivalents were $422.9 million as compared to $363.3 million at June 30, 2009. There were no outstanding borrowings under the revolving credit facility at September 30, 2009 as compared to $100.0 million at June 30, 2009, which was repaid in full on July 1, 2009. -- Cash flow from operations for the three month period ended September 30, 2009 was $200.6 million, compared to $108.7 million in the prior year period. The increase in operating cash flows as compared to the prior year period was primarily related to a $75.3 million increase in advanced payments, which benefited from the timing of our October academic term start occurring earlier than in the first quarter of fiscal 2009, and increased net income. -- On a cash-basis, capital expenditures were $33.2 million, or 6.2% of net revenues, for the three months ended September 30, 2009 compared to $50.8 million, or 11.7% of net revenues, in the same period in the prior year. Capital expenditures for fiscal 2010 are projected to be approximately 6.5% to 7.5% of net revenues compared to 7.5% of net revenues in fiscal 2009.

The presentation of EBITDA does not comply with U.S. generally accepted accounting principles (GAAP). For an explanation of EBITDA and Adjusted EBITDA (used for covenant compliance), and a reconciliation to net income, the most directly comparable GAAP financial measure, see the Non-GAAP Financial Measures disclosure in the financial tables section below.

Student Enrollment

At the start of the current October quarter (second quarter of fiscal 2010), total enrollment at our schools was over 136,000 students, a 22.7% increase from the same time last year. Same-school enrollment (schools with enrollment for one year or more) increased 22.1% to over 135,300 students. Students enrolled in fully online programs increased 60.0% to approximately 31,200 students.

2009 2008 Percentage October October Change Total enrollment 136,000 110,800 22.7% Same-school enrollment(1) 135,300 110,800 22.1% Students enrolled in fully online programs 31,200 19,500 60.0% (1) Schools with enrollment for one year or more.

Our quarterly revenues and income fluctuate primarily as a result of the pattern of student enrollments. The seasonality of our business has decreased over the last several years due primarily to an increased percentage of students enrolling in online programs, which generally experience less seasonal fluctuation than campus-based programs. The first quarter is typically the lowest revenue recognition quarter due to student vacations.

Conference Call and Webcast

Education Management will host a conference call to discuss its fiscal 2010 first quarter on Wednesday, November 4, 2009 at 5:00 p.m. (Eastern Time). Those wishing to participate in this call should dial 480-629-9643 approximately 10 minutes prior to the start of the call. A listen-only audio of the conference call will also be broadcast live over the Internet at http://www.edmc.com/. A replay of the conference call will be available at http://www.edmc.com/ until November 3, 2010.

About Education Management

Education Management (http://www.edmc.com/), with over 136,000 students as of October 2009, is among the largest providers of post-secondary education in North America, based on student enrollment and revenue, with a total of 93 locations in 28 U.S. states and Canada. We offer academic programs to our students through campus-based and online instruction, or through a combination of both. We are committed to offering quality academic programs and continuously strive to improve the learning experience for our students. Our educational institutions offer students the opportunity to earn undergraduate and graduate degrees and certain specialized non-degree diplomas in a broad range of disciplines, including design, media arts, health sciences, psychology and behavioral sciences, culinary, fashion, business, education, legal and information technology.

Cautionary Statement

This press release may include information that could constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements typically contain words such as "anticipates," "believes," "estimates," "expects," "intends" or similar words indicating that future outcomes are not known with certainty and are subject to risk factors that could cause these outcomes to differ significantly from those projected. Forward-looking statements include, but are not limited to, statements related to the Company's future operating and financial performance, and include statements regarding expected enrollment, revenue, expense levels, and earnings. Any such forward-looking statements may involve risk and uncertainties that could cause actual results to differ materially from any future results encompassed within the forward-looking statements. Factors that could cause or contribute to such differences include those matters disclosed in the Company's Securities and Exchange Commission filings. Past results of Education Management are not necessarily indicative of its future results. Education Management does not undertake any obligation to update any forward-looking statements.

Education Management Corporation COMPANY CONTACTS: James Sober, CFA Vice President, Finance (412) 995-7684 EDUCATION MANAGEMENT CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS FISCAL FIRST QUARTER (Dollars in millions) (Unaudited) For the three months ended September 30, 2009 2008 %Change ---- ---- ------- Net revenues $534.4 $434.2 23.1% Costs and expenses: Educational services 295.7 253.5 16.6% General and administrative 148.1 121.3 22.0% Depreciation and amortization 28.8 26.6 8.4% ---- ---- --- Total costs and expenses 472.6 401.4 17.7% ----- ----- ---- Income before interest and income taxes 61.8 32.8 88.5% Interest expense, net 36.3 38.2 (4.8%) ---- ---- ----- Income (loss) before income taxes 25.5 (5.4) n/m Provision for (benefit from) income taxes 9.7 (2.1) n/m --- ---- --- Net Income (loss) $15.8 $(3.3) n/m ===== ===== === Diluted earnings (loss) per share $0.13 $(0.03) n/m ===== ====== === Weighted average number of diluted shares outstanding (000's) 119,770 119,769 0.0% ======= ======= === EDUCATION MANAGEMENT CORPORATION AND SUBSIDIARIES SELECTED CASH FLOW DATA - FISCAL FIRST QUARTER (Dollars in millions) (Unaudited) For the three months ended September 30, 2009 2008 % Change ---- ---- -------- Net cash flows provided by operations $200.6 $108.7 84.5% Depreciation and amortization 28.8 26.6 8.4% Capital expenditures (1) (33.2) (50.8) (34.6%) (1) Represents cash paid for long-lived assets EDUCATION MANAGEMENT CORPORATION AND SUBSIDIARIES SELECTED BALANCE SHEET DATA - FISCAL FIRST QUARTER (Dollars in millions) (Unaudited) As of September 30, 2009 2008 ---- ---- Cash and cash equivalents $422.9 $390.5 Current assets 691.6 621.2 Total assets 4,399.7 4,268.0 Revolving credit facility 0.0 180.0 Other current liabilities 614.9 459.2 Long-term debt (including current portion) 1,885.4 1,898.2 Shareholders' equity 1,502.9 1,388.1 EDUCATION MANAGEMENT CORPORATION AND SUBSIDIARIES RECONCILIATION OF NON-GAAP MEASURES Reconciliation of Net Income to EBITDA (Dollars in millions) (Unaudited) Non-GAAP Financial Measures

EBITDA, a measure used by management to measure operating performance, is defined as net income plus net interest expense, taxes and depreciation and amortization, including amortization of intangible assets. EBITDA is not a recognized term under GAAP and does not purport to be an alternative to net income as a measure of operating performance or to cash flows from operating activities as a measure of liquidity. Additionally, EBITDA is not intended to be a measure of free cash flow available for management's discretionary use, as it does not consider certain cash requirements such as interest payments, tax payments and debt service requirements. Management believes EBITDA is helpful in highlighting trends because EBITDA excludes the results of decisions that are outside the control of operating management and can differ significantly from company to company depending on long-term strategic decisions regarding capital structure, the tax jurisdictions in which companies operate and capital investments. Management compensates for the limitations of using non-GAAP financial measures by using them to supplement GAAP results to provide a more complete understanding of the factors and trends affecting the business than GAAP results alone. Because not all companies use identical calculations, this presentation of EBITDA may not be comparable to similarly titled measures of other companies.

For the three months ended September 30, 2009 2008 %Change ---- ---- ------- Net income (loss) $15.8 $(3.3) n/m Interest expense, net 36.3 38.2 (4.8%) Provision for (benefit from) income taxes 9.7 (2.1) n/m Depreciation and amortization 28.8 26.6 8.4% ---- ---- --- EBITDA $90.6 $59.4 52.6% ===== ===== ====

Education Management Corporation

CONTACT: James Sober, CFA, Vice President, Finance of Education
Management Corporation, +1-412-995-7684

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

Genomic Health Announces Third Quarter 2009 Financial Results and Business Progress-- Product Revenue Increased 39 Percent Compared with Third Quarter 2008; Net Loss Narrowed -- -- Company to Webcast Analyst Day on November 12, 2009 -- -- Conference Call Today at 4:30 p.m. ET --

REDWOOD CITY, Calif., Nov. 4 /PRNewswire-FirstCall/ -- Genomic Health, Inc. today reported financial results and business progress for the quarter ended September 30, 2009.

Total revenue increased to $39.5 million in the third quarter of 2009 compared with $28.1 million in the third quarter of 2008. Product revenue from the Oncotype DX® breast cancer test was $38.9 million in the third quarter of 2009, an increase of 39 percent, compared with $28.1 million in the third quarter of 2008.

Net loss decreased to $502,000 in the third quarter of 2009 from $3.0 million in the third quarter of 2008. Basic and diluted net loss per share was $0.02 in the third quarter of 2009, compared with basic and diluted net loss per share of $0.11 in the third quarter of 2008.

Cash and cash equivalents and short-term investments at September 30, 2009 were $58.9 million, compared with $55.7 million at June 30, 2009 and $56.7 million at December 31, 2008.

"In the third quarter, we significantly grew our business, improved gross margins and increased the reimbursement per test resulting in a narrowed net loss," said Kim Popovits, President and Chief Executive Officer of Genomic Health. "We are committed to strengthening our business through continued investment in the worldwide expansion of the Oncotype DX breast cancer test and the anticipated launch of our Oncotype DX colon cancer test early next year. In addition, as we near break even, we are focused on driving longer-term growth by leveraging our rigorous development approach and commercial infrastructure to bring additional products to cancer patients."

Additional Third Quarter 2009 Financial Results

During the third quarter of 2009, approximately 50 percent of product revenue was recorded on an accrual basis and recognized at the time test results were delivered, reflecting established payment patterns from payors with agreements to pay or contracts in place.

Total operating expenses were $40.1 million, including cost of product revenues of $8.3 million, in the third quarter of 2009, compared with total operating expenses of $31.4 million, including cost of product revenues of $7.1 million, in the third quarter of 2008. Included in third quarter 2009 operating expenses were non-cash charges of $4.2 million, including $2.5 million of stock-based compensation expense and $1.7 million of depreciation and amortization expenses, compared with $2.3 million of stock-based compensation expense and $1.3 million of depreciation and amortization expenses in the same period in 2008.

Financial Results for Nine Months Ended September 30, 2009

Total revenue for the nine months ended September 30, 2009 was $110.0 million, compared with $79.3 million for the first nine months of 2008. Product revenue for the nine months ended September 30, 2009 was $107.5 million, compared with $77.8 million for the first nine months of 2008.

Net loss for the nine months ended September 30, 2009 was $9.1 million, compared with $13.8 million for the first nine months of 2008. Basic and diluted net loss per share was $0.32 for the nine months ended September 30, 2009, compared with basic and diluted net loss per share of $0.49 for the first nine months of 2008.

Upcoming Event

The Company will provide additional detail on research, development and commercial efforts in a business and scientific briefing to be held on Thursday, November 12, 2009 beginning at 12:30 p.m. ET.

Recent Highlights and Accomplishments Commercial Progress -- Delivered more than 12,600 Oncotype DX breast cancer test results in the third quarter of 2009, compared with more than 10,220 test results delivered in the third quarter of 2008, an increase of 23 percent year-over-year. -- Began accepting all appropriate breast cancer tumor samples, regardless of immunohistochemistry (IHC) estrogen receptor (ER) status, to facilitate the assessment of ER status by reverse transcription-polymerase chain reaction (RT-PCR) testing. -- Established two additional distribution agreements in South America. The Company has received samples from more than 50 countries to date. -- Initiated breast cancer clinical utility trials of Oncotype DX with clinical researchers in Japan and Spain. -- Launched a large adjuvant breast cancer trial with clinical researchers in Germany which, like TAILORx in the United States, uses the Oncotype DX assay to select patients for study randomization and treatment. -- Established a contract with Blue Cross Blue Shield of Arizona providing in-network benefit coverage for approximately 1 million lives. Peer-Reviewed Publications and Medical Meeting Presentations -- Presented two studies at the 2009 ASCO Breast Symposium. Highlights included: -- Results from a study demonstrating the critical role of manual microdissection to remove all biopsy cavities from breast cancer specimens. The Oncotype DX breast cancer test includes manual microdissection following review by a board certified surgical pathologist with breast expertise to predict a patient's benefit from chemotherapy and risk of disease recurrence. -- Results of a multi-center Japanese study demonstrating that the Oncotype DX breast cancer test had significant prognostic value in Japanese women with ER-positive early-stage breast cancer. In this study of 200 women with node negative breast cancer that was originally presented at the 2009 Kyoto Breast Cancer Consensus Conference International Convention, Oncotype DX identified a large portion of patients in Japan who had ER-positive early-stage breast cancer as having a low likelihood of distant recurrence. -- Presented results at the joint ECCO/ESMO Multidisciplinary Congress confirming that the distribution of Recurrence Scores® in European and Middle Eastern breast cancer patients is consistent with those observed in the U.S. Conference Call Details

To access the live conference call today, November 4, at 4:30 p.m. Eastern Time via phone, please dial (877) 361-8830 from the United States and Canada or +1(706) 679-8297 internationally. The conference ID is 38477730. Please dial in approximately ten minutes prior to the start of the call. A telephone replay will be available beginning approximately one hour after the call through November 11, and may be accessed by dialing (800) 642-1687 from the United States and Canada or +1(706) 645-9291 internationally. The replay passcode is 38477730.

To access the live and subsequently archived webcast of the conference call, go to the Investor Relations section of the company's web site at http://investor.genomichealth.com/. Please connect to the web site at least 15 minutes prior to the call to allow for any software download that may be necessary.

Analyst Day Details

The Company will hold a business and scientific briefing on Thursday, November 12, 2009 beginning at 12:30 p.m. ET in New York City. Speakers will focus on Genomic Health's business model, research and development, technology platform and patient centric philosophy as driving factors for making individualized cancer treatment the standard of care. In addition, the meeting will feature a presentation by Norman Wolmark, M.D., chairman of the National Surgical Adjuvant Breast and Bowel Project (NSABP), and the Department of Human Oncology at Allegheny General Hospital in Pittsburgh, Pennsylvania, centered on the need for individualized cancer treatment and his experience in both breast and colon cancer.

To access the live and subsequently archived webcast of the analyst day presentation, visit the Investor Relations section of Genomic Health's website at http://investor.genomichealth.com/. Please connect to the website at least 15 minutes prior to the beginning of the presentation to allow for any necessary software downloads. An archived replay will be available beginning 24 hours after the live presentation.

About Genomic Health

Genomic Health, Inc. is a life science company focused on the development and commercialization of genomic-based clinical laboratory services for cancer that allow physicians and patients to make individualized treatment decisions. In 2004, Genomic Health launched the Oncotype DX® breast cancer test, which has been shown to predict the likelihood of chemotherapy benefit as well as recurrence in early-stage breast cancer. In addition to the widely adopted Oncotype DX breast cancer test, Genomic Health is preparing to launch its Oncotype DX colon cancer test in early 2010. The company was founded in 2000 and is located in Redwood City, California. For more information, please visit http://www.genomichealth.com/

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements relating to the company's ability to strengthen its business through continued investment in the worldwide expansion of its Oncotype DX breast cancer test and its launch of a colon cancer test; the company's expectations regarding the commercialization of a test for colon cancer and the proposed timing of commercialization; the company's belief that it is nearing break even; the company's ability to focus on driving longer-term growth by leveraging its development approach and commercial infrastructure to bring additional products to cancer patients; the outcome, success or results of clinical trials; and the applicability of clinical study results to actual outcomes. Forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially, and reported results should not be considered as an indication of future performance. These risks and uncertainties include, but are not limited to: our ability to increase usage of our tests; the risk that we may not obtain or maintain sufficient levels of reimbursement for our existing tests and any future tests we may develop; the risks and uncertainties associated with the regulation of our tests by FDA; our ability to compete against third parties; our ability to develop and commercialize new tests; unanticipated costs or delays in research and development efforts; our ability to obtain capital when needed; our history of operating losses; the results of clinical studies; the applicability of clinical study results to actual outcomes; and the other risks set forth in the company's filings with the Securities and Exchange Commission, including the risks set forth in the company's Quarterly Report on Form 10-Q for the quarter ended June 30, 2009. These forward-looking statements speak only as of the date hereof. Genomic Health disclaims any obligation to update these forward-looking statements.

NOTE: The Genomic Health logo, Oncotype, Oncotype DX and Recurrence Score are trademarks or registered trademarks of Genomic Health, Inc. All other trademarks and service marks are the property of their respective owners.

GENOMIC HEALTH, INC. Condensed Consolidated Statements of Operations (In thousands, except share and per share amounts) (Unaudited) Three Months Ended Nine Months Ended September 30, September 30, 2009 2008 2009 2008 ---------- ---------- ---------- ---------- Revenues: Product revenues $38,910 $28,070 $107,529 $ 77,752 Contract revenues 607 51 2,436 1,592 ---------- ---------- ---------- ---------- Total revenues 39,517 28,121 109,965 79,344 Operating expenses: Cost of product revenues 8,301 7,140 24,019 19,875 Research and development 9,120 6,939 27,007 20,667 Selling and marketing 15,313 10,837 45,719 35,030 General and administrative 7,316 6,505 22,318 18,635 ---------- ---------- ---------- ---------- Total operating expenses 40,050 31,421 119,063 94,207 ---------- ---------- ---------- ---------- Loss from operations (533) (3,300) (9,098) (14,863) Interest and other income, net 116 369 591 1,438 Interest and other expense, net (22) (91) (109) (330) ---------- ---------- ---------- ---------- Loss before income taxes (439) (3,022) (8,616) (13,755) Provision for income taxes (63) - (454) - ---------- ---------- ---------- ---------- Net loss $(502) $(3,022) $(9,070) $(13,755) ========== ========== ========== ========== Basic and diluted net loss per share $(0.02) $(0.11) $(0.32) $(0.49) ========== ========== ========== ========== Shares used in computing basic and diluted net loss per share 28,579,045 28,331,505 28,538,915 28,270,776 ========== ========== ========== ========== GENOMIC HEALTH, INC. Condensed Consolidated Balance Sheets (In thousands) As of As of September 30, December 31, 2009 2008 (Unaudited) (Unaudited) --------- --------- Cash and cash equivalents $16,719 $11,171 Short-term investments 42,183 45,499 Accounts receivable, net 9,655 8,807 Prepaid expenses and other current assets 5,341 4,781 --------- --------- Total current assets 73,898 70,258 Property and equipment, net 13,235 15,562 Restricted cash 500 500 Other assets 477 369 --------- --------- Total assets $88,110 $86,689 ========= ========= Accounts payable $2,578 $1,898 Accrued expenses and other current liabilities 15,539 11,472 Deferred revenues 2,762 3,798 Notes payable 532 2,039 Other liabilities 1,002 1,307 Stockholders' equity 65,697 66,175 --------- --------- Total liabilities and stockholders' equity $88,110 $86,689 ========= ========= The condensed consolidated balance sheet at December 31, 2008 has been derived from the audited consolidated financial statements at that date included in the Company's Form 10-K for the fiscal year ended December 31, 2008.

Genomic Health, Inc.

CONTACT: Investors, Brad Cole, +1-650-569-2281,
investors@genomichealth.com or Media, Emily Faucette, +1-415-595-9407,
media@genomichealth.com, both of Genomic Health

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

Sangamo BioSciences Reports Third Quarter 2009 Financial Results

RICHMOND, Calif., Nov. 4 /PRNewswire-FirstCall/ -- Sangamo BioSciences, Inc. today reported third quarter 2009 financial results and accomplishments.

For the third quarter ended September 30, 2009, Sangamo reported a consolidated net loss of $4.9 million, or $0.12 per share, compared to a consolidated net loss of $6.3 million, or $0.15 per share, for the same period in 2008. As of September 30, 2009, the company had cash, cash equivalents, marketable securities and interest receivable of $47.9 million. In October 2009, Sangamo completed an underwritten public offering that resulted in net proceeds of $20.9 million to the company and entered into an expanded agreement with Sigma-Aldrich Corporation under the terms of which Sigma made initial payments of $20.0 million to Sangamo.

Revenues for the third quarter of 2009 were $4.1 million, compared to $3.7 million for the same period in 2008. Third quarter 2009 revenues were from the Company's collaboration agreements with Dow AgroSciences and Sigma-Aldrich Corporation, enabling technology agreements in protein production and research grants. The revenue recognized for the third quarter of 2009 consisted of $4.0 million in collaboration agreements and $51,000 in research grants.

Research and development expenses were $6.2 million for the third quarter of 2009, compared to $7.6 million for the same period in 2008. The decrease in research and development expenses for the third quarter of 2009 was primarily due to decreased manufacturing, preclinical, licensing and consulting expenses partially offset by increased stock based compensation expenses. Non-cash employee stock-based compensation included in research and development expenses totaled $0.8 million for the third quarter of 2009 compared to $0.6 million for the same period in 2008.

General and administrative expenses were $2.7 million for the third quarter of 2009, compared to $2.6 million for the same period in 2008. The increase in general and administrative expenses was primarily due to increased personnel costs, including non-cash employee stock-based compensation, which totaled $0.9 million in the third quarter of 2009 compared to $0.7 million in the same period in 2008.

Total operating expenses for the third quarter of 2009 were $8.9 million, compared to $10.1 million for the same period in 2008.

Net interest and other income (loss) were recorded as a net loss of $47,000 for the third quarter of 2009 compared to income of $42,000 for the same period in 2008.

Nine Month Results

For the nine months ended September 30, 2009, the consolidated net loss was $16.2 million, or $0.39 per share, compared to a consolidated net loss of $21.7 million, or $0.53 per share, for the nine-months ended September 30, 2008. Revenues were $11.9 million for the nine months ended September 30, 2009, compared to $9.4 million for the same period in 2008. Total operating expenses were $28.9 million for the nine months ended September 30, 2009, compared to $32.5 million for the same period in 2008. The decrease in operating expenses for 2009 was primarily associated with decreased manufacturing, preclinical, consulting and lab supply expenses.

Recent Highlights -- Presentation of top-line statistically significant Phase 2 ZFP Therapeutic(TM) data at the Society for Neuroscience Meeting. Sangamo presented top-line, statistically significant Phase 2 clinical data from its zinc finger DNA-binding protein (ZFP) Therapeutic program to develop SB-509 for treatment of diabetic neuropathy (DN) at the Society for Neuroscience Annual Meeting held in Chicago. The data demonstrated a direct neuroregenerative effect of SB-509 treatment that resulted in a statistically significant (p value=0.02) increase in small unmyelinated nerve fibers in the skin, or intraepidermal nerve fiber density (IENFD), in subjects with DN. Data were also presented that provided additional evidence of the positive effect of SB-509 on large fiber sensory nerve health as measured by improvements in nerve conduction velocity (NCV), in subjects with elevated markers of vascular damage (ICAM-1), and improvements in the muscle components of the neurologic exam (NIS-LL) 30-days after each of the three administrations of SB-509. Together these data confirm the neuroregenerative activity of SB-509 in patients with DN and define a drug-responsive population for future trials. -- Completion of an underwritten public offering. On October 13, 2009, Sangamo closed an underwritten public offering of 3,000,000 shares of its common stock at a public offering price of $7.20 per share resulting in net proceeds of approximately $20.9 million after deduction of underwriting discounts and commissions and other offering expenses. -- Expansion of licensing agreement with Sigma-Aldrich. Sigma-Aldrich Corporation and Sangamo announced a major expansion of our existing license agreement to include the exclusive rights to develop and distribute ZFP-modified cell lines for commercial production of protein pharmaceuticals. Under the expanded agreement, Sigma also obtained rights to certain ZFP-engineered transgenic animals for commercial applications. Under the terms of the agreement, Sigma made initial payments of $20.0 million to Sangamo, consisting of an upfront license fee of $15.0 million and $5.0 million through the purchase of Sangamo's common stock at $7.86 per share. Sangamo is eligible to earn additional contingent commercial license fees of up to $5.0 million based on certain conditions and thereafter a royalty based upon a percentage of net sales and sublicensing revenue. Sangamo is also eligible to receive commercial milestone payments ranging from $2.0 million to $10.0 million, up to a total of $25.0 million, based upon cumulative product sales. -- Announcement of a second Phase 1 clinical trial of SB-728-T for the treatment of HIV/AIDS. In September 2009, Sangamo announced the successful review and acceptance by the FDA of an Investigational New Drug (IND) application to initiate an open-label, repeat-dosing Phase 1 clinical trial (SB-728-T-902) of the company's ZFP nuclease (ZFN)-based therapeutic, SB-728-T. A single dose Phase 1 clinical study of SB-728-T was initiated in February 2009 and is ongoing at the University of Pennsylvania. Both Phase 1 studies are designed primarily to evaluate the safety and tolerability of this ZFP Therapeutic approach. However, subjects' CD4 T-cell counts, levels of CCR5-modified T-cells and viral burden will also be monitored. -- Publication of ground-breaking new ZFN-mediated gene editing applications in stem cells. Scientists from The Whitehead Institute led by Dr. Rudolf Jaenisch used ZFNs designed by Sangamo to efficiently and precisely modify the genomes of human embryonic stem cells (hESCs) and induced pluripotent stem cells (hiPSCs). Human ESCs and iPSCs are useful tools in drug discovery and development. Scientists also hope to use these cells therapeutically in transplantation medicine and other regenerative applications. The research was described in a paper published in the scientific journal Nature Biotechnology (Nat Biotechnol. 2009 Sep; 27(9):851-7). -- Sangamo's collaborators awarded significant clinical research awards to advance research into potential ZFP Therapeutics. Sangamo's collaborators at the City of Hope and University of Southern California were awarded a $14.5 million grant from the California Institute of Regenerative Medicine (CIRM). The grant will support the development of a ZFN-based stem cell therapy for HIV/AIDS. In addition, research led by Donald B. Kohn, M.D., Director of the UCLA Human Gene Medicine Program and member of the Broad Stem Cell Research Center, and Philip Gregory, D. Phil., Sangamo's chief scientific officer and vice president, research, was selected to receive an Innovations in Clinical Research Award of $486,000 from the Doris Duke Charitable Foundation. The grant will support an innovative research project conducted by Dr. Kohn and Sangamo scientists and titled "Beta-globin Gene Correction in Hematopoietic Stem Cells for Sickle Cell Disease." Conference Call

Sangamo will host a conference call today, November 4, 2009 at 5:00 p.m. ET, which will be open to the public. The call will also be webcast live and can be accessed via a link on the Sangamo BioSciences website in the Investor Relations section under "Events and Presentations" http://investor.sangamo.com/events.cfm. The webcast replay will also be available for two weeks after the call. During the conference call, the company will review these results and accomplishments, discuss other business matters, and provide forward-looking guidance with respect to the remainder of 2009.

The conference call dial-in numbers are 877-879-6209 for domestic callers and 719-325-4830 for international callers. The passcode for the call is 4978837. For those unable to listen in at the designated time, a conference call replay will be available for one week following the conference call, from approximately 8:00 p.m. ET on November 4, 2009 to midnight ET on November 11, 2009. The conference call replay numbers for domestic and international callers are 888-203-1112 and 719-457-0820 respectively. The conference ID number for the replay is 4978837.

About Sangamo

Sangamo BioSciences, Inc. is focused on the research and development of novel DNA-binding proteins for therapeutic gene regulation and modification. The most advanced ZFP Therapeutic(TM) development program is currently in Phase 2 clinical trials for evaluation of safety and clinical effect in patients with diabetic neuropathy and ALS. Sangamo also has two Phase 1 clinical trials to evaluate safety and clinical effect of a ZFP Therapeutic for the treatment of HIV/AIDS. Other therapeutic development programs are focused on cancer, neuropathic pain, nerve regeneration, Parkinson's disease and monogenic diseases. Sangamo's core competencies enable the engineering of a class of DNA-binding proteins known as zinc finger DNA-binding proteins (ZFPs). By engineering ZFPs that recognize a specific DNA sequence Sangamo has created ZFP transcription factors (ZFP TF) that can control gene expression and, consequently, cell function. Sangamo is also developing sequence-specific ZFP Nucleases (ZFN) for gene modification. Sangamo has established strategic partnerships with companies in non-therapeutic applications of its technology including Dow AgroSciences and Sigma-Aldrich Corporation. For more information about Sangamo, visit the company's web site at http://www.sangamo.com/.

This press release contains forward-looking statements regarding Sangamo's current expectations. These forward looking statements include, without limitation, references to the research and development of ZFP TFs and ZFNs, clinical trials of SB-509 and SB-728-T, therapeutic and non-therapeutic applications of Sangamo's ZFP technology platform, eligibility to receive royalty and milestone payments under the Sigma agreement, strategic partnership with collaborators and anticipated amount of cash and cash equivalents. These statements are not guarantees of future performance and are subject to certain risks, uncertainties and assumptions that are difficult to predict. Factors that could cause actual results to differ include, but are not limited to, the early stage of ZFP Therapeutic development, uncertainties related to the timing of initiation and completion of clinical trials, whether clinical trial results will validate and support the safety and efficacy of ZFP Therapeutics, and the ability to establish strategic partnerships. Further, there can be no assurance that the necessary regulatory approvals will be obtained or that Sangamo will be able to develop commercially viable ZFP-based therapeutics. Actual results may differ from those projected in forward-looking statements due to risks and uncertainties that exist in the company's operations and business environments. These risks and uncertainties are described more fully in Sangamo's Annual Report on Form 10-K and Quarterly Reports on Form 10-Q as filed with the Securities and Exchange Commission. Forward-looking statements contained in this announcement are made as of this date and will not be updated.

SELECTED CONSOLIDATED FINANCIAL DATA (in thousands, except per share data) (unaudited) STATEMENT OF OPERATIONS DATA: Three Months Ended Nine Months Ended September 30, September 30, ---------------- ---------------- 2009 2008 2009 2008 ---- ---- ---- ---- Revenues Collaboration agreements $4,012 $3,196 $11,382 $7,658 Research grants 51 549 564 1,694 -- --- --- ----- Total revenues 4,063 3,745 11,946 9,352 Operating expenses: Research and development 6,166 7,563 20,299 24,492 General and administrative 2,701 2,564 8,634 8,036 Total operating expenses 8,867 10,127 28,933 32,528 ----- ------ ------ ------ Loss from operations (4,804) (6,382) (16,987) (23,176) Interest and other income (loss), net (47) 42 793 1,448 Net loss $(4,851) $(6,340) $(16,194) $(21,728) ======= ======= ======== ======== Basic and diluted net loss per common share $(0.12) $(0.15) $(0.39) $(0.53) Shares used in computing basic and diluted net loss per common share 41,184 40,928 41,126 40,759 ====== ====== ====== ====== SELECTED BALANCE SHEET DATA September 30, 2009 December 31, 2008 ------------------ ----------------- Cash, cash equivalents, marketable securities and interest receivable $47,863 $65,025 Total assets 51,383 67,850 Total stockholders' equity 44,450 55,396

Sangamo BioSciences, Inc.

CONTACT: Elizabeth Wolffe, Ph.D. of Sangamo BioSciences, Inc.,
+1-510-970-6000, ext. 271

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

Orexigen(R) Therapeutics Announces Third Quarter 2009 Financial Results- Management to host call and webcast today at 5:00 p.m. Eastern to discuss financial results and recent business highlights -

SAN DIEGO, Nov. 4 /PRNewswire-FirstCall/ -- Orexigen® Therapeutics, Inc. , a biopharmaceutical company focused on the treatment of obesity, today announced unaudited financial results for the three months ended September 30, 2009.

Three Months Ended September 30, 2009

As of September 30, 2009, Orexigen held $56.9 million in cash and cash equivalents and an additional $50.9 million in investment securities, available-for-sale. Together, these amounts total $107.8 million.

For the three months ended September 30, 2009, Orexigen reported a net loss of $14.4 million, or $0.33 per share attributable to common stockholders, compared to a net loss of $24.8 million, or $0.72 per share attributable to common stockholders, for the comparable period in 2008.

Total operating expenses for the three months ended September 30, 2009, were $14.2 million compared to $25.1 million for the comparable period in 2008. The decreased operating expenses were due primarily to a decrease in research and development expenses in connection with the completion of the Company's Contrave® Phase 3 clinical trials, related proprietary product formulation work and consulting activities totaling approximately $12.9 million. The decrease was partly offset by an increase in costs incurred in connection with the preparation of the Contrave NDA and an increase in salaries and personnel related costs. In addition, general and administrative expenses increased approximately $1.0 million due primarily to an increase in salaries and personnel related costs, legal and accounting fees, recruiting expense and facilities costs.

"The recent completion of the COR Phase 3 program and the Phase 2b trial of Empatic(TM) were major milestones for Orexigen," said Mike Narachi, President and CEO of Orexigen. "The results demonstrate the potential of these two product candidates to help fill the current gap in obesity treatment by providing physicians with useful pharmacologic options to address the varying needs of this diverse patient population. We believe that Contrave, if approved, has the potential to serve as the first-line treatment of obesity for the majority of patients, while Empatic can be developed and positioned in a highly complementary way."

Recent Highlights Contrave

Orexigen announced new data from the COR-I, COR-II and COR-Diabetes trials at Annual Scientific Meeting of The Obesity Society in late October. These new data show that after completing 56 weeks of therapy with Contrave32 (bupropion SR 360 mg/naltrexone SR 32 mg):

-- Approximately 34-48% of patients lost at least 10% of their baseline body weight and approximately 17-23% lost at least 15%; -- Significant improvements in markers of cardiometabolic risk, including waist circumference, HDL and triglycerides were observed in Contrave treated patients. Patients at higher risk for developing cardiovascular disease and diabetes demonstrated additional improvement in markers of cardiometabolic risk such as waist circumference, HDL and triglycerides; -- In addition to the statistically significant improvements observed in hemoglobin A1c (HbA1c) in obese patients with type 2 diabetes, patients who began the trial with a HbA1c level greater than 8% saw a mean reduction of 1.1%, compared to 0.5% for the placebo group; -- Patients reported an increased ability to control their eating and resist food cravings; and -- There was no evidence of increased abuse liability.

The most frequently observed treatment-emergent adverse events were nausea, constipation and headache. Nausea was the leading adverse event resulting in discontinuation; however, for the majority of patients experiencing nausea, it was mild to moderate, transient and manageable.

The results from the successfully completed COR program of more than 4,500 patients exceed the FDA categorical efficacy benchmark for clinically significant weight loss, supporting the Company's plan to file a New Drug Application with the FDA in the first half of 2010.

Empatic

Orexigen recently announced the data from the Phase 2b clinical trial of Empatic. The results of this trial demonstrated that patients completing 24 weeks of Empatic360 (bupropion SR 360mg/zonisamide SR 360 mg) therapy lost 9.9% of their baseline body weight, or 22 pounds, compared to 1.7% for placebo patients (p<0.001). Importantly, Empatic patients continued to lose weight through the end of the trial, with no evidence of a weight loss plateau. Improvements were observed in key markers of cardiometabolic risk such as waist circumference, triglycerides, fasting insulin and blood pressure. The most commonly reported adverse events for all Empatic patients were headache, insomnia and nausea, and the most common adverse events leading to discontinuation were insomnia, headache and urticaria (hives). Adverse events and laboratory findings appeared to be consistent with the individual components of Empatic. There were no serious adverse events attributed by investigators to study drug. There were no statistically or clinically meaningful differences between Empatic and placebo on measures of cognitive function, depression, suicidality or anxiety.

Conference Call Today at 5:00 p.m. Eastern Time (2:00 p.m. Pacific Time)

The Orexigen management team will host a teleconference and webcast to discuss the third quarter 2009 financial results and recent business highlights. The live call may be accessed by phone by calling (866) 783-2138 (domestic) or (857) 350-1597 (international), participant code 88599521. The webcast can be accessed live on the investor relations section of the Orexigen web site at http://www.orexigen.com/, and will be archived for 14 days following the call. The archive may be accessed by calling (888) 286-8010 (domestic) or (617) 801-6888 (international), participant code 25068077.

About Orexigen Therapeutics

Orexigen Therapeutics, Inc. is a biopharmaceutical company focused on developing therapies that offer multiple approaches to treating obesity. The Company's lead investigational product, Contrave®, has completed the COR Phase 3 clinical development program and is on track for a regulatory submission with the FDA in the first half of 2010. The Company's second obesity drug candidate, EmpaticTM, has completed Phase 2 trials. Each product candidate is designed to act on a specific group of neurons in the central nervous system with the goal of achieving appetite suppression and sustained weight loss, through combination therapeutic approaches. Further information about the Company can be found at http://www.orexigen.com/.

Forward-Looking Statements

Orexigen cautions you that statements included in this press release that are not a description of historical facts are forward-looking statements. Words such as "believes," "anticipates," "plans," "expects," "indicates," "will," "intends," "potential," "suggests," "assuming," "designed" and similar expressions are intended to identify forward-looking statements. These statements are based on the Company's current beliefs and expectations. These forward-looking statements include statements regarding the efficacy and safety of Empatic(TM) and Contrave®, the potential for, and timing of, proceeding to Phase 3 clinical trials for Empatic or filing an NDA for Contrave, the commercial and therapeutic potential of Empatic and Contrave, and the potential to obtain regulatory approval for, and effectively treat obesity with, either product candidate. The inclusion of forward-looking statements should not be regarded as a representation by Orexigen that any of its plans will be achieved. Actual results may differ from those set forth in this release due to the risk and uncertainties inherent in the Orexigen business, including, without limitation: additional analyses of data from the Empatic Phase 2b trial or Contrave Phase 3 trials and any other clinical trials of Empatic or Contrave may produce negative or inconclusive results, or may be inconsistent with previously announced results or previously conducted clinical trials; the FDA may not agree with the Company's interpretation of efficacy and safety results; earlier clinical trials may not be predictive of future results; Empatic or Contrave may not receive regulatory approval on a timely basis or at all, and the FDA may require Orexigen to complete additional clinical, non-clinical or other requirements prior to the submission or the approval of NDAs for either product candidate; the potential for adverse safety findings relating to Empatic or Contrave to delay or prevent regulatory approval or commercialization, or result in product liability claims, including serious adverse events that are not characterized by clinical investigators as possibly related to Empatic or Contrave and adverse events associated with the individual components of these product candidates; the third parties on whom Orexigen relies to assist with the development programs for Empatic or Contrave, including clinical investigators, contract laboratories, clinical research organizations and manufacturing organizations, may not successfully carry out their contractual duties or obligations or meet expected deadlines, and the quality or accuracy of the data or materials generated by such third parties may be of insufficient quality to include in the Company's regulatory submissions; the ability of Orexigen and its licensors to obtain, maintain and successfully enforce adequate patent and other intellectual property protection of its product candidates; and other risks described in the Company's filings with the Securities and Exchange Commission. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof, and Orexigen undertakes no obligation to revise or update this news release to reflect events or circumstances after the date hereof. All forward-looking statements are qualified in their entirety by this cautionary statement. This caution is made under the safe harbor provisions of Section 21E of the Private Securities Litigation Reform Act of 1995. Information included herein is based on the Company's review and evaluation of the clinical data. All conclusions and determinations contained herein are subject to the Company's further analysis of the clinical data. The ultimate determination of the safety and efficacy of Contrave and Empatic will be made by the FDA and other relevant regulatory authorities.

Orexigen Therapeutics, Inc. (a development stage company) Balance Sheets (In thousands, except share and par value amounts) September 30, December 31, 2009 2008 ---- ---- (Unaudited) Assets Current assets: Cash and cash equivalents $56,936 $45,451 Investment securities, available-for-sale 50,859 40,716 Prepaid expenses and other current assets 1,980 1,184 ----- ----- Total current assets 109,775 87,351 Property and equipment, net 1,441 2,059 Restricted cash 1,290 1,375 Other assets 689 1,123 --- ----- Total assets $113,195 $91,908 ======== ======= Liabilities and stockholders' equity Current liabilities: Accounts payable and accrued expenses $10,562 $18,810 Deferred revenue, current portion 88 88 Long-term debt, current portion 7,184 7,591 ----- ----- Total current liabilities 17,834 26,489 Deferred revenue, less current portion 993 1,058 Long-term debt, less current portion 3,741 8,800 Other long-term liabilities 1,775 1,767 Commitments and contingencies Stockholders' equity: Preferred stock, $.001 par value, 10,000,000 shares authorized at September 30, 2009 and December 31, 2008; no shares issued and outstanding at September 30, 2009 and December 31, 2008 - - Common stock, $.001 par value, 100,000,000 shares authorized at September 30, 2009 and December 31, 2008; 47,039,720 and 34,433,322 shares issued and outstanding at September 30, 2009 and December 31, 2008, respectively 47 34 Additional paid-in capital 340,495 253,782 Accumulated other comprehensive income 27 153 Deficit accumulated during the development stage (251,717) (200,175) -------- -------- Total stockholders' equity 88,852 53,794 ------ ------ Total liabilities and stockholders' equity $113,195 $91,908 ======== ======= Orexigen Therapeutics, Inc. (a development stage company) Statements of Operations (In thousands, except per share amounts) (Unaudited) Period from Three Nine September Months Months 12, Ended Ended 2002 September September (Inception) 30, 30, to --------- --------- September 30, 2009 2008 2009 2008 2009 ---- ---- ---- ---- ----- Revenues: Collaborative agreement $- $- $- $- 174 License revenue 22 22 66 66 419 -- -- -- -- --- Total revenues 22 22 66 66 593 Operating expenses: Research and development 9,592 21,463 38,579 61,735 207,697 General and administrative 4,592 3,638 12,254 11,049 50,076 ----- ----- ------ ------ ------ Total operating expenses 14,184 25,101 50,833 72,784 257,773 ------ ------ ------ ------ ------- Loss from operations (14,162) (25,079) (50,767) (72,718) (257,180) Other income (expense): Interest income 47 662 295 2,800 8,974 Interest expense (318) (370) (1,070) (1,196) (3,511) ---- ---- ------ ------ ------ Total other income (expense) (271) 292 (775) 1,604 5,463 ---- --- ---- ----- ----- Net loss (14,433) (24,787) (51,542) (71,114) (251,717) Accretion to redemption value of redeemable convertible preferred stock - - - - (78) Deemed dividend of beneficial conversion for Series C preferred stock - - - - (13,860) -- -- -- -- ------- Net loss attributable to common stockholders $(14,433) $(24,787) $(51,542) (71,114) $(265,655) ======== ======== ======== ======== ========= Net loss per share attributable to common stockholders - basic and diluted $(0.33) $(0.72) $(1.38) $(2.12) ====== ====== ====== ====== Shares used in computing net loss per share attributable to common stockholders - basic and diluted 43,087 34,355 37,484 33,539 ====== ====== ====== ======

Orexigen Therapeutics, Inc.

CONTACT: Graham Cooper, Chief Financial Officer of Orexigen,
+1-858-875-8600; or Media, Lori Rosen, +1-212-301-7173, or Liz Frank,
+1-212-301-7216, both of WeissComm Partners, for Orexigen

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

Medivation Reports Third Quarter 2009 Financial Results and Provides Corporate Update-- Company Received $110 Million Up-Front Payment from Astellas -- -- Conference Call Today at 4:30 p.m. Eastern Time --

SAN FRANCISCO, Nov. 4 /PRNewswire-FirstCall/ -- Medivation, Inc. today reported on its corporate progress and financial results for the third quarter ended September 30, 2009.

"With the signing of our agreement for MDV3100 with Astellas last week, we now have a first-class partner with a global reach, leading commercial presence in the urology space, and strategic focus on oncology. This achievement marks our second major collaboration in just over a year's time, bringing us significant resources which allow us to drive our product candidates forward, while still maintaining substantial ownership of our dimebon and MDV3100 programs. We and Astellas are committed to advancing development of this novel androgen receptor antagonist as quickly as possible for a broad spectrum of prostate cancer disease states," said David Hung, M.D., president and chief executive officer of Medivation. "We also made important progress with dimebon and now have seven pivotal trials in our broad clinical development program in both Alzheimer's and Huntington diseases in various stages of activity. We have reported results from our first pivotal trial, we expect data in the first half of next year from our second confirmatory pivotal trial, and five other pivotal trials are ongoing."

Recent Accomplishments and Near-Term Milestones Dimebon (latrepirdine*) -- On track to announce top-line results from CONNECTION, a confirmatory, pivotal Phase 3 trial in patients with mild-to-moderate Alzheimer's disease, in the first half of 2010. -- Completed patient enrollment in a placebo-controlled Phase 3 safety study in 750 Alzheimer's disease patients on a variety of background anti-dementia drugs. -- Initiated patient enrollment in CONSTELLATION, a six-month, randomized, double-blind, placebo-controlled Phase 3 trial in approximately 570 patients with moderate-to-severe Alzheimer's disease that will evaluate as primary endpoints the effects of adding dimebon to Namenda®, a standard of care Alzheimer's disease medicine, on cognitive and behavioral symptoms. -- Initiated patient enrollment in CONTACT, a six-month, randomized, double-blind, placebo-controlled Phase 3 trial in approximately 600 patients with moderate-to-severe Alzheimer's disease that will assess as primary endpoints the potential benefits of adding dimebon to ongoing treatment with Aricept®, the leading Alzheimer's medication worldwide, on neuropsychiatric symptoms and activities of daily living. This study is the first pivotal Alzheimer's disease study to use the Neuropsychiatric Inventory (NPI) scale as a co-primary endpoint. -- Continued patient enrollment in CONCERT, a 12-month Phase 3 clinical trial in patients with mild-to-moderate Alzheimer's disease that is designed to evaluate the efficacy of dimebon when added to ongoing treatment with Aricept. -- Continued patient enrollment in HORIZON, a six-month, double-blind, placebo-controlled Phase 3 trial that is evaluating dimebon's potential benefits on cognition in patients with Huntington disease. *Latrepirdine is the proposed generic name for dimebon. MDV3100 -- Entered into a global collaboration agreement with Astellas Pharma Inc. to develop and commercialize MDV3100 for the treatment of prostate cancer. Under the terms of the agreement, Medivation has received an up-front cash payment of $110 million and is also eligible to receive payments of up to $335 million upon the attainment of development and regulatory milestones, plus up to an additional $320 million in commercial milestone payments. -- Initiated AFFIRM, a randomized, placebo-controlled, double-blind Phase 3 survival trial that is evaluating 160 mg/day of MDV3100 in men with castration-resistant prostate cancer who were previously treated with docetaxel-based chemotherapy. Corporate -- Appointed Hank Mansbach, M.D., a neurologist with more than 10 years of industry experience, as vice president, medical affairs. Third Quarter 2009 Financial Results

Revenue for the third quarter of 2009 was $16.3 million, consisting of partial recognition of the non-refundable up-front payment of $225.0 million received from Pfizer in October 2008. The up-front payment was recorded as deferred revenue upon receipt and is being recognized on a straight-line basis over the estimated performance period of the Company's obligations under its collaboration agreement with Pfizer, which the Company presently expects to complete in the first quarter of 2012.

Total operating expenses for the three months ended September 30, 2009, were $27.6 million, compared with total operating expenses of $20.6 million for the same period in 2008. These figures included non-cash stock-based compensation expense of $2.5 million in the quarter ended September 30, 2009, compared with $2.3 million for the same period in 2008.

For the nine months ended September 30, 2009, total operating expenses were $73.8 million, compared with total operating expenses of $55.3 million for the same period in 2008. These figures included non-cash stock-based compensation expense of $7.7 million in the nine months ended September 30, 2009, compared with $6.4 million for the same period in 2008.

Beginning October 21, 2008, Pfizer became responsible for 60 percent of all dimebon-related development and commercialization costs in the U.S., and 100 percent of such costs outside the U.S. The parties are making quarterly true-up payments as necessary to ensure that each bears its applicable share of costs. For the third quarter of 2009, the true-up payment payable to Medivation was $4.2 million. Medivation presents these cost-sharing true-up payments in the applicable expense line of its statements of operations.

Medivation reported a net loss for the quarter ended September 30, 2009, of $14.0 million, or $0.42 per share, compared with a net loss of $20.5 million, or $0.68 per share, for the same period in 2008. For the nine months ended September 30, 2009, the net loss was $28.5 million, or $0.90 per share, compared with a net loss of $54.5 million, or $1.86 per share, for the same period in 2008.

Cash, cash equivalents and short-term investments at September 30, 2009, totaled $214.5 million, compared with $221.4 million at December 31, 2008, and $237.7 million at June 30, 2009. This does not include the $110 million up-front payment Medivation received from Astellas on November 2, 2009 pursuant to the MDV3100 collaboration agreement.

Updated 2009 Financial Outlook

Medivation currently expects that total operating expenses for 2009, net of cost-sharing payments with Pfizer and Astellas, will be between $115 and $120 million, down from its prior forecast of between $117 and $127 million. Both the current and prior forecasts include approximately $10 million of non-cash stock-based compensation expense.

Conference Call Information

To participate by telephone in today's live call beginning at 4:30 p.m. Eastern Time by telephone, please call 877-874-1563 from the U.S. or +1-719-325-4891 internationally. In addition, the live conference call is being webcast and can be accessed on the "Events and Presentations" page of the "Investor Relations" section of the Company's website at http://www.medivation.com/. A replay also will be available for 30 days following the live call.

About Medivation

Medivation, Inc. is a biopharmaceutical company focused on the rapid development of novel small molecule drugs to treat serious diseases for which there are limited treatment options. Medivation aims to transform the treatment of these diseases and offer hope to critically ill patients and their caregivers. In September 2008, Medivation announced a global agreement with Pfizer, Inc to develop and commercialize dimebon (latrepirdine) for the treatment of Alzheimer's and Huntington diseases. With Pfizer, Medivation is conducting a broad dimebon clinical development program that includes several Phase 3 trials assessing the efficacy and safety of dimebon taken alone or in combination with other Alzheimer's medications in patients with mild, moderate and severe Alzheimer's disease. The companies are also conducting a Phase 3 trial of dimebon in Huntington disease. In October 2009, Medivation entered a global agreement with Astellas Pharma Inc. to develop and commercialize MDV3100 for prostate cancer. The first Phase 3 clinical trial in the MDV3100 development program, known as the AFFIRM trial, is under way in patients with castration-resistant prostate cancer who have previously been treated with docetaxel-based chemotherapy. For more information, please visit us at http://www.medivation.com/.

This press release contains forward-looking statements, including statements regarding the continued clinical development of Medivation's product candidates, the timing of clinical trial initiation and clinical trial data, the therapeutic and commercial potential of Medivation's product candidates, the performance of Medivation's obligations under its collaboration agreement with Pfizer and continuing true-up payments thereunder, potential future milestone payments under Medivation's collaboration agreement with Astellas, and future expected financial results, which are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Any statements contained in this press release that are not statements of historical fact may be deemed to be forward-looking statements. Forward-looking statements involve risks and uncertainties that could cause Medivation's actual results to differ significantly from those projected, including, without limitation, risks related to progress, timing and results of Medivation's clinical trials, difficulties or delays in obtaining regulatory approval, enrollment of patients in Medivation's clinical trials, partnering of Medivation's product candidates, including Medivation's dependence on the efforts of and funding by Pfizer and Astellas for the development of dimebon and MDV3100, respectively, the achievement of development, regulatory and commercial milestones under Medivation's collaboration agreements, manufacturing of Medivation's product candidates, competition with Medivation's product candidates should they receive marketing approval, the adequacy of Medivation's financial resources, unanticipated expenditures or liabilities, intellectual property matters, and other risks detailed in Medivation's filings with the Securities and Exchange Commission, including its quarterly report on Form 10-Q for the quarter ended September 30, 2009, filed today with the SEC. You are cautioned not to place undue reliance on the forward-looking statements, which speak only as of the date of this release. Medivation disclaims any obligation or undertaking to update or revise any forward-looking statements contained in this press release.

~financial statements follow~ MEDIVATION, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except per share data) (unaudited) Three Months Nine Months Ended Ended September 30, September 30, -------------- -------------- 2009 2008 2009 2008 ---- ---- ---- ---- Collaboration revenue $16,341 $- $49,021 $- ------- -- ------- -- Operating expenses: Research and development 21,530 15,514 54,851 41,728 Selling, general and administrative 6,034 5,122 18,950 13,532 ------ ------ ------ ------ Total operating expenses 27,564 20,636 73,801 55,260 ------ ------ ------ ------ Loss from operations (11,223) (20,636) (24,780) (55,260) Other income (expense): Interest income 153 170 967 735 Other income (expense), net (57) 10 (154) (2) --- -- ---- -- Total other income 96 180 813 733 -- --- --- --- Loss before provision for income taxes (11,127) (20,456) (23,967) (54,527) Provision for income taxes 2,846 - 4,538 2 ----- --- ----- --- Net loss $(13,973) $(20,456) $(28,505) $(54,529) ======== ======== ======== ======== Basic and diluted net loss per share $(0.42) $(0.68) $(0.90) $(1.86) ====== ====== ====== ====== Weighted average common shares used in the calculation of basic and diluted net loss per share 33,468 30,022 31,588 29,273 ====== ====== ====== ====== MEDIVATION, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands, except share and per share data) (unaudited) September December 30, 31, 2009 2008 ---- ---- ASSETS Current assets: Cash and cash equivalents $56,502 $71,454 Short-term investments 157,955 149,968 Receivable from collaboration partner 4,218 3,522 Prepaid expenses and other current assets 6,011 1,957 ----- ----- Total current assets 224,686 226,901 Property and equipment, net 1,070 768 Restricted cash 843 843 Intellectual property, net 51 54 Other non-current assets 694 706 --- --- Total assets $227,344 $229,272 ======== ======== LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $5,447 $7,166 Accrued expenses 12,998 5,772 Deferred revenue 65,361 64,286 Other current liabilities 121 93 --- -- Total current liabilities 83,927 77,317 Deferred revenue, net of current 98,041 148,137 Other non-current liabilities 360 399 Series A redeemable preferred stock 11 11 -- -- Total liabilities 182,339 225,864 ------- ------- Stockholders' equity: Preferred stock, $0.01 par value per share; 1,000,000 shares authorized; no shares issued and outstanding - - Common stock, $0.01 par value per share; 50,000,000 shares authorized; issued and outstanding 33,504,743 shares at September 30, 2009 and 30,088,390 at December 31, 2008 335 301 Additional paid-in capital 195,736 125,074 Accumulated other comprehensive income 99 693 Accumulated deficit (151,165) (122,660) -------- -------- Total stockholders' equity 45,005 3,408 ------ ----- Total liabilities and stockholders' equity $227,344 $229,272 ======== ========

Medivation, Inc.

CONTACT: Patrick Machado, Chief Financial Officer of Medivation, Inc.,
+1-415-829-4101; or Nicole Foderaro of WeissComm Partners, +1-415-946-1058,
for Medivation, Inc.

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

SRA Announces Financial Results for First Quarter of Fiscal Year 2010- Revenue up 6% year over year to $417 million - Diluted EPS up $0.04 year over year to $0.31 - Record quarterly contract awards of $933 million

FAIRFAX, Va., Nov. 4 /PRNewswire-FirstCall/ -- SRA International, Inc. , a leading provider of technology and strategic consulting services and solutions to government organizations and commercial clients, today announced operating results for the first quarter of fiscal year (FY) 2010, which ended September 30, 2009.

Revenue for the quarter was $417.5 million, up 6.4% from $392.4 million in the September 2008 quarter. Organic revenue growth was 8.4%. Operating income for the quarter was $30.0 million, for an operating margin of 7.2%. Net income was $18.1 million, for a net margin of 4.3%. Diluted earnings per share (DEPS) for the quarter were $0.31, up $0.04 as compared to the September 2008 quarter.

SRA President and CEO Stan Sloane said, "We're pleased with our continued progress in business execution and cost management. Investments in business development have helped drive stronger organic growth, and our new contract award total is a company record."

Executive Vice President and CFO Rick Nadeau added, "Our first quarter financial results reflected solid operating performance in the core federal business. Our balance sheet continues to be strong with essentially zero net debt."

Contract Awards

SRA won new business in the first quarter with potential value of $933 million, if all option years are exercised, for a book to bill ratio of 2.2. As of September 30, 2009, the company's backlog of signed business orders was $4.5 billion, up 9% year-over-year, and the funded portion of backlog was $832 million.

Major highlights of competitive contract awards in the quarter include: -- Federal Deposit Insurance Corporation (FDIC). SRA was awarded a recompete of our contract, under which we provide comprehensive enterprise-wide IT services for the FDIC. This represents the company's largest contract, providing about 6% of revenue. The value of the new award is estimated at $457.8 million over five years, if all options are exercised. -- Department of Homeland Security, Transportation Security Administration (TSA). The company won a task order under the EAGLE contract vehicle to monitor TSA's IT enterprise and assess IT security threats. The task order value is $53.5 million over five years, if all options are exercised, and will provide core primary and failover security operations center (SOC) services for up to five years. -- Cancer Prevention and Research Institute of Texas (CPRIT). The company was awarded a contract to provide scientific peer review support and grants management services. This is a new client for SRA and the contract is worth $16.2 million over five years, if all options are exercised. Forward Guidance

The company is updating revenue and earnings guidance for Fiscal Year 2010 originally provided on August 12, 2009. The table below represents management's current expectations about the company's future financial performance, based on information available at this time. The forward guidance in this table does not include any effect for acquisitions or divestitures that SRA might make in the future. The guidance assumes a FY 2010 diluted share count of 58.6 million.

Measure Fiscal Year (FY) Ending Change from ------- June 30, 2010 FY 2009 to 2010 ------------- --------------- Revenue $1.6 billion to $1.645 billion 4% to 7% ------- ------------------------------ ---------- Diluted earnings per share $1.15 to $1.25 14% to 24% ---------------------------------------------------------------------- Conference Call

SRA senior management will hold a conference call to discuss these operating results and forward guidance today at 5:00 PM Eastern. Interested parties may listen to the conference call by dialing 888-603-9639 (U.S./Canada) or 312-470-0140 (Other) with passcode SRX. The conference call will be Webcast simultaneously through a link on the SRA Web site (http://www.sra.com/). A replay of the conference call will be available approximately two hours after the conclusion of the call on Nov. 4 through Nov. 18 by dialing 866-428-3808 (U.S./Canada) or 203-369-0909 (Other) and entering passcode 1978.

About SRA International, Inc.

SRA and its subsidiaries are dedicated to solving complex problems of global significance for government organizations serving the national security, civil government and global health markets. Founded in 1978, the company and its subsidiaries have expertise in such areas as air surveillance and air traffic management; contract research organization (CRO) services; cyber security; disaster response planning; enterprise resource planning; environmental strategies; IT systems, infrastructure and managed services; logistics; public health preparedness; public safety; strategic management consulting; systems engineering; and wireless integration.

FORTUNE® magazine has chosen SRA as one of the "100 Best Companies to Work For" for ten consecutive years. The company and its subsidiaries employ more than 6,900 employees serving clients from headquarters in Fairfax, Va., and offices around the world. For additional information on SRA, please visit http://www.sra.com/.

Any statements in this press release about future expectations, plans, and prospects for SRA, including statements about the estimated value of the contract and work to be performed, and other statements containing the words "estimates," "believes," "anticipates," "plans," "expects," "will," and similar expressions, constitute forward-looking statements within the meaning of The Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those indicated by such forward-looking statements. In addition, the forward-looking statements included in this press release represent our views as of Nov. 4, 2009. We anticipate that subsequent events and developments will cause our views to change. However, while we may elect to update these forward-looking statements at some point in the future, we specifically disclaim any obligation to do so. These forward-looking statements should not be relied upon as representing our views as of any date subsequent to Nov. 4, 2009.

Consolidated Statements of Operations (Unaudited) (in thousands, except per share amounts) Three Months Ended 30-Sep-09 30-Sep-08 --------- --------- Revenue $417,499 $392,355 Operating costs and expenses: Cost of services 317,540 295,465 (a) Selling, general and administrative 62,828 63,565 (a) Depreciation and amortization 7,144 6,878 Gain on sale of Constella Futures Holding, LLC - (1,939) Acquired in-process research and development - 1,100 --- ----- Total operating costs and expenses 387,512 365,069 ------- ------- Operating income 29,987 27,286 Interest expense (483) (1,780) Interest income 408 772 --- --- Income before income taxes 29,912 26,278 Provision for income taxes 11,862 10,864 ------ ------ Net income $18,050 $15,414 ======= ======= Earnings per share: Basic $0.32 $0.27 ===== ===== Diluted $0.31 $0.27 ===== ===== (a) During the quarter the Company reclassified the portion of rent and facility costs, as well as stock-based compensation expense related to the employees who perform work directly for the Company's clients from the caption "selling, general and administrative expenses" to the caption "cost of services." All prior period balances have been reclassified to conform to the current period presentation in the Form 10-Q Quarterly Report filed today. Condensed Consolidated Balance Sheets (Unaudited) (in thousands) As of 30-Sep-09 30-Jun-09 --------- --------- Current assets: Cash and cash equivalents $70,478 $74,683 Accounts receivable, net 369,947 356,261 Inventories, net 8,402 6,786 Prepaid expenses and other 34,626 37,707 Deferred income taxes, current 17,478 13,924 ------ ------ Total current assets 500,931 489,361 ------- ------- Property, plant and equipment, net 39,049 38,130 ------ ------ Other assets: Goodwill 490,481 490,481 Identified intangibles, net 40,578 43,235 Deferred income taxes, noncurrent - 1,272 Deferred compensation trust 7,349 6,494 Other assets 23,661 25,320 ------ ------ Total other assets 562,069 566,802 ------- ------- Total assets $1,102,049 $1,094,293 ========== ========== Current liabilities: Accounts payable and accrued expenses $131,305 $137,443 Accrued payroll and employee benefits 105,406 111,296 Billings in excess of revenue recognized 15,885 16,598 Short-term borrowings 4,933 - ----- --- Total current liabilities 257,529 265,337 ------- ------- Long-term liabilities: Long-term debt 65,000 75,000 Deferred compensation liability 7,349 6,494 Deferred income taxes, noncurrent 3,717 - Other long-term liabilities 5,461 5,842 ----- ----- Total long-term liabilities 81,527 87,336 ------ ------ Total liabilities 339,056 352,673 ------- ------- Stockholders' equity 762,993 741,620 ------- ------- Total liabilities and stockholders' equity $1,102,049 $1,094,293 ========== ========== Condensed Consolidated Statements of Cash Flows (Unaudited) (in thousands) Three Months Ended 30-Sep-09 30-Sep-08 --------- --------- Cash flows from operating activities: Net income $18,050 $15,414 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 7,144 6,878 Stock-based compensation 2,466 2,696 Deferred income taxes 1,788 (456) Gain on sale - (1,939) Acquired in-process research and development - 1,100 Gain realized from forward exchange contracts (398) - Changes in assets and liabilities, net of the effect of acquisitions and divestitures (24,718) (9,593) ------- ------ Net cash provided by operating activities 4,332 14,100 ----- ------ Cash flows from investing activities: Capital expenditures (5,190) (4,042) Payments to Spectrum Solutions Group, Inc. shareholders - (7,016) Acquisitions, net of cash acquired - (132,194) Proceeds from sale of Constella Futures Holding, LLC - 14,320 Proceeds from note receivable 2,000 - Net proceeds from forward exchange contracts 398 - --- --- Net cash used in investing activities (2,792) (128,932) ------ -------- Cash flows from financing activities: Issuance of common stock 1,287 1,557 Excess tax benefit of stock option exercises 25 176 Net borrowings (repayments) under short-term credit facilities 4,715 (986) Borrowings under credit facility 35,000 50,000 Repayments under credit facility (45,000) (50,000) Purchase of treasury stock (857) (21,756) ---- ------- Net cash used in financing activities (4,830) (21,009) ------ ------- Effect of exchange rate changes on cash and cash equivalents (915) - ---- --- Net decrease in cash and cash equivalents (4,205) (135,841) Cash and cash equivalents, beginning of period 74,683 229,260 ------ ------- Cash and cash equivalents, end of period $70,478 $93,419 ======= ======= Supplemental disclosures of cash flow information: Cash paid during the period: Interest $426 $1,909 ==== ====== Income taxes $4,388 $4,074 ====== ====== Cash received during the period: Interest $385 $1,058 ==== ====== Income taxes $171 $328 ==== ==== Reconciliation Between Total Revenue and Organic Revenue (Unaudited) (in thousands) Organic revenue, as presented, is computed by comparing our reported revenue for the current period to revenue for the same period in the prior year adjusted to include revenue of acquired businesses for the pre- acquisition period of the prior year. In arriving at prior-year revenue, we include the revenue of acquired companies and remove the revenue of divested companies for the prior-year periods comparable to the current- year periods for which the companies are included in our reported revenue. The resulting rate is intended to represent our organic, or non- acquisitive, growth or decline year-over-year, including comparable period growth or decline attributable to acquired companies. We believe that this non-GAAP financial measure provides useful information because it allows investors to better assess the underlying growth rate of our business, including the post-acquisition activity of acquired companies. This non- GAAP financial measure is not used for any other purpose and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with GAAP. Three Months Ended 30-Sep-09 30-Sep-08 % Increase --------- --------- ---------- Total Revenue, as reported $417,499 $392,355 6.4% Plus: Revenue from acquired companies for the comparable prior year period 4,752 Less: Revenue from divested companies for the comparable prior year period (11,940) ------- Organic Revenue $417,499 $385,167 8.4% ======== ======== ====

SRA International, Inc.

CONTACT: David Mutryn, Director of Investor Relations, SRA
International, Inc., +1-703-502-7731, david_mutryn@sra.com

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

Amdocs Limited Reports Quarterly Revenue of $707 Million, Up Sequentially and Above GuidanceKey highlights: - Fourth quarter revenue of $707 million, above the $670-$690 million guidance range - Fourth quarter non-GAAP operating income of $128 million; non-GAAP operating margin of 18.1%; GAAP operating income of $97 million - Fourth quarter diluted non-GAAP EPS of $0.53, excluding amortization of purchased intangible assets and equity-based compensation expense, net of related tax effects - Diluted GAAP EPS of $0.42 for the fourth quarter - Free cash flow of $166 million for the fourth quarter - 12-month backlog of $2.385 billion at the end of the fourth quarter - First quarter fiscal 2010 guidance: Expected revenue of approximately $705-$725 million and diluted non-GAAP EPS of $0.51-$0.55, excluding acquisition-related costs and approximately $0.04-$0.05 per share of equity-based compensation expense, net of related tax effects. Diluted GAAP EPS is expected to be approximately $0.38-$0.44

ST. LOUIS, Nov. 4 /PRNewswire-FirstCall/ -- Amdocs Limited today reported that for its fiscal fourth quarter ended September 30, 2009, revenue was $707.4 million, a decrease of 14.3% from last year's fourth quarter and up 2.5% sequentially. Net income on a non-GAAP basis was $109.2 million, or $0.53 per diluted share, compared to non-GAAP net income of $117.2 million, or $0.54 per diluted share, in the fourth quarter of fiscal 2008. Non-GAAP net income excludes amortization of purchased intangible assets and equity-based compensation expenses of $23.4 million, net of related tax effects, in the fourth quarter of fiscal 2009 and excludes such amortization, equity-based compensation expenses and restructuring charges of $34.5 million, net of related tax effects, in the fourth quarter of fiscal 2008. The Company's GAAP net income for the fourth quarter of fiscal 2009 was $85.8 million, or $0.42 per diluted share, compared to GAAP net income of $82.7 million, or $0.38 per diluted share, in the prior year's fourth quarter.

"After experiencing a challenging fiscal year, we are pleased that our fourth quarter results demonstrated stronger-than-expected performance across our four key financial metrics: revenue, profitability, earnings and free cash flow. We believe this reflects positively on the value of Amdocs' market leading offerings and strategic position against the backdrop of steadying economic conditions. While indicators are still mixed across our market and the global economy, we are cautiously optimistic that our business is stabilizing to slightly improving, as reflected in our fiscal first quarter guidance for 2010," said Dov Baharav, chief executive officer of Amdocs Management Limited.

Baharav continued, "Reflecting on our relative successes in 2009, we experienced rising interest and strong signings in managed services which we believe addresses the communications industry's need to streamline cost structures, while concurrently offering the option to modernize systems. Additionally, we performed very well in cable and satellite in a tough economy, and we validated our market position by establishing and expanding important relationships with leading operators. We expect these two growth drivers - managed services and cable and satellite - to continue to perform well and provide a strong foundation for our results again in 2010. On the other hand, our project-oriented activities contracted in 2009 as they naturally reacted more sharply to deteriorating economic conditions. We believe, in aggregate, our project-oriented revenue is showing early signs of stabilization; however, decision cycles remain extended and results may still vary quarter to quarter in individual product areas and geographies."

Baharav concluded, "Lastly, we believe we have made the right investments to drive our future long-term growth. Over the course of the recession, we have deepened our relationships with key customers, led the industry in R&D investment, and continued to streamline our cost structure. As a result, we truly believe we are emerging from the global economic crisis in a stronger competitive position than we entered."

Free cash flow was $166 million for the quarter, comprised of cash flow from operations of $184 million less approximately $18 million in net capital expenditures and other.

Twelve-month backlog, which includes anticipated revenue related to contracts, estimated revenue from managed services contracts, letters of intent, maintenance and estimated on-going support activities, was $2.385 billion at the end of the fourth quarter of fiscal 2009.

Financial Outlook

Amdocs expects that revenue for the first quarter of fiscal 2010 will be approximately $705-$725 million. Diluted earnings per share on a non-GAAP basis for the first quarter are expected to be $0.51-$0.55, excluding acquisition-related costs and approximately $0.04-$0.05 per share of equity-based compensation expense, net of related tax effects. Amdocs estimates GAAP diluted earnings per share for the first quarter will be $0.38-$0.44.

Fiscal Year 2009 Results

For the fiscal year ended September 30, 2009, revenue decreased by 9.5% to $2.863 billion. Fiscal 2009 net income on a non-GAAP basis was $438.9 million, or $2.12 per diluted share (excluding acquisition-related costs, which include amortization of purchased intangible assets and in-process research and development write-off, and excluding restructuring charges and equity-based compensation expense, net of related tax effects, of $112.7 million), compared to non-GAAP net income of $499.6 million, or $2.29 per diluted share, in fiscal 2008 (excluding acquisition-related costs, which include amortization of purchased intangible assets and in-process research and development write-off, and excluding restructuring charges and equity-based compensation expense, net of related tax effects, of $120.7 million). The Company's GAAP net income in fiscal 2009 was $326.2 million, or $1.58 per diluted share, compared to GAAP net income of $378.9 million, or $1.74 per diluted share, in fiscal 2008.

Amdocs will host a conference call on November 4, 2009 at 5 p.m. Eastern Time to discuss the Company's fourth quarter results. The call will be carried live on the Internet via the Amdocs website, http://www.amdocs.com/.

Non-GAAP Financial Measures

This release includes non-GAAP diluted earnings per share and other non-GAAP financial measures, including free cash flow, non-GAAP cost of service, non-GAAP research and development, non-GAAP selling, general and administrative, non-GAAP operating income, non-GAAP operating margin, non-GAAP income taxes and non-GAAP net income. These non-GAAP measures exclude the following items:

-- amortization of purchased intangible assets; -- in-process research and development write-off; -- restructuring charges; -- equity-based compensation expense; and -- tax effects related to the above.

These non-GAAP financial measures are not in accordance with, or an alternative for, generally accepted accounting principles and may be different from non-GAAP financial measures used by other companies. In addition, these non-GAAP financial measures are not based on any comprehensive set of accounting rules or principles. Amdocs believes that non-GAAP financial measures have limitations in that they do not reflect all of the amounts associated with Amdocs' results of operations as determined in accordance with GAAP and that these measures should only be used to evaluate Amdocs' results of operations in conjunction with the corresponding GAAP measures.

Amdocs believes that the presentation of non-GAAP diluted earnings per share and other financial measures, including free cash flow, non-GAAP cost of service, non-GAAP research and development, non-GAAP selling, general and administrative, non-GAAP operating income, non-GAAP operating margin, non-GAAP income taxes and non-GAAP net income, when shown in conjunction with the corresponding GAAP measures, provides useful information to investors and management regarding financial and business trends relating to its financial condition and results of operations, as well as the net amount of cash generated by its business operations after taking into account capital spending required to maintain or expand the business.

For its internal budgeting process and in monitoring the results of the business, Amdocs' management uses financial statements that do not include amortization of purchased intangible assets, in-process research and development write-off, restructuring charges, equity-based compensation expense, and related tax effects. Amdocs' management also uses the foregoing non-GAAP financial measures, in addition to the corresponding GAAP measures, in reviewing the financial results of Amdocs. In addition, Amdocs believes that significant groups of investors exclude these non-cash expenses in reviewing its results and those of its competitors, because the amounts of the expenses between companies can vary greatly depending on the assumptions used by an individual company in determining the amounts of the expenses.

Amdocs further believes that, where the adjustments used in calculating non-GAAP diluted earnings per share are based on specific, identified amounts that impact different line items in the Consolidated Statements of Income (including cost of service, research and development, selling, general and administrative, operating income, income taxes and net income), it is useful to investors to understand how these specific line items in the Consolidated Statements of Income are affected by these adjustments.

Please refer to the Reconciliation of Selected Financial Metrics from GAAP to Non-GAAP tables below.

About Amdocs

Amdocs is the market leader in customer experience systems innovation, enabling world-leading service providers to deliver an integrated, innovative and the intentional customer experience(TM) - at every point of service. Amdocs provides solutions that deliver customer experience excellence, combining the software, service and expertise to help its customers execute their strategies and achieve service, operational and financial excellence. A global company with revenue of $2.86 billion in fiscal 2009, Amdocs has approximately 17,000 employees and serves customers in more than 60 countries around the world. For more information, visit Amdocs at http://www.amdocs.com/.

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 statements about Amdocs growth and business results in future quarters. Although we believe the expectations reflected in such forward-looking statements are based upon reasonable assumptions, we can give no assurance that our expectations will be obtained or that any deviations will not be material. Such statements involve risks and uncertainties that may cause future results to differ from those anticipated. These risks include, but are not limited to, the effects of general economic conditions, Amdocs ability to grow in the business markets that it serves, Amdocs ability to successfully integrate acquired businesses, adverse effects of market competition, rapid technological shifts that may render the Company's products and services obsolete, potential loss of a major customer, our ability to develop long-term relationships with our customers, and risks associated with operating businesses in the international market. Amdocs may elect to update these forward-looking statements at some point in the future; however, the Company specifically disclaims any obligation to do so. These and other risks are discussed at greater length in the Company's filings with the Securities and Exchange Commission, including in our Annual Report on Form 20-F for the fiscal year ended September 30, 2008 filed on December 8, 2008 and in our quarterly 6-Ks furnished on February 9, 2009, May 12, 2009 and August 10, 2009.

AMDOCS LIMITED Consolidated Statements of Income (in thousands, except per share data) Three months ended Twelve months ended September 30, September 30, ----------------------- ----------------------- 2009 2008 2009 2008 --------- --------- ---------- ---------- Revenue: License $ 27,267 $ 41,917 $ 135,146 $ 135,487 Service 680,152 783,360 2,727,461 3,026,609 --------- --------- ---------- ---------- 707,419 825,277 2,862,607 3,162,096 Operating expenses: Cost of license 589 462 2,686 2,729 Cost of service 450,122 530,428 1,831,947 2,023,562 Research and development 50,274 57,252 210,387 225,492 Selling, general and administrative 88,030 103,171 344,335 404,134 Amortization of purchased intangible assets 21,559 20,385 85,153 86,687 Restructuring charges and in-process research and development (1) - 12,116 20,780 13,896 --------- --------- ---------- ---------- 610,574 723,814 2,495,288 2,756,500 --------- --------- ---------- ---------- Operating income 96,845 101,463 367,319 405,596 Interest (expense) income and other, net (151) (11,842) (1,165) 11,955 --------- --------- ---------- ---------- Income before income taxes 96,694 89,621 366,154 417,551 Income taxes 10,943 6,910 39,978 38,645 --------- --------- ---------- ---------- Net income $ 85,751 $ 82,711 $ 326,176 $ 378,906 ========= ========= ========== ========== Basic earnings per share $ 0.42 $ 0.40 $ 1.61 $ 1.83 ========= ========= ========== ========== Diluted earnings per share (2) $ 0.42 $ 0.38 $ 1.58 $ 1.74 ========= ========= ========== ========== Basic weighted average number of shares outstanding 203,587 205,164 202,867 206,590 ========= ========= ========== ========== Diluted weighted average number of shares outstanding 204,883 217,479 207,606 219,606 ========= ========= ========== ========== (1) Restructuring charges and in-process research and development for the twelve months ended September 30, 2009 and 2008 include restructuring charges of $15,140 and $12,116 and in-process research and development of $5,640 and $1,780, respectively. (2) To reflect the impact of assumed conversion of the convertible notes, $0 and $1,486, representing interest expense and amortization of issuance costs, were added back to net income for the three and twelve months ended September 30, 2009, respectively, and $985 and $3,940 were added back to net income for the three and twelve months ended September 30, 2008, respectively, for the purpose of computing diluted earnings per share. AMDOCS LIMITED Selected Financial Metrics (in thousands, except per share data) Three months ended Twelve months ended September 30, September 30, --------------------- ------------------------- 2009 2008 2009 2008 --------- --------- ----------- ----------- Revenue $ 707,419 $ 825,277 $ 2,862,607 $ 3,162,096 Non-GAAP operating income 127,984 147,744 516,163 563,669 Non-GAAP net income 109,198 117,208 438,878 499,608 Non-GAAP diluted earnings per share (1) $ 0.53 $ 0.54 $ 2.12 $ 2.29 Diluted weighted average number of shares outstanding 204,883 217,479 207,606 219,606 (1) To reflect the impact of assumed conversion of the convertible notes, $0 and $1,486, representing interest expense and amortization of issuance costs, were added back to net income for the three and twelve months ended September 30, 2009, respectively, and $985 and $3,940 were added back to net income for the three and twelve months ended September 30, 2008, respectively, for the purpose of computing diluted earnings per share. AMDOCS LIMITED Reconciliation of Selected Financial Metrics from GAAP to Non-GAAP (in thousands) Three months ended September 30, 2009 ----------------------------------------------------- Reconciliation items ---------------------------------- Amortization of GAAP purchased Equity based intangible compensation Tax assets expense effect Non-GAAP ----------------------------------------------------- Operating expenses: Cost of license $ 589 $ - $ - $ - $ 589 Cost of service 450,122 - (4,957) - 445,165 Research and development 50,274 - (972) - 49,302 Selling, general and administrative 88,030 - (3,651) - 84,379 Amortization of purchased intangible assets 21,559 (21,559) - - - ----------------------------------------------------- Total operating expenses 610,574 (21,559) (9,580) - $579,435 ----------------------------------------------------- ----------------------------------------------------- Operating income 96,845 21,559 9,580 - 127,984 ----------------------------------------------------- ----------------------------------------------------- Income taxes 10,943 - - 7,692 18,635 ----------------------------------------------------- ----------------------------------------------------- Net income $ 85,751 $ 21,559 $ 9,580 $ (7,692) $ 109,198 ----------------------------------------------------- Three months ended September 30, 2008 -------------------------------------------------------------- Reconciliation items ---------------------------------------------- Amortization GAAP of purchased Equity based intangible Restructuring compensation Tax Non- assets charges expense effect GAAP -------------------------------------------------------------- Operating expenses: Cost of license $ 462 $ - $ - $ - $ - $ 462 Cost of service 530,428 - - (5,836) - 524,592 Research and develop- ment 57,252 - - (1,088) - 56,164 Selling, general and admini- strative 103,171 - - (6,856) - 96,315 Amortization of purchased intangible assets 20,385 (20,385) - - - - Restructuring charges and in-process research and develop- ment 12,116 - (12,116) - - - -------------------------------------------------------------- Total operating expenses 723,814 (20,385) (12,116) (13,780) - $677,533 -------------------------------------------------------------- -------------------------------------------------------------- Operating income 101,463 20,385 12,116 13,780 - 147,744 -------------------------------------------------------------- -------------------------------------------------------------- Income taxes 6,910 - - - 11,784 18,694 -------------------------------------------------------------- -------------------------------------------------------------- Net income $82,711 $20,385 $12,116 $13,780 $ (11,784) $117,208 -------------------------------------------------------------- AMDOCS LIMITED Reconciliation of Selected Financial Metrics from GAAP to Non-GAAP (in thousands) Twelve months ended September 30, 2009 -------------------------------------------------------------- Reconciliation items ------------------------------------------- Restructuring Amortization charges and of in-process Equity purchased research and based intangible development compensation Tax Non- GAAP assets expense effect GAAP -------------------------------------------------------------- Operating expenses: Cost of license $ 2,686 $ - $ - $ - $ - $ 2,686 Cost of service 1,831,947 - - (21,733) - 1,810,214 Research and development 210,387 - - (4,249) - 206,138 Selling, general and admini- strative 344,335 - - (16,929) - 327,406 Amortization of purchased intangible assets 85,153 (85,153) - - - - Restructuring charges and in-process research and development 20,780 - (20,780) - - - -------------------------------------------------------------- Total operating expenses 2,495,288 (85,153) (20,780) (42,911) - 2,346,444 -------------------------------------------------------------- -------------------------------------------------------------- Operating income 367,319 85,153 20,780 42,911 - 516,163 -------------------------------------------------------------- -------------------------------------------------------------- Income taxes 39,978 - - - 36,142 76,120 -------------------------------------------------------------- -------------------------------------------------------------- Net income $ 326,176 $ 85,153 $ 20,780 $ 42,911 $ (36,142) $ 438,878 -------------------------------------------------------------- Twelve months ended September 30, 2008 -------------------------------------------------------------- Reconciliation items ------------------------------------------- Restructuring Amortization charges and of in-process Equity purchased research and based intangible development compensation Tax Non- GAAP assets expense effect GAAP -------------------------------------------------------------- Operating expenses: Cost of license $ 2,729 $ - $ - $ - $ - $ 2,729 Cost of service 2,023,562 - - (23,547) - 2,000,015 Research and development 225,492 - - (4,714) - 220,778 Selling, general and admini- strative 404,134 - - (29,229) - 374,905 Amortization of purchased intangible assets 86,687 (86,687) - - - - Restructuring charges and in-process research and development 13,896 - (13,896) - - - -------------------------------------------------------------- -------------------------------------------------------------- Total operating expenses 2,756,500 (86,687) (13,896) (57,490) - 2,598,427 -------------------------------------------------------------- -------------------------------------------------------------- Operating income 405,596 86,687 13,896 57,490 - 563,669 -------------------------------------------------------------- -------------------------------------------------------------- Income taxes 38,645 - - - 37,371 76,016 -------------------------------------------------------------- -------------------------------------------------------------- Net income $ 378,906 $ 86,687 $ 13,896 $ 57,490 $ (37,371) $ 499,608 -------------------------------------------------------------- AMDOCS LIMITED Condensed Consolidated Balance Sheets (in thousands) As of ------------------------------ September 30, September 30, 2009 2008 ------------- ------------- ASSETS Current assets Cash, cash equivalents and short-term interest-bearing investments $ 1,173,041 $ 1,244,378 Accounts receivable, net, including unbilled of $21,749 and $48,264, respectively 454,965 573,764 Deferred income taxes and taxes receivable 117,848 84,515 Prepaid expenses and other current assets 126,704 102,930 ------------- ------------- Total current assets 1,872,558 2,005,587 Equipment, vehicles and leasehold improvements, net 279,659 317,081 Goodwill and other intangible assets, net 1,766,761 1,796,922 Other noncurrent assets 409,439 459,473 ------------- ------------- Total assets $ 4,328,417 $ 4,579,063 ============= ============= LIABILITIES AND SHAREHOLDERS' EQUITY Current Liabilities Accounts payable, accruals and other $ 415,371 $ 601,945 Deferred revenue 186,158 197,851 Deferred income taxes and taxes payable 9,338 30,228 ------------- ------------- Total current liabilities 610,867 830,024 0.50% Convertible notes 1,020 450,000 Noncurrent liabilities and other 503,477 493,848 Shareholders' equity 3,213,053 2,805,191 ------------- ------------- Total liabilities and shareholders' equity $ 4,328,417 $ 4,579,063 ============= ============= AMDOCS LIMITED Consolidated Statements of Cash Flows (in thousands) Year ended September 30, -------------------------- 2009 2008 ------------ ------------ Cash Flow from Operating Activities: Net income $ 326,176 $ 378,906 Reconciliation of net income to net cash provided by operating activities: Depreciation and amortization 198,119 192,937 In-process research and development expenses 5,640 1,780 Equity-based compensation expense 42,911 57,490 Loss (gain) on sale of equipment 197 (970) Deferred income taxes 16,249 1,111 Gain on repurchase of convertible notes (2,185) - Excess tax benefit from equity-based compensation (18) (211) Loss from short-term interest-bearing investments 4,449 4,945 Net changes in operating assets and liabilities, net of amounts acquired: Accounts receivable, net 131,527 (118,291) Prepaid expenses and other current assets (13,614) 4,173 Other noncurrent assets (2,690) (31,739) Accounts payable, accrued expenses and accrued personnel (160,321) (27,501) Deferred revenue 20,956 28,408 Income taxes payable, net (19,980) (26,824) Noncurrent liabilities and other (28,260) 18,799 ------------ ------------ Net cash provided by operating activities 519,156 483,013 ------------ ------------ Cash Flow from Investing Activities: Proceeds from sale of equipment, vehicles and leasehold improvements 994 2,655 Payments for purchase of equipment and leasehold improvements (83,325) (135,823) Proceeds from sale of short-term interest-bearing investments 1,045,278 708,708 Purchase of short-term interest-bearing investments (963,433) (685,873) Net cash paid for acquisitions (65,890) (58,772) ------------ ------------ Net cash used in investing activities (66,376) (169,105) ------------ ------------ Cash Flow from Financing Activities: Borrowings under long-term financing arrangements 450,000 - Payments under long-term financing arrangements (450,000) - Redemption of convertible notes (330,780) (175) Repurchase of convertible notes (116,015) - Repurchase of shares (20,014) (247,630) Proceeds from employee stock options exercised 27,893 37,577 Payments under capital lease and short-term financing arrangements (3,970) (542) Excess tax benefit from equity-based compensation 18 211 ------------ ------------ Net cash used in financing activities (442,868) (210,559) ------------ ------------ Net increase in cash and cash equivalents 9,912 103,349 Cash and cash equivalents at beginning of year 718,850 615,501 ------------ ------------ Cash and cash equivalents at end of year $ 728,762 $ 718,850 ============ ============ AMDOCS LIMITED Supplementary Information (in millions) ----------------------------------------------------------- Three months ended ----------------------------------------------------------- September 30, June 30, March 31, December 31, September 30, 2009 2009 2009 2008 2008 ------------- -------- --------- ------------ ------------- North America $ 528.0 $ 527.7 $ 539.8 $ 561.6 $ 558.7 Europe 93.0 84.4 105.0 111.4 150.9 Rest of World 86.4 78.2 66.3 80.8 115.7 ------------- -------- --------- ------------ ------------- Total Revenue $ 707.4 $ 690.3 $ 711.1 $ 753.8 $ 825.3 ============= ======== ========= ============ ============= ----------------------------------------------------------- Three months ended ----------------------------------------------------------- September 30, June 30, March 31, December 31, September 30, 2009 2009 2009 2008 2008 ------------- -------- --------- ------------ ------------- Customer Experience $ 668.6 $ 647.9 $ 668.0 $ 701.0 $ 756.5 Systems Directory 38.8 42.4 43.1 52.8 68.8 ------------- -------- --------- ------------ ------------- Total Revenue $ 707.4 $ 690.3 $ 711.1 $ 753.8 $ 825.3 ============= ======== ========= ============ ============= ----------------------------------------------------------- As of ----------------------------------------------------------- September 30, June 30, March 31, December 31, September 30, 2009 2009 2009 2008 2008 ------------- -------- --------- ------------ ------------- 12-Month Backlog $ 2,385 $ 2,370 $ 2,370 $ 2,400 $ 2,420 ------------- -------- --------- ------------ -------------

Amdocs

CONTACT: Elizabeth Grausam, Director of Investor Relations, Amdocs
Limited, +1-314-212-8328, dox_info@amdocs.com

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

HealthFitness Announces Third Quarter 2009 Financial ResultsThird Quarter 2009 Highlights: - Total revenue grew 6.9 percent compared to Q3 2008; - Health management revenue increased 22.9 percent compared to Q3 2008; - Secured a $3.0 million health management commitment from a large health insurance plan; - Secured a $1.6 million fitness management commitment from a large automotive company; - $4.8 million of new potential annualized revenue, net of contract terminations, was generated during the quarter from six new commitments; - Cash of $5.2 million compared to $1.3 million at December 31, 2008, and no debt outstanding.

MINNEAPOLIS, Nov. 4 /PRNewswire-FirstCall/ -- Health Fitness Corporation (NYSE Amex: FIT), a leading provider of integrated employee health and productivity management solutions, today announced financial results for the third quarter ended September 30, 2009.

The company reported revenue of $19.8 million in the third quarter of 2009, a 6.9 percent increase compared to third quarter 2008 revenue of $18.5 million. Gross profit for the quarter increased 7.6 percent to $6.4 million compared to $6.0 million in the third quarter of 2008. Gross margin for the quarter was 32.6 percent compared to 32.4 percent in last year's third quarter. The company reported net earnings of $0.91 million, or $0.09 per diluted share, compared to $0.84 million, or $0.09 per diluted share for the third quarter of 2008.

Four new health management commitments were generated during the quarter, resulting in potential annualized revenue of $3.3 million, compared to $1.2 million of potential annualized revenue generated in the same quarter last year, a 175 percent increase. Two new fitness management commitments were generated during the quarter, resulting in potential annualized revenue of $1.9 million, compared to $0.5 million of potential annualized revenue generated in the same quarter last year, a 280 percent increase. Health and fitness management annualized revenue loss from contract cancellations during the quarter totaled $0.2 million and $0.2 million, respectively, versus $0.3 million and $0.8 million in last year's third quarter. Total potential annualized revenue generated during the third quarter of 2009, net of contract cancellations, was $4.8 million, up 700 percent compared to $0.6 million in the comparable quarter of 2008.

Gregg Lehman, Ph.D., president and chief executive officer, said, "We are pleased with 6.9 percent quarterly revenue growth in light of a tough economy. The $4.8 million of net potential annualized revenue generated during the quarter surpasses the $3.1 million of net potential annualized revenue we produced during the second quarter of 2009, and represents our best quarter for new potential annualized revenue since the second quarter of 2006. Highlights from the third quarter include a health management commitment from a large insurance plan for $3.0 million of potential annualized revenue, which will begin service implementation in July 2010. We also received a fitness management commitment from an auto manufacturer, representing $1.6 million of potential annualized revenue, which will begin service implementation in January 2010."

"Going into the fourth quarter and 2010, we are optimistic about the potential for continued revenue growth. We are currently a finalist in one fitness management proposal and 12 health management proposals, representing potential annualized revenue of $10.7 million. As stated previously, our future revenue growth will continue to be driven by our ability to help self-insured employers reduce the cost of employee healthcare. In addition to the University of Louisville ROI study we published earlier this year, we are currently completing several new ROI analyses that initially show returns ranging from $2.25 to $3.62 for every $1.00 invested. We are excited about these initial results because they affirm the proposition that health improvement services can reduce the impact of health care costs. We will disclose more details about these successful outcomes in future issue briefs and other communications"

2009 Third Quarter Business Segment Information Revenue and gross profit information by segment: Health Management (in thousands) REVENUE Q3 2009 Q3 2008 ------- ------- Staffing Services $4,730 $4,552 Program Services $5,320 $3,624 Total Health Mgmt. $10,050 $8,176 GROSS PROFIT Q3 2009 Q3 2008 ------- ------- Staffing Services $1,233 $1,280 Program Services $2,814 $2,142 Total Health Mgmt. $4,047 $3,422

During the third quarter, health management segment revenue grew 22.9 percent to $10.1 million compared to $8.2 million in the third quarter of 2008. Within the segment, staffing services revenue increased 3.9 percent and program services revenue grew 46.8 percent compared to the third quarter of 2008. During the third quarter, compared to the same quarter last year, eHealth platform enrollment increased 23 percent; biometric screening participation increased 21 percent; health advising sessions increased 53 percent and health coaching enrollment increased 265 percent.

Gross margin for the health management segment was 40.3 percent for the quarter, down from 41.8 percent for the prior-year period. Within the segment, gross margin for program services decreased to 52.9 percent, from 59.1 percent for the prior-year period. This decrease is primarily attributed to the mix of program services delivered, the addition of telephonic health coaches during the quarter, and higher costs for our eHealth platform. Gross margin for staffing services decreased to 26.1 percent for the quarter, compared to 28.1 percent for the prior-year period, which is attributed to higher wages and benefits for on-site staff.

Fitness Management (in thousands) REVENUE Q3 2009 Q3 2008 ------- ------- Staffing Services $9,175 $9,702 Program Services $551 $619 Total Fitness Mgmt. $9,726 $10,321 GROSS PROFIT Q3 2009 Q3 2008 ------- ------- Staffing Services $2,175 $2,357 Program Services $219 $209 Total Fitness Mgmt. $2,394 $2,566

Fitness management segment revenue during the third quarter of 2009 decreased 5.8 percent compared to the same period last year. This anticipated decrease in revenue primarily reflects revenue lost due to contract terminations since the beginning of 2008.

Gross margin for the fitness management segment was 24.6 percent compared to 24.9 percent during the prior-year period.

Third Quarter RFPs

During the third quarter, the company received 31 Request For Proposals (RFPs) for health management services and four RFPs for fitness management services. For the first nine months of 2009, the company received 86 RFPs for health management services and 18 RFPs for fitness management services.

2009 Year-To-Date Results

For the nine months ended September 30, 2009, revenue increased 3.1 percent to $57.8 million, from $56.0 million for the same period last year. Gross profit increased 8.8 percent to $18.3 million, from $16.9 million for the prior-year period. Gross margins for the nine-month period increased to 31.8 percent compared to 30.1 percent during the prior-year period. Net earnings for the nine-month period increased 48.6 percent to $2.3 million, from $1.5 million for the prior-year period. Net earnings per diluted share totaled $0.22 compared to $0.15 for the same period last year.

Eleven new health management commitments and three health management customer expansions were generated during the first nine months, resulting in potential annualized revenue of $8.4 million, compared to $5.1 million generated in the same period last year, a 65 percent increase. Seven new fitness management commitments were generated during the first nine months, resulting in potential annualized revenue of $2.8 million, compared to $1.0 million generated in the same period last year, a 180 percent increase. Health and fitness management annualized revenue loss from contract cancellations during the first nine months totaled $0.4 million and $1.8 million, respectively, versus $0.3 million and $1.4 million in the same period last year. Total potential annualized revenue generated during the first nine months of 2009, net of contract cancellations, was $9.0 million, up 105 percent compared to $4.4 million in the comparable period of 2008.

Balance Sheet

The company ended its third quarter with $5.2 million in cash, compared to $1.3 million at December 31, 2008. Working capital at September 30, 2009, less cash, totaled $8.4 million compared to $9.4 million on December 31, 2008. At September 30, 2009, the company had no balance outstanding on its $3.5 million credit facility, and had stockholders' equity of $31.1 million.

Lehman concluded, "While Congress continues to debate the overall direction of health care reform, we are pleased that each of the four bills currently under consideration include provisions that address prevention and wellness. We believe this focus on prevention and wellness affirms the critical need for these services to effectively manage rising health care costs caused by poor diet and exercise choices."

Conference Call

The company will conduct a conference call today at 4:30 pm ET to discuss its financial results for the third quarter ended September 30, 2009. Participants can dial (800) 860-2442 or (412) 858-4600 to access the conference call, or can listen via a live Internet web cast, which can be found at http://www.hfit.com/. A replay of the call is available by visiting http://www.hfit.com/ for the next 30 days or by calling (877) 344-7529 or (412) 317-0088, conference number 435003, through November 10, 2009.

About HealthFitness

HealthFitness is a leading provider of integrated employee health improvement services to Fortune 500 companies, the health care industry and individual consumers. With 30-plus years of experience, HealthFitness partners with employers to effectively manage health care and productivity costs by improving individual health and well-being. HealthFitness provides a portfolio of health and fitness management solutions, including best-in-class integration, INSIGHT® Health Risk Assessments, screenings, EMPOWERED(TM) Health Coaching, and fitness facility design and management. For more information on HealthFitness, visit http://www.hfit.com/.

Forward Looking Statements

Certain statements in this release, including, without limitation, statements relating to the state of the economy, the potential for continued revenue growth, the return on investment of the company's programs, the strong finalist pipeline, and health care reform, are forward-looking statements. In addition, the estimated annualized revenue value of new and lost contracts, customer expansions and outstanding requests for proposal are forward looking statements, which are based upon estimates of the anticipated annualized revenue to be realized or lost. Such information should be used only as an indication of the activity the company has recently experienced in its two business segments. These estimates, when considered together, should not be considered an indication of the total net, incremental revenue growth the company expects to generate in 2009 or in any year, as actual net growth may differ from these estimates due to actual staffing levels, participation rates and service duration, in addition to other revenue the company may lose in the future due to customer termination. Any statements that are not based upon historical facts, including the outcome of events that have not yet occurred and the company's expectations for future performance, are forward-looking statements. The words "potential," "believe," "estimate," "expect," "intend," "may," "could," "will," "plan," "anticipate," and similar words and expressions are intended to identify forward-looking statements. Such statements are based upon the current beliefs and expectations of management. Actual results may vary materially from those contained in forward-looking statements based on a number of factors including, without limitation, the company's inability to deliver the health management services demanded by major corporations and other clients, its inability to successfully cross-sell health management services to its fitness management clients, its inability to successfully obtain new business opportunities, its failure to have sufficient resources to make investments, its ability to make investments and implement strategies successfully, continued delays in obtaining new commitments and implementing services, the continued deterioration of general economic conditions, contract cancellations, governmental action on health care reform, and other factors disclosed from time to time in the company's filings with the U.S. Securities and Exchange Commission including our Form 10-K for 2008 as filed with the SEC. You should take such factors into account when making investment decisions and are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date on which they are made. The company undertakes no obligation to update any forward-looking statements.

CONTACTS Company Contact: Investor Relations Contact: Wes Winnekins, CFO Joe Dorame, Robert Blum, Joe Diaz Health Fitness Corporation Lytham Partners, LLC (952) 897-5275 (602) 889-9700 E: fit@lythampartners.com HEALTH FITNESS CORPORATION CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) Three Months Ended Nine Months Ended September 30, September 30, 2009 2008 2009 2008 ---- ---- ---- ---- REVENUE $19,775,972 $18,497,423 $57,764,111 $56,015,548 COSTS OF REVENUE 13,335,335 12,510,045 39,419,619 39,149,412 ---------- ---------- ---------- ---------- GROSS PROFIT 6,440,637 5,987,378 18,344,492 16,866,136 OPERATING EXPENSES Salaries 3,143,231 2,950,618 9,259,634 8,949,305 Other selling, general and administrative 1,783,897 1,485,206 5,188,745 5,080,973 Amortization of trademarks and other intangible assets 24,758 42,771 74,275 128,311 ------ ------ ------ ------- Total operating expenses 4,951,886 4,478,595 14,522,654 14,158,589 --------- --------- ---------- ---------- OPERATING INCOME 1,488,751 1,508,783 3,821,838 2,707,547 OTHER INCOME (EXPENSE) Interest expense - (16,252) - (20,383) Other, net 19 (662) 1,546 412 -- ---- ----- --- EARNINGS BEFORE INCOME TAX EXPENSE 1,488,770 1,491,869 3,823,384 2,687,576 INCOME TAX EXPENSE 576,872 650,519 1,551,847 1,158,814 ------- ------- --------- --------- NET EARNINGS $911,898 $841,350 $2,271,537 $1,528,762 ======== ======== ========== ========== NET EARNINGS PER COMMON SHARE: Basic $0.09 $0.09 $0.23 $0.16 Diluted 0.09 0.09 0.22 0.15 WEIGHTED AVERAGE COMMON SHARES OUTSTANDING: Basic 9,781,522 9,610,238 9,724,247 9,837,994 Diluted 10,438,155 9,688,941 10,138,651 9,982,990 HEALTH FITNESS CORPORATION CONSOLIDATED BALANCE SHEETS (UNAUDITED) SEPTEMBER 30, 2009 AND DECEMBER 31, 2008 September 30, December 31, 2009 2008 ---- ---- ASSETS CURRENT ASSETS Cash $5,194,454 $1,300,620 Trade and other accounts receivable, less allowances of $285,000 and $317,600 15,558,692 16,306,197 Inventory 300,757 347,510 Prepaid expenses and other 750,135 354,257 Deferred tax assets 324,831 288,626 ------- ------- Total current assets 22,128,869 18,597,210 PROPERTY AND EQUIPMENT, net 1,378,396 1,243,413 OTHER ASSETS Goodwill 14,546,250 14,546,250 Software technology, less accumulated amortization of $1,789,200 and $1,301,300 2,173,204 1,977,071 Trademark, less accumulated amortization of $459,000 and $438,700 34,000 54,400 Other intangible assets, less accumulated amortization of $367,500 and $313,600 161,625 215,500 ------- ------- $40,422,344 $36,633,844 =========== =========== LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES Trade accounts payable $1,563,775 $1,470,440 Accrued salaries, wages, and payroll taxes 3,881,585 2,632,329 Other accrued liabilities 1,138,652 1,664,710 Accrued self funded insurance 217,620 310,511 Deferred revenue 1,708,619 1,820,960 --------- --------- Total current liabilities 8,510,251 7,898,950 DEFERRED TAX LIABILITY 769,607 751,769 LONG-TERM OBLIGATIONS - - COMMITMENTS AND CONTINGENCIES STOCKHOLDERS' EQUITY Common stock, $0.01 par value; 25,000,000 shares authorized; 10,136,550 and 9,647,404 shares issued and outstanding at September 30, 2009 and December 31, 2008, respectively 101,366 96,474 Additional paid-in capital 29,129,448 28,263,803 Accumulated comprehensive loss from foreign currency translation (66,548) (83,835) Retained earnings (accumulated deficit) 1,978,220 (293,317) --------- -------- 31,142,486 27,983,125 ---------- ---------- $40,422,344 $36,633,844 =========== ===========

Health Fitness Corporation

CONTACT: Company Contact, Wes Winnekins, CFO of Health Fitness
Corporation, +1-952-897-5275; or Investor Relations, Joe Dorame, Robert Blum,
or Joe Diaz, all of Lytham Partners, LLC, +1-602-889-9700,
fit@lythampartners.com, for Health Fitness Corporation

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

KapStone Reports Third Quarter 2009 Results

NORTHBROOK, Ill., Nov. 4 /PRNewswire-FirstCall/ -- KapStone Paper and Packaging Corporation today reported results for the third quarter ended September 30, 2009.

-- Net income of $25.7 million, up $23.4 million versus prior year -- EBITDA of $60.3 million, up $33.8 million versus prior year -- $53.5 million of alternative fuel mixture tax credits earned in the quarter -- Diluted EPS of $0.69, up $0.63 per share versus prior year -- $158.4 million of debt pre-payments made in the quarter -- An additional $25.0 million debt pre-payment was made after September 30, 2009

Roger W. Stone, Chairman and Chief Executive Officer, stated, "In the third quarter, we made substantial progress toward many important goals. Our operating rate was in the high 90 percent range compared to 85 percent in the second quarter and 72 percent in the first quarter. Our backlog is getting stronger and we are starting to see some modest price improvement. Our balance sheet strengthened due to the debt reduction of over $158 million in the third quarter resulting from good operating cash flow and the proceeds received from the exercise of 17 million warrants."

Third Quarter Operating Highlights

While unit sales volume during the third quarter of 2009 increased by over 3 percent, consolidated net sales decreased $37.4 million to $170.3 million compared to $207.7 million from the same quarter a year ago. Lower selling prices and less favorable product mix on a higher percentage of linerboard sales reduced revenues by $39.8 million. Net sales for third quarter of 2009 also compare unfavorably to the same period of 2008 due the inclusion in 2008's net sales of $8.9 million from the dunnage bag business which was sold on March 31, 2009. However, when comparing net sales in the third quarter of 2009 to the second quarter of 2009, sales improved by $13.8 million on a 17 percent volume increase as demand has continued increasing from the first quarter of the year.

Operating income of $46.5 million for the 2009 third quarter increased by $32.4 million, or 229 percent compared to the 2008 quarter primarily due to $53.5 million of alternative fuel mixture tax credits, $7.1 million from lower costs on materials, energy and transportation, and $6.0 million due to a change in the timing of the annual cold mill outage in North Carolina. These gains were partially offset by lower average selling prices, a less favorable product mix, and the sale of the dunnage bag business. Selling prices of most of our products continued to decline throughout the first half of the year and stabilized during the third quarter. As a result, average revenue per ton for the third quarter of 2009 was $495 versus $605 in the same quarter a year ago, or down 18 percent per ton. Operations in the third quarter of 2009 as compared to the same quarter a year ago were negatively impacted by an unplanned outage in the third quarter of 2009 due to the failure of a major water pipe which shut the mill down for approximately two days, reducing production by 6,000 tons and reducing operating income by approximately $2.5 million, including the impact of $1.1 million less received from the alternative fuel mixture tax credit.

Operating income for the third quarter of 2009 improved $13.1 million over the second quarter of 2009 primarily on increased volumes and higher operating rates despite a decline in average revenue per ton, down $34, or 6 percent, from the second quarter of 2009.

Included in the 2009 and 2008 third quarters' operating results is a $2.4 million charge for the amortization of an intangible asset relating to an acquired coal contract with favorable prices valued at $14.1 million at the date of the CKD acquisition. The coal contract and related amortization terminate on December 31, 2009.

Interest expense of $2.8 million for the third quarter of 2009 decreased by $5.2 million over the comparable quarter in 2008 and reflected the impact of over $250 million of debt repayments and lower interest rates since a year ago. Effective August 1, 2009, the Company's average interest rate on its term loans was reduced to 2.9 percent down from an average of 3.5 percent for the quarter ended June 30, 2009. Interest rates on the term loans are expected to be further reduced to approximately 1.75 percent in November 2009. In the 2009 third quarter, the Company incurred higher non-cash amortization charges related to debt issuance costs of approximately $2.5 million which included a one-time charge of approximately $1.9 million for the acceleration of the amortization associated with the debt repayments.

The effective tax rate for the 2009 quarter was 37.9 percent compared to 52.2 percent for the 2008 quarter. The anticipated effective tax rate for the full year of 2009 is approximately 38 percent.

Cash Flow and Working Capital

Cash flow for the 2009 third quarter reflects $61.0 million provided by operating activities, $6.9 million used in investing activities and $73.1 million used in financing activities. During the 2009 quarter, the Company received $85.2 million from exercises of 17 million common stock warrants. The Company used the proceeds from the warrant exercises and cash proceeds from operations to paydown $158.4 million of debt. Since September 30, 2009, the Company has prepaid an additional $25.0 million of debt, bringing the total debt outstanding as of today to $194.9 million.

The Company was in compliance with all debt covenants at September 30, 2009. Due to the significant debt reduction and the high EBITDA generated over the past year, the Company's debt to EBITDA ratio is 1.42 to 1 at September 30, 2009.

For 2010, the Company is evaluating whether it may qualify for a $1.01 per gallon tax credit for cellulosic biofuel producers under Section 40(b)(6). We are also researching how we can indirectly benefit from the Biomass Crop Assistance Program (BCAP) a subsidy for suppliers of biomass who sell to approved biomass conversion facilities, which will, in turn, convert biomass to energy. Both of KapStone's mills are approved biomass conversion facilities.

At September 30, 2009, the Company had working capital of $66.1 million.

On March 31, 2009, KapStone received approval from the Internal Revenue Service for its registration as an alternative fuel mixer, which provides a refund of $0.50 per gallon of alternative fuel used in KapStone's pulp making process. KapStone has submitted refund claims totaling $121.9 million based on fuel usage from mid-January 2009 through September 30, 2009. The Company has received refunds from the Internal Revenue Service totaling $109.7 million through the end of the third quarter. The pre-tax impact of the alternative fuel mixture tax credit is included in cost of sales in the consolidated financial statements in the amounts of $53.5 million and $107.5 million for the three and nine months ended September 30, 2009, respectively, and $14.4 million of the credit is included in the consolidated balance sheet as a reduction to finished goods inventory. The cash receipts and pre-tax earnings generated from the alternative fuel mixture tax credit are currently expected to exceed $50 million for the fourth quarter of 2009. The alternative fuel mixture tax credit is currently scheduled to expire on December 31, 2009.

Conclusion

In summary, Stone commented, "Since the first quarter of 2009, our operations have experienced a steady recovery with higher production and sales in each quarter. We are sharply focused on improving product mix and pricing and are planning on a strong finish for 2009. Recent announcements confirm that the industry is committed to balancing supply with demand and that speaks well for its future. With a stronger and improving balance sheet, we are well-positioned for future growth."

Conference Call

KapStone will host a conference call at 11 a.m. ET, Thursday, November 5, 2009, to discuss the Company's financial results for the 2009 third quarter. All interested parties are invited to listen and may do so by either accessing a simultaneous broadcast webcast on KapStone's website, http://www.kapstonepaper.com/, or for those unable to access the webcast, the following dial-in numbers are available:

Domestic: 800.299.8538 International: 617.786.2902 Participant Pass code: 62214320

The webcast is also being distributed through the Thomson StreetEvents Network. Individual investors can listen to the call at http://earnings.com/, Thomson's individual investor portal, powered by StreetEvents. Institutional investors can access the call via Thomson StreetEvents (http://streetevents.com/) a password-protected event management site.

A replay of the webcast will be available for 30 days on the Company's web site following the call.

About the Company

Headquartered in Northbrook, IL, KapStone Paper and Packaging Corporation is a leading North American producer of unbleached kraft paper products, and linerboard. The Company is the parent company of KapStone Kraft Paper Corporation which includes paper mills in Roanoke Rapids, NC and North Charleston, SC, a lumber mill in Summerville, SC, and five chip mills in South Carolina. The business employs approximately 1,550 people.

Non-GAAP Financial Measures

This press release includes certain non-GAAP financial measures. Management uses these measures to focus on the on-going operations, and believes it is useful to investors because they enable them to perform meaningful comparisons of past and present operating results. The Company believes that EBITDA and Adjusted EBITDA provide useful information to investors because they improve the comparability of the financial results between periods and provide for greater transparency to key measures used to evaluate the performance and liquidity of the Company. Management uses EBITDA for evaluating the Company's performance against competitors and as a primary measure for employees' incentive programs and potential future contingent earn-out payments to International Paper Company. Reconciliations of Net Income to EBITDA, EBITDA to Adjusted EBITDA, Net Income to Adjusted Net Income, Basic EPS to Adjusted Basic EPS, and Diluted EPS to Adjusted Diluted EPS are included in the financial schedules contained in this press release. However, these measures should not be construed as an alternative to any other measure of performance determined in accordance with GAAP.

Forward-Looking Statements

Statements in this news release that are not historical are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements can often be identified by words such as "may," "will," "should," "would,' "expect," "project," "anticipate," "intend," "plan," "believe," "estimate," "potential," "outlook," or "continue," the negative of these terms or other similar expressions. These statements reflect management's current views and are subject to risks, uncertainties and assumptions, many of which are beyond the Company's control that could cause actual results to differ materially from those expressed or implied in these statements. Factors that could cause actual results to differ materially include, but are not limited to: (1) the ability of KapStone to successfully integrate Charleston's operations and employees and KapStone's ability to realize anticipated synergies and cost savings; (2) industry conditions, including changes in cost, competition, changes in the Company's product mix and demand and pricing for the Company's products; (3) market and economic factors, including changes in raw material and healthcare costs, exchange rates and interest rates; (4) results of legal proceedings and compliance costs, including unanticipated expenditures related to the cost of compliance with environmental and other governmental regulations; (5) the ability to achieve and effectively manage growth; (6) the ability to pay the Company's debt obligations; (7) the ability to carry out the Company's strategic initiatives and manage associated costs; and (8) the potential impact of changes to or a discontinuation before December 31, 2009 of the federal incentive program for alternative fuel mixtures. Further information on these and other risks and uncertainties is provided under Item 1A "Risk Factors" in the Company's Annual Report on Form 10-K for the year ended December 31, 2008 and Quarterly Report on Form 10-Q for the quarter ended September 30, 2009, and elsewhere in reports that the Company files or furnishes with the SEC. These filings can be found on KapStone's Web site at http://www.kapstonepaper.com/ and the SEC's Web site at http://www.sec.gov/. Forward-looking statements included herein speak only as of the date hereof and the Company disclaims any obligation to revise or update such statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events or circumstances.

KapStone Paper and Packaging Corporation Consolidated Statements of Income ($ in thousands, except share and per share amounts) (unaudited) Quarter Ended Fav / (Unfav) September 30, Variance -------------- 2009 2008 % ---- ---- ---- Net sales $170,335 $207,671 -18.0% Cost and expenses: Cost of sales, excluding depreciation and amortization 86,812 151,064 42.5% Freight and distribution 16,262 19,969 18.6% Selling, general and administrative expenses 7,105 9,757 27.2% Depreciation and amortization 13,664 12,953 -5.5% (Loss) / gain on sale of business (278) - n/a Other operating income 285 218 30.7% --- --- ---- Operating income 46,499 14,146 228.7% Foreign exchange gain /(loss) 175 (607) n/a Interest income - 51 n/a Interest expense 2,821 8,011 64.8% Amortization of debt issuance costs 2,532 761 -232.7% ----- --- ------ Income before provision for income taxes 41,321 4,818 757.6% Provision for income taxes 15,649 2,513 -522.7% ------ ----- ------ Net income $25,672 $2,305 1013.8% ======= ====== ====== Earnings per share: Basic $0.70 $0.09 ===== ===== Diluted $0.69 $0.06 ===== ===== Weighted-average number of shares outstanding: Basic 36,548,515 26,904,070 ========== ========== Diluted 36,940,773 38,012,635 ========== ========== Effective tax rate 37.9% 52.2% ==== ==== Nine Months Ended Fav / (Unfav) September 30, Variance ----------------- 2009 2008 % ---- ---- ---- Net sales $467,412 $342,962 36.3% Cost and expenses: Cost of sales, excluding depreciation and amortization 271,650 233,422 -16.4% Freight and distribution 42,755 33,480 -27.7% Selling, general and administrative expenses 23,292 19,251 -21.0% Depreciation and amortization 40,761 18,381 -121.8% (Loss) / gain on sale of business 16,417 - n/a Other operating income 733 589 24.4% --- --- ---- Operating income 106,104 39,017 171.9% Foreign exchange gain /(loss) 48 (607) n/a Interest income 1 891 -99.9% Interest expense 11,887 8,815 -34.8% Amortization of debt issuance costs 4,210 1,170 -259.8% ----- ----- ------ Income before provision for income taxes 90,056 29,316 207.2% Provision for income taxes 35,160 11,530 -204.9% ------ ------ ------ Net income $54,896 $17,786 208.6% ======= ======= ===== Earnings per share: Basic $1.77 $0.69 ===== ===== Diluted $1.75 $0.49 ===== ===== Weighted-average number of shares outstanding: Basic 31,096,354 25,859,149 ========== ========== Diluted 31,355,785 36,429,893 ========== ========== Effective tax rate 39.0% 39.3% ==== ==== OPERATING SEGMENT DATA ($ In thousands) Quarter Ended Fav / (Unfav) September 30, Variance -------------- 2009 2008 % ---- ---- ---- Net sales Unbleached kraft $170,335 $199,601 -14.7% Other - 8,906 -100.0% Intersegment sales elimination - (836) n/a - ---- --- Total net sales $170,335 $207,671 -18.0% ======== ======== ===== Operating income Unbleached kraft $51,952 $19,608 165.0% Other - 1,608 -100.0% (Loss) / gain on sale of business (278) - n/a Corporate (5,175) (7,070) 26.8% ------ ------ ---- Total operating income $46,499 $14,146 228.7% ======= ======= ===== Nine Months Ended Fav / (Unfav) September 30, Variance ----------------- 2009 2008 % ---- ---- ---- Net sales Unbleached kraft $461,384 $320,506 44.0% Other 6,927 25,703 -73.0% Intersegment sales elimination (899) (3,247) 72.3% ---- ------ ---- Total net sales $467,412 $342,962 36.3% ======== ======== ==== Operating income Unbleached kraft $105,245 $50,087 110.1% Other 748 4,209 -82.2% (Loss) / gain on sale of business 16,417 - n/a Corporate (16,306) (15,279) -6.7% ------- ------- ---- Total operating income $106,104 $39,017 171.9% ======== ======= ===== KapStone Paper and Packaging Corporation Consolidated Balance Sheets ($ in thousands) September 30, December 31, 2009 2008 ---- ---- (unaudited) Assets Current assets: Cash and cash equivalents $3,074 $4,165 Trade accounts receivable, net of allowances of $2,884 in 2009 and $2,421 in 2008 59,615 71,489 Other receivables 15,189 6,207 Inventories 61,600 89,692 Refundable and prepaid income taxes 2,947 14,145 Prepaid expenses and other current assets 3,193 1,748 Restricted cash 2,500 - Deferred income taxes 5,620 3,363 ----- ----- Total current assets 153,738 190,809 ------- ------- Plant, property and equipment, net 470,304 483,780 Other assets 1,553 882 Intangible assets, net 29,517 45,195 Goodwill 5,449 6,524 ----- ----- Total assets $660,561 $727,190 ======== ======== Liabilities and Stockholders' Equity Current liabilities: Current portion of long-term debt and notes $25,960 $40,556 Accounts payable 36,404 42,214 Accrued expenses 16,607 30,462 Accrued compensation costs 8,689 13,646 ----- ------ Total current liabilities 87,660 126,878 ------ ------- Long-term debt and notes, less current portion 187,059 389,374 Pension and post retirement benefits 6,994 8,355 Deferred income taxes 32,757 15,951 Other liabilities 23,556 5,865 ------ ----- Total other liabilities 250,366 419,545 ------- ------- Stockholders' equity: Common stock $.0001 par value 5 3 Additional paid-in capital 219,107 132,206 Retained earnings 103,662 48,766 Accumulated other comprehensive loss (239) (208) ---- ---- Total stockholders' equity 322,535 180,767 ------- ------- Total liabilities and stockholders' equity $660,561 $727,190 ======== ======== KapStone Paper and Packaging Corporation Consolidated Statement of Cash Flows ($ in thousands) (unaudited) Quarter Ended Nine Months Ended September 30, September 30, -------------- ----------------- 2009 2008 2009 2008 ---- ---- ---- ---- Operating activities: Net income $25,672 $2,305 $54,896 $17,786 Adjustments to reconcile net income to cash provided by operating activities: Depreciation and amortization 13,664 12,953 40,761 18,381 Stock based compensation expense 652 498 1,686 1,189 Amortization of debt issuance costs 2,532 1,070 4,210 1,170 Loss on disposal of assets 468 - 756 - Deferred income taxes 2,405 11,313 13,750 12,999 Gain / (loss) on sale of business (278) - (16,417) - Changes in operating assets and liabilities 15,888 (21,068) 24,148 (23,521) ------ ------- ------ ------- Total cash provided by operating activities $61,003 $7,071 $123,790 $28,004 ------- ------ -------- ------- Investing activities: CKD acquisition $- $(468,058) $1,000 $(470,451) KPB acquisition-earn- out due to sale of dunnage bag business - - (3,977) - Proceeds from sale of business (1,185) - 34,898 - Restricted cash - - (2,500) - Capital expenditures (5,746) (8,094) (18,656) (12,714) ------ ------ ------- ------- Total cash (used in) / provided by investing activities $(6,931) $(476,152) $10,765 $(483,165) ------- --------- ------- --------- Financing activities: Proceeds from revolving credit facility $3,000 $71,800 $64,300 $71,800 Repayments on revolving credit facility (3,000) (17,000) (76,700) (17,000) Proceeds from long- term debt and notes - 455,000 - 455,000 Repayments of long- term debt and notes (158,362) (56,814) (208,093) (71,953) Proceeds from exercises of warrants into common stock 85,217 14,054 85,217 15,146 Debt issuance costs paid - (12,593) (370) (12,593) --- ------- ---- ------- Total cash (used in) / provided by financing activities $(73,145) $454,447 $(135,646) $440,400 -------- -------- --------- -------- Net increase / (decrease) in cash and cash equivalents (19,073) (14,634) (1,091) (14,761) Cash and cash equivalents-beginning of period 22,147 56,508 4,165 56,635 ------ ------ ----- ------ Cash and cash equivalents-end of period $3,074 $41,874 $3,074 $41,874 ====== ======= ====== ======= KapStone Paper and Packaging Corporation Supplemental Information GAAP to Non-GAAP Reconciliations ($ in thousands, except share and per share amounts) (unaudited) Quarter Ended Nine Months Sept 30, Ended Sept 30, ------------- --------------- 2009 2008 2009 2008 ---- ---- ---- ---- Net Income (GAAP) to EBITDA (Non- GAAP) to Adjusted EBITDA: Net income (GAAP) $25,672 $2,305 $54,896 $17,786 Interest income - (51) (1) (891) Interest expense 2,821 8,011 11,887 8,815 Amortization of debt issuance costs 2,532 761 4,210 1,170 Provision for income taxes 15,649 2,513 35,160 11,530 Depreciation and amortization 13,664 12,953 40,761 18,381 ------ ------ ------ ------ EBITDA (Non-GAAP) $60,338 $26,492 $146,913 $56,791 ======= ======= ======== ======= Alternative fuel mixture tax credits (53,458) - (107,464) - Charleston outage costs 1,805 - 1,805 - Dunnage bag business 278 (1,706) (17,266) (4,492) Stock based compensation expense 652 498 1,686 1,189 KPB annual maintenance outage - 5,966 - 5,966 CKD acquisition start up expenses - 2,205 - 2,361 --- ----- --- ----- Adjusted EBITDA (Non-GAAP) $9,615 $33,455 $25,674 $61,815 ====== ======= ======= ======= Net Income (GAAP) to Adjusted Net Income (Non-GAAP): Net income (GAAP) $25,672 $2,305 $54,896 $17,786 Alternative fuel mixture tax credits (33,213) - (65,508) - Amortization of acquired coal contract with favorable prices 1,513 1,092 4,458 1,386 Accelerated amortization of debt issuance costs 1,170 - 1,148 - Charleston outage costs 1,121 - 1,100 - Dunnage bag business 173 (815) (10,525) (2,725) Stock based compensation expense 405 238 1,028 721 KPB annual maintenance outage - 2,852 - 3,620 CKD acquisition start up expenses - 1,054 - 1,432 --- ----- --- ----- Adjusted Net Income (Non-GAAP) $(3,157) $6,726 $(13,402) $22,220 ======= ====== ======== ======= Basic EPS (GAAP) to Adjusted Basic EPS (Non-GAAP): Basic EPS (GAAP) $0.70 $0.09 $1.77 $0.69 Alternative fuel mixture tax credits (0.91) - (2.11) - Amortization of acquired coal contract with favorable prices 0.04 0.04 0.14 0.05 Accelerated amortization of debt issuance costs 0.03 - 0.04 - Charleston outage costs 0.03 - 0.04 - Dunnage bag business - (0.03) (0.34) (0.11) Stock based compensation expense 0.01 0.01 0.03 0.03 KPB annual maintenance outage - 0.11 - 0.14 CKD acquisition start up expenses - 0.04 - 0.06 --- ---- --- ---- Adjusted Basic EPS (Non-GAAP) $(0.10) $0.26 $(0.43) $0.86 ====== ===== ====== ===== Diluted EPS (GAAP) to Adjusted Diluted EPS (Non-GAAP): Diluted earnings per share (GAAP) $0.69 $0.06 $1.75 $0.49 Alternative fuel mixture tax credits (0.90) - (2.09) - Amortization of acquired coal contract with favorable prices 0.04 0.03 0.14 0.04 Accelerated amortization of debt issuance costs 0.03 - 0.04 - Charleston outage costs 0.03 - 0.04 - Dunnage bag business - (0.02) (0.34) (0.07) Stock based compensation expense 0.01 0.01 0.03 0.02 KPB annual maintenance outage - 0.08 - 0.10 CKD acquisition start up expenses - 0.03 - 0.04 --- ---- --- ---- Adjusted Diluted EPS (Non-GAAP) $(0.10) $0.19 $(0.43) $0.62 ====== ===== ====== =====

KapStone Paper and Packaging Corporation

CONTACT: Andrea K. Tarbox, Vice President and Chief Financial Officer of
KapStone Paper and Packaging Corporation, +1-847-239-8812

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

Cogo Group, Inc. Reports 2009 Third Quarter Results- Q3 Net Revenue: $82.0 million Generally Accepted Accounting Principles ("GAAP") (a year-on-year increase of 9.7%) - Q3 Net Income attributable to Cogo Group, Inc.: $3.4 million GAAP and $6.7 million Non-GAAP - Q3 EPS Diluted attributable to Cogo Group, Inc.: $0.09 GAAP and $0.18 Non-GAAP (a year-on-year increase of 28.6% Non-GAAP) - Company provides Q4 guidance of $86-88 million in revenue and Non-GAAP EPS Diluted attributable to Cogo Group, Inc. of $0.18-0.19.

SHENZHEN, China, Nov. 4 /PRNewswire-FirstCall/ -- Cogo Group, Inc. , a leading provider of customized design solutions for the technology manufacturing sector in China, today announced unaudited financial results for its third quarter of 2009. The Company posted quarterly revenue of $82.0 million, up 9.7% year-over-year, compared to $74.8 million reported in the third quarter of 2008.

Net income attributable to Cogo Group, Inc. for the third quarter of 2009 was $3.4 million, up 144.2% from $1.4 million in the same period last year, with Non-GAAP net income attributable to Cogo Group, Inc. of $6.7 million, up 24.5% over the same period last year. Earnings per share ("EPS") Diluted attributable to Cogo Group, Inc. on a U.S. GAAP basis was $0.09. Non-GAAP EPS Diluted attributable to Cogo Group, Inc. (which excludes share-based compensation expense and acquisition related costs, net including amortization, impairment and extraordinary gain of intangible assets, related deferred taxation and impairment loss of goodwill) was $0.18, up 28.6% from the third quarter of 2008.

Key Financial Indicators (all numbers in USD thousands, except Earnings per share data) Q3 2009(1) Q3 2008(1) Percent Change Net Revenue $82,042 $74,794 9.7% Cost of Sales $70,201 $64,453 8.9% Gross Profit $11,841 $10,341 14.5% Net Operating Expenses $9,206 $10,200 (9.7%) Income from Operations $2,635 $141 1768.8% Net Income Attributable to Cogo Group, Inc.(2) $3,363 $1,377 144.2% EPS Diluted Attributable to Cogo Group, Inc. $0.09 $0.04 125.0% Non-GAAP EPS Diluted attributable to Cogo Group, Inc.(2) $0.18 $0.14 28.6% (1) The US dollar amounts are calculated based on the conversion rate of US $1 to RMB 6.8262 as of September 30, 2009, US $1 to RMB 6.7899 as of September 30, 2008. (2) Included in the Q3 2009 net income attributable to Cogo Group, Inc. was an amount of $2.2 million in respect of share-based compensation expense in accordance with Accounting Standards Codification ("ASC") 718, Compensation - Stock Compensation and $1.1 million, net acquisition related costs including amortization, impairment and extraordinary gain of intangible assets and related deferred taxation. Non-GAAP net income attributable to Cogo Group, Inc., excluding the effects of share-based compensation expense and acquisition related costs, was $6.7 million or $0.18 Non-GAAP EPS Diluted attributable to Cogo Group, Inc. Included in the Q3 2008 net income was an amount of $1.5 million for share-based compensation expense and $2.5 million acquisition related costs (including amortization, impairment and extraordinary gain of intangible assets and related deferred taxation). Recent Developments

In September, the Company announced a series of design wins within multiple Smartphone and Smartbook products on both Windows Mobile and Android platforms. The Company continued to experience sequential growth in the telecommunications equipment and combined digital media and handset businesses while aggressively pursuing new opportunities within the Industrial Applications business.

"Since Cogo's Industrial business was first introduced in the first quarter of 2008, it has grown to 13.5% of sales, and we expect that it will continue to grow much faster than the overall company through 2010 and beyond," said Jeffrey Kang, CEO and Chairman of Cogo. "Growth in our Industrial Applications business is being driven by the aggressive build-out of China's Smart Power Grid, high speed railways and roll-out of Smart Meters. We expect that the inclusion of new opportunities, like auto electronics, will only further accelerate our growth in this end-market."

Financial Results

Net revenue for the third quarter was $82.0 million, an increase of 9.7% compared to $74.8 million reported for the third quarter of last year. The net revenue breakdown is as follows: $11.1 million, or 13.5% of total revenue representing a 259.6% year-over-year increase, from component sales relating to industrial applications business, which includes industrial solutions targeted at the electrical grid and other sectors; $49.4 million, or 60.2% of total revenue for digital media end-market (including handset business), up 1.5% from the same period in 2008 and $20.3 million, or 24.7% of total revenue for telecommunications equipment, representing a 9.4% decrease year-over-year.. The Company's service business contributed $1.3 million in net revenues for the third quarter and accounted for approximately 1.6% of total net revenue.

Cost of sales, which includes the aggregate purchase cost of components from suppliers and the direct cost of services, was $70.2 million, compared to $64.5 million in the same period last year, representing an increase of 8.9% year-over-year. Gross profit for the third quarter was $11.8 million, up 14.5% compared to the $10.3 million during the third quarter of last year. Gross margin for the third quarter increased to 14.4%, compared to 13.8% reported during the third quarter of 2008. The increase in both gross profit and gross profit margin was primarily attributable to the increased revenue in industrial business end-market, which generally had a higher gross margin than that of the digital media and telecommunications equipment end-markets.

Selling, general and administrative expenses totaled $6.9 million, remained stable as compared to $6.9 million reported for the third quarter of last year. Research and development ("R&D") expenses increased by 7.7% to $2.3 million compared to $2.1 million in the third quarter of 2008. The increase was primarily attributable to an increase in share-based compensation costs of $0.7 million as a result of new stock awards granted to research staff in 2009.

Income from operations was $2.6 million as compared to $0.1 million for the third quarter of 2008. Operating margin for the third quarter was 3.2% versus 0.2% for the third quarter of 2008. Excluding the effects of share-based compensation and acquisition-related costs including amortization of intangible assets, operating margin would have been 8.7% for the third quarter of 2009, compared to 6.1% for the same period in 2008. Noncontrolling interests' share of income was $0.3 million, an increase of 200.9% as compared to $0.1 during the same period in 2008.

Net income attributable to Cogo Group, Inc. for the third quarter was $3.4 million or EPS Diluted attributable to Cogo Group, Inc. of $0.09 on a U.S. GAAP basis, compared to net income attributable to Cogo Group, Inc. of $1.4 million, or EPS Diluted attributable to Cogo Group, Inc. of $0.04 in the third quarter of 2008. Included in the third quarter 2009 net income attributable to Cogo Group, Inc. was $2.2 million for share-based compensation expenses, $1.1 million, net for acquisition-related costs (including amortization, impairment and extraordinary gain of intangible assets and related deferred taxation). Excluding the share-based compensation expenses and acquisition-related costs (including amortization, impairment and extraordinary gain of intangible assets and related deferred taxation), the Company would have reported net income attributable to Cogo Group, Inc. of $6.7 million, or $0.18 Non-GAAP EPS Diluted attributable to Cogo Group, Inc. for the third quarter, as compared to $0.14 for the third quarter of 2008. The weighted average number of shares used in the calculation of diluted EPS attributable to Cogo Group, Inc. was 37.7 million compared to 39.2 million in the third quarter of 2008.

For the nine-month period ended September 30, 2009, the Company reported revenue of $219.0 million, an increase of 6.4% compared to $205.9 million reported during the same period of 2008. Gross profit was $31.3 million, a decrease of 10.1% compared to $34.9 million reported during the nine-month period ended September 30, 2008. Gross margin was 14.3% of sales, compared to a gross margin of 16.9% for the same period last year. Net operating expenses were $25.0 million, an increase of 4.2% as compared to $24.0 million for the same period last year. Income from operations was $6.4 million, a decrease of 41.6% from the $10.9 million reported during the prior year period. Non-GAAP operating margins, excluding share-based compensation expenses and acquisition-related costs (including amortization, impairment and extraordinary gain of intangible assets and related deferred taxation), were 7.9%, down 1.9% as compared to the same period last year, as a result of the lower gross margin.

Balance Sheet

As of September 30, 2009, cash was $101.5 million, up $0.5 million from $101.0 million at June 30, 2009. Pledged bank deposits were $17.0 million as of September 30, 2009 and June 30, 2009. The Company continues to be in a strong financial position with a current ratio of 4.6 to 1. Inventory turnover was shortened slightly to 27 days from 31 days as of September 30, 2009. Accounts receivable were collected in an average of 95 days. Net cash used in operating activities for the nine months ended September 30, 2009 was $3.6 million. The Company had bank borrowings of $14.0 million as of September 30, 2009 as compared to $4.4 million as of June 30, 2009. Total equity was $223.1 million as of September 30, 2009, an increase of 3.3% from $215.9 million as of June 30, 2009.

Business Outlook

Based on current visibility and new business in the pipeline, management is providing 2009 Q4 guidance of $86-88 million in revenue and Non-GAAP EPS Diluted attributable to Cogo Group, Inc. of $0.18-0.19.

Mr. Kang remarked, "I believe that Cogo's unique business position within the Chinese market, together with the breadth of its business relationships across a growing range of end markets and our large net cash position will support the company's accelerating revenue growth in 2010. Simply, given the business momentum we are seeing, particularly in the Industrial sector and with our Small and Medium Enterprise customers, we expect to move back into a high-growth phase in 2010. We continue to believe that the worst of the Chinese economic situation is behind us and see the opportunity to continue to expand our operating margin towards our target of 10%."

Cogo 2009 Q3 Earnings Results Conference Call Date/ Time: November 4, 2009 (Wednesday) @ 4:30 PM (ET) Conference Call: US/ Canada Toll-Free: 1-877-941-4775 International: +1 (480) 629 9761 Webcast/ Audio Recording: http://viavid.net/dce.aspx?sid=00006AD5 . Replay (from 11/04/2009 at 7:30 pm to 11/11/2009 at 11:59 pm ET): US/ Canada Toll-Free: 1-800-406-7325 (Passcode: 4167390) International: +1 (303) 590 3030 (Passcode: 4167390) About Cogo Group, Inc.:

Cogo Group, Inc. Cogo Group, Inc. is a leading provider of customized module and subsystem design solutions in China. The Company believes it acts as a proxy to China's technology industry as it works with virtually all the major ODMs and OEMs in China. Cogo leverages these relationships and combines their IP to create designs that Cogo then sells to electronic manufacturers. These designs allow manufacturers to reduce their time to market for new products and ultimately increase sales. Cogo focuses on the telecommunications equipment, digital media and industrial applications end-markets for their customized design modules while also offering business and engineering services to their large telecommunications equipment vendor customers. Over the last twelve years, Cogo has grown its customer list to include nearly 1,300 manufacturers across the telecommunications equipment, digital media and industrial applications markets, covering both multinational Chinese subsidiaries and Chinese domestic companies.

Safe Harbor Statement:

This press release includes certain statements that are not descriptions of historical facts, but are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities and Exchange Act of 1934. These forward-looking statements may include statements about our proposed discussions related to our business or growth strategy such as growth in digital media, mobile handset and telecommunications businesses, as well as our potential acquisitions which are subject to change. Such information is based upon expectations of our management that were reasonable when made, but may prove to be incorrect. All such assumptions are inherently subject to uncertainties and contingencies beyond our control and upon assumptions with respect to future business decisions, which are subject to change. For further descriptions of other risks and uncertainties, see our most recent Annual Report filed with the Securities and Exchange Commission (SEC) on Form 10-K, and our subsequent SEC filings, including our most recent Forms S-1 and/or S-3. Copies of filings made with the SEC are available through the SEC's electronic data gathering analysis retrieval system (EDGAR) at http://www.sec.gov/.

About Non-GAAP Financial Measures:

To supplement Cogo's consolidated financial results presented in accordance with GAAP, Cogo uses the following measures defined as Non-GAAP financial measures by the SEC: 1) Non-GAAP net income attributable to Cogo Group, Inc., which is net income attributable to Cogo Group, Inc. excluding share-based compensation expenses and acquisition related costs, net such as amortization, impairment and extraordinary gain of intangible assets, related deferred taxation and impairment of goodwill, 2) Non-GAAP basic and diluted earnings per share attributable to Cogo Group, Inc., which is basic and diluted earnings per share attributable to Cogo Group, Inc. excluding share-based compensation expenses and acquisition related costs, net such as amortization, impairment and extraordinary gain of intangible assets, related deferred taxation and impairment of goodwill, 3) Non-GAAP operating margin, which is operating margin excluding share-based compensation expenses and acquisition related costs such as amortization and impairment of intangible assets, and impairment of goodwill, and 4) Non-GAAP income from operation, which is income from operation excluding share-based compensation expenses and acquisition related costs such as amortization and impairment of intangible assets, and impairment of goodwill. The presentation of these Non-GAAP financial measures is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with GAAP. For more information on these Non-GAAP financial measures, please see the table captioned "Unaudited Reconciliation of Non-GAAP measures to the most comparable GAAP measures" set forth at the end of this release.

Cogo believes that these Non-GAAP financial measures provide meaningful supplemental information regarding its performance and liquidity by excluding share-based compensation expenses and acquisition related costs, net such as amortization, impairment and extraordinary gain of intangible assets, related deferred taxation and impairment of goodwill that may not be indicative of its operating performance from a cash perspective. Cogo believes that both management and investors benefit from referring to these Non-GAAP financial measures in assessing its performance and when planning and forecasting future periods. These Non-GAAP financial measures also facilitate management's internal comparisons to Cogo's historical performance and liquidity. Cogo computes its Non-GAAP financial measures using the same consistent method from quarter to quarter. Cogo believes these Non-GAAP financial measures are useful to investors in allowing for greater transparency with respect to supplemental information used by management in its financial and operational decision making. A limitation of using Non-GAAP net income attributable to Cogo Group, Inc., Non-GAAP basic and diluted earnings per share attributable to Cogo Group, Inc., Non-GAAP income from operations and Non-GAAP operating margin is that these Non-GAAP measures exclude share-based compensation expenses and acquisition related costs, net such as amortization, impairment and extraordinary gain of intangible assets, related deferred taxation and impairment of goodwill that have been and will continue to be for the foreseeable future a recurring expense in our business. Management compensates for these limitations by providing specific information regarding the GAAP amounts excluded from each Non-GAAP measure. The accompanying tables have more details on the reconciliations between GAAP financial measures that are most directly comparable to Non-GAAP financial measures.

Tables Attached COGO GROUP, INC. and SUBSIDIARIES UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME Three Months ended September 30, -------------------------------- 2009 2009 2008 USD'000 RMB'000 RMB'000 Net Revenue Product sales 80,728 551,063 503,128 Services revenue 1,314 8,970 4,717 ------ ------- ------- 82,042 560,033 507,845 Cost of sales Cost of goods sold (69,147) (472,010) (433,954) Cost of services (1,054) (7,194) (3,674) ------ ------- ------- (70,201) (479,204) (437,628) Gross profit 11,841 80,829 70,217 Selling, general and administrative expenses (6,949) (47,437) (47,065) Research and development expenses (2,308) (15,756) (14,550) Impairment loss on goodwill and intangible assets - - (7,653) Other operating income, net 51 349 8 ------ ------- ------- Income from operations 2,635 17,985 957 Interest expense (84) (572) (191) Interest income 544 3,716 7,366 ------ ------- ------- Earnings before income taxes 3,095 21,129 8,132 Income tax benefit 248 1,691 1,936 ------ ------- ------- Net income 3,343 22,820 10,068 Less net income attributable to noncontrolling interest (319) (2,175) (717) ------ ------- ------- Net income before extraordinary item 3,024 20,645 9,351 Extraordinary item (less applicable income taxes benefit of RMB 4,423 thousand) 339 2,315 - ------ ------- ------- Net income attributable to Cogo Group, Inc. 3,363 22,960 9,351 ====== ======= ======= Earnings per share attributable to Cogo Group, Inc. USD RMB RMB Income before extraordinary item 0.08 0.56 0.24 Extraordinary item 0.01 0.06 - ------ ------- ------- - Basic 0.09 0.62 0.24 Income before extraordinary item. 0.08 0.55 0.24 Extraordinary item 0.01 0.06 - ------ ------- ------- - Diluted 0.09 0.61 0.24 Weighted average number of common shares outstanding - Basic 36,809,304 38,869,625 - Diluted 37,745,926 39,233,125 COGO GROUP, INC. and SUBSIDIARIES UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS September 30, December 31, ------------- ------------ 2009 2009 2008 ---- ---- ---- USD'000 RMB'000 RMB'000 Assets Current assets: Cash 101,485 692,753 686,379 Pledged bank deposits 17,000 116,045 115,983 Accounts receivable, net 85,063 580,657 497,992 Bills receivable 1,561 10,658 13,555 Inventories 20,444 139,557 95,855 Prepaid expenses and other receivables 3,009 20,543 20,211 ----- ------ ------ Total current assets 228,562 1,560,213 1,429,975 Property and equipment, net 2,238 15,274 17,993 Goodwill and intangible assets, less accumulated amortization, RMB65,392 thousand (USD9,580 thousand) in 2009 and RMB42,819 thousand in 2008 46,674 318,609 237,234 Other assets 61 416 1,608 --- --- ----- Total Assets 277,535 1,894,512 1,686,810 ======= ========= ========= Liabilities and equity Current liabilities: Accounts payable 13,049 89,080 107,512 Bank borrowings 14,003 95,585 - Income taxes payable 1,739 11,872 8,225 Accrued expenses and other liabilities 20,908 142,722 141,925 ------ ------- ------- Total current liabilities 49,699 339,259 257,662 Deferred tax liabilities 2,936 20,044 19,693 Other non-current liabilities 1,757 11,992 - ----- ------ --- Total liabilities 54,392 371,295 277,355 Equity Common stock: Par value: USD 0.01 Authorized 200,000,000 shares Issued: 40,079,336 shares Outstanding: 36,134,925 shares in 2009 35,231,661 shares in 2008 477 3,258 3,196 Additional paid in capital 176,758 1,206,585 1,146,840 Retained earnings 84,252 575,121 524,240 Accumulated other comprehensive loss (15,721) (107,318) (107,645) -------- --------- --------- 245,766 1,677,646 1,566,631 Less cost of common stock in treasury, 3,944,411 shares in 2009 and 2008 (23,833) (162,687) (162,687) -------- --------- --------- Total Cogo Group, Inc. equity 221,933 1,514,959 1,403,944 Noncontrolling interest 1,210 8,258 5,511 ----- ----- ----- Total equity 223,143 1,523,217 1,409,455 ------- --------- --------- Total liabilities and equity 277,535 1,894,512 1,686,810 ======= ========= ========= COGO GROUP, INC. and SUBSIDIARIES UNAUDITED RECONCILIATION OF NON-GAAP MEASURES TO THE MOST COMPARABLE GAAP MEASURES Three Months ended September 30, ------------------ 2009 2008 ---- ---- $'000 $'000 Net Income GAAP net income attributable to Cogo Group, Inc. 3,363 1,377 Share-based compensation expense 2,191 1,506 Acquisition related costs, extraordinary item and related deferred taxation 1,129 2,487 ----- ----- Non-GAAP net income attributable to Cogo Group, Inc. 6,683 5,370 Income from operation GAAP income from operations 2,635 141 Share-based compensation expense 2,191 1,506 Acquisition related costs 2,288 2,884 ----- ----- Non-GAAP income from operation 7,114 4,531 ===== ===== Operating Margin GAAP operating margin 3.2% 0.2% Non-GAAP operating margin 8.7% 6.1% Earnings per share $ $ GAAP net income attributable to Cogo Group, Inc. per common share- Basic 0.09 0.04 ==== ==== GAAP net income attributable to Cogo Group, Inc. per common share- Diluted 0.09 0.04 ==== ==== Non-GAAP net income attributable to Cogo Group, Inc. per common share- Basic 0.18 0.14 ==== ==== Non-GAAP net income attributable to Cogo Group, Inc. per common share- Diluted 0.18 0.14 ==== ==== Weighted average number of common shares outstanding Basic 36,809,304 38,869,625 ========== ========== Diluted 37,745,926 39,233,125 ========== ==========

Cogo Group, Inc.

CONTACT: Cogo Group, Inc. Investor Relations, HK, +852 2730 1518, or US,
+1-646-291-8998

Web Site: http://www.cogo.com.cn/investorinfo.html

FTI Consulting, Inc. Reports 2009 Third Quarter Results- Revenues of $348.6 Million, Net Income of $37.6 Million, EPS of $0.70 and EBITDA of $77.9 Million; All Third Quarter Records - Share Repurchase Authorization Increased To $500 Million - Share Repurchase to Begin with $250 Million Accelerated Stock Buyback

WEST PALM BEACH, Fla., Nov. 4 /PRNewswire-FirstCall/ -- FTI Consulting , the global business advisory firm dedicated to helping organizations protect and enhance their enterprise value, today reported its financial results for the third quarter ended September 30, 2009.

Third Quarter Results

For the third quarter of 2009 compared to the prior year period, revenues increased 7.1% to $348.6 million from $325.5 million; net income increased 42.5% to $37.6 million from $26.4 million; diluted earnings per common share, or diluted EPS, increased 45.8% to $0.70 from $0.48 and EBITDA, a non-GAAP financial measure as defined below, increased 19.4% to $77.9 million, or 22.3% of revenues, from $65.2 million, or 20.0% of revenues.

Excluding the effect of changes in foreign currency exchange rates, revenues increased 9.0%, as compared to the 2008 third quarter. Net income and EPS included the one-time effects of a non-taxable gain of $2.3 million in connection with the purchase of the outstanding 50% interest in our Strategic Communications segment's German joint venture and certain tax benefits that reduced the Company's effective tax rate for the quarter to 33.2%. Operating cash flow for the third quarter of 2009 was $119.7 million, or $68.2 million greater than the operating cash flow generated in the third quarter of 2008. Cash and short-term investments was $313.6 million as of September 30, 2009.

Commenting on the quarter, Jack Dunn, FTI's president and chief executive officer, said, "Our record third quarter performance continues to demonstrate the power of our balanced portfolio in a variety of economic cycles and the recognition of our ability to address the critical issues confronting businesses around the world. We increased revenues and profits to record third quarter levels and continued to make strategic investments in our businesses. Restructuring activity remained strong, which benefited our Corporate Finance/Restructuring segment. Our Economics segment also reported record revenue as we began to see signs of improved litigation driven activity and the partial thawing of capital markets with associated M&A transactions.

Mr. Dunn continued, "Our cash flow generation enabled us to further invest in our key practices to prepare for market share growth as others retrench. We extended our breadth of global capabilities with launches of a Forensic and Litigation Consulting practice in Paris, a restructuring advisory practice in Munich and the buy-out of the joint venture partner in our strategic communications operation in Frankfurt. Through key hires we continued to expand our International Arbitration, Forensic and Litigation Consulting and Corporate Finance/Restructuring practices. Our Technology segment enhanced its product leadership with the introduction of Ringtail QuickCull, which enables corporations to increase the efficiency of e-discovery by culling and analyzing data on-premise, and extends our reach through multiple long term agreements. On Monday, we announced the expansion of our Forensic and Litigation Consulting practice with the addition of a number of highly regarded SEC investigation professionals thereby solidifying our leadership in this important field.

Mr. Dunn concluded, "With our most challenging seasonal quarter behind us, we are optimistic about our future. In 2010, we expect to continue to work on the large number of cases that resulted from the challenging economic environment while concurrently benefiting from the early stages of an expansion. Given that the majority of our business segments benefit from a growing economy, we are confident in our ability to deliver our target organic revenue growth rate of 10% to 12% next year. It is with this confidence that our Board has approved increasing our stock buyback program authorization to $500 million. We intend to fund the initial stock buyback with our cash on hand and to continue with internally generated cash flow."

Third Quarter Business Segment Results Corporate Finance/Restructuring

Revenues in the Corporate Finance/Restructuring segment increased 39.2% to $127.8 million from $91.8 million in the prior year. Segment EBITDA increased 71.2% to $43.6 million, or 34.1% of segment revenues, from $25.5 million, or 27.7% of segment revenues, in the prior year. The segment continued to be active in restructuring assignments in a broad range of industries being impacted by the global recession, including financial services, automotive, utility/energy, media and telecommunications. Segment growth was also enhanced by continued strong contributions from its global expansion into markets outside the U.S., notably the U.K., Canada and Latin America. Profitability in the segment was strong, as the robust demand drove higher chargeable hours and billing rates, and increased revenue allowed for operating leverage.

Forensic and Litigation Consulting

Revenues in the Forensic and Litigation Consulting segment were $65.0 million, compared with $65.8 million in the prior year. Segment EBITDA was $14.9 million, or 22.9% of segment revenues, essentially the same as in the prior year period. Activities related to several large financial fraud investigations, the segment's intellectual property and domain expertise industry practices were strong while levels of more routine commercial litigation and investigations remained soft as the challenging global economic environment continued to restrain discretionary spending.

Technology

Revenues in the Technology segment were $48.7 million, compared to $55.4 million in the prior year. Segment EBITDA was $15.2 million, or 31.3% of segment revenues, compared to $15.4 million, or 27.8% of segment revenues, in the prior year. Revenues in the quarter decreased year-over-year as increased contributions from large investigation cases were offset by declines in revenues from product liability engagements and continued pricing pressure in the segment's On Demand business. Segment EBITDA declined only slightly as improved operating efficiencies and cost controls offset the decline in revenues and contributed to the year-over-year EBITDA margin increase.

Economic Consulting

Revenues in the Economic Consulting segment increased 5.6% to a record $59.6 million from $56.4 million in the prior year. Segment EBITDA was $14.0 million, or 23.4% of segment revenues, compared to $15.8 million, or 27.9% of segment revenues, in the prior year. The revenue increase resulted from continued growth in the segment's new offices in New York, Los Angeles and London, and improving activity in strategic M&A and financial dispute matters during the quarter. EBITDA margins declined year-over-year due to the cost of expansion into new markets and a 19% increase in professional headcount to meet anticipated rising demand.

Strategic Communications

Revenues in the Strategic Communications segment were $47.5 million, compared to $56.1 million in the prior year. Segment EBITDA was $6.6 million, or 13.8% of segment revenues, compared to $12.4 million, or 22.1% of revenues, in the prior year. As the segment with the largest exposure to foreign currency, unfavorable exchange rates reduced revenues for the quarter by $3.0 million. The segment continued to be challenged by a dramatically slower volume of M&A transactions compared to last year and the continued impact of the global recession causing fee pressures from retained clients. Segment EBITDA declined year-over-year due to the lower revenues, as the segment has retained most of its professionals to meet an expected increase in demand.

Share Repurchase Authorized

Today our Board of Directors authorized a new two year stock repurchase program of up to $500 million. The Company intends to execute a $250 million accelerated stock buyback with Goldman, Sachs & Co. as soon as practicable.

Third Quarter Conference Call

FTI will hold a conference call for analysts and investors to discuss third quarter financial results at 5:00 PM Eastern time on Wednesday, November 4, 2009. The call can be accessed live and will be available for replay over the Internet for 90 days by logging onto the Company's website, http://www.fticonsulting.com/.

About FTI Consulting

FTI Consulting, Inc. is a global business advisory firm dedicated to helping organizations protect and enhance enterprise value in an increasingly complex legal, regulatory and economic environment. With more than 3,500 employees located in most major business centers in the world, we work closely with clients every day to anticipate, illuminate, and overcome complex business challenges in areas such as investigations, litigation, mergers and acquisitions, regulatory issues, reputation management and restructuring. More information can be found at http://www.fticonsulting.com/.

Use of Non-GAAP Measure

Note: We define EBITDA as operating income before depreciation and amortization of intangible assets plus non-operating litigation settlements. We use EBITDA in evaluating financial performance. Although EBITDA is not a measure of financial condition or performance determined in accordance with GAAP we believe that it can be a useful operating performance measure for evaluating our results of operation as compared from period to period and as compared to our competitors. EBITDA is a common alternative measure of operating performance used by investors, financial analysts and rating agencies to value and compare the financial performance of companies in our industry. We use EBITDA to evaluate and compare the operating performance of our segments and it is one of the primary measures used to determine employee bonuses. We also use EBITDA to value the businesses we acquire or anticipate acquiring. Reconciliations of EBITDA to Net Income and segment EBITDA to segment operating profit are included in the accompanying tables to today's press release. EBITDA is not defined in the same manner by all companies and may not be comparable to other similarly titled measures of other companies unless the definition is the same. This non-GAAP measure should be considered in addition to, but not as a substitute for or superior to, the information contained in our statements of income.

Safe Harbor Statement

This press release includes "forward-looking statements" within the meaning of Section 21E of the Securities Exchange Act of 1934 that involve uncertainties and risks. Forward-looking statements include statements concerning our plans, objectives, goals, strategies, future events, future revenues, future results and performance, expectations, plans or intentions relating to acquisitions and other matters, business trends and other information that is not historical, including statements regarding estimates of our future financial results. When used in this press release, words such as "estimates," "expects," "anticipates," "projects," "plans," "intends," "believes," "forecasts" and variations of such words or similar expressions are intended to identify forward-looking statements. All forward-looking statements, including, without limitation, estimates of our future financial results, are based upon our expectations at the time we make them and various assumptions. Our expectations, beliefs and projections are expressed in good faith, and we believe there is a reasonable basis for them. However, there can be no assurance that management's expectations, beliefs and projections will result or be achieved or that actual results will not differ from expectations. The Company has experienced fluctuating revenues, operating income and cash flow in some prior periods and expects this will occur from time to time in the future. The Company's actual results may differ from our expectations. Further, preliminary results are subject to normal year-end adjustments. Other factors that could cause such differences include the current global financial crisis and economic conditions, the crisis in and deterioration of the financial and real estate markets, the pace and timing of the consummation and integration of past and future acquisitions, the Company's ability to realize cost savings and efficiencies, competitive and general economic conditions, retention of staff and clients and other risks described under the heading "Item 1A. Risk Factors" in the Company's most recent Form 10-K and in the Company's other filings with the Securities and Exchange Commission. We are under no duty to update any of the forward-looking statements to conform such statements to actual results or events and do not intend to do so.

FTI CONSULTING, INC. CONDENSED CONSOLIDATED STATEMENTS OF INCOME FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2009 AND 2008 (in thousands, except per share data) ----------------------------------------------------- Nine Months Ended September 30, ------------------------ 2009 2008(1)(2) ---------- ----------- (unaudited) Revenues $1,057,008 $970,269 ---------- -------- Operating expenses Direct cost of revenues 579,797 537,703 Selling, general and administrative expense 262,571 241,989 Amortization of other intangible assets 18,370 13,019 ------ ------ 860,738 792,711 ------- ------- Operating income 196,270 177,558 ------- ------- Other income (expense) Interest income and other 6,085 7,536 Interest expense (33,477) (33,848) Litigation settlement gains (losses), net 250 (711) --- ---- (27,142) (27,023) ------- ------- Income before income tax provision 169,128 150,535 Income tax provision 62,675 59,778 ------ ------ Net income $106,453 $90,757 ======== ======= Earnings per common share - basic $2.11 $1.85 ===== ===== Weighted average common shares outstanding - basic 50,419 49,009 ====== ====== Earnings per common share - diluted $1.99 $1.69 ===== ===== Weighted average common shares outstanding - diluted 53,584 53,640 ====== ====== (1) As of January 1, 2009 we adopted FSP APB 14-1, "Accounting for Convertible Debt Instruments that May be Settled in Cash Upon Conversion (Including Partial Cash Settlement)" (FSP APB 14-1) which addresses the accounting for convertible debt instruments that may be settled in cash upon conversion. Our 3 3/4% Convertible Senior Notes due 2012 issued in August 2005 are subject to FSP APB 14-1. The adoption of FSP APB 14-1 requires retrospective application of its effects to all previous years. The adoption of FSP APB 14-1 resulted in a $3.0 million increase in interest expense, a $1.2 million decrease in income tax provision, a $1.8 million decrease in net income and a $0.04 decrease in basic and fully diluted earnings per share for the nine months ended September 30, 2008 as compared to the amounts previously reported. (2) These amounts are revised based upon our completion of an internal re-examination of our historical practices regarding our accounting for acquisition-related earnout payments. In connection with this re-examination, we concluded that we had reported immaterial errors in prior period financial statements. Further information related to these immaterial errors can be found in the Current Report on Form 8-K as filed by the Company with the Securities and Exchange Commission on August 10, 2009. This press release should be read in conjunction with such previously filed reports. The impact of the correction of these errors resulted in a decrease in net income of $1.7 million and a decrease in basic and fully diluted earnings per share of $0.03 for the nine months ended September 30, 2008. FTI CONSULTING, INC. CONDENSED CONSOLIDATED STATEMENTS OF INCOME FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2009 AND 2008 (in thousands, except per share data) ------------------------------------------------------- Three Months Ended September 30, ---------------------- 2009 2008(1)(2) -------- ------------ (unaudited) Revenues $348,637 $325,497 -------- -------- Operating expenses Direct cost of revenues 193,204 175,309 Selling, general and administrative expense 84,976 91,513 Amortization of other intangible assets 6,171 5,664 ----- ----- 284,351 272,486 ------- ------- Operating income 64,286 53,011 ------ ------ Other income (expense) Interest income and other 3,330 1,942 Interest expense (11,434) (10,942) Litigation settlement gains (losses), net - (275) --- ---- (8,104) (9,275) ------ ------ Income before income tax provision 56,182 43,736 Income tax provision 18,626 17,383 ------ ------ Net income $37,556 $26,353 ======= ======= Earnings per common share - basic $0.74 $0.53 ===== ===== Weighted average common shares outstanding - basic 50,696 49,541 ====== ====== Earnings per common share - diluted $0.70 $0.48 ===== ===== Weighted average common shares outstanding - diluted 53,896 54,460 ====== ====== (1) As of January 1, 2009 we adopted FSP APB 14-1, "Accounting for Convertible Debt Instruments that May be Settled in Cash Upon Conversion (Including Partial Cash Settlement)" (FSP APB 14-1) which addresses the accounting for convertible debt instruments that may be settled in cash upon conversion. Our 3 3/4% Convertible Senior Notes due 2012 issued in August 2005 are subject to FSP APB 14-1. The adoption of FSP APB 14-1 requires retrospective application of its effects to all previous years. The adoption of FSP APB 14-1 resulted in a $1.0 million increase in interest expense, a $0.4 million decrease in income tax provision, a $0.6 million decrease in net income and a $.02 decrease in basic and fully diluted earnings per share for the quarter ended September 30, 2008 as compared to the amounts previously reported. (2) These amounts are revised based upon our completion of an internal re-examination of our historical practices regarding our accounting for acquisition-related earnout payments. In connection with this re-examination, we concluded that we had reported immaterial errors in prior period financial statements. Further information related to these immaterial errors can be found in the Current Report on Form 8-K as filed by the Company with the Securities and Exchange Commission on August 10, 2009. This press release should be read in conjunction with such previously filed reports. The impact of the correction of these errors resulted in a decrease in net income of $0.6 million and a decrease in basic and fully diluted earnings per share of $0.01 for the three months ended September 30, 2008. FTI CONSULTING, INC. OPERATING RESULTS BY BUSINESS SEGMENT (Unaudited) ------------------------------------- Revenues EBITDA (1) Margin Utilization(3) -------- ---------- ------ -------------- (in thousands) ------------------- -------------------- Three Months Ended September 30, 2009 Corporate Finance/ Restructuring $127,808 $43,584 34.1% 68% Forensic and Litigation Consulting 65,040 14,867 22.9% 73% Strategic Communications 47,493 6,557 13.8% N/M Technology 48,708 15,230 31.3% N/M Economic Consulting 59,588 13,957 23.4% 73% ------ ------ $348,637 94,195 27.0% N/M ======== Corporate (16,324) ------- EBITDA (1) $77,871 22.3% ======= ------------------- Nine Months Ended September 30, 2009 Corporate Finance/ Restructuring $389,320 $131,750 33.8% 76% Forensic and Litigation Consulting 197,392 46,818 23.7% 74% Strategic Communications 134,814 18,232 13.5% N/M Technology 163,935 58,360 35.6% N/M Economic Consulting 171,547 34,621 20.2% 75% ------- ------ $1,057,008 289,781 27.4% N/M ========== Corporate (53,368) ------- EBITDA (1) $236,413 22.4% ======== ------------------- Three Months Ended September 30, 2008 Corporate Finance/ Restructuring $91,818 $25,463 27.7% 72% Forensic and Litigation Consulting 65,786 14,932 22.7% 68% Strategic Communications 56,099 12,405 22.1% N/M Technology 55,385 15,371 27.8% N/M Economic Consulting 56,409 15,751 27.9% 86% ------ ------ $325,497 83,922 25.8% N/M ======== Corporate (18,709) ------- EBITDA (1) (2) $65,213 20.0% ======= ------------------- Nine Months Ended September 30, 2008 Corporate Finance/ Restructuring $267,224 $76,997 28.8% 76% Forensic and Litigation Consulting 195,351 45,305 23.2% 72% Strategic Communications 172,910 39,674 22.9% N/M Technology 168,195 59,906 35.6% N/M Economic Consulting 166,589 43,054 25.8% 86% ------- ------ $970,269 264,936 27.3% N/M ======== Corporate (55,971) ------- EBITDA (1) (2) $208,965 21.5% ======== Average Revenue- Billable Generating Rate (3) Headcount -------- --------- ------------------- Three Months Ended September 30, 2009 Corporate Finance/ Restructuring $455 776 Forensic and Litigation Consulting $329 656 Strategic Communications N/M 547 Technology N/M 350 Economic Consulting $460 302 --- N/M 2,631 ===== Corporate EBITDA (1) ------------------- Nine Months Ended September 30, 2009 Corporate Finance/ Restructuring $436 776 Forensic and Litigation Consulting $337 656 Strategic Communications N/M 547 Technology N/M 350 Economic Consulting $457 302 --- N/M 2,631 ===== Corporate EBITDA (1) ------------------- Three Months Ended September 30, 2008 Corporate Finance/ Restructuring $439 646 Forensic and Litigation Consulting $332 668 Strategic Communications N/M 599 Technology N/M 357 Economic Consulting $444 253 --- N/M 2,523 ===== Corporate EBITDA (1) (2) ------------------- Nine Months Ended September 30, 2008 Corporate Finance/ Restructuring $433 646 Forensic and Litigation Consulting $332 668 Strategic Communications N/M 599 Technology N/M 357 Economic Consulting $447 253 --- N/M 2,523 ===== Corporate EBITDA (1) (2) (1) We define EBITDA as operating income before depreciation and amortization of intangible assets plus non-operating litigation settlements. Although EBITDA is not a measure of financial condition or performance determined in accordance with generally accepted accounting principles (GAAP), we believe that it can be a useful operating performance measure for evaluating our results of operations as compared from period to period and as compared to our competitors. EBITDA is a common alternative measure of operating performance used by investors, financial analysts and credit rating agencies to value and compare the financial performance of companies in our industry. We use EBITDA to evaluate and compare the operating performance of our segments and it is one of the primary measures used to determine employee bonuses. We also use EBITDA to value the businesses we acquire or anticipate acquiring. EBITDA is not defined in the same manner by all companies and may not be comparable to other similarly titled measures of other companies unless the definition is the same. This non-GAAP measure should be considered in addition to, but not as a substitute for or superior to, the information contained in our statements of income. See also our reconciliation of Non-GAAP financial measures. (2) These amounts are revised based upon our completion of an internal re-examination of our historical practices regarding our accounting for acquisition-related earnout payments. In connection with this re-examination, we concluded that we had reported immaterial errors in prior period financial statements. Further information related to these immaterial errors can be found in the Current Report on Form 8-K as filed by the Company with the Securities and Exchange Commission on August 10, 2009. This press release should be read in conjunction with such previously filed reports. (3) The majority of the Technology and Strategic Communications segments' revenues are not generated on an hourly basis. Accordingly, utilization and average billable rate metrics are not presented as they are not meaningful. Utilization where presented is based on a 2,032 hour year. RECONCILIATION OF OPERATING INCOME AND NET INCOME TO EARNINGS BEFORE INTEREST, TAXES, DEPRECIATION AND AMORTIZATION (Unaudited) -------------------------------------------------------------------- Corporate Forensic and Strategic Finance / Litigation Communi- Restructuring Consulting cations Technology ------------- ------------ ---------- ---------- Three Months Ended September 30, 2009 Net income Interest income and other Interest expense Litigation settlement losses Income tax provision Operating income $41,058 $13,656 $4,267 $10,179 Depreciation 934 582 949 2,993 Amortization of other intangible assets 1,592 629 1,341 2,058 Litigation settlement gains - - - - --- --- --- --- EBITDA (1) 43,584 14,867 6,557 15,230 ====== ====== ===== ====== Nine Months Ended September 30, 2009 Net income Interest income and other Interest expense Litigation settlement losses Income tax provision Operating income $124,475 $43,164 $11,885 $43,290 Depreciation 2,513 1,728 2,499 8,884 Amortization of other intangible assets 4,762 1,926 3,848 6,186 Litigation settlement gains - - - - --- --- --- --- EBITDA (1) 131,750 46,818 18,232 58,360 ======= ====== ====== ====== Three Months Ended September 30, 2008(2)(3) Net income Interest income and other Interest expense Litigation settlement losses Income tax provision Operating income $23,904 $13,521 $10,163 $10,519 Depreciation 693 621 955 2,752 Amortization of other intangible assets 866 790 1,337 2,100 Litigation settlement losses - - (50) - --- --- --- --- EBITDA (1) 25,463 14,932 12,405 15,371 ====== ====== ====== ====== Nine Months Ended September 30, 2008(2)(3) Net income (loss) Interest income and other Interest expense Litigation settlement losses Income tax provision Operating income $72,745 $41,318 $33,703 $49,656 Depreciation 1,880 1,885 2,313 7,560 Amortization of other intangible assets 2,372 2,102 3,909 2,925 Litigation settlement losses - - (251) (235) --- --- ---- ---- EBITDA (1) 76,997 45,305 39,674 59,906 ====== ====== ====== ====== Economic Consulting Corp HQ Total ---------- ------- ----- Three Months Ended September 30, 2009 Net income $37,556 Interest income and other (3,330) Interest expense 11,434 Litigation settlement losses - Income tax provision 18,626 ------ Operating income $12,925 $(17,799) 64,286 Depreciation 481 1,475 7,414 Amortization of other intangible assets 551 - 6,171 Litigation settlement gains - - - --- --- --- EBITDA (1) 13,957 (16,324) 77,871 ====== ======= ====== Nine Months Ended September 30, 2009 Net income $106,453 Interest income and other (6,085) Interest expense 33,477 Litigation settlement losses (250) Income tax provision 62,675 ------ Operating income $31,665 $(58,209) 196,270 Depreciation 1,308 4,591 21,523 Amortization of other intangible assets 1,648 - 18,370 Litigation settlement gains - 250 250 --- --- --- EBITDA (1) 34,621 (53,368) 236,413 ====== ======= ======= Three Months Ended September 30, 2008(2)(3) Net income $26,353 Interest income and other (1,942) Interest expense 10,942 Litigation settlement losses 275 Income tax provision 17,383 ------ Operating income $14,798 $(19,894) 53,011 Depreciation 382 1,410 6,813 Amortization of other intangible assets 571 - 5,664 Litigation settlement losses - (225) (275) --- ---- ---- EBITDA (1) 15,751 (18,709) 65,213 ====== ======= ====== Nine Months Ended September 30, 2008(2)(3) Net income (loss) $90,757 Interest income and other (7,536) Interest expense 33,848 Litigation settlement losses 711 Income tax provision 59,778 ------ Operating income $40,096 $(59,960) 177,558 Depreciation 1,247 4,214 19,099 Amortization of other intangible assets 1,711 - 13,019 Litigation settlement losses - (225) (711) --- ---- ---- EBITDA (1) 43,054 (55,971) 208,965 ====== ======= ======= (1) We define EBITDA as operating income before depreciation and amortization of intangible assets plus non-operating litigation settlements. Although EBITDA is not a measure of financial condition or performance determined in accordance with generally accepted accounting principles (GAAP), we believe that it can be a useful operating performance measure for evaluating our results of operations as compared from period to period and as compared to our competitors. EBITDA is a common alternative measure of operating performance used by investors, financial analysts and credit rating agencies to value and compare the financial performance of companies in our industry. We use EBITDA to evaluate and compare the operating performance of our segments and it is one of the primary measures used to determine employee bonuses. We also use EBITDA to value the businesses we acquire or anticipate acquiring. EBITDA is not defined in the same manner by all companies and may not be comparable to other similarly titled measures of other companies unless the definition is the same. This non-GAAP measure should be considered in addition to, but not as a substitute for or superior to, the information contained in our statements of income. (2) As of January 1, 2009 we adopted FSP No. APB 14-1, "Accounting for Convertible Debt Instruments that May be Settled in Cash upon Conversion (Including Partial Cash Settlement)" (FSP APB 14-1) which addresses the accounting for convertible debt that may be settled in cash upon conversion. Our 3 3/4% Convertible Senior Subordinated Notes due 2012 issued in August 2005 are subject to FSP APB 14-1. The adoption of FSP APB 14-1 requires retrospective application of its effects to all previous years. The adoption of FSP APB 14-1 resulted in a $1.0 million increase in interest expense, a $0.4 million decrease in income tax provision, and a $0.6 million decrease in net income for the quarter ended September 30, 2008 as compared to the amounts previously reported. For the nine months ended September 30, 2008, the adoption of FSP APB 14-1 resulted in a $3.0 million increase in interest expense, a $1.2 million decrease in income tax provision, and a $1.8 million decrease in net income as compared to the amounts previously reported. (3) These amounts are revised based upon our completion of an internal re-examination of our historical practices regarding our accounting for acquisition-related earnout payments. In connection with this re-examination, we concluded that we had reported immaterial errors in prior period financial statements. Further information related to these immaterial errors can be found in the Current Report on Form 8-K as filed by the Company with the Securities and Exchange Commission on August 10, 2009. This press release should be read in conjunction with such previously filed reports. FTI CONSULTING, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2009 AND 2008 (in thousands) ----------------------------------------------------- Nine Months Ended September 30, ---------------------- 2009 2008(1)(2) -------- ------------ (unaudited) Operating activities Net income $106,453 $90,757 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation 21,523 19,099 Amortization of other intangible assets 18,370 13,019 Provision for doubtful accounts 15,040 13,107 Non-cash share-based compensation 18,439 21,392 Excess tax benefits from share-based compensation (3,647) (5,653) Non-cash interest expense 5,449 5,311 Other (1,801) 3,022 Changes in operating assets and liabilities, net of effects from acquisitions: Accounts receivable, billed and unbilled (30,120) (81,898) Notes receivable (19,638) (6,322) Prepaid expenses and other assets 3,451 (8,319) Accounts payable, accrued expenses and other (16,218) (4,382) Income taxes 30,761 20,812 Accrued compensation 18,017 25,224 Billings in excess of services provided (2,535) 1,279 ------ ----- Net cash provided by operating activities 163,544 106,448 ------- ------- Investing activities Payments for acquisition of businesses, including contingent payments and acquisition costs, net of cash received (38,152) (313,402) Purchases of property and equipment (17,975) (24,385) Purchases of short-term investments (35,717) - Other 303 991 --- --- Net cash (used in) investing activities (91,541) (336,796) ------- -------- Financing activities Payments of short-term borrowings of acquired subsidiary - (2,275) Payments of long-term debt and capital lease obligations (13,459) (7,511) Cash received for settlement of interest rate swaps 2,288 - Net issuance of common stock under equity compensation plans 15,671 22,476 Excess tax benefit from share based compensation 3,647 5,653 Other (4) (171) -- ---- Net cash provided by financing activities 8,143 18,172 ----- ------ Effect of exchange rate changes and fair value adjustments on cash and cash equivalents 5,981 (2,110) ----- ------ Net increase (decrease) in cash and cash equivalents 86,127 (214,286) Cash and cash equivalents, beginning of period 191,842 360,463 ------- ------- Cash and cash equivalents, end of period $277,969 $146,177 ======== ======== (1) As of January 1, 2009 we adopted FSP APB 14-1, "Accounting for Convertible Debt Instruments that May be Settled in Cash Upon Conversion (Including Partial Cash Settlement)" (FSP APB 14-1) which addresses the accounting for convertible debt instruments that may be settled in cash upon conversion. Our 3 3/4% Convertible Senior Notes due 2012 issued in August 2005 are subject to FSP APB 14-1. The adoption of FSP APB 14-1 requires retrospective application of its effects to all previous years. (2) These amounts are revised based upon our completion of an internal re-examination of our historical practices regarding our accounting for acquisition-related earnout payments. In connection with this re-examination, we concluded that we had reported immaterial errors in prior period financial statements. Further information related to these immaterial errors can be found in the Current Report on Form 8-K as filed by the Company with the Securities and Exchange Commission on August 10, 2009. This press release should be read in conjunction with such previously filed reports. FTI CONSULTING, INC. CONDENSED CONSOLIDATED BALANCE SHEETS AS OF SEPTEMBER 30, 2009 AND DECEMBER 31, 2008 (in thousands, except per share amounts) ----------------------------------------------- September 30, December 31, 2009 2008(1)(2) ------------- ------------ Assets (unaudited) Current assets Cash and cash equivalents $277,969 $191,842 Short term investments 35,655 - Accounts receivable: Billed receivables 254,601 237,009 Unbilled receivables 119,172 98,340 Allowance for doubtful accounts and unbilled services (63,590) (45,309) ------- ------- Accounts receivable, net 310,183 290,040 Notes receivable 20,472 15,145 Prepaid expenses and other current assets 28,376 34,989 Deferred income taxes 24,742 24,372 ------ ------ Total current assets 697,397 556,388 Property and equipment, net of accumulated depreciation 74,792 78,575 Goodwill 1,173,552 1,143,461 Other intangible assets, net of amortization 180,597 189,304 Notes receivable, net of current portion 71,093 56,500 Other assets 54,348 59,349 ------ ------ Total assets $2,251,779 $2,083,577 ========== ========== Liabilities and Stockholders' Equity Current liabilities Accounts payable, accrued expenses and other $60,026 $108,905 Accrued compensation 149,409 135,922 Current portion of long-term debt and capital lease obligations 137,613 132,915 Billings in excess of services provided 28,635 30,872 ------ ------ Total current liabilities 375,683 408,614 Long-term debt and capital lease obligations, net of current portion 417,532 418,592 Deferred income taxes 98,255 83,777 Other liabilities 48,970 45,037 ------ ------ Total liabilities 940,440 956,020 Stockholders' equity Preferred stock, $0.01 par value; 5,000 shares authorized, none outstanding - - Common stock, $0.01 par value; 75,000 shares authorized; 75,000 shares issued and outstanding - 51,815 (2009) and 50,903 (2008) 518 509 Additional paid-in capital 776,870 733,520 Retained earnings 578,956 472,503 Accumulated other comprehensive income (45,005) (78,975) ------- ------- Total stockholders' equity 1,311,339 1,127,557 --------- --------- Total liabilities and stockholders' equity $2,251,779 $2,083,577 ========== ========== (1) As of January 1, 2009 we adopted FSP APB 14-1, "Accounting for Convertible Debt Instruments that May be Settled in Cash Upon Conversion (Including Partial Cash Settlement)" (FSP APB 14-1) which addresses the accounting for convertible debt instruments that may be settled in cash upon conversion. Our 3 3/4% Convertible Senior Notes due 2012 issued in August 2005 are subject to FSP APB 14-1. The adoption of FSP APB 14-1 requires retrospective application of its effects to all previous years. The adoption of this FSP resulted in a $0.6 million decrease in other assets, a $18.0 decrease in the current portion of long-term debt, a $7.0 million increase in deferred income taxes, an $18.0 million increase in additional paid in capital and a $7.6 million decrease in retained earnings from the amounts previously reported at December 31, 2008. (2) These amounts are revised based upon our completion of an internal re-examination of our historical practices regarding our accounting for acquisition-related earnout payments. In connection with this re-examination, we concluded that we had reported immaterial errors in prior period financial statements. Further information related to these immaterial errors can be found in the Current Report on Form 8-K as filed by the Company with the Securities and Exchange Commission on August 10, 2009. This press release should be read in conjunction with such previously filed reports.

FTI Consulting, Inc.

CONTACT: Jack Dunn, President & CEO, FTI Consulting, +1-561-515-1900;
Investors, Gordon McCoun, or Media, Andy Maas, both of FD, +1-212-850-5600

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

Image Sensing Systems Announces Third Quarter Financial Results

SAINT PAUL, Minn., Nov. 4 /PRNewswire-FirstCall/ -- Image Sensing Systems, Inc. , announced today the results for its third quarter ended September 30, 2009.

(Logo: http://www.newscom.com/cgi-bin/prnh/20050512/CGISSLOGO)

Net income for the quarter ended September 30, 2009 was $1.6 million ($0.38 per diluted share) compared to $1.2 million ($0.29 per diluted share) for the same period in 2008. Net income for the first nine months of 2009 was $3.0 million ($0.74 per diluted share) compared to $3.4 million ($0.86 per diluted share) for the same period in 2008. Net income for the quarter ended September 30, 2009 was positively impacted by the recognition of tax credits in a foreign jurisdiction whose status was uncertain prior to the quarter. The earnings impact related to the credits was approximately $0.06 per diluted share.

Revenue for the third quarter was $6.8 million compared to $6.1 million for the same period a year ago, while revenue for the first nine months of 2009 was $17.9 million compared to $18.7 million for the same period a year ago. Royalties for the third quarter were $3.4 million compared to $3.7 million for the same period a year ago and were $9.1 million in the first nine months of 2009 as compared to $10.0 million in the first nine months of 2008. North American sales, which are sales of RTMS® in North America, were $1.7 million for the third quarter compared to $920,000 for the same period of 2008 and were $4.7 million for the first nine months of 2009 as compared to $4.5 million in the first nine months of 2008. International sales, which include both Autoscope® and RTMS sales outside of North America, were $1.8 million in the third quarter as compared to $1.4 million in the same period in 2008, and $4.1 million in the first nine months of 2009 as compared to $4.2 million in the same period of 2008. Sales of RTMS world-wide for the quarter were $2.4 million as compared to $1.2 million in the third quarter of 2008.

On a non-GAAP basis, excluding intangible asset amortization net of tax and the foreign tax credits, net income for the third quarter was $1.5 million ($0.36 per diluted share) and for the first nine months was $3.1 million ($0.77 per diluted share).

Ken Aubrey, CEO, said, "Our Q3 results reflect a continued difficult selling environment brought on by the economic downturn that was partially countered by tight expense control and the favorable foreign jurisdiction tax credit outcome. Our international business continues to be under pressure from what we see as lingering recessionary effects. Our domestic business, however, has shown two quarters of stabilization and we're pleased with the progress of our RTMS operations.

"We are pressing forward on our manufacturing cost reduction initiatives and hybrid product developments with the ongoing intention to be better positioned than our competitors when the world's economies improve."

Non-GAAP Information

We provide certain non-GAAP financial information as supplemental information to GAAP amounts. This non-GAAP information excludes the impact, net of tax, of amortizing the intangible assets from the EIS asset purchase and may include other non-recurring items. Management believes that this presentation facilitates the comparison of our current operating results to historical operating results. Management uses this non-GAAP information to evaluate short-term and long-term operating trends in our core operations. Non-GAAP information is not prepared in accordance with GAAP and should not be considered a substitute for or an alternative to GAAP financial measures and may not be computed the same as similarly titled measures used by other companies.

About Image Sensing

Image Sensing Systems, Inc. is a technology company focused in infrastructure productivity improvement through the development of software-based detection solutions for the Intelligent Transportation Systems (ITS) sector and adjacent overlapping markets. ISS' industry leading computer-enabled detection (CED) products, including the Autoscope® machine-vision family and the RTMS® radar family, combine embedded software signal processing with sophisticated sensing technologies for use in transportation, environmental and safety/surveillance management. CED is a group of technologies in which software, rather than humans, examines the outputs of complex sensors to determine what is happening in the field of view in real-time. With more than 100,000 instances sold in over 60 countries worldwide, our depth of experience coupled with breadth of product portfolio uniquely positions us to provide powerful hybrid technology solutions and to exploit the convergence of the traffic, security and environmental management markets. We are headquartered in St. Paul, Minnesota. Visit us on the web at imagesensing.com.

Safe Harbor Statement: Statements made in this release concerning the Company's or management's intentions, expectations, or predictions about future results or events are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements reflect management's current expectations or beliefs, and are subject to risks and uncertainties that could cause actual results or events to vary from stated expectations, which variations could be material and adverse. Factors that could produce such a variation include, but are not limited to, the following: the inherent unreliability of earnings, revenue and cash flow predictions due to numerous factors, many of which are beyond the Company's control; developments in the demand for the Company's products and services; relationships with the Company's major customers and suppliers; unanticipated delays, costs and expenses inherent in the development and marketing of new products and services; the impact of governmental laws and regulations; and competitive factors. Our forward-looking statements speak only as of the time made, and, except as may be required by law, we assume no obligation to publicly update any such statements. Additional information concerning these and other factors that could cause actual results and events to differ materially from the Company's current expectations are contained in the Company's reports and other documents filed with the Securities and Exchange Commission, including its Form 10-K for the year ended December 31, 2008 as updated by Form 10-Q filings made in 2009.

Image Sensing Systems, Inc. Condensed Consolidated Statements of Income (in thousands, except per share information) (unaudited) Three-Month Nine-Month Period Ended Period Ended September 30, September 30, --------------- -------------- 2009 2008 2009 2008 ---- ---- ---- ---- Revenue Royalties $3,389 $3,742 $9,068 $10,007 North American sales 1,679 920 4,729 4,468 International sales 1,755 1,420 4,096 4,221 ----- ----- ----- ----- 6,823 6,082 17,893 18,696 Cost of revenue 1,269 860 2,947 3,468 ----- --- ----- ----- Gross profit 5,554 5,222 14,946 15,228 Operating expenses Selling, marketing and product support 1,721 1,695 5,272 4,688 General and administrative 796 980 2,574 2,883 Research and development 868 701 2,541 2,167 Amortization of intangible assets 192 192 576 576 --- --- --- --- 3,577 3,568 10,963 10,314 ----- ----- ------ ------ Income from operations 1,977 1,654 3,983 4,914 Other income (expense), net 9 (6) 18 58 -- -- -- -- Income before income taxes 1,986 1,648 4,001 4,972 Income taxes 426 486 1,010 1,539 --- --- ----- ----- Net income $1,560 $1,162 $2,991 $3,433 ====== ====== ====== ====== Basic net income per share $0.39 $0.29 $0.75 $0.87 Diluted net income per share $0.38 $0.29 $0.74 $0.86 Weighted shares - basic 3,986 3,942 3,985 3,933 Weighted shares - diluted 4,073 4,005 4,065 4,010 Reconciliation of GAAP to non-GAAP basis Non-GAAP operating expenses (1,2) 3,385 3,155 10,387 9,517 ----- ----- ------ ----- Non-GAAP income from operations 2,169 2,067 4,559 5,711 Other income (expense), net 9 (6) 18 58 -- -- -- -- Non-GAAP income before income taxes 2,178 2,061 4,577 5,769 Non-GAAP income taxes(3) 727 626 1,442 1,810 --- --- ----- ----- Non-GAAP net income $1,451 $1,435 $3,135 $3,959 ====== ====== ====== ====== Non-GAAP basic net income per share $0.36 $0.36 $0.79 $1.01 Non-GAAP diluted net income per share $0.36 $0.36 $0.77 $0.99 Notes to non-GAAP adjustments ----------------------------- (1) Amortization of intangible asset for period as shown above is removed (2) Withdrawn offering expense of $221 is removed in 2008 (3) Income taxes are increased by impact of (1,2) at ISS' marginal tax rate of 34% and in 2009 by $236 for foreign tax credits Image Sensing Systems, Inc. Condensed Consolidated Balance Sheet (in thousands) (unaudited) September 30, December 31, 2009 2008 ---- ---- Assets Current assets Cash and cash equivalents $7,861 $10,289 Investments 3,940 4,000 Receivables, net 6,498 6,620 Inventories 2,862 1,608 Prepaid expenses and deferred taxes 1,147 752 ----- --- 22,308 23,269 Property and equipment, net 869 728 Deferred income taxes 1,575 1,575 Goodwill and intangible assets, net 9,989 10,536 ----- ------ $34,741 $36,108 ======= ======= Liabilities and Shareholders' Equity Current liabilities Accounts payable and accrued expenses $2,278 $2,135 Bank debt - 3,750 EIS earnout payable - 1,164 Income taxes payable 667 283 --- --- 2,945 7,332 Income taxes payable 204 246 Shareholders' equity 31,592 28,530 ------ ------ $34,741 $36,108 ======= ======= Image Sensing Systems, Inc. Condensed Consolidated Statement of Cash Flows (in thousands) (unaudited) Nine-Month Period Ended September 30, ------------- 2009 2008 ---- ---- Operating activities Net income $2,991 $3,433 Adjustments to reconcile net income to net cash provided by operations Depreciation and amortization 906 863 Stock option expense 266 246 Changes in operating assets and liabilities (1,217) (1,215) ------ ------ Net cash provided by operating activities 2,946 3,327 Investing activities Purchases of property and equipment, net of disposals (496) (239) Payment of EIS earnout (1,192) - Sales (purchases) of investments 60 (5,400) -- ------ Net cash used in investing activities (1,628) (5,639) Financing activities Proceeds from exercise of stock options 4 109 Repayment of bank debt (3,750) (1,000) ------ ------ Net cash used in financing activities (3,746) (891) ------ ---- Decrease in cash and cash equivalents (2,428) (3,203) Cash and cash equivalents, beginning of period 10,289 10,876 ------ ------ Cash and cash equivalents, end of period $7,861 $7,673 ====== ======

Photo: http://www.newscom.com/cgi-bin/prnh/20050512/CGISSLOGO
http://photoarchive.ap.org/
PRN Photo Desk photodesk@prnewswire.com Image Sensing Systems, Inc.

CONTACT: Greg Smith, Chief Financial Officer of Image Sensing Systems,
Inc., +1-651-603-7700

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

Gaiam Reports Third Quarter Fiscal 2009 ResultsThird quarter revenue increases 23% to $74.4 million Year-to-date free cash flow increases to $17.2 million

BOULDER, Colo., Nov. 4 /PRNewswire-FirstCall/ -- Gaiam, Inc. , a lifestyle media company, announced today results for its third quarter ended September 30, 2009. Gaiam will host a conference call today, November 4, 2009, at 2:30 p.m. MST (4:30 p.m. EST) to review the results.

Dial-in No.: (800) 619-0355 (domestic) or (212) 547-0278 (international) Passcode: GAIAM

Revenue for the third quarter ended September 30, 2009 increased 23.5% to $74.4 million from $60.3 million recorded in the same period last year. The increase in sales was primarily due to the solar division, and to our trade business which grew 24.2% in the quarter, partially offset by the planned reduction in catalog circulation.

Gross profit increased to $35.8 million, or 48.1% of revenue, for the third quarter of 2009, from $33.8 million, or 56.1% of revenue, in the comparable quarter last year. The change in gross margin as a percentage of revenue reflects the growth of the lower margin solar business and the implementation of media category management at retail.

Selling and operating expenses decreased to $31.6 million or 42.5% of revenue during the third quarter of 2009, from $34.0 million or 56.5% of revenue during the same quarter last year, reflecting the significant cost saving measures, including reducing payroll costs, optimizing the direct business through reduced catalog prospecting and closing non-profitable businesses.

Operating income for the quarter increased to $945,000 from a loss of $17.3 million during the same quarter of the last year. Gaiam's prior year results included a $13.9 million pre-tax impairment charge related to the Company's acquired media libraries, website development costs and related assets.

In the third quarter of 2009, Gaiam generated free cash flow of $1.8 million, an $11.3 million improvement from the free cash flow use of $9.5 million during the same quarter of the prior year. For the first nine months of the year, Gaiam's free cash flow increased to $17.2 million, a $35.6 million improvement from the use of $18.4 million in cash during the same period last year.

For the first nine months of 2009, the Company generated $20.9 million in cash from operations and ended the quarter with $44.4 million in cash, up $12.5 million from the end of 2008, and up $1.7 million for the quarter. The Company's current ratio remained strong at 3.4.

"We believe we have turned the corner with respect to our performance. By focusing on our core growth strategies and cost savings, our operating performance improved in each of our business segments and we returned to profitability. It was an especially strong quarter for our trade business, where we reported over 24% growth in sales to retailers compared to the same quarter last year. We also leveraged our partnerships, releasing the first of many-to-come Discovery titles in the non-theatrical segment, and expanded our media category management in the fitness segment," said Lynn Powers, CEO and President. "We are seeing fourth quarter retail orders continue to improve and believe that we are well positioned from a product and inventory standpoint as we move into the important holiday season."

"We are pleased with the return to profitability and $17.2 million of free cash flow year-to-date. The positive trends experienced in the third quarter have continued and we expect to return to double-digit internal revenue growth, in-line with our historical rates, in the fourth quarter. Looking to 2010, we believe that our revenue momentum, new media relationships and strong balance sheet position us well to drive top and bottom line growth as well as growth in our market share in non-theatrical media," said Jirka Rysavy, Chairman.

A replay of the call will begin approximately one hour after the end of the call and will continue until 11:00 p.m. CST on November 11, 2009.

Replay number: (203) 369-3171

For more information about Gaiam, please visit http://www.gaiam.com/, or call 1-800-869-3603.

This press release includes forward-looking statements relating to matters that are not historical facts. Forward-looking statements may be identified by the use of words such as "expect," "intend," "believe," "will," "should" or comparable terminology or by discussions of strategy. While Gaiam believes its assumptions and expectations underlying forward-looking statements are reasonable, there can be no assurance that actual results will not be materially different. Risks and uncertainties that could cause materially different results include, among others, introduction of new products and services, completion and integration of acquisitions, the possibility of negative economic conditions, and other risks and uncertainties included in Gaiam's filings with the Securities and Exchange Commission. Gaiam assumes no duty to update any forward-looking statements.

GAIAM, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (In thousands, except per share data) Three Months Ended Three Months Ended September 30, 2009 September 30, 2008 ------------------ ------------------ Net revenue $74,439 100.0 % $60,285 100.0 % Cost of goods sold 38,628 51.9 % 26,440 43.9 % ------ ------ Gross profit 35,811 48.1 % 33,845 56.1 % Selling and operating 31,641 42.5 % 34,049 56.5 % Corporate, general and administration 3,225 4.3 % 3,126 5.2 % Other expenses, net - 0.0 % 13,947 23.1 % --- ------ Income (loss) from operations 945 1.3 % (17,277) -28.7 % Interest and other income 86 0.1 % 355 0.6 % -- --- Income (loss) before income taxes 1,031 1.4 % (16,922) -28.1 % Income tax expense (benefit) 388 0.5 % (6,922) -11.5 % --- ------ Net income (loss) 643 0.9 % (10,000) -16.6 % Net (income) attributable to the noncontrolling interest (278) -0.4 % (115) -0.2 % ---- ---- Net income (loss) attributable to Gaiam, Inc $365 0.5 % $(10,115) -16.8 % ==== ======== Weighted-average shares outstanding: Basic 23,085 24,020 Diluted 23,167 24,020 Net income (loss) per share attributable to Gaiam, Inc. common shareholders: Basic $0.02 $(0.42) Diluted $0.02 $(0.42) GAIAM, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (In thousands, except per share data) Nine Months Ended Nine Months Ended September 30, 2009 September 30, 2008 ------------------ ------------------ Net revenue $190,837 100.0 % $182,675 100.0 % Cost of goods sold 92,594 48.5 % 71,699 39.2 % ------ ------ Gross profit 98,243 51.5 % 110,976 60.8 % Selling and operating 96,269 50.5 % 102,686 56.2 % Corporate, general and administration 9,431 4.9 % 9,601 5.3 % Other expenses, net - 0.0 % 40,655 22.2 % --- ------ Loss from operations (7,457) -3.9 % (41,966) -22.9 % Interest and other income 221 0.1 % 32,363 17.7 % --- ------ Loss before income taxes (7,236) -3.8 % (9,603) -5.2 % Income tax benefit (2,699) -1.4 % (4,031) -2.2 % ------ ------ Net loss (4,537) -2.4 % (5,572) -3.0 % Net loss attributable to the noncontrolling interest 803 0.4 % 251 0.1 % --- --- Net loss attributable to Gaiam, Inc. $(3,734) -2.0 % $(5,321) -2.9 % ======= ======= Weighted-average shares outstanding: Basic 23,370 24,611 Diluted 23,370 24,611 Net loss per share attributable to Gaiam, Inc. common shareholders: Basic $(0.16) $(0.22) Diluted $(0.16) $(0.22) GAIAM, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (In thousands) September 30, December 31, 2009 2008 ------------- ------------ Assets Current assets: Cash and cash equivalents $44,437 $31,965 Accounts receivable, net 31,383 33,664 Inventory, net 26,011 40,782 Deferred advertising costs 3,496 2,578 Receivable and deferred tax assets 14,090 15,448 Other current assets 4,528 4,795 ----- ----- Total current assets 123,945 129,232 Property and equipment, net 28,341 27,381 Media library, net 12,541 12,102 Deferred tax assets, net 7,184 6,076 Goodwill 24,166 23,180 Other intangibles, net 714 880 Notes receivable and other assets 3,193 3,247 ----- ----- Total assets $200,084 $202,098 ======== ======== Liabilities and Equity Current liabilities: Accounts payable $28,650 $26,567 Accrued liabilities 7,948 6,885 ----- ----- Total current liabilities 36,598 33,452 Total equity 163,486 168,646 Total liabilities and equity $200,084 $202,098 ======== ========

Gaiam, Inc.

CONTACT: Carole Buyers, VP Corporate Finance and Investor Relations of
Gaiam, Inc., +1-303-222-3808, carole.buyers@gaiam.com; or John Mills, Senior
Managing Director, ICR, +1-310-954-1105, jmills@icrinc.com, for Gaiam, Inc.

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

Digital Ally Reports Third Quarter Operating ResultsCOMPANY GENERATES NET INCOME AND EXPECTS STRONG FOURTH QUARTER

OVERLAND PARK, Kan., Nov. 4 /PRNewswire-FirstCall/ -- Digital Ally, Inc. , which develops, manufactures and markets advanced video surveillance products for law enforcement, homeland security and commercial security applications, today announced its operating results for the third quarter and first nine months of 2009. An investor conference call is scheduled for 11:00 a.m. EST tomorrow, November 5, 2009 (see details below).

"Although we did not ship any large international orders, I am pleased to report that the Company generated net income in the three months ended September 30, 2009," stated Stanton E. Ross, Chief Executive Officer of the Company. "Gross profit margins recovered to 58.3%, versus 50.0% in the second quarter and 42.3% in the first quarter of 2009, and we realized positive results from our cost control initiative to reduce overall selling general and administrative expenses. Third quarter revenues trailed the levels achieved in the prior-year quarter and the second quarter of 2009, primarily due to the absence of significant international sales, which can fluctuate quite substantially from quarter to quarter. During the third quarter of last year, international sales exceeded $3.1 million, whereas such sales totaled less than $300,000 in the quarter ended September 30, 2009."

"We also experienced a reduction in average order size in the most recent quarter, which we believe reflects the budgetary constraints that are impacting most law enforcement agencies in the current challenging economic environment. However, we received and shipped eight $100,000-plus domestic orders, totaling $1.3 million, during the third quarter, suggesting that Digital Ally is making inroads with larger law enforcement departments with its new DVM-750 system. Production rates for our new DVM-750, DVM-500 Ultra and DVM-500 Plus in-car video systems improved throughout the third quarter, reaching planned production rates of 60 to 70 units per day in September 2009."

For the three months ended September 30, 2009, the Company reported revenue of approximately $5.7 million, compared with revenue of approximately $8.5 million in the third quarter of 2008. International revenues decreased to $270,491 in the third quarter of 2009, compared with approximately $3.2 million (including a single order valued at $2.2 million) in the quarter ended September 30, 2008. International orders are often larger in size than typical domestic orders, and the timing of the receipt and shipment of such orders can have a significant impact upon Digital Ally's sales in particular quarters. Net income for the quarter ended September 30, 2009 totaled $81,402, or $0.01 per diluted share, compared with net income of $873,609, or $0.05 per diluted share, in the prior-year quarter, and net losses in the three quarters preceding the most recent quarter.

Gross profits declined to $3,334,989 in the third quarter of 2009, compared with gross profits of $5,167,824 in the prior-year period. Gross profit margins approximated 58.3% of revenues in the most recent quarter, versus 61.1% in the third quarter of 2008, 50.0% in the second quarter of 2009 and 42.3% in the first quarter of 2009. The decrease in third quarter gross profit margins, when compared with the prior-year quarter, was primarily due to product conversion costs and inefficiencies related to the introduction of new products during 2009. However, the Company experienced a significant improvement in gross margins during the third quarter of 2009, when compared with the second and first quarters of 2009. This was attributable to the successful introduction of, and production efficiencies realized from, the new products as the year has progressed. As noted earlier, production rates for the new models steadily improved throughout the quarter ended September 30, 2009, and the Company expects such production rates to improve further during the fourth quarter. Management also expects gross profit margins to continue to improve in the quarter ending December 31, 2009.

Selling, General and Administrative ("SG&A") expenses declined 15% to $3,212,553 (56.2% of sales) in the third quarter of 2009, compared with $3,798,436 (44.9% of sales) in the year-earlier quarter. The majority of this decrease was attributable to lower sales commissions resulting from a decline in sales, along with lower research and development costs, a reduction in stock compensation expense, and the inclusion of $278,172 in vendor settlements and credits. The Company has implemented overhead cost containment initiatives during 2009 that positively impacted operating results during the third quarter 2009.

For the three months ended September 30, 2009, the Company reported operating income of $122,436, compared with $1,369,388 in the third quarter of 2008.

The Company reported pretax income of $131,402 in the quarter ended September 30, 2009, versus pretax income of $1,391,609 in the quarter ended September 30, 2008. After an income tax provision of $50,000, the Company reported net income of $81,402 in the third quarter of 2009. This compared with net income of $873,609, after income tax expense of $518,000, in the third quarter of 2008.

Basic and diluted earnings per share of $0.01 in the most recent quarter compared with basic earnings per share of $0.06 and diluted earnings per share of $0.05 in the prior-year quarter.

On a non-GAAP basis, the Company reported adjusted net income (before income taxes, depreciation, amortization and stock-based compensation), a non-GAAP financial measure, of $643,842, or $0.04 per diluted share, in the quarter ended September 30, 2009, versus adjusted net income of $2,083,370, or $0.16 per diluted share, in the quarter ended September 30, 2008. (Non-GAAP adjusted net income is described in greater detail in a table at the end of this news release).

"We expect production rates and gross profit margins to continue to improve during the fourth quarter, as we put behind us the start-up costs and inefficiencies associated with the delayed introduction of new products during the first nine months of the year," Ross said. "Based upon domestic orders already received or in the pipeline, including $1.6 million in backorders on our books at the end of September, higher gross margins, and the shipment of a previously announced $3 million-plus order to the Turkish Police Department, we expect that our fourth quarter will represent a strong finish to the current year."

"In light of the encouraging reception among law enforcement personnel of our new FirstVu wearable body camera and the DV-500 Ultra motorcycle and watercraft video system at the recent International Association of Chiefs of Police Conference in Denver, and with additional new product introductions planned for coming months, we are optimistic that 2010 should be an exciting year for the Company," concluded Ross.

For the nine months ended September 30, 2009, the Company reported revenue of approximately $17.1 million, compared with revenue of approximately $25.9 million in the first nine months of 2008. Gross profits declined to $8,705,134 in the nine months ended September 30, 2009, versus $16,026,314 in the corresponding period of the previous year. An operating loss of ($2,130,834) was recorded in the first nine months of 2009, compared with operating income of $6,144,158 in the year-earlier period. The Company reported a pretax loss of ($2,103,745) in the nine months ended September 30, 2009, versus pretax income of $6,215,676 in the first nine months of 2008. After an income tax benefit of $720,000, the Company reported a net loss of ($1,383,745) in the first nine months of 2009, versus net income (after income tax expense of $2,253,000) of $3,962,676 in the nine months ended September 30, 2008.

The Company recorded a net loss per share of $0.01 in the first nine months of 2009 compared with basic earnings per share of $0.26 and diluted earnings per share of $0.22 in the corresponding period of the previous year.

On a non-GAAP basis, the Company reported an adjusted net loss (before income taxes, depreciation, amortization and stock-based compensation), a non-GAAP financial measure, of ($20,803) in the nine months ended September 30, 2009, versus adjusted net income of $7,614,845 in the nine months ended September 30, 2008.

The Company generated $474,691 in net cash from its operating activities during the first nine months of 2009, compared with $2,951,153 in net cash used in operating activities during the nine months ended September 30, 2008. As of September 30, 2009, the Company had $1,017,790 of cash and equivalents, working capital of $13,876,461, no debt outstanding, and shareholders' equity of $16,951,030.

Non-GAAP Financial Measures

Digital Ally, Inc. has provided financial information in this release that has not been prepared in accordance with GAAP. This information includes non-GAAP adjusted net income. Digital Ally uses such non-GAAP financial measures internally in analyzing its financial results and believes they are useful to investors, as a supplement to GAAP measures, in evaluating Digital Ally's ongoing operational performance. Digital Ally believes that the use of these non-GAAP financial measures provides an additional tool for investors to use in evaluating ongoing operating results and trends and in comparing its financial measures with other companies in Digital Ally's industry, many of which present similar non-GAAP financial measures to investors. As noted, the non-GAAP financial measures discussed above exclude certain non-cash expenses/income including: (1) income tax expense/benefit, (2) depreciation and amortization expenses and (3) share-based compensation expense pursuant to SFAS 123(R).

Non-GAAP financial measures should not be considered in isolation from, or as a substitute for, financial information prepared in accordance with GAAP. Investors are encouraged to review the reconciliation of these non-GAAP measures to their most directly comparable GAAP financial measure as detailed above. As previously mentioned, a reconciliation of GAAP to the non-GAAP financial measures has been provided in the tables included as part of this press release.

Investor Conference Call

The Company will host an investor conference call at 11:00 a.m. Eastern Time tomorrow, November 5, 2009, to discuss its third quarter and nine-month operating results, along with other topics of interest. Shareholders and other interested parties may participate in the conference call by dialing 800-860-2442 (international/local participants dial 412-858-4600) and asking to be connected to the "Digital Ally, Inc. Conference Call" a few minutes before 11:00 a.m. EST on November 5, 2009. The call will also be broadcast live on the Internet at http://www.videonewswire.com/event.asp?id=62874. A replay of the conference call will be available one hour after the completion of the conference call until 5:00 p.m. on Monday, January 4, 2010 by dialing 877-344-7529 (international/local participants dial 412-317-0088) and entering the conference ID 434680.

The call will also be archived on the Internet through January 4, 2010, at http://www.videonewswire.com/event.asp?id=62874 and on the Company's website at http://www.digitalallyinc.com/.

About Digital Ally, Inc.

Digital Ally, Inc. develops, manufactures and markets advanced technology products for law enforcement, homeland security and commercial security applications. The Company's primary focus is digital video imaging and storage. For additional information, visit http://www.digitalallyinc.com/

The Company is headquartered in Overland Park, Kansas, and its shares are traded on The Nasdaq Capital Market under the symbol "DGLY".

This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Act of 1934. These forward-looking statements are based largely on the expectations or forecasts of future events, can be affected by inaccurate assumptions, and are subject to various business risks and known and unknown uncertainties, a number of which are beyond the control of management. Therefore, actual results could differ materially from the forward-looking statements contained in this press release. A wide variety of factors that may cause actual results to differ from the forward-looking statements include, but are not limited to, the following: whether the federal economic stimulus funding for law enforcement agencies will have a positive impact on the Company's revenues; the Company's ability to deliver its new product offerings as scheduled and have them perform as planned or advertised; its ability to achieve higher revenues and improved production rates and profit margins in the fourth quarter of 2009; its ability to increase sales and profits in 2010; its ability to expand its share of the in-car video market in the domestic and international law enforcement communities; whether there will be a commercial market, domestically and internationally, for one or more of its new products; its ability to commercialize its products and production processes, including increasing its production capabilities to satisfy orders in a cost-effective manner; whether the Company will be able to adapt its technology to new and different uses, including being able to introduce new products; competition from larger, more established companies with far greater economic and human resources; its ability to attract and retain customers and quality employees; its ability to obtain patent protection on any of its products and, if obtained, to defend such intellectual property rights; the effect of changing economic conditions; and changes in government regulations, tax rates and similar matters. These cautionary statements should not be construed as exhaustive or as any admission as to the adequacy of the Company's disclosures. The Company cannot predict or determine after the fact what factors would cause actual results to differ materially from those indicated by the forward-looking statements or other statements. The reader should consider statements that include the words "believes", "expects", "anticipates", "intends", "estimates", "plans", "projects", "should", or other expressions that are predictions of or indicate future events or trends, to be uncertain and forward-looking. The Company does not undertake to publicly update or revise forward-looking statements, whether as a result of new information, future events or otherwise. Additional information respecting factors that could materially affect the Company and its operations are contained in its annual report on Form 10-K for the year ended December 31, 2008 and its report on Form 10-Q for the three and nine months ended September 30 2009, as filed with the Securities and Exchange Commission.

For Additional Information, Please Contact: Stanton E. Ross, CEO at (913) 814-7774 or RJ Falkner & Company, Inc., Investor Relations Counsel at (800) 377-9893 or via email at info@rjfalkner.com (Financial Highlights Follow) DIGITAL ALLY, INC. CONDENSED CONSOLIDATED BALANCE SHEETS AT SEPTEMBER 30, 2009 AND DECEMBER 31, 2008 2009 2008 ---------- ---------- Assets (Unaudited) Current assets: Cash and cash equivalents $1,017,790 $1,205,947 Accounts receivable-trade, less allowance for doubtful accounts of $110,000 - 2009 and $90,000 - 2008 5,412,504 6,242,306 Accounts receivable-other 483,414 414,176 Inventories 8,093,499 8,359,961 Prepaid income taxes - 85,943 Prepaid expenses 296,568 217,916 Deferred taxes 1,875,000 1,345,000 --------- --------- Total current assets 17,178,775 17,871,249 ---------- ---------- Furniture, fixtures and equipment 2,869,306 2,471,205 Less accumulated depreciation and amortization 1,370,103 738,554 --------- ------- 1,499,203 1,732,651 --------- --------- Deferred taxes 1,055,000 975,000 Intangible assets, net 349,391 365,643 Other assets 170,975 149,066 ------- ------- Total assets $20,253,344 $21,093,609 =========== =========== Liabilities and Stockholders' Equity Current liabilities: Accounts payable $2,025,115 $2,791,565 Accrued expenses 1,268,290 1,053,624 Income taxes payable 4,482 - Customer deposits 4,427 84,039 ----- ------ Total current liabilities 3,302,314 3,929,228 --------- --------- Commitments and contingencies Stockholders' equity: Common stock, $0.001 par value; 75,000,000 shares authorized; Shares issued: 16,169,739 - 2009 and 15,926,077 - 2008 16,170 15,926 Additional paid in capital 19,661,554 18,428,292 Treasury stock, at cost (shares: 248,610 - 2009 and 210,360 - 2008) (1,687,465) (1,624,353) Retained earnings (deficit) (1,039,229) 344,516 --------- ------- Total stockholders' equity 16,951,030 17,164,381 ---------- ---------- Total liabilities and stockholders' equity $20,253,344 $21,093,609 =========== =========== (FOR ADDITIONAL INFORMATION, PLEASE REFER TO THE COMPANY'S QUARTERLY REPORT ON FORM 10-Q FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2009 AS FILED WITH THE SEC) DIGITAL ALLY, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2009 AND 2008 (Unaudited) Three months ended Nine months ended September 30, September 30, ---------------- ------------------- 2009 2008 2009 2008 ---- ---- ---- ---- Product revenue $5,565,667 $8,400,597 $16,270,054 $25,786,496 Other revenue 149,016 50,673 851,009 154,500 ------- ------ ------- ------- Total revenue 5,714,683 8,451,270 17,121,063 25,940,996 Cost of revenue 2,379,694 3,283,446 8,415,929 9,914,682 --------- --------- --------- --------- Gross profit 3,334,989 5,167,824 8,705,134 16,026,314 Selling, general and administrative expenses: Research and development expense 696,523 785,428 2,803,038 1,893,318 Selling, advertising and promotional expense 748,634 889,496 1,922,535 2,500,789 Stock-based compensation expense 348,704 531,947 1,054,003 1,106,258 Charges related to purchase and cancellation of employee stock options - - 358,104 - Vendor settlements and credits (278,173) - (278,173) - General and administrative expense 1,696,865 1,591,565 4,976,461 4,381,791 --------- --------- --------- --------- Total selling, general and administrative expenses 3,212,553 3,798,436 10,835,968 9,882,156 --------- --------- ---------- --------- Operating income (loss) 122,436 1,369,388 (2,130,834) 6,144,158 ------- --------- --------- --------- Interest income 8,966 22,221 27,089 71,518 ----- ------ ------ ------ Income (loss)before income tax benefit (provision) 131,402 1,391,609 (2,103,745) 6,215,676 Income tax benefit (provision) (50,000) (518,000) 720,000 (2,253,000) ------ ------- ------- --------- Net income (loss) $81,402 $873,609 $(1,383,745) $3,962,676 ======= ======== =========== ========== Net income (loss) per share information: Basic $0.01 $0.06 $(0.09) $0.26 Diluted $0.01 $0.05 $(0.09) $0.22 Weighted average shares outstanding: Basic 15,821,075 15,736,559 15,756,342 15,181,662 Diluted 16,008,581 17,634,577 15,756,342 17,625,361 DIGITAL ALLY, INC. RECONCILIATION OF NET INCOME TO NON-GAAP ADJUSTED NET INCOME FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2009 AND 2008 (unaudited) (unaudited) Three months ended Nine months ended September 30, September 30, ---------------- ------------------- 2009 2008 2009 2008 ---- ---- ---- ---- Net income (loss) $81,402 $873,609 $(1,383,745) $3,962,676 Non-GAAP adjustments: Income tax provision (benefit) 50,000 518,000 (720,000) 2,253,000 Stock-based compensation 348,704 531,947 1,412,107 1,106,258 Depreciation and amortization 163,736 159,814 670,835 292,911 ------- ------- ------- ------- Total Non-GAAP adjustments 562,440 1,209,761 1,362,842 3,652,169 ------- --------- --------- --------- Non-GAAP adjusted net income(loss) $643,842 $2,083,370 $(20,803) $7,614,845 ======== ========== ======== ========== Non-GAAP adjusted net income (loss)per share information: Basic $0.04 $0.18 $(0.01) $0.37 Diluted $0.04 $0.16 $(0.01) $0.32 Weighted average shares outstanding: Basic 15,821,075 15,736,559 15,756,342 15,181,662 Diluted 16,008,581 17,634,577 15,756,342 17,625,361 DIGITAL ALLY, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2009 AND 2008 (Unaudited) Nine Months Ended September 30, -------------------- 2009 2008 ------ ------ Cash Flows From Operating Activities: Net income (loss) $(1,383,745) $3,962,676 Adjustments to reconcile net income (loss) to net cash flows provided by (used in) operating activities: Depreciation and amortization 670,835 292,911 Stock based compensation 1,412,107 1,106,258 Reserve for inventory obsolescence 334,754 175,575 Reserve for bad debt allowance 20,000 1,776 Deferred tax (benefit) provision (610,000) (125,000) Change in assets and liabilities: (Increase) decrease in: Accounts receivable - trade 809,802 (5,371,199) Accounts receivable - other (69,238) (210,483) Inventories (68,292) (3,991,078) Prepaid income taxes 85,943 - Prepaid expenses (78,652) 5,339 Other assets (21,909) 47,815 Increase (decrease) in: Accounts payable (766,450) 1,078,264 Accrued expenses 214,666 416,930 Income taxes payable 4,482 (101,140) Customer deposits (79,612) (235,933) Unearned income - (3,864) --- ----- Net cash provided by (used in) operating activities 474,691 (2,951,153) ------- --------- Cash Flows from Investing Activities: Purchases of furniture, fixtures and equipment (398,101) (1,066,043) Additions to intangible assets (23,034) (116,392) ------ ------- Net cash (used in) investing activities (421,135) (1,182,435) ------- --------- Cash Flows from Financing Activities: Proceeds from exercise of stock options and warrants 261,399 2,374,972 Excess (deficiency) in tax benefits related to stock-based compensation (120,000) 2,345,000 Purchase of common shares for treasury (63,112) (1,624,353) Purchase of employee stock options (320,000) - ------- --- Net cash provided by (used in) financing activities (241,713) 3,095,619 ------- --------- Decrease in cash and cash equivalents (188,157) (1,037,969) Cash and cash equivalents, beginning of period 1,205,947 4,255,039 --------- --------- Cash and cash equivalents, end of period $1,017,790 $3,217,070 ========== ========== Supplemental disclosures of cash Flow information: Cash payments for interest $- $- === === Cash payments for income taxes $21,500 $131,000 ======= ======== Supplemental disclosures of non-cash investing and financing activities: Restricted common stock grant $58,750 $- ======= === Common stock surrendered as consideration for exercise of stock options $321,743 $539,566 ======== ========

Audio: http://http//www.videonewswire.com/event.asp?id=62874 Digital Ally, Inc.

CONTACT: Stanton E. Ross, CEO of Digital Ally, Inc., +1-913-814-7774; or
RJ Falkner & Company, Inc., Investor Relations Counsel, 1-800-377-9893,
info@rjfalkner.com, for Digital Ally, Inc.

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