GAAP net income was $1.1 million, or $0.06 per fully diluted share. This includes a $0.8 million non-cash stock-based compensation expense, a $0.4 million asset write-off and a $0.1 million adjustment resulting from the temporary suspension of the Company’s ability to utilize its net operating losses for California income tax purposes.

“In the current tough macroeconomic environment, we were happy with the strength in our earnings this quarter,” said Ken McBride, Stamps.com president and CEO. “We continued to experience growth in our PC Postage business outside of the enhanced promotion channel, albeit at a slower rate than we did before the current economic downturn. We are also making good progress in our strategic investment areas of enterprise and shipping.”

Stamps.com reported 2009 second quarter GAAP net income of $1.1 million. On a per share basis, total 2009 second quarter GAAP net income was $0.06 based on fully diluted shares outstanding of 16.4 million. Second quarter GAAP net income was reduced by $0.8 million for FASB 123R stock-based compensation expense, a $0.4 million asset write-off of inventory of discontinued products and an income tax adjustment of $0.1 million resulting from the temporary suspension of the Company’s ability to utilize its net operating losses for California income tax purposes based on legislation which was passed in 2008 and is effective for tax years 2008 and 2009. Non-GAAP and GAAP amounts are reconciled in the following table:

Second Quarter Fiscal 2009
All amounts in millions except	Non-GAAP			FASB			Asset			Income Tax			GAAP
per share or margin data:	Amounts			123R			Write-Off			Adjustment			Amounts

Cost of Sales	$	5.48		$	0.07		$	-		$	-		$	5.55
Research & Development		2.04			0.16			-			-			2.20
Sales & Marketing		8.03			0.20			-			-			8.23
General & Administrative		2.54			0.39			0.37			-			3.31
Total Expenses		18.08			0.82			0.37			-			19.28

Gross margin		72.9	%		(0.3	%)		-			-			72.5	%

Income from Operations		2.10			(0.82	)		(0.37	)		-			0.90
Interest and Other Income		0.23			-			-			-			0.23
Pre-Tax Income		2.33			(0.82	)		(0.37	)		-			1.14

Provision for Income Taxes		(0.03	)		-			-			(0.05	)		(0.08	)

Net Income	$	2.30		$	(0.82	)	$	(0.37	)	$	(0.05	)	$	1.05

On a diluted per share basis	$	0.14		$	(0.05	)	$	(0.02	)	$	(0.00	)	$	0.06

Shares used in per share calculation		16.43			16.43			16.43			16.43			16.43

Excluding the FASB Statement 123R expense, asset write-off and income tax adjustment, 2009 second quarter non-GAAP net income was $2.3 million or $0.14 per fully diluted share based on fully diluted shares outstanding of 16.4 million. This compares to 2008 second quarter non-GAAP net income per fully diluted share excluding 123R expenses of $0.15 (there were no comparable asset write-offs or income tax adjustments in the second quarter of 2008). Thus, non-GAAP second quarter diluted earnings per share excluding 123R-related expenses were down 6% versus the same quarter last year.

Under the current share repurchase plan originally approved by the Board of Directors on February 5, 2009, the Company has repurchased 0.85 million shares for a total cost of $7.1 million. On July 23, 2009, Stamps.com’s Board of Directors approved a new share repurchase plan, effective upon the expiration of the current plan in August 2009, authorizing the Company to repurchase up to 2.5 million shares of Stamps.com stock from August 2009 through February 2010.

The timing of share purchases, if any, and the number of shares to be bought at any one time will depend on market conditions and also will depend on the Company’s assessment of risk that its net operating loss asset could be impaired if such a repurchase were undertaken. Share purchases may be made from time-to-time on the open market or in negotiated transactions at the Company's discretion in compliance with Rule 10b-18 of the United States Securities and Exchange Commission. The Company's purchase of any of its shares is subject to limitations that may be imposed on such purchases by applicable securities laws and regulations and the rules of the Nasdaq Stock Market.

Stamps.com currently expects total 2009 revenue to be $80 to $90 million. 2009 GAAP net income per share is expected to be $0.20 to $0.40, including approximately $3 million of 2009 FASB Statement 123R stock-based compensation expense, $0.4M asset write-off and $0.5 to $1.0 million of expected taxes resulting from the temporary suspension of the Company’s ability to utilize its net operating losses for California income tax purposes. Excluding the FASB Statement 123R expenses, asset write-off and the additional California income taxes, non-GAAP 2009 net income per fully diluted share is expected to be $0.40 to $0.60.

Stamps.com currently has approximately $235 million in Federal NOLs and $150 million in State NOLs, with a potential value of up to $95 million in tax savings over the next 15 years. Under Internal Revenue Code Section 382 rules, if a change of ownership is triggered, the Company’s NOL asset may be impaired. A change in ownership can occur whenever there is a shift in ownership by more than 50 percentage points by one or more 5% shareholders within a three-year period. We estimate that as of June 30, 2009 the Company was at an approximately 28% level compared with the 50% level that would trigger impairment of our NOL asset.

During the second quarter of 2008, the Company received shareholder approval to amend its articles of incorporation in order to protect its NOL asset (the “NOL Protective Measures”) and those measures are now in effect. Under the NOL Protective Measures there is no change to the way that existing Stamps.com shares are held or traded, but any person, company or investment firm which wishes to become a “5% shareholder” of Stamps.com must first obtain a waiver from the Company’s board of directors. In addition, any person, company or investment firm which is already a “5% shareholder” of Stamps.com cannot make any additional purchases of Stamps.com stock without a waiver from the Company’s board of directors.

Stamps.com currently has 16.1 million shares outstanding and therefore ownership of approximately 805 thousand shares or greater would currently constitute a “5% shareholder”. Stamps.com strongly urges that any stockholder contemplating owning more than 650 thousand shares contact the Company before doing so.

The Stamps.com financial results conference call will be web cast today at 5:00 p.m. Eastern Time and may be accessed at http://investor.stamps.com. The Company plans to discuss its business outlook during the conference call. Following the conclusion of the web cast, a replay of the call will be available at the same website. About Stamps.com and PhotoStamps

Stamps.com (Nasdaq: STMP) is a leading provider of Internet-based postage services. Stamps.com’s service enables small businesses, enterprises, advanced shippers, and consumers to print U.S. Postal Service-approved postage with just a PC, printer and Internet connection, right from their home or office. The Company currently has PC Postage partnerships with Avery Dennison, Microsoft, HP, the U.S. Postal Service and others.

PhotoStamps is a patented Stamps.com product that couples the technology of PC Postage with the simplicity of a web-based image upload and order process. Customers may create full custom PhotoStamps with their own digital photograph, or they may choose a licensed image from one of many PhotoStamps collections such as the collegiate collection. Since launching PhotoStamps in May 2005, more than 70 million individual PhotoStamps have been shipped to customers. Stamps.com currently has PhotoStamps partnerships with Apple, Google/Picassa, HP/Snapfish, Costco, Adobe and others.

To supplement the Company’s condensed financial statements presented in accordance with GAAP, Stamps.com uses non-GAAP measures of certain components of financial performance. These non-GAAP measures include non-GAAP income from operations, non-GAAP pre-tax income, non-GAAP net income, non-GAAP earnings per diluted share, and non-GAAP gross margin. These non-GAAP measures are provided to enhance investors’ overall understanding of the Company’s current financial performance and the Company’s prospects for the future and provide further information about the impact of the adoption of the accounting standard FASB 123R. The Company believes the non-GAAP measures that exclude stock-based compensation, asset write-offs, litigation charges, income tax adjustments, and income tax benefits enhance the comparability of results against prior periods. These measures should be considered in addition to results prepared in accordance with generally accepted accounting principles, but should not be considered a substitute for, or superior to, GAAP results. Reconciliation to the nearest GAAP measure of all non-GAAP measures included in this press release can be found in the financial tables included on page 2 of this press release.

"Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995: This release includes forward-looking statements about our anticipated results and our PhotoStamps spend that involve risks and uncertainties. Important factors, including the Company's ability to complete and ship its products, maintain desirable economics for its products and obtain or maintain regulatory approval, which could cause actual results to differ materially from those in the forward-looking statements, are detailed in filings with the Securities and Exchange Commission made from time to time by STAMPS.COM, including its Annual Report on Form 10-K for the year ended December 31, 2008, Quarterly Reports on Form 10-Q, and Current Reports on Form 8-K. STAMPS.COM undertakes no obligation to release publicly any revisions to any forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.

STAMPS.COM INC.

STATEMENTS OF OPERATIONS

(in thousands, except per share data: unaudited)

	Three Months ended June 30,				Six Months ended June 30,
	2009		2008		2009		2008
Revenues:
Subscription	$	15,207	$	15,577	$	30,521	$	30,774
Product		2,580		2,583		5,197		5,066
Insurance		395		377		799		765
PhotoStamps		1,995		2,873		3,708		5,877
Other		5		-		5		-
Total revenues		20,182		21,410		40,230		42,482
Cost of revenues:
Subscription		2,872		2,262		5,880		5,004
Product		1,030		948		1,975		1,828
Insurance		123		119		248		239
PhotoStamps		1,521		2,092		2,821		4,219
Total cost of revenues		5,546		5,421		10,924		11,290
Gross profit		14,636		15,989		29,306		31,192
Operating expenses:
Sales and marketing		8,227		8,780		16,291		17,403
Research and development		2,199		2,102		4,426		4,045
General and administrative		3,306		4,457		6,570		8,400
Total operating expenses		13,732		15,339		27,287		29,848
Income from operations		904		650		2,019		1,344
Other income, net:
Interest income		232		736		589		1,653
Other income		-		-		-		21
Total other income, net		232		736		589		1,674
Pre-tax income		1,136		1,386		2,608		3,018
Income tax expense (benefit)		84		80		334		(3,486	)
Net income	$	1,052	$	1,306	$	2,274	$	6,504
Net income per share:
Basic	$	0.06	$	0.07	$	0.14	$	0.33
Diluted	$	0.06	$	0.07	$	0.14	$	0.33
Weighted average shares outstanding:
Basic		16,301		19,382		16,581		19,553
Diluted		16,427		19,712		16,709		19,831

CONDENSED BALANCE SHEETS

(in thousands)


	June 30,			December 31,
	2009			2008

ASSETS
Cash and investments	$	70,242		$	74,059
Trade accounts receivable		2,936			2,962
Other accounts receivable		494			1,201
Other current assets		3,791			4,426
Property and equipment, net		2,608			3,086
Intangible assets, net		500			505
Deferred tax		3,671			3,671
Other assets		3,028			3,348
Total assets	$	87,270		$	93,258

LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Accounts payable and accrued expenses	$	9,195		$	11,174
Deferred revenue		3,422		$	3,743
Total liabilities		12,617			14,917

Stockholders' equity:
Common stock		47			47
Additional paid-in capital		628,647			626,810
Treasury Stock		(99,238	)		(90,613	)
Accumulated deficit		(454,117	)		(456,391	)
Unrealized loss on investments		(686	)		(1,512	)
Total stockholders' equity		74,653			78,341
Total liabilities and stockholders' equity	$	87,270		$	93,258

Stamps.com Investor Contact	Press Contact:
Stamps.com Investor Relations	Brew PR
(310) 482-5830	(310) 600-7160
http://investor.stamps.com	dena@brewpr.com