SupportSoft Reports First Quarter 2009 Financial Results

REDWOOD CITY, CA, Apr 29 (MARKET WIRE) --
SupportSoft, Inc. (NASDAQ: SPRT), a provider of software and services
that make technology work, today reported unaudited financial results for
its first quarter ended March 31, 2009.

Q1 2009 Financial Summary

Total revenue for the first quarter of 2009 was $10.5 million, as compared
to $12.8 million in the fourth quarter of 2008 and $11.6 million in the
first quarter of 2008. For the first quarter of 2009, Consumer revenue was
$3.6 million as compared to $3.1 million in the fourth quarter of 2008 and
$703,000 in the first quarter of 2008. For the first quarter of 2009,
Enterprise revenue was $6.9 million as compared to $9.7 million in the
fourth quarter of 2008 and $10.9 million in the first quarter of 2008.
First quarter 2009 Enterprise revenue consisted of $807,000 of license
revenue, $3.7 million of maintenance revenue and $2.4 million of service
revenue.

On a GAAP basis, net loss for the first quarter of 2009 was $7.4 million,
or $(0.16) per share, compared to a net loss of $6.8 million, or $(0.15)
per share, in the fourth quarter of 2008 and $3.6 million, or $(0.08) per
share, in the first quarter of 2008.

Non-GAAP net loss for the first quarter of 2009 was $5.3 million, or
$(0.11) per share, compared to a non-GAAP net loss of $3.4 million, or
$(0.07) per share, in the fourth quarter of 2008 and $2.4 million, or
$(0.05) per share, in the first quarter of 2008. Non-GAAP results exclude
stock compensation expenses, amortization of intangible assets and
restructuring and impairment charges. These items totaled $2.1 million for
the first quarter of 2009, $3.3 million for the fourth quarter of 2008,
and $1.2 million for the first quarter of 2008. A reconciliation of GAAP
to non-GAAP results is presented in the tables below.

At March 31, 2009 cash and total investments including a put option
relating to auction rate securities were $89.9 million, compared to $95.0
million at December 31, 2008.

"We are pleased with our performance in the first quarter, particularly
the strong revenue growth posted by the Consumer business in the current
economic environment," said Josh Pickus, CEO of SupportSoft. "We are
progressing rapidly with plans to sell our Enterprise business and
establish ourselves as a pure play provider of technology enabled services
for the digital home and small office."

Recent Company Highlights

Consumer Segment

-- Consumer revenue grows 16% sequentially and 414% year over year

-- New partnership launches with TigerDirect, multi-channel retailer of
PC and CE devices

-- Major U.S. retailer currently in pilot establishes rollout plans

-- Tech services program for anti-virus provider AVG grows rapidly

-- Restructuring actions lower go-forward cost structure for Consumer
business

Enterprise Segment

On April 5, 2009, SupportSoft entered into an agreement to sell its
Enterprise business to Consona Corporation. Pursuant to the terms of the
Asset Purchase Agreement, Consona has agreed to acquire certain assets and
assume certain liabilities related to the Company's Enterprise business as
set forth in the agreement. SupportSoft will receive a $20 million cash
payment subject to certain adjustments. The Asset Purchase Agreement must
be approved by a majority of the Company's stockholders, and may be
terminated by either SupportSoft or Consona if the closing of the
transaction has not occurred by August 31, 2009 or upon the occurrence of
certain customary events as set forth in the agreement.

Conference Call

SupportSoft will host a conference call discussing the Company's first
quarter 2009 results on Wednesday, April 29, 2009 starting at 4:30 p.m. ET
(1:30 p.m. PT). A live audio webcast and replay of the call will be
available at the Investor Relations section of SupportSoft's Web Site at
http://www.supportsoft.com/Company/ir_webcasts_events.html. The live call
may be accessed by dialing (877) 440-5803 (domestic) or (719) 325-4908
(international) and referencing passcode 643-2113. A replay of the call
can also be accessed by dialing (888)-203-1112 (domestic) or (719)
457-0820 (international), and referencing passcode: 643-2113.

Cautionary Note Regarding Forward-Looking Statements

This press release contains forward-looking statements regarding our
expected future performance as well as assumptions underlying or relating
to such statements of expectation, all of which are "forward-looking
statements" within the meaning of Section 27A of the Securities Act of
1933 and Section 21E of the Securities Exchange Act of 1934. We are
subject to many risks and uncertainties that may materially affect our
business and future performance and cause those forward-looking
statements to be inaccurate. All statements in this press release, other
than statements that are purely historical, are forward-looking
statements. Words such as "outlook," "anticipates," "expects,"
"believes," "intends," "plans," "seeks," "forecasts," "estimates" and
similar expressions often identify such forward-looking statements.
Forward-looking statements in this press release include, without
limitation, the following: statements about SupportSoft's company-wide
and segment revenue for the first quarter of 2009, the progress of its
Consumer partnerships and cost reduction measures and the sale of the
Enterprise business.

Forward-looking statements are subject to risks and uncertainties that
could cause actual results to differ materially from those discussed in
these forward-looking statements. These risks and uncertainties include,
but are not limited to: the potential for first quarter 2009 revenue to
change based on the completion of the quarterly closing and review by
SupportSoft's independent registered public accounting firm; our
dependence on a limited number of channel partners for our Consumer
revenue; the potential that any of SupportSoft's consumer partnerships
take longer to produce revenue or do not produce revenue; the possibility
that the sale of the Enterprise business will not be completed
successfully; the possibility that restructuring actions and other cost
reduction measures may not be effective as planned; our ability to
successfully transition divestitures and acquisitions; as well as other
risks detailed from time to time in our SEC filings, including those
described in the "Risk Factors" section in our most recent Annual Report
on Form 10-K filed with the SEC on March 11, 2009. You can locate these
filings on the Investor Relations page of our website,
www.supportsoft.com/Company/investor_relations.html.

Statements included in this release are based upon information known to
SupportSoft as of the date of this release, and SupportSoft assumes no
obligation to publicly revise or update any statement for any reason.

Disclosure Regarding Non-GAAP Financial Measures

SupportSoft has excluded stock-based compensation expenses, amortization
of intangible assets and restructuring and impairment charges from its
GAAP results in order to determine the non-GAAP financial measures of net
loss and net loss per share. Each of the excluded items (as such items are
applicable to particular time periods) is discussed in more detail below.

Stock-based compensation -- we believe that the non-GAAP measures,
excluding stock-based compensation expenses, when viewed in addition to
and not in lieu of our reported GAAP results, assist investors in
understanding our results of operations. Stock-based compensation
expenses do not require cash settlement and are not used by management to
assess the performance of the Company's business.

Amortization of intangible assets -- the Company does not acquire
businesses on a predictable cycle; therefore management excludes
acquisition-related intangible asset amortization and related charges when
evaluating its operating performance. The Company also excludes such
charges as they represent non-cash expenses.

Restructuring and impairment charges -- we believe the non-GAAP measures,
excluding restructuring and impairment charges, provide meaningful
supplemental information to investors in understanding our ongoing
operational costs and expenses, without the broad-based termination costs
that comprised our restructuring expense. The Company does not undertake
significant restructurings on a predictable basis and, as result, excludes
associated charges in order to enable better and more consistent
evaluation of the Company's operating expenses before and after such
actions are taken.

SupportSoft uses these non-GAAP financial measures internally to evaluate
its performance from period to period and against the performance of other
software companies, many of which present similar non-GAAP financial
measures. We also believe that investors benefit from seeing "through the
eyes of management" as our operating budgets and compensation programs are
based on the non-GAAP financial measures we present in this press release.

Finally, SupportSoft believes the non-GAAP measures provide useful
supplemental information for investors to evaluate our operating results
in the same manner as the research analysts that follow SupportSoft, all
of whom present non-GAAP projections in their published reports. As such,
the non-GAAP measures provided by the Company facilitate an "apples to
apples" comparison of our performance with the financial projections
published by the analysts.

The economic substance behind our decision to use such non-GAAP measures
is that such measures approximate our controllable operating performance
more closely than the most directly comparable GAAP financial measures.

The material limitation associated with the use of the non-GAAP financial
measures is that the non-GAAP measures do not reflect the full economic
impact of the Company's activities and reliance solely on non-GAAP
measures may lead management to make business decisions with
unanticipated economic consequences on the Company's GAAP financial
results. We compensate for this limitation by not relying exclusively on
non-GAAP financial measures to make business decisions. We also
continuously reevaluate which non-GAAP measures are appropriate.

Amounts related to the first quarter of 2009 are subject to completion of
management's and its independent registered public accounting firm's
customary closing and review procedures.

Important Additional Information Will Be Filed With The SEC

SupportSoft filed a preliminary proxy statement with the SEC on April 10,
2009 and plans to file with the SEC and mail to its stockholders a
definitive proxy statement in connection with the proposed sale of the
Enterprise Business and the other corporate matters described therein. The
preliminary proxy statement contains (and the definitive proxy statement
will contain) important information about SupportSoft, Consona
Corporation, the proposed sale of the Enterprise Business and the other
corporate matters described therein. Investors and security holders are
urged to read the proxy statement carefully before making any voting or
investment decision with respect to the proposed sale of the Enterprise
Business and the other corporate matters described therein. Investors and
security holders may obtain free copies of the proxy statement and other
documents filed with the SEC by SupportSoft through the web site
maintained by the SEC at www.sec.gov. In addition, investors and security
holders may obtain free copies of the proxy statement from SupportSoft by
contacting Maura Burns at maura.burns@supportsoft.com or (650) 556-8992.

SupportSoft and its directors and executive officers may be deemed to be
participants in the solicitation of proxies with respect to the proposed
sale of the Enterprise Business and the other corporate matters set forth
in the proxy statement. Information regarding SupportSoft's directors and
executive officers and their ownership of SupportSoft's shares is
contained in SupportSoft's Annual Report on Form 10-K for the year ended
December 31, 2008 and in the preliminary proxy statement that was filed
on April 10, 2009, and is supplemented by other public filings made, and
to be made, with the SEC. A more complete description will be available
in the definitive proxy statement we expect to file in connection with the
proposed sale of the Enterprise Business. Investors and security holders
may obtain additional information regarding the direct and indirect
interests of SupportSoft and its directors and executive officers with
respect to the proposed sale of the Enterprise Business by reading the
proxy statement and other filings referred to above.

SUPPORTSOFT, INC.
GAAP CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
(unaudited)

Three Months Ended
-------------------------------------
March 31, December 31, March 31,
----------- ----------- -----------
2009 (1) 2008 2008
----------- ----------- -----------
Revenues:
License $ 807 $ 3,081 $ 2,974
Maintenance 3,668 3,997 4,002
Services 2,443 2,660 3,949
Consumer 3,614 3,107 703
----------- ----------- -----------
Total revenues 10,532 12,845 11,628

Costs and expenses:
Cost of license 110 134 51
Cost of maintenance 375 420 530
Cost of services 2,307 2,587 3,577
Cost of consumer 4,379 3,870 1,229
Amortization of intangible assets 43 43 30
Research and development 1,789 1,936 2,090
Sales and marketing 4,059 5,045 5,981
General and administrative 2,374 2,309 1,938
Restructuring and impairment
charges 896 1,885 -
Stock-based compensation 1,188 1,417 1,174
----------- ----------- -----------

Total costs and expenses 17,520 19,646 16,600
----------- ----------- -----------

Loss from operations (6,988) (6,801) (4,972)

Interest income (expense) and other,
net (302) 177 1,449
----------- ----------- -----------

Loss before income taxes (7,290) (6,624) (3,523)

Provision for income taxes 106 164 108
----------- ----------- -----------

Net loss $ (7,396) $ (6,788) $ (3,631)
----------- ----------- -----------

Net loss per share:
Basic $ (0.16) $ (0.15) $ (0.08)
----------- ----------- -----------
Diluted $ (0.16) $ (0.15) $ (0.08)
----------- ----------- -----------

Shares used in computing per share
amounts:
Basic 46,330 46,142 46,150
----------- ----------- -----------
Diluted 46,330 46,142 46,150
----------- ----------- -----------

Allocation of restructuring and
impairment charges:
Cost of maintenance $ 23 $ - $ -
Cost of service 93 212 -
Cost of consumer - 5 -
Research and development - 137 -
Sales and marketing 711 1,006 -
General and administrative 69 525 -
----------- ----------- -----------
Total restructuring and
impairment charges $ 896 $ 1,885 $ -
=========== =========== ===========

Allocation of stock-based
compensation:
Cost of maintenance $ 22 $ 23 $ 19
Cost of service 169 180 176
Cost of consumer 42 47 11
Research and development 137 173 145
Sales and marketing 430 517 405
General and administrative 388 477 418
----------- ----------- -----------
Total stock-based compensation $ 1,188 $ 1,417 $ 1,174
=========== =========== ===========

Note 1: Amounts in the first quarter of 2009 are subject to completion
of management's and its independent registerd public accounting firm's
customary closing and review procedures.

SUPPORTSOFT, INC.
RECONCILIATION OF GAAP FINANCIAL RESULTS TO NON-GAAP FINANCIAL MEASURES
(in thousands, except per share amounts)
(unaudited)

Three Months Ended
-------------------------------------
March 31, December 31, March 31,
----------- ----------- -----------
2009 2008 2008
----------- ----------- -----------

GAAP costs and expenses $ 17,520 $ 19,646 $ 16,600
Amortization of intangible assets (43) (43) (30)
Restructuring and impairment
charges (896) (1,885) -
Stock-based compensation (1,188) (1,417) (1,174)
----------- ----------- -----------
Non-GAAP costs and expenses 15,393 16,301 15,396

GAAP loss from operations (6,988) (6,801) (4,972)
Amortization of intangible assets 43 43 30
Restructuring and impairment
charges 896 1,885 -
Stock-based compensation 1,188 1,417 1,174
----------- ----------- -----------
Non-GAAP loss from operations (4,861) (3,456) (3,768)

GAAP loss before income taxes (7,290) (6,624) (3,523)
Amortization of intangible assets 43 43 30
Restructuring and impairment
charges 896 1,885 -
Stock-based compensation 1,188 1,417 1,174
----------- ----------- -----------
Non-GAAP loss before income taxes (5,163) (3,279) (2,319)

GAAP net loss $ (7,396) $ (6,788) $ (3,631)
Amortization of intangible assets 43 43 30
Restructuring and impairment
charges 896 1,885 -
Stock-based compensation 1,188 1,417 1,174
----------- ----------- -----------
Non-GAAP net loss $ (5,269) $ (3,443) $ (2,427)
=========== =========== ===========

Basic net loss per share
GAAP $ (0.16) $ (0.15) $ (0.08)
Non-GAAP $ (0.11) $ (0.07) $ (0.05)

Diluted net loss per share
GAAP $ (0.16) $ (0.15) $ (0.08)
Non-GAAP $ (0.11) $ (0.07) $ (0.05)

Shares used in computing per share
amounts (GAAP)
Basic 46,330 46,142 46,150
Diluted 46,330 46,142 46,150

Shares used in computing per share
amounts (Non-GAAP)
Basic 46,330 46,142 46,150
Diluted 46,330 46,142 46,150

The adjustments above reconcile the Company's GAAP financial results to
the non-GAAP financial measures used by the Company. The Company's
non-GAAP financial measures exclude restructuring and impairment
charges, stock-based compensation and amortization of intangible
assets from the GAAP financial results. The Company believes that
presentation of these non-GAAP items provides meaningful supplemental
information to investors, when viewed in conjunction with, and not in
lieu of, the Company's GAAP results. However, the non-GAAP financial
measures have not been prepared under a comprehensive set of accounting
rules or principles. Non-GAAP information should not be considered in
isolation from, or as a substitute for, information prepared in
accordance with GAAP. Moreover, there are material limitations
associated with the use of non-GAAP financial measures. See the
text of this press release for more information on non-GAAP financial
measures.

Amounts in the first quarter of 2009 are subject to completion of
management's and its independent registered public accounting firm's
customary closing and review procedures.

SUPPORTSOFT, INC.
GAAP CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)

March 31, December 31, March 31,
2009 (1) 2008 (2) 2008
----------- ----------- -----------
(unaudited) (audited) (unaudited)
Assets
Current assets:
Cash, cash equivalents and
short-term investments $ 66,686 $ 72,090 $ 83,427
Accounts receivable, net 7,604 10,384 10,944
Prepaid expenses and other current
assets 1,420 1,642 1,783
----------- ----------- -----------
Total current assets 75,710 84,116 96,154
----------- ----------- -----------
Long-term investments 18,216 15,766 23,934
Auction rate security put option 5,037 7,148 -
Property and equipment, net 1,033 1,275 1,949
Goodwill 12,646 12,646 9,792
Purchased technology 1,249 1,318 -
Intangible assets, net 374 417 1,685
Other assets 934 900 753
----------- ----------- -----------

Total assets $ 115,199 $ 123,586 $ 134,267
=========== =========== ===========

Liabilities and Stockholders' Equity
Liabilities:
Accounts payable and accrued
compensation $ 2,270 $ 3,019 $ 2,407
Other accrued liabilities 2,927 3,534 3,584
Deferred revenue 8,416 10,119 10,207
Other long-term liabilities 1,594 1,468 937
----------- ----------- -----------
Total liabilities $ 15,207 $ 18,140 $ 17,135
----------- ----------- -----------

Stockholders' equity:
Common stock $ 5 $ 5 $ 5
Additional paid-in-capital 219,093 217,647 213,557
Accumulated other comprehensive
loss (2,045) (2,541) (2,240)
Accumulated deficit (117,061) (109,665) (94,190)
----------- ----------- -----------
Total stockholders' equity $ 99,992 $ 105,446 $ 117,132
----------- ----------- -----------

Total liabilities and stockholders'
equity $ 115,199 $ 123,586 $ 134,267
=========== =========== ===========

Note 1: Amounts in the first quarter of 2009 are subject to completion
of management's and its independent registered public accounting firm's
customary closing and review procedures.

Note 2: Derived from audited financial statements.

SUPPORTSOFT, INC.
SEGMENT INFORMATION
(in thousands)
(unaudited)

Three Months Ended March 31, 2009 (1)
----------------------------------------------
Consolidated
Enterprise Consumer Corporate Total
---------- ---------- ---------- ----------
Revenue:
License $ 807 $ - $ - $ 807
Maintenance 3,668 - - 3,668
Services 2,443 - - 2,443
Consumer - 3,614 - 3,614
---------- ---------- ---------- ----------
Total revenue 6,918 3,614 - 10,532
---------- ---------- ---------- ----------
Segment operating costs and
expenses (5,118) (7,901) - (13,019)
Amortization of intangible
assets - (43) - (43)
Common corporate expenses - - (2,374) (2,374)
Restructuring and
impairment charges (821) (6) (69) (896)
Stock-based compensation (419) (381) (388) (1,188)
Interest expense and other,
net - - (302) (302)
---------- ---------- ---------- ----------
Income (loss) before income
taxes $ 560 $ (4,717) $ (3,133) $ (7,290)
========== ========== ========== ==========

Three Months Ended March 31, 2008
----------------------------------------------
Consolidated
Enterprise Consumer Corporate Total
---------- ---------- ---------- ----------
Revenue:
License $ 2,974 $ - $ - $ 2,974
Maintenance 4,002 - - 4,002
Services 3,949 - - 3,949
Consumer - 703 - 703
---------- ---------- ---------- ----------
Total revenue 10,925 703 - 11,628
---------- ---------- ---------- ----------
Segment operating costs and
expenses (8,121) (5,337) - (13,458)
Amortization of intangible
assets (30) - - (30)
Common corporate expenses - - (1,938) (1,938)
Stock-based compensation (401) (355) (418) (1,174)
Interest income and other,
net - - 1,449 1,449
---------- ---------- ---------- ----------
Income (loss) before income
taxes $ 2,373 $ (4,989) $ (907) $ (3,523)
========== ========== ========== ==========

Consumer Segment. In our Consumer segment, we provide premium technology
support to consumers over the phone and the internet for a fee. We offer
our services to consumers through retailers and other companies who
provide technology products and services to consumers. We also provide
our services directly to consumers through www.support.com.

Enterprise Segment. Our Enterprise customers use our software to resolve
technical problems for their customers. Digital service providers use
our products to automate the installation, activation and verification
of broadband services, to reduce the cost and improve the quality of
support for customers, and to enable the remote management of devices
located at customer premises. Corporate IT departments and IT
outsourcing firms use our software to improve the cost-effectiveness
and efficiency of their support through an integrated portfolio of
proactive service, self service and assisted service products.

Corporate. This category consists of common corporate expenses such
as general and administrative expenses, interest income, and other
income or expenses, which are items that we do not allocate to our
business segments.

Note 1: Amounts in the first quarter of 2009 are subject to completion
of management's and its independent registered public accounting firm's
customary closing and review procedures.

Contact Information:

Carolyn Bass and Daniel Wood
Market Street Partners
(415) 445-3235
sprt@marketstreetpartners.com

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