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  • JBMARIA JBMARIA Oct 4, 2007 4:11 PM Flag



    It's going to be a soft Q and will affect future guidance-not what was hoped for but not devastating either:

    Thursday October 4, 4:01 pm ET

    REDWOOD CITY, CA--(MARKET WIRE)--Oct 4, 2007 -- SupportSoft, Inc. (NasdaqGS:SPRT - News), a leading provider of software and services for technology problem resolution, today announced preliminary unaudited financial results for the quarter ended September 30, 2007. SupportSoft currently expects to report approximately the following results for the third quarter:

    -- Revenue of $11.1 million - $11.3 million, compared to the Company's
    prior forecast of $12 million - $13 million.
    -- Non-GAAP net loss of ($0.08) - ($0.10) per share, compared to the
    Company's prior forecast of ($0.09) - ($0.11); and
    -- Cash and marketable securities of $114 million, reflecting cash usage
    of less than $1 million.
    Non-GAAP results exclude stock compensation expense. The Company currently expects to report a GAAP net loss of ($0.11) to ($0.13) per share for the third quarter.

    SupportSoft also announced an updated financial outlook for 2007. For the full year, the Company now expects total revenues of approximately $47 million and a non-GAAP net loss of ($0.35) to ($0.37) per share, compared to the Company's prior forecast of $54 - $55 million and ($0.31) - ($0.35). The Company is reducing its outlook due to:

    -- Longer rollout periods for the Company's consumer partner programs,
    including a program the Company is launching with a major U.S. retailer.
    Based on discussions with the retail partner, the Company believes the
    first phase of this program will be operational at the end of this year
    within a meaningful number of stores in one key state, with further
    expansion in 2008.
    -- Caution in forecasting and closure of license transactions in the
    Company's base business in light of the third quarter revenue shortfall.

    "The two principal risks in our business have been the timing of partner rollouts in our consumer business and the lumpiness of license revenue in our base business," said Josh Pickus, President and CEO of SupportSoft. "Our third quarter results and fourth quarter outlook reflect the way in which these risks can affect our business. In spite of these setbacks, we remain firmly convinced that our consumer business offers substantial growth opportunities and that our base business can be operated in a profitable manner.

    "We launched our consumer business at the beginning of this year and have made enormous progress in nine months," continued Mr. Pickus. "We have signed over ten partners, more than twice the number originally forecast. These partners include three new relationships from Q3 -- a key U.K. retailer, a major anti-virus provider, and a leading search engine. In direct-to-consumer, is fully operational and continues to improve its performance on key metrics every quarter. From a product perspective, we have released a series of innovative solutions specifically targeted at the premium support market. Even with this progress, the path to our revenue targets has proven longer than anticipated, forcing us to revise our outlook for the year. We are driving hard to convert early progress into financial results.

    "In our base business we experienced difficulty in completing key license transactions in the third quarter. All of these transactions remain in the pipeline, but the third quarter revenue shortfall has caused us to be cautious about predicting closure during the fourth quarter. Our goal is to operate our base business in a consistently profitable manner, and we are taking steps in the fourth quarter to put us in a position to achieve this goal in 2008. We expect to provide more detail on our plans in our conference call following the release of full financial results for the third quarter."

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