REDWOOD CITY, CA — (CRWENEWSWIRE) - 02/08/12 - Support.com, Inc. (NASDAQ:SPRT), a leading provider of cloud-based technology services and software for consumers and small business, today reported unaudited financial results for its fourth quarter ended December 31, 2011.

Q4 2011 Financial Summary

For the fourth quarter of 2011, total revenue was $15.0 million compared to $12.4 million in the third quarter of 2011 and $12.3 million in the fourth quarter of 2010.

On a GAAP basis, loss from continuing operations for the fourth quarter of 2011 was $4.2 million, or $(0.09) per share, compared to $7.1 million, or $(0.15) per share, in the third quarter of 2011, and $4.0 million, or $(0.08) per share, in the fourth quarter of 2010.

Non-GAAP loss from continuing operations for the fourth quarter of 2011 was $2.8 million, or $(0.06) per share, compared to $5.0 million, or $(0.10) per share, in the third quarter of 2011, and $3.1 million, or $(0.07) per share, in the fourth quarter of 2010.

Non-GAAP results exclude stock-based compensation expense, amortization of intangible assets, restructuring and impairment charges, income tax impact of the disposition of a business unit on continuing operations, acquisition expense, and tax expense associated with acquired goodwill. These items impacted results from continuing operations by $1.4 million in the fourth quarter of 2011, $2.1 million in the third quarter of 2011 and $807,000 in the fourth quarter of 2010. A reconciliation of GAAP to non-GAAP results is presented in the tables below.

“We had an outstanding fourth quarter, with strong revenue growth and significant bottom line improvement,” said Josh Pickus, President and Chief Executive Officer. “Progress in current programs, activity levels in the pipeline, especially in small business opportunities, and targeted initiatives to drive operating efficiency position us well for 2012.”

Balance Sheet Information

At December 31, 2011 cash, cash equivalents and investments were $53.0 million compared to $59.3 million at September 30, 2011.

Recent Highlights

* Awarded Comcast small business program
* Extended Staples program to 2013
* Entered into agreement with leading security vendor Trend Micro to distribute Support.com(R) software products
* Acquired managed service provider for small business in January 2012

Conference Call

Support.com will host a conference call discussing the Company’s fourth quarter 2011 results on Wednesday, February 8, 2012 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 the Company’s website at http://www.support.com/about/investor-relations/webcastsevents. The live call may be accessed by dialing (877) 312-8789 (domestic) or (253) 237-1314 (international) and referencing passcode 42057006. A replay of the call can also be accessed by dialing (855) 859-2056 (domestic) or (404) 537-3406 (international), and referencing passcode 42057006.

About Support.com

Support.com, Inc. provides cloud-based technology services and software for consumers and small business. Support.com Personal Technology Experts(R) provide a quick, cost-effective and stress-free technology support experience over the Internet and the phone using the Company’s advanced technology platform. Support.com also offers a wide range of easy-to-use software products that detect and repair common computer problems and optimize performance and security. Support.com offers programs through many of the nation’s leading retailers, broadband service providers, software vendors and PC/CE OEMs, and provides software to over a million consumers and small businesses. For more information please visit us at: www.support.com, www.facebook.com/support.com, or http://twitter.com/support_com.

Support.com, Inc. is an Equal Opportunity Employer. For more information, visit: http://www.support.com/about/careers.

Copyright © 2012 Support.com, Inc. All rights reserved. Support.com and Personal Technology Experts are trademarks or registered trademarks of Support.com, Inc. in the U.S. and other countries. All other marks are the property of their respective owners.

Note on Forward-Looking Statements

Statements made in this document that are not historical facts are “forward-looking statements” and accordingly involve risks and uncertainties that could cause actual results to differ materially from those described herein. Forward-looking statements include, for example, all statements relating to projected financial performance (including without limitation statements involving projections of revenue, margin, income (loss), earnings (loss) per share, cash usage, capital structure, and other financial items); the plans and objectives of management for future operations, partnerships, products, services or investments; and future performance in economic and other terms. The potential risks and uncertainties that could cause results to differ materially include, among others, our ability to retain and grow major partnerships, our ability to market and sell software and services directly to consumers and small businesses, our ability to maintain and grow revenue, our ability to scale and manage our workforce and our ability to control expenses and achieve desired margins. These and other risks are detailed in Support.com’s reports filed with the Securities and Exchange Commission, including without limitation its latest Annual Report on Form 10-K and its latest quarterly report on Form 10-Q, copies of which may be obtained from www.sec.gov. Support.com does not intend to update this information to reflect future events or circumstances, and disclaims any obligation to do so except as may be required by law.

Disclosure Regarding Non-GAAP Financial Measures

Support.com has excluded stock-based compensation expense, amortization of intangible assets, restructuring and impairment charges, income tax impact of the disposition of a business unit on continuing operations, acquisition expense, and tax expense associated with acquired goodwill from its GAAP results in order to determine the non-GAAP financial measures of loss from continuing operations and loss from continuing operations per share referenced in this document. We believe that the non-GAAP measures, when viewed in addition to and not in lieu of our reported GAAP results, assist investors in understanding our results of operations.

A. Stock-based compensation expense. Management excludes stock-based compensation expense when evaluating its operating performance because such expense does not require cash settlement and because such expense is not used by management to assess the performance of the Company’s business. Stock-based compensation expense was $957,000 in the fourth quarter of 2011, compared to $937,000 in the third quarter of 2011 and $717,000 in the fourth quarter of 2010. On an annual basis, stock-based compensation expense was $3.8 million in 2011 and $3.3 million in 2010.

B. Amortization of intangible assets. Management excludes acquisition-related intangible asset amortization and related charges when evaluating its operating performance because the Company does not acquire businesses on a predictable cycle and excluding such charges enables more consistent evaluation of the Company’s operating performance. Management also excludes such charges because they represent non-cash expenses. Amortization of intangible assets was $330,000 in the fourth quarter of 2011, compared to $330,000 in the third quarter of 2011 and $90,000 in the fourth quarter of 2010. On an annual basis, amortization of intangible assets was $866,000 in 2011 and $364,000 in 2010.

C. Restructuring and impairment charges. Management excludes restructuring and impairment charges when evaluating its operating performance because the Company does not undertake restructurings on a predicable basis and excluding such charges enables more consistent evaluation of the Company’s operating performance. Restructuring and impairment expense was zero in the fourth quarter of 2011, compared to $368,000 in the third quarter of 2011 and zero in the fourth quarter of 2010. On an annual basis, restructuring and impairment charges were $470,000 in 2011 and zero in 2010.

D. Income tax impact of the disposition of a business unit on continuing operations. Management excludes the income tax impact of the disposition of a business unit when evaluating its operating performance because this tax impact is not a result of the Company’s continuing operations. The income tax expense related to the disposition of a business unit was zero in the fourth quarter of 2011, compared to zero in the third quarter of 2011 and zero in the fourth quarter of 2010. On an annual basis, the income tax expense related to the disposition of a business unit was zero in 2011 and $58,000 in 2010.

E. Acquisition expense. Management excludes acquisition expense such as legal fees and advisory fees when evaluating its operating performance because the Company does not acquire businesses on a predictable cycle and excluding such expense enables more consistent evaluation of the Company’s operating performance. Acquisition expense was $5,000 in the fourth quarter of 2011, compared to $190,000 in the third quarter of 2011 and zero in the fourth quarter of 2010. On an annual basis, acquisition expense was $543,000 in 2011 and zero in 2010.

F. Tax expense associated with acquired goodwill. The Company is required to record a deferred tax liability and the related tax expense that results from the amortization for income tax purposes of acquired goodwill. Management excludes tax expense associated with acquired goodwill when evaluating its operating performance because the Company does not acquire businesses on a predictable cycle and excluding such expense enables more consistent evaluation of the Company’s operating performance. Tax expense associated with acquired goodwill was $67,000 in the fourth quarter of 2011, compared to $270,000 in the third quarter of 2011 and zero in the fourth quarter of 2010. On an annual basis, tax expense associated with acquired goodwill was $337,000 in 2011 and zero in 2010.

The Company believes that non-GAAP measures have significant limitations in that they do not reflect all of the amounts associated with the Company’s financial results as determined in accordance with GAAP and that these measures should only be used to evaluate the Company’s financial results in conjunction with the corresponding GAAP measures. In addition, the exclusion of the charges and expenses indicated above from the non-GAAP financial measures presented does not indicate an expectation by management that such charges and expenses will not be incurred in subsequent periods.

Source: Support.com, Inc.

Contact:
Contact Information:
Investor Contact
Carolyn Bass
Market Street Partners
(415) 445-3235
sprt@marketstreetpartners.com
Media Contact
Seth Geisler
Martin Levy Public Relations, Inc.
(858) 610-9860
seth@martinlevypr.com

SUPPORT.COM, INC.
                 GAAP CONDENSED CONSOLIDATED BALANCE SHEETS
                               (in thousands)
                                (unaudited)

                             December 31,     September 30,    December 31,
                                 2011     (1)      2011     (1)    2010
                             ------------     -------------    ------------

Assets
Current assets:
  Cash, cash equivalents and
   short-term investments    $     51,902     $      56,682    $     71,568
  Accounts receivable, net         10,284             6,119           5,133
  Prepaid expenses and other
   current assets                   1,068             1,174           1,617
                             ------------     -------------    ------------
    Total current assets           63,254            63,975          78,318
Long-term investments               1,111             2,625           2,667
Property and equipment, net           461               528             623
Goodwill                           13,621            13,621          10,181
Purchased technologies, net           144               164             226
Intangible assets, net              5,670             6,000           1,076
Other assets                          735               723             648
                             ------------     -------------    ------------

Total assets                 $     84,996     $      87,636    $     93,739
                             ============     =============    ============

Liabilities and
 Stockholders' Equity
Current Liabilities:
  Accounts payable           $      1,196     $         609    $        536
  Accrued compensation              1,676             2,352           1,248
  Other accrued liabilities         4,491             4,495           3,575
  Short-term deferred
   revenue                          4,723             3,897           1,574
                             ------------     -------------    ------------
    Total current
     liabilities                   12,086            11,353           6,933
Long-term deferred revenue            489               514               -
Other long-term liabilities         1,086             1,119             749
                             ------------     -------------    ------------
Total liabilities                  13,661            12,986           7,682
                             ------------     -------------    ------------

Stockholders' equity:
Common stock                            5                 5               5
Additional paid-in-capital        233,977           232,953         229,692
Accumulated other
 comprehensive loss                (1,698)           (1,708)         (1,331)
Accumulated deficit              (160,949)         (156,600)       (142,309)
                             ------------     -------------    ------------
Total stockholders' equity         71,335            74,650          86,057
                             ------------     -------------    ------------

Total liabilities and
 stockholders' equity        $     84,996     $      87,636    $     93,739
                             ============     =============    ============

Note 1: 2011 amounts are subject to completion of management's and its
 independent registered public accounting firm's customary closing and
 review procedures.

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

                          Three Months Ended
                 December     September     December   Year Ended December
                    31,          30,           31,             31,
                 --------     ---------     --------  ---------------------
                   2011   (1)    2011   (1)   2010      2011   (1)   2010
                 -------- --- --------- --- --------  -------- --- --------
Revenue:
 Services        $ 11,124     $   8,532     $  9,384  $ 37,248     $ 32,276
 Software and
  other             3,880         3,818        2,870    16,591       11,901
                 --------     ---------     --------  --------     --------
  Total revenue    15,004        12,350       12,254    53,839       44,177

Cost of revenue:
 Cost of
  services          8,585         7,917        6,980    29,919       26,737
 Cost of
  software and
  other               449           458          381     1,744        1,358
                 --------     ---------     --------  --------     --------
  Total cost of
   revenue          9,034         8,375        7,361    31,663       28,095

Gross profit        5,970         3,975        4,893    22,176       16,082
                 --------     ---------     --------  --------     --------

Operating
 expenses:
 Research and
  development       1,599         1,577        1,316     6,057        5,214
 Sales and
  marketing         5,509         5,954        4,911    21,791       18,091
 General and
  administrative    2,705         3,074        2,625    12,005       10,963
 Amortization of
  intangible
  assets              330           330           90       866          364
                 --------     ---------     --------  --------     --------
  Total
   operating
   expenses        10,143        10,935        8,942    40,719       34,632
                 --------     ---------     --------  --------     --------

Loss from
 operations        (4,173)       (6,960)      (4,049)  (18,543)     (18,550)

Interest income
 and other, net        83            96          104       455          540
                 --------     ---------     --------  --------     --------

Loss from
 continuing
 operations,
 before income
 taxes             (4,090)       (6,864)      (3,945)  (18,088)     (18,010)

Income taxes
 provision            106           264           10       401           88
                 --------     ---------     --------  --------     --------

Loss from
 continuing
 operations,
 after income
 taxes             (4,196)       (7,128)      (3,955)  (18,489)     (18,098)

Income (loss)
 from
 discontinued
 operations, net
 of income taxes     (153)           18            4      (151)          31
                 --------     ---------     --------  --------     --------
Net Loss         $ (4,349)    $  (7,110)    $ (3,951) $(18,640)    $(18,067)
                 ========     =========     ========  ========     ========

Earnings per
 share:
 Basic and
  diluted
  earnings per
  share:
  Loss from
   continuing
   operations,
   after income
   taxes         $  (0.09)    $   (0.15)    $  (0.08) $  (0.39)    $  (0.39)
  Earnings
   (loss) from
   discontinued
   operations,
   net of income
   taxes            (0.00)         0.00         0.00     (0.00)        0.00
                 --------     ---------     --------  --------     --------
 Net loss per
  basic and
  diluted share  $  (0.09)    $   (0.15)    $  (0.08) $  (0.39)    $  (0.39)
                 ========     =========     ========  ========     ========

Shares used in
 computing per
 share amounts:
  Basic            48,351        48,326       47,536    48,288       46,818
                 --------     ---------     --------  --------     --------
  Diluted          48,351        48,326       47,536    48,288       46,818
                 --------     ---------     --------  --------     --------

Note 1:  2011 amounts are subject to completion of management's and its
         independent registered public accounting firm's customary closing
         and review procedures.

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

                               Three Months Ended
                         December  September   December      Year Ended
                           31,        30,        31,        December 31,
                        ---------  ---------  ---------  ------------------
                           2011       2011       2010      2011      2010
                        ---------  ---------  ---------  --------  --------

GAAP cost of revenue    $   9,034  $   8,375  $   7,361  $ 31,663  $ 28,095
   Stock-based
    compensation
    expense (Cost of
    revenue portion
    only)                     (91)       (68)       (47)     (274)     (169)
   Restructuring and
    impairment charges
    (Cost of revenue
    portion only)               -        (55)         -       (93)        -
                        ---------  ---------  ---------  --------  --------
Non-GAAP cost of
 revenue                $   8,943  $   8,252  $   7,314  $ 31,296  $ 27,926

GAAP operating expenses $  10,143  $  10,935  $   8,942  $ 40,719  $ 34,632
   Stock-based
    compensation
    expense (Excl. cost
    of revenue portion)      (866)      (869)      (670)   (3,494)   (3,162)
   Amortization of
    intangible assets        (330)      (330)       (90)     (866)     (364)
   Restructuring and
    impairment charges
    (Excl. cost of
    revenue portion)            -       (313)         -      (377)        -
   Acquisition expense         (5)      (190)         -      (543)        -
                        ---------  ---------  ---------  --------  --------
Non-GAAP operating
 expenses               $   8,942  $   9,233  $   8,182  $ 35,439  $ 31,106

GAAP income taxes
 provision              $     106  $     264  $      10  $    401  $     88
   Income tax impact of
    the disposition of
    a business unit on
    continuing
    operations                  -          -          -         -       (58)
   Tax expense
    associated with
    acquired goodwill         (67)      (270)         -      (337)        -
                        ---------  ---------  ---------  --------  --------
Non-GAAP income taxes
 provision (benefit)    $      39  $      (6) $      10  $     64  $     30

GAAP loss from
 continuing operations,
 after income taxes     $  (4,196) $  (7,128) $  (3,955) $(18,489) $(18,098)
   Stock-based
    compensation
    expense                   957        937        717     3,768     3,331
   Amortization of
    intangible assets         330        330         90       866       364
   Restructuring and
    impairment charges          -        368          -       470         -
   Income tax impact of
    the disposition of
    a business unit on
    continuing
    operations                  -          -          -         -        58
   Acquisition expense          5        190          -       543         -
   Tax expense
    associated with
    acquired goodwill          67        270          -       337         -
                        ---------  ---------  ---------  --------  --------
   Total impact of Non-
    GAAP exclusions     $   1,359  $   2,095  $     807  $  5,984  $  3,753

Non-GAAP loss from
 continuing operations,
 after income taxes     $  (2,837) $  (5,033) $  (3,148) $(12,505) $(14,345)
                        =========  =========  =========  ========  ========

Basic and diluted loss
 per share from
 continuing operations,
 after income taxes
   GAAP                 $   (0.09) $   (0.15) $   (0.08) $  (0.38) $  (0.39)
   Non-GAAP             $   (0.06) $   (0.10) $   (0.07) $  (0.26) $  (0.31)

Shares used in
 computing per share
 amounts (GAAP)
   Basic                   48,351     48,326     47,536    48,288    46,818
   Diluted                 48,351     48,326     47,536    48,288    46,818

Shares used in
 computing per share
 amounts (Non-GAAP)
   Basic                   48,351     48,326     47,536    48,288    46,818
   Diluted                 48,351     48,326     47,536    48,288    46,818

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 stock-based compensation expense, amortization of intangible assets, restructuring and impairment charges, income tax impact of the disposition of a business unit on continuing operations, acquisition expense, and tax expense associated with acquired goodwill. 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.

2011 amounts are subject to completion of management's and its independent registered public accounting firm's customary closing and review procedures.

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