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July 20, 2004 -- Combined Offering to Expand Unified Software Platform for Digital Service Provider “Triple Play” -- Redwood City, CA– July 20, 2004 – SupportSoft, Inc. (Nasdaq: SPRT), a provider of Real-Time Service Management software, and Core Networks Incorporated, a privately held Canadian software company based in Halifax, Nova Scotia, announced that they have signed a definitive merger agreement under which SupportSoft will acquire all, or substantially all, of the assets of Core Networks for approximately US$17 million in cash. The transaction is subject to customary closing conditions. SupportSoft anticipates that the transaction will close in September 2004 and will be accretive to earnings per share within 12 months of closing. Established in 1998, Core Networks specializes in software products for network monitoring, management and activation of advanced digital services for DSL and cable broadband providers. Core Networks’ software products are evolving into a comprehensive portfolio of solutions for network management and monitoring, usage policy management, firmware upgrade management and remote management of home network devices. “SupportSoft’s proven strength in providing digital service providers (DSPs) with the software solutions they require to efficiently expand their customer offerings for the ‘triple play’ of high speed data, voice and video delivery, now becomes even stronger through the acquisition of Core Networks,” said Radha Basu, SupportSoft Chairman and CEO. “Comprehensive service automation -- especially for the ‘last mile’ leading to a subscriber’s home or small business -- is essential to creating a great customer experience. We believe the integration of Core Network’s real-time networking products with SupportSoft’s Real-Time Service Management platform uniquely positions our combined offering as the first true, end-to-end solution for IP-based digital services.” Major benefits that SupportSoft anticipates from the acquisition include: · Technology foundation for triple play service automation including voice over IP, video over IP and enhanced broadband service offerings, · Expanded capability to support home network and small business environments through remote management of residential and small business gateway equipment, · Accelerated ability to deliver end-to-end service automation solutions from the customer premises, in the network and at the call center, · Expanded expertise for building solutions that identify and resolve network problems. “Having met with broadband providers around the globe, SupportSoft is consistently named as the company that is helping redefine customer service delivery through software innovation,” said Craig Soderquist, Core Networks’ President and CEO. “The integration of Core Networks and SupportSoft technologies promises to make standardizing on SupportSoft for voice, video and data service automation even more appealing to customers. Rather than working with multiple point solution vendors with conflicting agendas, technologies and priorities -- not to mention an inconsistent understanding of network technologies -- service providers now have one leader they can turn to for their service delivery needs.” The company also announced its earnings for Q2 2004 with revenues of $16.9 million, a 34% increase from $12.6 million for the same period last year and a 7% increase from $15.7 million for the previous quarter. Net income on a GAAP basis for the quarter was $4.9 million or $0.11 per diluted share, compared with $2.0 million or $0.06 per diluted share a year ago and $3.9 million or $0.09 per diluted share for the previous quarter. The Company’s cash and cash equivalents were $127.9 million at June 30, 2004, which compares to a cash balance of $121.4 million at December 31, 2003. SupportSoft has been cash flow positive for ten consecutive quarters. Net operating margin for the quarter was 30%, up from 16% for the year-ago quarter and 24% for the previous quarter. About SupportSoft |
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