Salary.com Announces Fourth Quarter and Fiscal 2009 Financial Results - News for the HR and Recruiting Marketplace

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Salary.com Announces Fourth Quarter and Fiscal 2009 Financial Results

Reports 32 nd Consecutive Quarter of Revenue Growth

WALTHAM, Mass. - May 14, 2009 - Salary.com, Inc. (NASDAQ: SLRY), a leading provider of on-demand HRMS/payroll, compensation and talent management solutions, today announced financial results for its fourth quarter and fiscal year, which ended March 31, 2009.

Revenue in the fourth quarter was $11.3 million, an increase of 21% over the fourth quarter of fiscal 2008. Bookings were $12.3 million, an increase of 18% over the fourth quarter of fiscal 2008. Non-GAAP operating cash flow, which excludes cash payments for severance, narrowed to an outflow of $0.6 million in the fourth quarter. GAAP operating cash flow narrowed to an outflow of $1.8 million in the fourth quarter. For the full year, revenue was $42.5 million, up 23% from fiscal 2008.

Kent Plunkett, founder and chief executive officer stated, "The fourth quarter marks Salary.com's 32 nd quarter of consecutive revenue growth.

Investments the company made in 2009 paid off in the fourth quarter and we expect new products and technology as well as our expanded sales pipeline to continue to fuel growth in fiscal 2010. At the same time, the cost reductions we implemented in January helped reduce our cash outflow to the lowest level in four quarters. Furthermore, we remain on track to return to positive operating cash flow in fiscal 2010."

Plunkett continued, "Fiscal 2010 is off to a promising start as we are beginning to realize the benefits of our broadened product suite which provides us with an increasing number of cross-selling and up-selling opportunities. We believe our combination of strict cost discipline combined with a rich, best-in-breed product portfolio, positions us as a leader in the on-demand human capital management space."

Fourth Quarter 2009 Financial Summary

Fourth quarter revenue was $11.3 million, an increase of 21% over the fourth quarter of fiscal 2008.

On a GAAP basis, for the fourth quarter of fiscal 2009, Salary.com reported a net loss of $8.8 million, or ($0.55) per diluted share, compared to a net loss of $3.6 million, or ($0.26) per diluted share, in the fourth quarter of fiscal 2008.

On a non-GAAP basis, excluding the impact of restructuring expenses, stock-based compensation expense and amortization of intangibles, Salary.com reported a net loss of $2.8 million, or ($0.18) per diluted share, for the fourth quarter of fiscal 2009, compared to a net loss of $1.2 million, or ($0.09) per diluted share, in the fourth quarter of fiscal 2008.

Cash and cash equivalents as of March 31, 2009 were $21.1 million, compared to $23.5 million as of December 31, 2008.

Current deferred revenue grew to $26.5 million as of March 31, 2009, an increase from $25.3 million as of December 31, 2008. Total deferred revenue was $28.3 million as of March 31, 2009, an increase from $27.3 million as of December 31, 2008.

Excluding non-recurring cash payments for severance, non-GAAP cash flow from operations was a net outflow of $0.6 million in the fourth quarter of fiscal 2009. Including the non-recurring payments, GAAP cash flow from operations was a net outflow of $1.8 million.

Fiscal Year 2009 Financial Summary
Additional Fourth Quarter and Fiscal 2009 Business Highlights Business Outlook Bryce Chicoyne, Salary.com's chief financial officer said, "We are pleased to show continued revenue growth despite the macro environment. At the same time, the cost reductions we recently implemented are having a positive impact on our bottom line results. We anticipate that the combination of our growing sales pipeline, our recent success in bundling payroll, compensation management, and talent management products and continued diligence with respect to expense management will result in positive operating cash flow for the company in fiscal 2010."

For the first quarter of fiscal 2010, Salary.com expects total revenue in the range of $11.0 million to $11.5 million. Non-GAAP net loss, which excludes non-cash stock-based compensation expenses of approximately $1.7 million, and amortization of intangibles of approximately $1.1 million, is expected to be in the range of $2.5 million to $3.0 million. GAAP net loss for the first quarter of fiscal 2010 is expected to be in the range of $5.4 million to $5.9 million. Weighted average diluted shares for the quarter are estimated to be approximately 16.3 million shares.

Fiscal year 2009 revenue was $42.5 million, an increase of 23% over fiscal year 2008.

On a GAAP basis, for the fiscal year 2009, Salary.com reported a net loss of $26.5 million, or ($1.73) per diluted share, compared to a net loss of $10.6 million, or ($0.77) per diluted share, in the fiscal year 2008.

On a non-GAAP basis, excluding the impact of restructuring expenses, stock-based compensation expense and amortization of intangibles, Salary.com reported a net loss of $11.8 million, or ($0.77) per diluted share, for the fiscal year 2009, compared to a net loss of $3.7 million, or ($0.27) per diluted share, in the fiscal year 2008.

Excluding non-recurring cash payments for severance, non-GAAP cash flow from operations was a net outflow of $7.4 million in the fiscal year 2009. Including the non-recurring payments, GAAP cash flow from operations was a net outflow of $8.6 million.

Salary.com added over 700 new enterprise customers in fiscal 2009, increasing enterprise customer count by 25% to over 3,500 at the end of the fiscal year (including 29% of the Fortune 500).

New customer additions in the fourth quarter of fiscal 2009 included Adams Golf, ADS Alliance Data Systems, Inc., BP America Inc., Coach USA, NEC Corporation and Nii Holdings Inc.

During the fourth quarter, Salary.com repurchased approximately 169,000 shares at an average purchase price of $1.84 per share.

To date, the Company has repurchased approximately 878,000 shares at an average price of $1.61 per share. The company remains active in repurchasing shares, and recently increased its authorization from $2.5 million to $7.5 million.

Business Outlook
Bryce Chicoyne, Salary.com's chief financial officer said, "We are pleased to show continued revenue growth despite the macro environment. At the same time, the cost reductions we recently implemented are having a positive impact on our bottom line results. We anticipate that the combination of our growing sales pipeline, our recent success in bundling payroll, compensation management, and talent management products and continued diligence with respect to expense management will result in positive operating cash flow for the company in fiscal 2010."

For the first quarter of fiscal 2010, Salary.com expects total revenue in the range of $11.0 million to $11.5 million. Non-GAAP net loss, which excludes non-cash stock-based compensation expenses of approximately $1.7 million, and amortization of intangibles of approximately $1.1 million, is expected to be in the range of $2.5 million to $3.0 million. GAAP net loss for the first quarter of fiscal 2010 is expected to be in the range of $5.4 million to $5.9 million. Weighted average diluted shares for the quarter are estimated to be approximately 16.3 million shares.

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