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Company reports sequentially increasing revenue and profit, and full-year EPS of $.12


MARLBORO, Mass., January 17, 2003 Concord Communications Inc. (Nasdaq: CCRD), an industry leader in ensuring application performance and availability across networks and systems to ensure profitable business operations, today announced its financial results for its fourth quarter ended December 31, 2002. Revenue increased 3% to $23.6 million over $23.1 million in the third quarter. Both pro forma and GAAP earnings per share were $0.04, up from $0.03 in the prior quarter. Revenue for the full year 2002 was $93.9 million, and increase of 6.5% over revenue of $87.9 million in 2001. Pro forma and GAAP earnings per share for the full year were $.12, up from a loss of ($.39) in 2001.

Concords customers are increasingly looking to business operations to drive profit, explained Jack Blaeser, Concords CEO and president. Companies that manage their business operations effectively can generate more revenue or reduce costs. Most often, the largest efficiency gain is found through enhancing the performance of critical business applications. Application management requires detailed drill-downs, like those the eHealthTM software provides, indicating likely causes of poor IT performance, which can occur anywhere: applications, networks, servers or clients.

According to Mike Betz, EMEA managing director, Concord, Today's economic environment requires disciplined cost management, driving corporate customers to more efficiently operate their globally distributed networks. eHealth is the only highly scalable, distributed software capable of serving the full range of mid-sized corporations to global customers, as evidenced by the new and expanded contracts within our EMEA client base.

Integrated Products Drive Increased Sales

Consistent with prior quarters, contributions from the product portfolio for Q4 are as follows:

Fault Management: approximately 15%

System Management: approximately 15%

Application Management: approximately 10%

Network Management: approximately 60%

Gross margins were 82%

Operating expenses were $19.2 million

Operating profit was positive

Pretax income margin was 3%


Diversified Customer Base Stabilizes Revenue

International revenue was $9.3 million or 39% from customers like Telecom Austria, Vital Technology Group Mexico and Nomura International

New and expanded customer contracts in EMEA include: BT Ignite, Fujitsu Services, Orange UK,
Telecom Austria, Telecom Italia, and Telekom in South Africa

63 new customers purchased the eHealth Suite, including Regence Blue Cross Blue Shield, Canon USA and Dixons Department Stores

82% of quarterly revenues were generated from returning customers such as Rockwell Automation, Pepsico and Securities Industry Automation Corporation (SIAC)

Enterprise customer revenue was 55% of quarterly revenue, from customers such as Conde Nast Publications, Countrywide Home Loans and Huntington National Bank

28% of revenue came from managed service customers such as Telecom Italia and Fujitsu Services and 17% of revenue was from carrier customers such as Orange UK and Comcast. In total, these two categories accounted for 45% of customer revenue.

Cash Increased, DSOs down

Cash grew over $1.3 million to $73.7 million

DSO was 66 days, down from DSO of 73 days in Q3

Guidance & GAAP Reporting Established

Concord is establishing guidance for Q1 between $23.0-23.5 million in revenue, and pro forma and GAAP earnings per share between $0.01 to $0.03. Concord will report pro-forma and GAAP EPS for only Q1. After Q1, only GAAP EPS will be reported.

Conference Call

Concord will hold a conference call today, January 17th 2003, to discuss results, product direction and future expectations at 8:00AM EDT. The phone number for the call is 800-473-6123 (domestic) and 973-582-2710 (international). The call will be available for approximately two weeks. The number for the replay is 877-519-4471 for U.S./Canada and 973-341-3080 for international callers. The access code is 3686756.

About Concord Communications

Concord Communications, Inc. (NASDAQ: CCRD) is a market leader in software solutions that maximize the performance and availability of the global IT infrastructure. Concord has more than 2900 customers, including all of the largest telecommunications companies in the world, as well as hundreds of blue-chip corporations worldwide. With its eHealth Suite of software products, Concord offers the only solution to combine real time information with historical context for integrated management across systems, applications and networks. Only by successfully managing performance and availability across all of these key areas can organizations truly ensure effective e-business. This end-to-end view provides the critical insights needed to power day-to-day business and e-commerce operations for some of today's most successful service providers and corporations worldwide. Concord is headquartered in Marlboro, Mass.

For more information on Concord, call 1-800-851-8725

or visit Concord on the Web at http://www.concord.com

Concord Communications, Inc., eHealth, Live Status, Fault Manager, and the Concord logo are trademarks of Concord Communications, Inc.

Safe Harbor

Forward-looking statements made in this press release, including forward-looking statements regarding revenue and profit expectations, are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Readers are cautioned that all forward-looking statements involve risks and uncertainties, and actual results could differ materially from the forward-looking statements contained herein. Risks and uncertainties include, without limitation, the magnitude and duration of the continuing domestic financial crisis and economic slowdown and specifically its impact on the software, networking and telecommunications industries; our customers' ability to obtain funding, specifically in light of the aforementioned financial and economic climate, and the resulting potential delay of customer purchasing decisions; risks associated with geopolitical uncertainty, especially in light of the current situation in Iraq and North Korea; risks of continued operating losses; the ability to attract and retain quality professional employees; uncertainties involving intellectual property rights and litigation, especially those involving potential piracy in new markets; litigation in general; risks in technology development and commercialization; risks in product development, including the companys transition to the Oracle database and market acceptance of and demand for the Company's products; risks associated with competition and competitive pricing pressures; risks associated with international sales, including foreign currency risks; and other risks detailed in the Company's filings with the Securities and Exchange Commission, including but not limited to, the Company's annual report on Form 10-K and quarterly reports on Form 10-Q. Any forward-looking statements should be considered in light of all these factors. The information contained in this press release is applicable only today and should thereafter be considered historical and will no longer constitute the Company's current expectations. The company undertakes no obligation to update information contained in this press release.

For further information, please contact:

Anna Milborrow/Casey Balkham

Brodeur Worldwide

Telephone: +44 (0)20 7298 7042/ +44 (0)20 7298 7043

Mail to: amilborrow@uk.brodeur.com/cbalkham@uk.brodeur.com
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