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RESTON, Va.–(BUSINESS WIRE)– Tier Technologies, Inc. (Nasdaq:TIER) today announced results for the quarter and year ended September 30, 2009 and provided updates on continuing strategic growth initiatives.

Results of Operations

Fourth Quarter Fiscal 2009 Results

For the quarter ended September 30, 2009, Tier reported revenues from Continuing Operations of $25.7 million, a 12.9% increase over the same quarter last year. Net loss from Continuing Operations was ($1.3) million, or ($0.06) per fully diluted share.

Continuing Operations include Electronic Payment Solutions, or EPS, and certain wind-down businesses. On a standalone basis, our core EPS business reported quarterly revenues of $24.8 million, or a 17.3% increase over the same quarter last year. Our general, administrative, selling and marketing expenses, which support our Continuing Operations, were $6.4 million, down $3.2 million over the same quarter last year.

Fiscal Year 2009 Results

For the year ended September 30, 2009, Tier reported revenues from Continuing Operations of $128.2 million, a 4.6% increase over the last year. Net loss from Continuing Operations was ($5.5) million, or ($0.28) per fully diluted share.

Continuing Operations include Electronic Payment Solutions, or EPS, and certain wind-down businesses. On a standalone basis, our core EPS business reported annual revenues of $123.2 million, or a 5.7% increase over last year. Our general, administrative, selling and marketing expenses, which support our Continuing Operations, were $32.2 million, down $4.5 million over the last year. We expect to see a continued decrease in these types of expenses as we streamline our operations in the future.

Management’s Comments

Ronald L. Rossetti, Chairman and Chief Executive Officer of Tier Technologies stated, “I am pleased to report adjusted EBITDA from Continuing Operations for FY2009, of $3.0 million as compared with an adjusted EBITDA loss of ($7.0) million in FY2008, and for the quarter ended September 30, 2009, adjusted EBITDA from Continuing Operations of $1.1 million compared to an adjusted EBITDA loss of ($3.4) million for the quarter ended September 30, 2008.”

“Our concentration today in our core “biller direct” business is to continue increasing Net Revenue growth over a fixed cost platform,” said Rossetti. “Even in these difficult economic conditions, where over 60% of our EPS revenue is directly tied to tax collections which have experienced steep revenue declines, we believe that our strategy is beginning to prove itself, as we were able to generate significant increases in both Net Revenue and adjusted EBITDA. This improvement is the result of increasing our profitability per transaction and driving substantial transaction growth while reducing overhead and holding platform costs relatively flat, thereby creating margin expansion in both Net Revenue and adjusted EBITDA. For the year ended September 30, 2009 our EPS transactions grew by 44.5% and our EPS gross margin (gross sales less direct and other costs) by 245 basis points, and for the fourth quarter by 70.4% and 176 basis points, respectively.”

Tier defines Net Revenue as revenue after discount fees, processing and interchange costs. Tier defines adjusted EBITDA as net income from Continuing Operations before interest expense net of interest income, taxes, depreciation and amortization and stock-based compensation expense, both cash and non-cash.

The following table shows a reconciliation of Gross Revenue to Net Revenue for the three and twelve months ended September 30, 2009 and 2008 (in thousands):

The following table shows a reconciliation of net income from Continuing Operations to adjusted EBITDA for the three and twelve months ended September 30, 2009 and 2008 (in thousands):

Adjusted EBITDA and Net Revenues are non-GAAP financial measures. Tier’s management believes these measures are useful for evaluating performance against peer companies within its industry, and provide investors with additional transparency with respect to financial measures used by management in its financial and operational decision-making. Non-GAAP financial measures should not be considered a substitute for the reported results prepared in accordance with US GAAP. Tier’s definition used to calculate non-GAAP financial measures may differ from those used by other companies.

Liquidity

As of September 30, 2009, Tier had $57.6 million in cash and marketable securities, and $7.4 million in restricted investments. Tier currently holds $31.2 million in auction rate securities as long-term investments. These investments are revenue bonds and asset-backed notes issued by state agencies. The investments are AAA-rated and collateralized with student loans and guaranteed under the Federal Family Education Loan Program. Tier has no short-term or long-term debt.

Conference Call

Tier will host a conference call Thursday, November 10, 2009 at 5:00 p.m. Eastern Time to discuss these results. To access the conference call, please dial (888)335-3240 and provide conference ID # 39918898. The conference call is also available live via the Internet at www.tier.com. A replay will be available at 8:00 p.m. Eastern Time at www.tier.com or by calling (800) 642-1687 and entering conference ID # 39918898. The replay will be available until 11:59 p.m. Eastern Time on November 24, 2009.

About Tier Technologies, Inc.

Tier Technologies, Inc. is a leading provider of electronic payment solutions in the biller direct market. Headquartered in Reston, Virginia, the company provides over 3,900 electronic payment clients in all 50 states and the District of Columbia with enhanced payment services that include multiple payment choices, payment channels, and bill payment products and services. Tier serves clients in multiple markets including federal, state, and local governments, educational institutions, utilities and commercial clients through its subsidiary, Official Payments Corporation. For more information, see www.tier.com and www.officialpayments.com.

Statements made in this press release that are not historical facts are forward-looking statements that are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements relate to future events or Tier’s future financial and/or operating performance and generally can be identified as such because the context of the statement includes words such as “may,” “will,” “intends,” “plans,” “believes,” “anticipates,” “expects,” “estimates,” “shows,” “predicts,” “potential,” “continue,” or “opportunity,” the negative of these words or words of similar import. Tier undertakes no obligation to update any such forward-looking statements. Each of these statements is made as of the date hereof based only on current information and expectations that are inherently subject to change and involve a number of risks and uncertainties. Actual events or results may differ materially from those projected in any of such statements due to various factors, including, but not limited to: the potential loss of funding by clients, including due to government budget shortfalls or revisions to mandated statutes; the timing, initiation, completion, renewal, extension or early termination of client projects; the Company’s ability to realize revenues from its business development opportunities; the impact of governmental investigations or litigations; and unanticipated claims as a result of project performance, including due to the failure of software providers or subcontractors to satisfactorily complete engagements. For a discussion of these and other factors which may cause our actual events or results to differ from those projected, please refer to the Company’s annual report on Form 10-K for the fiscal year ended September 30, 2009 filed with the SEC.

2009

2008

Preferred stock, no par value; authorized shares: 4,579; no shares issued and outstanding

Common stock and paid-in capital; shares authorized: 44,260; shares issued: 20,687 and 20,619; shares outstanding: 18,238 and 19,735

Wind-

down

(Loss) income from continuing operations before other income and income taxes

(Loss) income from continuing operations before taxes

Loss from continuing operations before other income and income taxes

Wind-

down

Loss from continuing operations before other income and income taxes