Concord Communications Announces Third Quarter Results.

MARLBORO, Mass.--(BUSINESS WIRE)--Oct. 21, 1997--Concord Communications, Inc. (NASDAQ:CCRD) today announced financial results for its third quarter ended September 30, 1997. Revenues for the quarter were $5.3 million, 125% greater than revenues of $2.3 million in the third quarter of 1996. Net income for the quarter was $202,000 or $ .02 per share, up from a net loss of $881,000 or ($.09) per share, in the third quarter of 1996.

For the nine months ended September 30, 1997, revenues were $13.0 million, an increase of 123% over revenues of $5.8 million for the nine months ended September 30, 1996. Net loss for the nine months ended September 30, 1997 was $764,000 or ($.08) per share, improved from a net loss of $3.7 million or ($.38) per share, in the same period in 1996.

On October 16, 1997, Concord Communications commenced an initial public offering of 2,900,000 shares of common stock, including 2,300,000 shares sold by the Company and 600,000 shares sold by selling stockholders, at $14.00 per share. The Company raised $29.2 million in this offering which was completed today.

"Concord's third quarter results continue our strong performance for the year. More Fortune 1000 organizations and telecommunications service providers are turning to Concord's Network Health performance and reporting solutions for an automated, easy-to-understand snapshot of the IT resources critical to their core business activities," said Jack Blaeser, Concord Communications President and CEO. "During the quarter we added more than 50 new accounts to our existing array of blue chip customers. In addition, our existing customer business continued to accelerate with close to 50% of Q3 business derived from our installed base. These high-profile customers have helped us achieve a leadership position in the network performance reporting and analysis market."

Concord Communications, Inc., is the leading developer of Web-based network reporting and analysis solutions that provide customers with the information they need to measure the effectiveness of their IT investment. The premier service providers, ISPs and Fortune 1000 companies turn to Concord each morning to assess the health of their corporate networks. Concord can be found on the Internet at: http://www.concord.com .

Any statements contained in this press release that do not describe historical facts may constitute forward looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995. Any forward looking statements contained herein are based on current expectations, but are subject to a number of risks and uncertainties. The factors that could cause actual future results to differ materially from current expectations include the following: fluctuations in customer demand; the Company's ability to manage its growth; the risk of new product introductions and customer acceptance of new products; the rapid technological change which characterizes the Company's markets; the risks associated with competition; the risks associated with international sales as the Company expands its markets; and the ability of the Company to compete successfully in the future, as well as other risks identified in the Company's Securities and Exchange Commission filings, including but not limited to those appearing under the caption "Risk Factors" in the Company's Prospectus dated October 15, 1997.

Concord, the Concord logo and Network Health are registered trademarks of Concord Communications, Inc.

                     Concord Communications, Inc.
                  Condensed Statement Months Ended
                         Sept. 30
Cost of revenues             771         377      2,050         1,309
Gross profit           ,272         2,811
Selling and marketicome (loss)          $ 202      $ (881)    $ (764)     $ (3,676)
Pro forma net income
  (loss) per sha
  average number of
  common and common
 ance Sheets
                       (Unaudited,                                          1997    assets
                123
            149
    Total current assets                      4,665          4,086

Equipment and improvements, net               2,006          1,498
Deferred financing costs                        454            --

Total Assets                                  7,125       $  5,584

Liabilities, Redeemable
 convertible preferred stock and
   Stockholders' Deficit
Current liabilities:
  Accounts payable and accrued expenses    $  4,115       $  3,885
  Deferred revenue                            2,756          1,331
  Current portion of long-term debt             476            257
     Total current liabilities                7,347          5,473
Long-term debt, net of current portion          937            668
  Total Liabilities                           8,284          6,141

Redeemable Convertible Preferred Stock     15,140         14,478

Common stock, deferred compensation
and additional paid-in capital             18,268         18,105
Accumulated deficit                       (34,567)       (33,140)
  Total Stockholders' Deficit             (16,299)       (15,035)

Total Liabilities, Redeemable
Convertible Preferred Stock and
Stockholders' Deficit                    $  7,125          5,584

CONTACT: Concord Communications, Inc.

Gary Haroian, 508/460-4646

[e-mail]

or

Christine Washburn, 508/303-4312

[e-mail]