Tier Signs Two-Year Contract Extension with Alabama to Run Child Support Payment Center

Business Wire, Sept 16, 2003

Business Editors/High-Tech Writers

WALNUT CREEK, Calif.--(BUSINESS WIRE)--Sept. 16, 2003

Tier Technologies, Inc. (Nasdaq: TIER) announced today that it has received a two-year extension from the Alabama Department of Human Resources to operate the state's Child Support Payment Center. The Child Support Payment Center is responsible for processing the majority of child support payments for the state. The value of the contract extension, which is based on the number of transactions processed, is up to $6 million over the two-year period.

Under the contract extension, which runs through Aug. 2, 2005, Tier will handle ongoing payment processing and bank return items for the state as well as engage in customer service and collection activities.

Tier signed the original three-year contract with Alabama in 2000. During calendar year 2002, Tier processed over 2.1 million transactions, which provided more than $302 million in child support for the citizens of Alabama. As part of the initial contract, Tier led the statewide centralization, implementation and operation of Alabama's Child Support Payment Center, using the company's proprietary Kids1st(SM) remittance processing software.

"Tier is extremely pleased that the State of Alabama has chosen to extend our contract," said James R. Weaver, Tier's Chief Executive Officer. "We have provided state-of-the-art child support processing services for Alabama through use of our Kids1st(SM) software, and look forward to doing so in the years to come."

About Tier

Tier is a vertically-focused consulting firm that provides business and information technology consulting, systems design and integration, transaction processing, business process outsourcing and business process reengineering for its clients primarily in the state and local government, healthcare, insurance and utilities markets. Tier brings specific industry knowledge, proven delivery capability and proprietary applications to its client relationships. The combination of domain expertise and technical capability allow Tier to provide solutions that link increased operating efficiencies with systems and technology improvements. Tier serves Fortune 1000 companies and government entities, is included in the Russell 3000(R) Index and was ranked by Forbes Magazine as one of the "200 Best Small Companies" in America in 2002. More information about the company is available at www.tier.com.

Statements made in this press release, including statements regarding the contract extension and the estimated value of the contract extension, are forward looking statements that are made pursuant to the safe harbor provisions of the Securities Litigation Reform Act of 1995.

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 timing, initiation, completion, renewal, extension or early termination of client projects; the potential loss of funding by clients, including due to government budget shortfalls or revisions to mandated statutes; failure to achieve anticipated gross margin levels with respect to individual projects, including due to unanticipated costs incurred in fixed-price or transaction-based projects; 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 most recent annual report on Form 10-K for the year ended Sept. 30, 2002 and quarterly reports on Form 10-Q, as well as other filings with the SEC.

Tier...Expect A Lot(sm)