8-K

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF

THE SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): July 31, 2008

SALARY.COM, INC.

(Exact name of registrant as specified in its charter)

Delaware

(State of incorporation or organization)

001-33312	04-3465241
(Commission file number)	(I.R.S. employer identification no.)

195 West Street, Waltham, Massachusetts 02451

(Address of principal executive office) (Zip code)

Registrant’s telephone number, including area code: (781) 464-7300

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02. Results of Operations and Financial Condition.

On July 31, 2008, Salary.com issued a press release announcing its results of operations for the three months ended, and financial condition as of, June 30, 2008. The text of the press release is furnished as Exhibit 99.1 to this Form 8-K and is incorporated herein by reference.

The information in this Item 2.02 of this Current Report, including the exhibit hereto, shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section or Sections 11 and 12(a)(2) of the Securities Act of 1933, as amended. The information contained herein and in the accompanying exhibit shall not be incorporated by reference into any registration statement or other document filed with the Securities and Exchange Commission by the Company, whether made before or after the date hereof, regardless of any general incorporation language in such filing, except as shall be expressly set forth by specific reference in such filing.

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits

99.1 Press release issued July 31, 2008.

2

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	SALARY.COM, INC.
Date: July 31, 2008	By:	/s/ Bryce Chicoyne
		Bryce Chicoyne
		Senior Vice President and Chief Financial Officer

3

Exhibit Index

Exhibit No.	Description
99.1	Press release issued July 31, 2008.

4

EX-99.1

EXHIBIT 99.1

Salary.com™ Reports First Quarter Fiscal 2009 Financial Results

29^th consecutive quarter of revenue growth

First quarter revenue increased 28% and bookings increased 33%

over the first quarter of fiscal 2008

WALTHAM, Mass. – July 31, 2008 – Salary.com, Inc. (NASDAQ: SLRY), a leading provider of on-demand compensation and talent management solutions, today announced financial results for its first quarter of fiscal 2009, which ended June 30, 2008. Revenue in the first quarter was $9.6 million, an increase of 28% over the first quarter of fiscal 2008. Bookings were $10.8 million, an increase of 33% over the first quarter of fiscal 2008.

Kent Plunkett, founder and chief executive officer stated, “We were pleased with the company’s performance in the first quarter, which was a solid start to fiscal 2009. First quarter revenue was at the upper end of our guidance, which helped produce a smaller-than-anticipated net loss, and we delivered solid year-over-year growth in bookings. The strategic sales and marketing initiative that we announced last quarter is off to a good start and will complement the broadening of our data-rich product portfolio to drive future bookings and revenue growth. We continue to believe that we are at the early stages of a large market opportunity, and the investments we are making will help to ensure that Salary.com is one of the long-term winners in the overall compensation and talent management market place.”

First Quarter of Fiscal 2009 Financial Summary

• First quarter of fiscal 2009 revenue of $9.6 million.

• On a GAAP basis, for the first quarter of fiscal 2009, Salary.com reported a net loss of $6.2 million, or ($0.42) per diluted share, compared to a net loss of $1.4 million, or ($0.10) per diluted share, in the first quarter of fiscal 2008.

• On a non-GAAP basis, excluding the impact of stock-based compensation expense and amortization of intangibles, for the first quarter of fiscal 2009, Salary.com reported a net loss of $3.4 million, or ($0.23) per diluted share, compared to a net loss of $0.5 million, or ($0.04) per diluted share, in the first quarter of fiscal 2008.

• Cash and cash equivalents at the end of the first quarter of fiscal 2009 were $34.7 million, compared to $37.7 million at end March 31, 2008, with the decrease primarily due to increased sales and marketing expenditures to fund previously disclosed growth initiatives.

• Current deferred revenue grew to $22.0 million at the end of the first quarter of fiscal 2009, an increase from $20.5 million at the end of fiscal 2008. Total deferred revenue was $23.3 million at the end of the first quarter, an increase from $22.0 million at March 31, 2008.

• Cash flow from operations was a net outflow of $2.1 million in the first quarter of fiscal 2009 and free cash flow, a non-GAAP measure, was an outflow of $2.5 million.

Bryce Chicoyne, Salary.com’s chief financial officer said, “Our first quarter results reflect solid execution and we are pleased to have met our expectations. At the same time, we are making good progress expanding our sales force and implementing the marketing initiatives that we announced previously, and we continue to anticipate positive long-term results from these efforts.”

Business Highlights

• Salary.com added approximately 240 new enterprise customers in the first quarter of fiscal 2009.

• New customer additions in the first quarter of fiscal 2009 included Four Seasons Hotels – Canada, Express Scripts, MSC Software, The New York Times Company, Novartis, Teva Pharmaceuticals, and VF Corporation.

• In May 2008, Salary.com announced the formation of a provider alliance with Convergys to offer enhanced compensation outsourced solutions and services to help customers reduce compensation costs and redeploy existing resources to more strategic compensation and talent management initiatives.

• Also in May 2008, Salary.com demonstrated momentum with its CompAnalyst^® Canada dataset, with the announcement that several marquee customers chose the product to market price over 650 benchmark jobs. These customers include Stratos Mobile Networks, HRB Management, The Hershey Company, Peter Kiewit Sons, Inc., Omron Canada Inc., Sonoco Products Company, Harry Winston, Credit Union of Central British Columbia and Globe Union Group Inc.

Business Outlook

For the second quarter of fiscal 2009, Salary.com expects total revenue in the range of $10.2 to $10.7 million. Non-GAAP net loss, which excludes non-cash stock-based compensation expenses of approximately $2.2 million and amortization of intangibles of approximately $0.8 million, is expected to be in the range of $3.2 to $3.7 million. GAAP net loss for the second quarter of fiscal 2009 is expected to be in the range of $6.2 to $6.7 million. Weighted average diluted shares for the quarter are estimated to be approximately 15.0 million shares.

Salary.com continues to expect total revenue in fiscal 2009 to be in the range of $45.0 to $49.0 million, and cash flow from operations is expected to be in the range of $0 to $1.0 million. Non-GAAP net loss, which excludes non-cash impact of stock-based compensation expense of approximately $9.0 million and amortization of intangibles of approximately $3.0 million, is expected to be in the range of $10.0 to $13.0 million. On a GAAP basis, net loss for fiscal 2009 is expected to be in the range of $22.0 to $25.0 million. Weighted average diluted shares for the year are estimated to be approximately 15.1 million shares.

Conference call

What:	Salary.com first quarter financial results conference call and webcast
When:	Thursday, July 31, 2008
Time:	5:00 PM ET
Live Call:	(877) 419-6592, domestic (719) 325-4939, international
Replay:	(888) 203-1112, conference ID 6312124, domestic (719) 457-0820, conference ID 6312124, international
Webcast:	http://investor.salary.com/events.cfm (live and replay)

About Salary.com, Inc.

Salary.com is a leading provider of on-demand compensation and talent management solutions helping businesses and individuals manage pay and performance. Salary.com’s highly configurable software applications, proprietary data and consulting services help HR and compensation professionals automate, streamline and optimize critical talent management processes including: market pricing, compensation planning, performance management and succession planning. Built with compensation and competency data at the core, Salary.com solutions provide businesses of all sizes with the most productive and cost-effective way to manage and inspire their most important asset – their people.

For more information, visit www.salary.com.

Safe Harbor Statement

This release contains “forward-looking” statements that are made pursuant to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. These are statements that are predictive in nature, that depend upon or refer to future events or conditions, or that include words such as “may,” “will,” “expects,” “projects,” “anticipates,” “estimates,” “believes,” “intends,” “plans,” “should,” “seeks,” and similar expressions. This press release contains forward-looking statements relating to, among other things, Salary.com’s expectations and assumptions concerning future performance. Forward-looking statements involve known and unknown risks and uncertainties that may cause actual future results to differ materially from those projected or contemplated in the forward-looking statements. The risks and uncertainties referred to above include, but are not limited to, risks associated with possible fluctuations in our operating results and rate of growth, our history of operating losses, the possibility that we will not achieve GAAP profitability, our ability to expand our customer base and product and service offerings, interruptions or delays in our service or our Web hosting, our business model, breach of our security measures, the emerging market in which we operate, integration and performance of acquired businesses, our ability to hire, retain and motivate our employees and manage our growth, our ability to generate additional revenues from our investments in sales and marketing, competition, our ability to continue to release and gain customer acceptance of new and improved versions of our service, successful customer deployment and utilization of our services, fluctuations in the number of shares outstanding and general economic factors, as well as those risks and uncertainties described in Salary.com’s filings with the Securities and Exchange Commission. Salary.com expressly disclaims any obligation to update any forward-looking statements.

(SLRY-F)

Contact:

Media:

Schwartz Communications

Bill Keeler, 781-684-0770

Investors:

Salary.com, Inc.

Bryce Chicoyne, CFO, 781-464-7889

or

Integrated Corporate Relations

Garo Toomajanian, 781-464-7340

EXHIBIT 1

Salary.com, Inc.

Condensed Consolidated Balance Sheets

(in thousands, unaudited)

	June 30, 2008		March 31, 2008
ASSETS
Current assets:
Cash and cash equivalents	$	34,707	$	37,727
Accounts receivable, net of allowance for doubtful accounts		5,671		4,734
Prepaid expenses and other current assets		2,012		1,922
Total current assets		42,390		44,383
Property, equipment and software, net		2,294		1,566
Goodwill and intangible assets, net		18,655		19,091
Other assets		1,582		1,169
Total assets	$	64,921	$	66,209
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable and accrued compensation	$	3,485	$	4,681
Accrued expenses and other current liabilities		3,340		3,146
Deferred revenue, current portion		21,989		20,523
Total current liabilities		28,814		28,350
Deferred revenue, net of current portion		1,279		1,510
Long term liabilities		688		181
Total liabilities		30,781		30,041
Total stockholders’ equity
Total stockholders’ equity		34,140		36,168
Total liabilities and stockholders’ equity	$	64,921	$	66,209

EXHIBIT 2

Salary.com, Inc.

Consolidated Statements of Operations

(in thousands, except per share data)

(unaudited)

	Three Months Ended June 30,
	2008			2007
Revenues:
Subscription revenues	$	8,989		$	6,758
Advertising revenues		625			781
Total revenues		9,614			7,539
Cost of revenues (1)		3,240			1,622
Gross profit		6,374			5,917
Operating expenses:
Research and development (1)		1,809			882
Sales and marketing (1)		6,490			3,899
General and administrative (1)		3,995			2,927
Amortization of intangible assets		379			135
Total operating expenses		12,673			7,843
Loss from operations		(6,299	)		(1,926	)
Other income:
Interest income		250			561
Other income (expense)		(27	)		—
Total other income		223			561
Loss before provision for income taxes		(6,076	)		(1,365	)
Provision for income taxes		86			—
Net loss	$	(6,162	)	$	(1,365	)
Net loss per share—basic and diluted	$	(0.42	)	$	(0.10	)
Weighted average shares outstanding—basic and diluted		14,597			13,358
(1)    Amounts include stock-based compensation expense, as follows:
	Three Months Ended June 30
	2008			2007
Cost of revenues	$	400		$	95
Research and development		266			2
Sales and marketing		717			202
General and administrative		604			375
	$	1,987		$	674

EXHIBIT 3

Salary.com, Inc.

Condensed Consolidated Statements of Cash Flows

(in thousands, unaudited)

	Three Months Ended June 30,
	2008			2007
Cash flows from operating activities:
Net loss	$	(6,162	)	$	(1,365	)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation and amortization		1,017			404
Stock-based compensation		1,987			674
Other non-cash items		55			59
Change in operating assets and liabilities		1,008			1,841
Net cash provided by (used in) operating activities		(2,095	)		1,613
Cash flows from investing activities:
Cash paid for acquisition of business		(250	)		(10,198	)
Cash paid for intangible assets		(30	)		(214	)
Increase in restricted cash		(372	)		—
Purchases of property and equipment		(327	)		(116	)
Capitalization of software development costs		(45	)		(162	)
Net cash used in investing activities		(1,024	)		(10,690	)
Cash flows from financing activities:
Net proceeds from exercise (buyback) of common stock options and warrants		100			(9	)
Net cash provided by (used in) financing activities		100			(9	)
Effect of exchange rate changes on cash and cash equivalents		(1	)		(1	)
Decrease in cash and cash equivalents		(3,020	)		(9,087	)
Cash and cash equivalents, beginning of period		37,727			49,016
Cash and cash equivalents, end of period	$	34,707		$	39,929

EXHIBIT 4

Salary.com, Inc.

Reconciliation of Non-GAAP Measures

(in thousands, except per share data, unaudited)

	Three Months Ended June 30,
	2008			2007
Reconciliation of GAAP loss from operations to non-GAAP loss from operations:
Loss from operations	$	(6,299	)	$	(1,926	)
Amortization of intangible assets		379			135
Amortization of intangible assets (included in cost of revenues)		397			13
Stock-based compensation		1,987			674
Non-GAAP loss from operations	$	(3,536	)	$	(1,104	)
Reconciliation of GAAP net loss to non-GAAP net loss:
GAAP net loss	$	(6,162	)	$	(1,365	)
Amortization of intangible assets		379			135
Amortization of intangible assets (included in cost of revenues)		397			13
Stock-based compensation		1,987			674
Non-GAAP net loss	$	(3,399	)	$	(543	)
Non-GAAP net loss per share	$	(0.23	)	$	(0.04	)
Weighted average shares outstanding—basic and diluted		14,597			13,358
Reconciliation of GAAP cash flow from operations to non-GAAP free cash flow:
GAAP cash flow from operations	$	(2,095	)	$	1,613
Purchases of property and equipment		(327	)		(116	)
Capitalization of software development costs		(45	)		(162	)
Free cash flow	$	(2,467	)	$	1,335
Calculated Bookings:
Increase in deferred revenue	$	1,235		$	597
Revenue		9,614			7,539
Calculated bookings	$	10,849		$	8,136

EXHIBIT #5

SALARY.COM

Reconciliation of Non-GAAP Operating Statement Line Items

(In thousands, unaudited)

	Three months ended June 30, 2008
	US GAAP Results		Amortization of Intangible Assets			Stock-based Compensation Expense			Non-GAAP Results
Cost of revenues	$	3,240	$	(397	)	$	(400	)	$	2,443
Research and development expenses		1,809		—			(266	)		1,543
Sales and marketing expenses		6,490		—			(717	)		5,773
General and administrative expenses		3,995		—			(604	)		3,391
Amortization of intangible assets		379		(379	)		—			—
Total operating expenses	$	12,673	$	(379	)	$	(1,587	)	$	10,707
	Three months ended June 30, 2007
	US GAAP Results		Amortization of Intangible Assets			Stock-based Compensation Expense			Non-GAAP Results
Cost of revenues	$	1,622	$	(13	)	$	(95	)	$	1,514
Research and development expenses		882		—			(2	)		880
Sales and marketing expenses		3,899		—			(202	)		3,697
General and administrative expenses		2,927		—			(375	)		2,552
Amortization of intangible assets		135		(135	)		—			—
Total operating expenses	$	7,843	$	(135	)	$	(579	)	$	7,129
	Three months ended March 31, 2008
	US GAAP Results		Amortization of Intangible Assets			Stock-based Compensation Expense			Non-GAAP Results
Cost of revenues	$	2,516	$	(365	)	$	(288	)	$	1,863
Research and development expenses		1,464		—			(201	)		1,263
Sales and marketing expenses		5,395		—			(504	)		4,891
General and administrative expenses		3,355		—			(660	)		2,695
Amortization of intangible assets		389		(389	)		—			—
Total operating expenses	$	10,603	$	(389	)	$	(1,365	)	$	8,849

The non-GAAP financial measures in the text of this press release and accompanying non-GAAP supplemental information represent financial measures used by Salary.com’s management to evaluate the operating performance of the Company and to conduct its business operations. Non-GAAP financial measures discussed in the press release exclude amortization of intangible assets and stock-based compensation. By excluding these non-cash charges, Salary.com can evaluate its operations and can compare its results on a more consistent basis to the results of other companies in the industry. Management uses the non-GAAP financial measures for planning purposes, including the preparation of operating budgets and to determine appropriate levels of operating and capital investments. Management also believes that the non-GAAP financial measures provide additional insight for analysts and investors in evaluating the Company’s financial and operational performance and in assisting investors in comparing the Company’s financial performance to those of other companies in the Company’s industry, many of which present similar non-GAAP financial measures to investors. However, these non-GAAP financial measures are not intended to be an alternative to financial measures prepared in accordance with GAAP and should not be considered in isolation from our GAAP results of operations. Pursuant to the requirements of the SEC Regulation G, a detailed reconciliation between the Company’s GAAP and non-GAAP financial results is provided in this press release and investors are advised to carefully review and consider this information as well as the GAAP financial results that are disclosed in the Company’s SEC filings.