Apropos Technology Reports Continued Profitability

Apropos Technology Reports Continued Profitability 


OAKBROOK TERRACE, Ill., July 22  /PRNewswire-FirstCall/ -- Apropos Technology
(NASDAQ:APRS), a leading provider of real time multi-channel interaction
management solutions, today reported revenues increased 6.7% to $5.0 million
for the second quarter ended June 30, 2004 from $4.7 million for the second
quarter ended June 30, 2003.  Revenues for the six months ended June 30, 2004
were $10.1 million compared to $9.8 million for the six months ended June 30,
2003.

Net income for the three months ended June 30, 2004, was $109,000, or income of
$0.01 per share, which includes restructuring and other charges of $88,000, or
$0.00 per share.  This restructuring and other charge is an adjustment of the
reserve for consolidation of the corporate headquarters. Net loss for the
comparable three months ended June 30, 2003, was $1.5 million, or a loss of 
$0.09 per share.  Net income for the six months ended June 30, 2004, was
$124,000, or income of $0.01 per share, which includes restructuring and other
charges of $0.5 million, or $0.03 per share. These restructuring and other
charges related to the lease termination costs associated with the relocation
of the Company's EMEA headquarters and adjustment of the reserve for
consolidation of the corporate headquarters. Net loss for the comparable six
months ended June 30, 2003, was $3.4 million, or a loss of  $0.21 per share,
which includes restructuring and other charges of $0.4 million, or $0.03 per
share.  This restructuring and other charge related to staff reductions in
February 2003.

During the second quarter, the Company received new and add-on customer orders
from Ashland, Inc.; CenterBeam, Inc.; ICL Fujitsu; Mellon Global Investments;
Remedy, a BMC Company; and Seagate Technology.

"Despite lower sequential revenues in the second quarter, the Company has
delivered positive earnings," stated Kevin Kerns, CEO and President.  "During
the quarter, the Company made selected staff additions in marketing and sales,
introduced an entirely redesigned web site, and launched a variety of direct
demand generation programs in order to increase the level of sales activity and
market awareness."

"With the current quarter results, the Company has now reported three
consecutive quarters of positive net income and cash flows.  The Company
continues to closely monitor its operating activities, generating cash from
operations during the second quarter of approximately $540,000.  The Company's
cash and investment balances increased from the prior quarter by $612,000 to
$40.9 million at June 30, 2004."

A conference call will be conducted by the Company at 5:00 p.m. Eastern Time
(ET) on Thursday, July 22. The conference call will be available to all
interested parties over the Internet.  To listen to the call on the Internet,
go to http://www.apropos.com/ or http://www.fulldisclosure.com/ at least
fifteen minutes early to register, download, and install any necessary audio
software. For those who cannot listen to the live broadcast, a replay will be
available shortly after the call at http://www.apropos.com/ ,
http://www.fulldisclosure.com/ or by dialing 877-519-4471 or 973-341-3080
(international) and providing access code 4978536.  The replay will be
available by phone through July 29, and over the Internet for 30 days.

About Apropos Technology

Apropos Technology, Inc. (NASDAQ:APRS) develops and markets one of the
industry's leading business communications platforms, providing an open, system
independent application suite for real time, multi-channel interaction
management. This application platform enables companies to personalize and
intelligently manage all of their customer, employee, and vendor interactions,
thereby reducing costs, improving communications and operating efficiency, and
increasing overall revenue opportunities. The application provides timely and
accurate information on communications of all types to those within the
business who need visibility into real time business performance and trends.
This information enables customers to react immediately to changing business
conditions and make informed strategic decisions. The company's award-winning
solution has received seven (7) US patents for call center related technology
inventions, including a patent on the concept of blending multi-channel
communications into a single, universal queuing system. The solution
intelligently classifies, prioritizes, routes and reports on each business
interaction, based on the value of each interaction, across a variety of
communications media, including Voice, E-mail, Web, Fax, and Voice over IP
(VoIP). Apropos Technology serves over 300 clients worldwide from its Corporate
headquarters in Oakbrook Terrace, Ill., and from its European headquarters in
the United Kingdom. Additional information about Apropos and its products can
be found at http://www.apropos.com/ .

Apropos Technology statements contained in this press release that are not
purely historical are forward-looking statements within the meaning of Section
21E of the Securities and Exchange Act of 1934, including statements regarding
Apropos Technology's expectations, anticipations, goals, beliefs, targets,
hopes, intentions or strategies regarding the future.  Forward-looking
statements include statements regarding business model, product introduction
and acceptance, future sales, sales growth and sales channels, profitability
and results of operations, gross margins, operating expenses and financial
stability.  These forward-looking statements are subject to various risks and
uncertainties as more fully set forth under the caption "Risk Factors
Associated with Apropos' Business and Future Operating Results" in Apropos
Technology's Annual Report on Form 10-K for the year ended December 31, 2003,
as filed with the Securities and Exchange Commission.  Apropos Technology's
actual results and the timing of certain events may differ significantly from
the results discussed in the forward-looking statements; Apropos Technology
makes no commitment to disclose any revisions to forward-looking statements, or
any facts, events or circumstances after the date hereof that may bear upon
forward-looking statements.

                         Apropos Technology, Inc.
             Condensed Consolidated Statements of Operations
                 (In thousands, except per share amounts)

                           Three months ended         Six months ended
                                June 30                   June 30
                           2004         2003         2004         2003
  Revenue               (Unaudited)  (Unaudited)  (Unaudited)  (Unaudited)
    Software licenses     $1,638       $1,587       $3,625       $3,648
    Services and other     3,330        3,069        6,503        6,165
  Total revenue            4,968        4,656       10,128        9,813

  Cost of goods and
   services
    Cost of software         116          133          287          203
    Cost of services and
     other                 1,020        1,175        1,871        2,332
  Total cost of goods
   and services            1,136        1,308        2,158        2,535

  Gross margin             3,832        3,348        7,970        7,278

  Operating expenses
    Sales and marketing    1,760        1,924        3,433        4,208
    Research and
     development           1,032        1,500        2,084        3,195
    General and
     administrative          946        1,424        2,043        2,991
    Stock compensation
     charge                    -           75            -          150
    Restructuring and
     other charges            88            -          456          448
  Total operating
   expenses                3,826        4,923        8,016       10,992

  Income (loss) from
   operations                  6       (1,575)         (46)      (3,714)

  Other income (expense)
    Interest income          107          123          203          283
    Other income (expense),
     net                      (4)         (12)         (33)          (4)
  Total other income         103          111          170          279

  Net income (loss)         $109      $(1,464)        $124      $(3,435)

  Net income (loss) per
   share
    Basic                  $0.01       $(0.09)       $0.01       $(0.21)
    Diluted                $0.01       $(0.09)       $0.01       $(0.21)

  Weighted-average number
   of shares outstanding
    Basic                 17,273       16,729       17,188       16,702
    Diluted               18,614       *            18,575       *

  * Diluted weighted-average number of shares outstanding for 2003 is not
    shown as the effect would be anti-dilutuve.


                         Apropos Technology, Inc.
                  Condensed Consolidated Balance Sheets
                              (In thousands)

                                                   June 30     December 31
                                                     2004          2003
  Assets                                          (Unaudited)
  Current assets:
    Cash and cash equivalents                      $39,405        $38,265
    Short-term investments                           1,515          1,000
    Accounts receivable, net                         2,423          2,895
    Inventory                                           41             73
    Prepaid expenses and other current assets          662            588

  Total current assets                              44,046         42,821

  Equipment, net                                       663            921
  Other assets                                          24            199

  Total assets                                     $44,733        $43,941

  Liabilities and shareholders' equity
  Current liabilities:
    Accounts payable                                  $142            $81
    Accrued expenses                                 1,476          1,618
    Deferred revenues                                3,474          3,296
    Other current liabilities                          630            562

  Total current liabilities                          5,722          5,557

  Accrued restructuring, less current portion          360            560

  Shareholders' equity
    Common shares                                      173            173
    Additional paid-in capital                     102,574        102,263
    Treasury stock                                       -           (392)
    Accumulated deficit                            (64,096)       (64,220)

  Total shareholders' equity                        38,651         37,824

  Total liabilities and shareholders' equity       $44,733        $43,941


DATASOURCE: Apropos Technology



CONTACT:  Frank Leonard of Apropos Technology, [phone],

ext. 7724,  ; Investors Relations, Leslie Loyet of

Financial Relations Board, [phone],

 



Web site:  http://www.apropos.com/ 

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