Apropos Technology Reports Profitable Fourth Quarter

Apropos Technology Reports Profitable Fourth Quarter 


OAKBROOK TERRACE, Ill., Feb. 1  /PRNewswire-FirstCall/ -- Apropos Technology
(NASDAQ:APRS), a leading provider of real time multi-channel interaction
management solutions, reported net income for the three months ended December
31, 2004 of $355,000, or $0.02 per share.  Net income for the comparable three
months ended December 31, 2003 was $761,000, or $0.05 per share.  Net loss for
the year ended December 31, 2004 was $336,000, or a loss of $0.02 per share,
which includes restructuring and other charges of $1.3 million, or $0.07 per
share.  Net loss for the comparable year ended December 31, 2003 was $5.7
million, or a loss of  $0.34 per share, which includes restructuring and other
charges of $2.9 million, or $0.17 per share.

Revenues for the fourth quarter ended December 31, 2004 decreased slightly to
$5.5 million from $5.6 million for the fourth quarter ended December 31, 2003. 
Revenues for the year ended December 31, 2004 were $20.6 million compared to
$20.1 million for the year ended December 31, 2003.

"We are starting to show traction from our focused marketing efforts," stated
David McCrabb, interim CEO and President.  "The Company has returned to
profitability for the fourth quarter and has now shown two quarters of
sequential revenue growth.  Additionally, we reported positive cash flows for
the fifth consecutive quarter.  Consequently, we have a strong balance sheet
that provides a solid platform from which we can execute our business plans and
meet customer expectations.  We are now focused on growing software revenue in
2005 and have increased our sales force to enable us to meet our plan.

"During the fourth quarter, the Company released version 6.5 of its award-
winning product suite.  Apropos v6.5 introduces more robust, affordable
business continuity options for contact center users of its solution, along
with multiple improvements in fault tolerance and disaster recovery
capabilities.  In the short period since its release, 5% of our customer base
has made the decision to migrate to Apropos v6.5.

"Apropos recently announced its first targeted bundled software and service
package, 'Apropos for Credit Unions.'  This package is a complete solution
designed specifically for credit unions and mid-sized financial services
institutions.  This solution provides the multi-channel interaction management
capabilities credit unions need in their member service centers to increase
both member loyalty and their asset base, while at the same time reducing
member support costs.

"Finally, the Company finished calendar 2004 with certain milestones worth
noting:

   -- In 2004, the Company reported annual revenue growth for the first time
      since calendar 2000.
   -- 2004 benefited from a streamlined operating cost structure.  Annual
      operating costs in 2004 of $15.6 million were down 17% from 2003,
      excluding restructuring charges from the past two years.
   -- 2004 was the first year in the Company's history it generated cash
      (defined as the change in cash, cash equivalents and short-term
      investment balances for the respective periods).  During 2004, the
      Company generated cash of $1.9 million compared to 2003 when the
      Company used cash of $2.8 million.



I want to personally thank the entire Apropos team for their hard work and
effort that enabled us to reach these positive milestones in 2004."

During the fourth quarter, the Company received new and add-on customer orders
from Birch Telecom; GE Fanuc Automation Manufacturing, Inc.; Internet Security
Systems; Juniper Networks; and NorCal Waste Systems, Inc.  The Company also
added two resellers in the United States and United Kingdom during the fourth
quarter.

A conference call will be conducted by the Company at 5:00 p.m. Eastern Time
(ET) on Tuesday, February 1, 2005. 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 888-203-1112 or 719-457-0820
(international) and providing access code 3431152.  The replay will be
available by phone through February 8, 2005, 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       Twelve months ended
                              December 31               December 31
                           2004         2003         2004         2003
  Revenue               (Unaudited)  (Unaudited)
    Software licenses     $2,058       $2,578       $7,415       $7,903
    Services and other     3,407        3,032       13,158       12,232
  Total revenue            5,465        5,610       20,573       20,135

  Cost of goods and services
    Cost of software         190          112          649          407
    Cost of services and
     other                 1,090          892        3,859        4,227
  Total cost of goods and
   services                1,280        1,004        4,508        4,634

  Gross margin             4,185        4,606       16,065       15,501

  Operating expenses
    Sales and marketing    2,043        1,683        7,363        7,519
    Research and
     development             968        1,037        4,073        5,349
    General and
     administrative          973        1,145        4,148        5,611
    Stock compensation
     charge                    -           57            -          282
    Restructuring and
     other charges             -            -        1,291        2,875
  Total operating expenses 3,984        3,922       16,875       21,636

  Income (loss) from
   operations                201          684         (810)      (6,135)

  Other income (expense)
    Interest income          189          100          536          482
    Other income (expense),
     net                     (35)         (23)         (62)         (21)
  Total other income         154           77          474          461

  Net income (loss)         $355         $761        $(336)     $(5,674)

  Net income (loss)
   per share
     Basic                 $0.02        $0.05      $ (0.02)     $ (0.34)
     Diluted               $0.02        $0.04      $ (0.02)     $ (0.34)

  Weighted-average number
   of shares outstanding
     Basic                17,574       16,901       17,324       16,787
     Diluted              18,161       18,093       17,324       16,787



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

                                                December 31    December 31
                                                    2004           2003
  Assets
  Current assets:
    Cash and cash equivalents                     $ 39,153        $38,265
    Short-term investments                           2,005          1,000
    Accounts receivable, net                         3,155          2,895
    Inventory                                           34             73
    Prepaid expenses and other current assets          355            588

  Total current assets                              44,702         42,821

  Equipment, net                                       565            921
  Other assets                                          21            199

  Total assets                                     $45,288        $43,941

  Liabilities and shareholders' equity
  Current liabilities:
    Accounts payable                                  $155            $81
    Accrued expenses                                 1,854          1,618
    Deferred revenues                                3,403          3,296
    Other current liabilities                          856            562

  Total current liabilities                          6,268          5,557

  Accrued restructuring, less current portion          245            560

  Shareholders' equity
    Common shares                                      176            173
    Additional paid-in capital                     103,155        102,263
    Treasury stock                                       -           (392)
    Accumulated deficit                            (64,556)       (64,220)

  Total shareholders' equity                        38,775         37,824

  Total liabilities and shareholders' equity       $45,288        $43,941


DATASOURCE: Apropos Technology, Inc.



CONTACT:  Frank Leonard of Apropos Technology, [phone] ext. 7724,

 , or Investors Relations, Leslie Loyet of Financial

Relations Board, [phone],  



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

http://www.fulldisclosure.com/ 

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