Record 71% increase in Apropos Q2 profits

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Apropos Technology has announced record revenues of $7 million for the quarter ended June 30 – an increase of 71% over the same quarter last year.

Revenues for the first six months of 2000 were $12.9 million, an increase of 74% over revenues of $7.4 million for the same period in 1999.

For the second quarter, gross margins increased to 70% from 66% in the first quarter of 2000, which is in line with management’s goal of achieving 75% to 80% gross margins in the next 12 months.

The increase in gross margins reflects a combination of higher software license revenue and the continued growth of customer support revenues. Currently, 97% of customers are participating in on-going software support programs.

The net loss for the second quarter of 2000 was $1.7 million ($0.12, excluding amortization of deferred stock compensation). This compares with a net loss of $1.2 million ($0.41) for the second quarter of 1999. During the second quarter, Apropos had a one time, non-recurring G&A charge against earnings of $950,000 due to the unfavorable resolution of a previous distributor contract dispute. Without this charge, Apropos’ net loss for the quarter would have been $750,000 ($0.05).

For the second quarter, including amortization of deferred stock compensation, net loss was $2.0 million ($0.14), compared to a net loss of $1.2 million, or $.41 per share for the same period in 1999. For the first six months of 2000, the net loss was $6.3 million, or $.55 per share, versus a loss of $3.4 million, or $1.13 per share in the same period of 1999.

Revenue growth for the quarter was achieved through continued strong demand in North America and increasing growth in the Europe Middle East & Africa and Asia Pacific markets. Apropos’ international expansion continues to gain momentum, with new customer sales made in several new international markets, including Apropos’ first sales into China and Japan.

Significant new orders were received in the quarter from traditional brick and mortar companies such as Palm Computing, Seagate Technology, AGFA, Fujitsu, and Fellowes Manufacturing. Orders were also received from several emerging dot.com companies, including Calico Commerce, Digital Insight, ePolicy, and Connected.

During the quarter, the company continued to experience an increase in its average selling price for new systems, growing to $247,000 for the quarter versus $218,000 for the same quarter in 1999, a year over year increase of 13%. This can be attributed to a combination of larger contact center sales and a strong bias on the part of new customers to order the full suite of multimedia capabilities-for voice, e-mail, and web contact. Most of these multimedia sales came directly from traditional brick and mortar companies (representing approximately 70% of revenues in the quarter) looking to add eBusiness capabilities.

Apropos

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