Aptimus Announces Second Quarter 2007 Financial Results

Aptimus, Inc. (NASDAQ: APTM) today reported its second quarter 2007 results, including:

--  Q2 2007 GAAP revenues of $4.0 million

--  Q2 2007 GAAP loss of $1.3 million including $257,000 of share based
    compensation
    

Aptimus, Inc., the Point-of-Action™ online advertising network, today reported second quarter 2007 GAAP revenues of $4.0 million, a 26% increase over Q2 2006 GAAP revenues and a 12% sequential increase over Q1 GAAP 2007 revenues. GAAP net loss for the quarter was $1.3 million, or $0.20 per share.

The GAAP net loss during the quarter includes $257,000 of non cash expense related to share based compensation. Without the non cash expense, the net loss would have been $1.0 million, or $0.16 per share, which is a 15% sequential improvement from the adjusted net loss in the first quarter of 2007. A reconciliation of this supplemental information is reflected below.

The GAAP net loss also includes $238,000 of legal, banking and other costs related to strategic corporate activities performed during the quarter. The reported profit and loss per share amounts are determined without consideration of income tax expense as the tax benefit of the company's net operating loss carry-forward has been fully reserved.

GAAP cost of revenue, or the fees earned by the company's network publishers, for the quarter were $2.1 million, or 53% of revenues, compared to $1.6 million, or 50% of revenues for the second quarter of 2006 and $2.0 million or 56% of revenues for the first quarter of 2007. This quarter's cost of revenues includes the impact of a substantial new Education oriented Publisher agreement in which the percentage of publisher fees begin at higher than average levels to include relationship start up costs, and then decline over the first 6 months to normal publisher fee levels. As an offset to this increase, the Company benefited during the quarter from a credit agreed to during the quarter of $224,000 related to fees previously overpaid to a Publisher due to unmet guarantees.

The sequential improvement in the company's loss benefited from an increase in revenues, an improvement in the percentage of revenues paid to network publishers, and a full quarter's benefit from the cost reduction initiatives implemented in the fourth quarter of 2006 and the first quarter of 2007.

"We are pleased with our second quarter results and feel the company made important improvements in its business and technology foundation this quarter," said Rob Wrubel, president and CEO of Aptimus. "We launched new relationships with key publishers and moved forward with continuing product releases enabling a new class of Internet advertising to support large advertiser needs."

Below is an update on the company's objectives for 2007:

Expanding placement formats and ad products for advertisers -- Aptimus continued the expansion of its product suite for advertisers and publishers with the recent announcement of cost per interaction based pricing and its first Internet Advertising Bureau standard advertising unit, the Portico. These new product capabilities accelerate the evolution of traditional lead generation based advertising into a new class of performance based advertising. The cost per interaction pricing approach enables advertisers and agencies to pay for a consumer's interaction with the advertising unit, merging the best of branding with direct response elements. The new IAB standard Portico advertising unit also enables Aptimus to present performance-based advertising within high volume IAB standard sized advertising areas, opening up significantly more volume of placements within web sites. For examples of these industry leading new capabilities, visit www.aptimus.com .

Expand network among top 100 publishers -- The company added multiple new placements with AOL during the quarter and has additional placements launching in Q3. The company also is continuing its discussions with Yahoo! regarding relationship expansion. In addition, the company announced a new exclusive relationship with Forbes.com during the quarter with placements being rolled out in the third quarter. Other new publishers to the Aptimus Network include Lycos, Demand Media, and the return of a former publisher CNET.

Direct advertiser sales growth -- The company has continued its progress in growing direct advertiser relationships, including growth in its education client base. The recent introduction of cost per interaction pricing approaches also appears to offer an opportunity to accelerate direct advertiser sales with new brand focused advertisers. This quarter, the company added new relationships with many direct advertisers.

Key financial metrics during the quarter were as follows:

                                Three Months Ended
                                 6/30/07        3/31/07        6/30/06
                            ------------   ------------   ------------
Total Revenues              $  4,022,000   $  3,602,000   $  3,186,000

Education Revenue           $  1,964,000   $  1,415,000   $    489,000

Combined placement
 average RPM                $      35.12   $      44.28   $      59.24
Combined placement
 page impressions            113,903,000     80,793,000     53,784,000

% of revenue from the
 education vertical                 48.8%          39.3%          15.3%