EXHIBIT 99.1 APTIMUS ANNOUNCES SECOND QUARTER 2006 FINANCIAL RESULTS SAN FRANCISCO, August 8, 2006-- Aptimus, Inc. (NASDAQ: APTM) today reported its second quarter 2006 results, including: o Q2 2006 Revenues of $3.2 Million o Q2 2006 GAAP Loss of $613,000 o Company has signed long term strategic publisher agreement with AOL, its first top 5 publisher o A second top 5 publisher now live with a test o Rob Wrubel promoted to CEO and Tim Choate to become full-time Chairman Aptimus, Inc., the Point-of-ActionTM online advertising network, today announced that Q2 2006 revenues totaled $3.2 million, a sequential increase of 8% over Q1 2006. Net loss for the quarter was $613,000, or $0.09 per share. The loss during the quarter includes a $126,000 non-cash expense related to stock based compensation. Without that expense, the net loss for the quarter would have been $487,000, or $0.07 per share. A reconciliation of this supplemental information is reflected below. 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. Cost of revenue, or the fees earned by the company's network publishers, for the quarter were $1.6 million, or 50% of revenues, compared to $1.4 million, or 46% of revenues for the first quarter of 2006. As of June 30, 2006, Aptimus had $9.9 million in cash, cash equivalents and short-term investments on its balance sheet. The company continues to carry no debt. As part of its quarterly achievements, Aptimus announced three important corporate events: o The company signed a multi-year strategic publisher relationship with AOL to provide transactional advertising placements throughout the AOL network. As part of the agreement, AOL will have the right to acquire up to 5% of the outstanding shares of Aptimus' common stock once specific revenue targets are achieved. While there is no minimum commitment by AOL, the minimum threshold for warrant vesting to begin is $15 million in revenue to Aptimus over the first two years of the agreement. o Aptimus also signed and launched a second top 5 web publisher. This deal is in a test phase currently, with the opportunity to expand over time, and initial results are favorable. o Finally, Rob Wrubel has been promoted to the position of Chief Executive Officer and continues as President. Tim Choate, the founder of Aptimus, has become full-time Chairman of the company and will be actively engaged in the company's strategic publisher relationships and other strategic initiatives. "This was a very significant quarter for the company and I am excited by the progress we made on a number of key business fronts," said Tim Choate, Chairman of Aptimus. "As we predicted in our first quarter call, we turned back to revenue growth and now feel well positioned for further growth during the third quarter and beyond. Most exciting is the launch of our strategic
relationship with AOL, which has the potential to take the company to a new threshold of leadership in the next wave of Internet marketing," added Choate. "As part of our move to growth, I'm also delighted to announce the promotion of Rob Wrubel to President & CEO," continued Choate. "Rob's leadership has been instrumental to our progress to date and we expect his role expansion will help the business go even further, while enabling me to spend more time on business strategy and strategic business opportunities," concluded Choate. Wrubel has served as President of Aptimus since October 2005, as the company's Executive Vice President in the four month period before that, and as a Board Member since 2000. He has overseen the expansion of Aptimus' sales and business development teams, as well as the significant business shifts to prepare a foundation for stable, long term growth based on delivering the best quality and quantity of leads for advertisers. Rob's background before Aptimus includes roles as founding CEO of Ask Jeeves, COO of Knowledge Adventure, founding CEO of Whole Body, Inc. and as an executive at Cendant. "I am excited to be able to expand my role in the company's next phase of growth and I look forward to my continued deep business partnership with Tim, who will remain central to our business even as he spends more time focusing on strategy and strategic business relationships," said Wrubel. Rob is a seasoned entrepreneur and business builder in leading a range of companies in emerging growth industries including multimedia software, Internet search technologies, and alternative health care. In Wrubel's new role, he will continue to build Aptimus' organization, products and market position for leadership in the performance-based Internet advertising market. Choate will be continuing in a full-time role as Chairman, focused on strategic business development, broad company strategy, new business ventures and supporting Wrubel's efforts to lead company operations as needed The following is an update on the key objectives the company has outlined: FOCUS ON TOP 100 PUBLISHERS - Aptimus made significant progress with the top 100 publishers during the second quarter, including converting its successful test campaign with AOL into a multi-year strategic relationship. The Aptimus Network platform delivered strong revenues per impression for AOL in a key location with significant volumes, providing additional evidence of the unique power of Aptimus' model and technologies. In addition, the company signed and launched another test with a top 5 web publisher during the quarter, with favorable initial results. The company also signed multiple new publishers in growing vertical spaces including online dating, game downloading, and social networking. EXPANDING PLACEMENT FORMATS AND AD PRODUCTS FOR ADVERTISERS - Aptimus has achieved encouraging results in active non-registration type placements such as download and log-in pages using new ways to leverage the company's technology to optimize lower response type locations. As a result, the company's "Other Impression" volumes grew faster during the quarter than "Core Impression" volumes grew. Aptimus now expects Other Impression volumes and revenues to accelerate as these placement locations expand within its network. Average RPMs for the company's Other Impression inventory are expected to decline at the same time as the volume of impressions in this area increase while the company expands its formats to still less active locations with large available impression volumes. AD SALES GROWTH - The company made progress during the quarter in building on its direct sales initiatives, including introducing a new channel categorization of its network, hiring additional sales staff, and entering into new categories including technology, travel and health. Aptimus intends to leverage its new and expanding strategic relationships with top publishers to accelerate this effort in the coming months.
LEAD QUALITY INITIATIVES - The company's focus on lead quality over the past year has begun to pay off. For example, one of the largest education advertisers has recently significantly increased the fee it pays Aptimus per lead as well as expanded the lead volume available for Aptimus Network distribution. The advertiser made these decisions based on Aptimus' improvements in lead quality as measured by interview and enrollment rates. Other advertisers have similarly become more stable and are providing regular positive feedback on Aptimus lead quality. The company expects these favorable results to convert into expanded commitments to Aptimus in the future. NEW TECHNOLOGY INVESTMENT - The company continued to improve its technology this quarter, adding new creative formats for publishers and advertisers, expanding it's up-sell capabilities, and adding new targeting options such as time of day or day of week. The company also made changes this quarter to improve usability and ease of ordering for consumers, to enhance user experience and further increase lead quality for clients. Key financial metrics during the quarter were as follows: (Page impressions in thousands) Three Months Ended 6/30/2006 3/31/2006 6/30/2005 ------------ ------------- ------------- Network Revenues $ 3,186,000 $ 2,947,000 $ 3,922,000 Email and Other Revenues 12,000 561,000 ------------ ------------- ------------- Total Revenues $ 3,186,000 $ 2,959,000 $ 4,483,000 Core placement CPM $ 219.61 $ 216.16 $ 263.58 Core placement page impressions 10,717 10,411 12,066 ------------ ------------- ------------- Revenue from Core placements $ 2,353,000 $ 2,250,000 $ 3,180,000 % of revenue from Core placements 73.9% 76.0% 70.9% Other placement CPM $ 19.34 $ 17.65 $ 18.79 Other placement page impressions 43,066 39,508 39,472 ------------ ------------- ------------- Revenue from Other placements $ 833,000 $ 697,000 $ 742,000 % of revenue from Other placements 26.1% 23.6% 16.5% % of revenue from email and other programs 0.0% 0.4% 12.6% Business Outlook - ---------------- "This was a solid quarter for Aptimus. We have made strong progress against the goals we set out for the company at the beginning of the year," said Wrubel. "Though we are not yet ready to provide specific quarterly guidance given the challenge of forecasting exact launch dates for major new placements with AOL and other publishers, we do expect to see further growth this quarter that we feel should continue into future quarters," added Wrubel. The company's CFO, John Wade, concurred with this assessment. "While we will continue to defer at this time any specific forecast for 2006 financial results, we do expect third quarter revenues to increase by more than 10% sequentially over the second quarter," said Wade. Conference Call - ---------------- Tim Choate will host a conference call today to review the company's second quarter 2006 results beginning at 5:00 p.m. Eastern Time. The conference call in number is (866) 851-7100 and the participant code is 762812. In addition to the call, a web cast will be available live on the
Internet, and a replay will also be accessible from the Investor section of the company's website at www.aptimus.com until September 30, 2006. About Aptimus, Inc. - ------------------- Aptimus is the Point-of-ActionTM online advertising network that reaches engaged users by placing offers in the transactional areas of Web sites they trust. Supported by category-leading Web sites, the network consists of ten targeted channels that reach over 10 million highly valuable consumers each month. The company's proprietary optimization technology presents advertisers' offers on the Web sites where they reach the right consumers, automatically targeting based on prior consumer response in each location and each individual consumer's demographics. Aptimus' current advertisers include many of the top 500 marketers such as Procter & Gamble, Nokia, Dell, Vonage, SC Johnson and Carnival Cruises. Aptimus has offices in San Francisco and Seattle, and is publicly traded on the NASDAQ NM under the symbol APTM. More information on Aptimus is available at the company's Web site at http://www.aptimus.com. Non-GAAP Financial Measures - --------------------------- This press release makes reference to non-GAAP operating expenses and earnings, which exclude stock-based compensation expenses required under GAAP. The company uses these non-GAAP measures internally to assess its performance. The company believes these non-GAAP measures provide a meaningful perspective on its operations, but cautions investors to consider these measures in addition to, not as a substitute for, its consolidated financial results as presented in accordance with GAAP. A complete reconciliation between GAAP and non-GAAP financial measures is included in the company's quarterly earnings releases and is also available in the investor relations section of the company's website. This press release contains statements that may constitute "forward-looking statements" within the meaning of the Securities Act of 1933 and the Securities Exchange Act of 1934, as amended by the Private Securities Litigation Reform Act of 1995. Such statements include, without limitation, comments regarding the company's future success, the nature and likelihood of the company's revenue growth, the company's revenue and profit forecasts, the sufficiency of the company's capital base, the ability of the company to keep its current clients and distribution publishers and add new ones, the ability of the company to achieve and maintain profitability, the viability of its network approach to direct marketing, the quality of recent product enhancements, the improving quality of the leads delivered by the company to its advertiser clients, the ability of the company to achieve specific or any revenue thresholds in its relationship with AOL, the ability of the company to maintain its relationship with AOL, the success of the company's relationship with AOL in general, the continued success of the company's test placements with other top publishers, the ability of the company to convert and/or expand such test placements to long term agreements, the ability and/or likelihood of the company achieving market leadership, the positive impact of recent managerial changes, the market acceptance of the company's products and services, the success of the company's future strategic initiatives, the ability of the company to hire and retain qualified personnel, and the company's long term prospects, in general. Prospective investors are cautioned that any such forward-looking statements are not guarantees of future performance and involve substantial risks and uncertainties, and actual results may differ materially from those contemplated by such forward-looking statements. Important factors currently known to management that could cause actual
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