ANGOSS Reports Continued Revenue Growth In Second Quarter Results.

Business Editors/High-Tech Writers

TORONTO--(BUSINESS WIRE)--June 24, 2003

ANGOSS Software Corporation (TSX-V: ANC) released today its unaudited results for the second quarter and six month periods ended May 31, 2003, reporting continued revenue growth in both second quarter and six month results over 2002 results despite the declining value of the US dollar compared with corresponding prior year periods.

"During the second quarter we experienced continuing improvements in revenue growth, cash flow and operating profitability in North America, a strong performance from our solutions organization in delivering value to our telecom clients, improved revenue growth in Europe as well as implementing new solution sales hires and expansion initiatives in North America, Europe and Australia" commented ANGOSS President Eric Apps. "These positives were offset to some extent by the substantial decline in the US dollar and tight budgets for software purchases which continue to result in purchase deferrals by many clients and prospects outside the consumer credit risk management and telecom sectors."

Results Summary

                    Three months ended          Six months ended
                          May 31                    May 31
                2003                 2002   2003                 2002
---------------------------------------------------------------------

Revenues        $ 1,290,317   $ 1,225,454   $ 2,839,853   $ 2,543,315
---------------------------------------------------------------------
Net (loss)
 income (1)       (142,236)       117,196        57,581       631,186
---------------------------------------------------------------------
Per Share
 Amounts          $ (0.004)       $ 0.013       $ 0.001       $ 0.013
---------------------------------------------------------------------

(1) 2002 net income includes income from discontinued operations. See "Results Detail". See also "Impact of Decline of US Dollar on Operations".

Operating Highlights

12% Growth In First Half Revenues and Operating Profits.

During the first half of 2003 revenues of $2,839,853 increased by 11.7% over 2002 results ($2,543,315). North American and European data mining revenues grew 9.5% and 31.2%, respectively. Operating profit for the six months ended May 31, 2003 increased to $282,923 (2002: $250,554). Net income for the six months ended May 31, 2003 was $57,581 (2002: $631,186). In 2002 net income reflected a gain of $584,412 resulting from the Q1 2002 divestment of a non-core business and a provision of $125,000 for future income taxes. See "Results Detail".

5% Second Quarter Growth In North America; 15% Growth In Europe.

During the second quarter of 2003, revenues of $1,290,317 were up 5.3% from 2002 results ($1,225,454). North American data mining revenue growth of 4.4% and European data mining revenue growth of 14.7% was reported, reflecting foreign exchange effects associated with the decline of the US Dollar and continued client and prospect budget constraints. Operating profit for the second quarter was $11,539 (2002: $138,053). Operating expenses in the second quarter of 2003 were comparable to those in Q1 2003. Increases in year over year expenses relate primarily to new hires in sales, solutions and professional services, research and development and advisory fees. The Company reported a net loss of $142,236 during the second quarter (2002: net income of $117,196). The net loss in Q2 2003 was mainly attributable to foreign exchange losses (a foreign exchange loss of $164,228 in Q2 2003 compared with a loss of $82,367 during the second quarter of 2002).

Telecom Solutions Result In 58% Solutions Revenues Growth During Second Quarter

Solution delivery revenues including analyst training, analytics solutions and other data mining services provided to clients, increased 57.6% during the second quarter of 2003 compared to the second quarter of 2002. This increase was primarily as a result of customer segmentation, marketing analytics and churn management solutions being delivered to North American telecommunications industry clients reflecting the Company's expansion of its solution delivery capabilities.

Hiring of Director of Analytical Solutions

During the second quarter the Company hired Robert Tyrie as Director of Analytical Solutions to assume responsibility for supervising delivery of ANGOSS and partner marketing and risk analytics industry solutions to ANGOSS clients. Robert Tyrie has over 18 years of experience in the design, development and delivery of software systems for enterprise environments. He has specialized in large-scale projects for Banking, Insurance and Government organizations where he helped create CRM, Financial Reporting and Simulation Systems. He previously worked with Siebel Systems and Janna Systems in product marketing and client services roles, deploying CRM solutions to numerous financial service clients, including one of the world's largest CRM solution implementations in the insurance industry.

Advisor Retained For North American Sales Hire

The Company's current Director of North American Sales, Pavel Treskin, will be relocating to the Company's European operations to lead the Company's European sales team and expand the Company's relationships with European clients and partners effective during the fourth quarter of 2003. The Company has engaged a professional services organization to commence a search for a new Director of North American sales to lead the North American sales organization.

Letter of Intent For Australian Joint Venture Company

The Company has entered into a term sheet providing for the formation of a joint venture company to represent ANGOSS in the Australian and New Zealand markets. The Australian principals of the joint venture partner are senior sales and services professionals with extensive credentials in the sale and delivery of customer relationship management and business intelligence solutions. The agreement is expected to be finalized during the third quarter of 2003.

Partnerships

During the second quarter the Company collaborated with Siebel Systems, Inc. on several customer initiatives relating to their previously disclosed licensing agreement. Deliveries under the Company's previously disclosed licensing agreement with Siebel are proceeding as scheduled. The Company also completed integration of KnowledgeSTUDIO with Microstrategy Intelligence Server providing best of breed data mining and OLAP capabilities for clients selecting Microstrategy applications for their decision support and business intelligence needs. The Company also successfully completed deliveries to PeopleSoft under its previously disclosed licensing agreement with PeopleSoft. The PeopleSoft predictive analytics offering is currently expected to be made available by PeopleSoft to clients during the 2003 fiscal year.

Impact Of Decline In Value of US Dollar On Operations

North American revenue growth and net income during the six months and for the second quarter ended May 31, 2003 were reduced as a result of foreign exchange effects associated with the decline of the US Dollar. With sales completed primarily in US dollars, and expenses incurred primarily in non-US currencies, the Company has traditionally had no natural hedge for relative declines in the value of the US Dollar. Such declines reduce revenues otherwise realized on US dollar denominated sales. During the second quarter of 2003, the weighted average exchange rate applied to sales was 1.4343, a decline of 6.37% from the weighted average exchange rate in effect during Q1 of the 2003 and an 8.34% decline in the weighted average rate in effect in Q2 2002. Declines in the value of the US dollar also affect the carrying value of US financial assets held by the Company. As at May 31, 2003, the exchange rate was 1.3708, down 14.2% from November 30, 2002 and down 8.48% from February 28, 2003.

As a result of these developments, the Company's foreign exchange losses have increased from $59,062 during the first quarter of 2003 to a total of $223,290 during the first half of 2003. In May 2003, as a result of continuing exchange rate volatility and uncertain interest rate and currency outlooks, the Company fixed amounts to be received on the delivery of US$500,000 of existing US term deposits during the balance of 2003. The Company has also announced price increases to be effective during the third quarter to offset the relative decline in value of the US Dollar. These initiatives are expected to reduce the Company's exposure to continued deterioration in the value of the US Dollar. To the extent recent declines in the value of the US dollar reverse over the balance of the fiscal 2003 year, resulting foreign exchange gains would also offset foreign exchange losses experienced during the first half of the year.

KnowledgeSTUDIO 4.1 Release, Mining Manager 2 Launch Planned For July, 2003

During June, 2003 ANGOSS successfully completed its beta testing program for KnowledgeSTUDIO 4.1 and Mining Manager 2.0. These products are scheduled for general availability in July, 2002, with deliveries to clients commencing during the third quarter. Customers have been notified of revised pricing being implemented effective with the KnowledgeSTUDIO product releases.

Repayable Contribution

In conjunction with the receipt of funding for R&D development under a previously disclosed contribution agreement, the Company has recorded, as a long term liability, a repayable contribution of $108,510. As R&D work continues on the funded project, this amount will increase to a maximum of $246,600. The amount will be repayable through royalties on future product sales.

Options

In accordance with the requirements of The Toronto Venture Exchange and as disclosed in the Company's Management Information Circular dated March 7, 2003, the Company confirms the grant during the second quarter of 112,500 options to non-executive directors of the Company.

Results Detail

Unaudited preliminary results for the three and six months ended May 31, 2003 are as follows:

ANGOSS Software Corporation
Income Statement Information
(unaudited, stated in Canadian dollars)
For the period ended May 31,

                         Three Months              Six Months
                   -----------------------   ------------------------
                   2003               2002   2003                2002
                   -----------------------   ------------------------
Revenues           $1,290,317   $1,225,454   $2,839,853     2,543,315
                   -----------------------   ------------------------
                   -----------------------   ------------------------
Gross Margin        1,273,154    1,220,497    2,820,974     2,534,704
Operating Expenses
 General and
  administration      364,333      297,858      716,659       577,382
 Sales and
  marketing           558,247      541,792    1,230,137     1,158,593
 Research and
  development,
  net (note 11)       339,035      242,794      591,255       548,175
                   -----------------------   ------------------------
                    1,261,615    1,082,444    2,538,051     2,284,150
                   -----------------------   ------------------------
                   -----------------------   ------------------------
Income (loss)
 from continuing
 operations
 before the
 following             11,539      138,053      282,923       250,554
TRIFOX recovery        26,345       35,394       26,345        35,394
 Amortization        (15,892)     (28,366)     (28,397)      (56,705)
 Foreign
  exchange gain
  (loss)            (164,228)     (82,367)    (223,290)      (52,592)
 Financing fees
  and related
  interest                  -        3,299            -       (4,877)
Income (loss)
  from continuing
  operations
  before income
                   -----------------------   ------------------------
  taxes             (142,236)       66,013       57,581       171,774
                   -----------------------   ------------------------
                   -----------------------   ------------------------
Provision for
  future income
  taxes                     -            -            -     (125,000)
Discontinued
  operations -
  SmartWare                 -       51,183            -       584,412
Net Income         $(142,236)     $117,196       57,581       631,186
                   -----------------------   ------------------------
                   -----------------------   ------------------------
Basic and
  diluted
  earnings (loss)
  per share          $(0.004)       $0.013       $0.001        $0.013
                   -----------------------   ------------------------
                   -----------------------   ------------------------
Weighted
  average number
  of shares
  outstanding

Basic              38,502,096   38,402,096   38,502,096    38,395,594
Diluted            38,502,096   38,972,618   38,924,735    38,998,291


Selected Cash Flow Information
(unaudited, stated in Canadian dollars)
For the period ended May 31,
                           Three Months                Six Months
                       ----------------------   ---------------------
                         2003            2002   2003             2002

Cash provided by
 (used in) operating
 activities                $6,403   $(43,578)    550,190     (89,369)
Cash (used in)
 investing activities    (35,393)     (8,641)   (72,168)    (178,578)
Cash provided by
 (used in) financing
 activities               114,135    (20,091)    114,135     (12,730)
Net increase
 (decrease) in cash
 during the period         85,145    (72,310)    592,157    (280,677)


Selected Balance Sheet Information
(unaudited, stated in Canadian dollars)
                                       May 31,           November 30,
                                        2003                  2002

 Cash and cash
  equivalents                      $1,253,867                $661,710
 Accounts receivable                  830,824               1,420,305
 Prepaid expenses and
  other                                88,426                 100,278
                                   ----------------------------------
Total current assets                2,173,117               2,182,293
 Other assets                         138,625                  94,854
                                   ----------------------------------
Total assets                       $2,311,742              $2,277,147
                                   ----------------------------------
                                   ----------------------------------
 Accounts payable and
  accrued liabilities                $305,497                $316,732
 Current portion of
  deferred revenue                    753,789                 861,240
 Other                                  4,689                   5,245
                                   ----------------------------------
Total current
 liabilities                        1,063,975               1,183,217
                                   ----------------------------------
 Future tax
  liabilities                         250,000                 250,000
 Repayable
  contribution
  agreement                           108,510                       -
 Deferred revenue                      73,044                  90,923
                                   ----------------------------------
Total liabilities                   1,495,529               1,524,140
                                   ----------------------------------
Total shareholders'
 equity                               816,213                 753,007
                                   ----------------------------------
Liabilities and
 shareholders' equity              $2,311,742              $2,277,147
                                   ----------------------------------

About ANGOSS Software Corporation

ANGOSS Software Corporation, headquartered in Toronto, Canada, develops data mining software solutions that help business organizations across financial services, telecommunications, pharmaceuticals, retailing and manufacturing industries make "Better Business Decisions. Every Day."(TM)

ANGOSS data mining solutions includes:

-- KnowledgeSEEKER(R), KnowledgeSTUDIO(R),

KnowledgeExcelerator(R) and KnowledgeSERVER(R), advanced data

mining tools for analysts that are easy to learn, enjoyable to

use and interoperate seamlessly with the Windows, Office and

SQL Server application platforms from Microsoft (R)

Corporation.

-- Informatica Data Mining Tools, a best of breed data mining

module for users of Informatica Analytic Applications 

developed by ANGOSS for resale by Informatica Corporation.

-- KnowledgeSERVER(R) for PeopleSoft, the ANGOSS data mining and

decisioning solution for the PeopleSoft 8 application suite.

-- KnowledgeSERVER(R) for Siebel, the ANGOSS data mining and

decisioning solution for the Siebel eBusiness application

suite.

-- KnowledgeSERVER(R) for Microstrategy, the ANGOSS data mining

and decisioning solution for the Microstrategy Intelligence

Server.

-- KnowledgeWebMiner(TM), the ANGOSS data mining solution for

mining web data.

-- The ANGOSS Data Mining SDK for SQL Server 2000 and

KnowledgeSTUDIO SDK, software development kits leveraging

Microsoft and Internet standards, platforms and technologies

that help corporate and commercial software developers to

support rapid deployment of advanced data mining technology to

enterprise applications.

Related Links

For Microsoft Corporation
http://www.microsoft.com/sql/partners/dwa/datamining.asp
For Informatica Analytic Applications
http://www.angoss.com/WEB2003/Partners/informatica.html
For PeopleSoft CBM
http://www.angoss.com/WEB2003/Partners/peoplesoft.html
For Siebel eBusiness
http://www.angoss.com/WEB2003/Partners/siebel.html
For Microstrategy Intelligence Server
http://www.angoss.com/WEB2003/Partners/microstrategy.html

Trademarks and registered trademarks referred to above are the property of their respective owners.

This press release contains statements of a forward-looking nature. These statements are made under the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995. The accuracy of these statements may be impacted by a number of business risks and uncertainties that could cause actual results to differ materially from those projected or anticipated, including: the risk that the sale of our products and services involves a long sales cycle; the risk that the economic environment and business conditions will remain difficult to predict; the risk of competition in our target markets; the risk that we may not respond adequately to evolving technologies; the risk that we or our customers may have difficulties in introducing our products or services; the risk that we will encounter difficulties in continuing to offer services; the risk that we will encounter difficulties in integrating the operations of acquired companies with our own; the risks of conducting our operations in a variety of international locations; the risk that we may need to record future write-downs of assets arising from our investments in other companies; the risks relating to the costs that we may incur as a result of litigation against us; and other risks described in our filings with securities regulatory authorities, including our annual reports, interim financial statements and similar disclosure documents. ANGOSS Software does not undertake any obligation to update this forward-looking information after the date of its initial publication, except as required under applicable law.

The Toronto Venture Exchange has neither approved nor disapproved the above information.