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Primus Announces Preliminary Second Quarter 2004 Financial Results

July 12, 2004

SEATTLE, July 8 -- Primus Knowledge Solutions, Inc. announced its preliminary results for the second quarter ended June 30, 2004. The Company anticipates that second quarter revenue will come in at about $5.7 million, a 54% increase compared to the $3.7 million reported in the second quarter of 2003. Primus also expects revenue of approximately $11.8 million for the six months ended June 30, 2004, a 28% increase compared to $9.2 million for the six months ended June 30, 2003.

"While we were able to grow revenues significantly over the second quarter of 2003, we were disappointed that we had a number of transactions that we were unable to close before the end of this quarter," said Michael Brochu, chief executive officer and president. "We anticipate closing these transactions and capitalizing on other opportunities during the remainder of 2004."

In spite of the increases in revenue, the company says it expects losses for the three and six month periods ended June 30, 2004 to be in the range of $0.09 to $0.12 per share and $0.22 to $0.25 per share, respectively, compared to losses of $0.14 per share and $0.20 per share in the three and six month periods ended June 30, 2003.

Included in total revenue for the second quarter of 2004 is license revenue from an enterprise license agreement with an existing customer for Primus Communications Center, Primus' electronic commerce platform. This transaction represented approximately 20% of total revenue for the second quarter of 2004. This was a non-cash transaction, as the customer elected to apply an existing deposit balance against all amounts due.

The Company has cash and cash equivalents of approximately $8.3 million at June 30, 2004.

For more information, contact the company at www.primus.com.