ATG Announces Second-Quarter Results; Company Meets Guidance on Revenue and EPS, Exceeds Guidance on Cash Position.Business/Technology Editors CAMBRIDGE, Mass.--(BUSINESS WIRE)--July 25, 2002 ATG ATG antithymocyte globulin. lymphocyte immune globulin (antithymocyte globulin equine, ATG, ATG equine, LIG) Atgam Pharmacologic class: Immunoglobulin Therapeutic class: Immunosuppressant (Art Technology Group, Inc.; Nasdaq: ARTG ARTG Australian Register of Therapeutic Goods ), a leading developer of online CRM (Customer Relationship Management) An integrated information system that is used to plan, schedule and control the presales and postsales activities in an organization. applications for commerce, portals, and relationship management, today announced its results for the second quarter ended June 30, 2002. Total revenues for the quarter were $25.2 million compared with total revenues in the second quarter of 2001 of $35.5 million. The company's net loss was $2.8 million, or ($0.04) per share, in the second quarter of 2002. This compares with a net loss of $41.9 million, or ($0.61) per share, in the second quarter of 2001, which included restructuring charges restructuring charge The expense of reorganizing a company's operations. A restructuring charge is an infrequent expense that generally results from asset writedowns or facility closings. of $44.2 million. ATG's closing balance for cash and equivalents as of June 30, 2002 was $77.8 million, compared with a closing balance as of March 31, 2002 of $80.0 million. For the six months ended June 30, 2002, total revenues were $52.5 million, compared with total revenues for the six months ended June 30, 2001 of $78.8 million. The company's net loss for the six months ended June 30, 2002 was $5.6 million, compared with a net loss for the six months ended June 30, 2001 of $54.8 million.
SECOND-QUARTER FINANCIAL HIGHLIGHTS
(In millions, except per share data, and
percentages)
Three Months Ended Six Months Ended
June 30, June 30, June 30, June 30,
2002 2001 2002 2001
Total revenues $ 25.2 $ 35.5 $ 52.5 $ 78.8
License revenue 12.2 19.1 24.7 44.6
Percent of
total revenues 49% 54% 47% 57%
Services revenue 12.9 16.4 27.7 34.2
Percent of
total revenues 51% 46% 53% 43%
Net loss (2.8) (41.9)(a) (5.6) (54.8)(a)
Loss per share (0.04) (0.61)(a) (0.08) (0.80)(a)
Cash, cash equivalents
and short-term
marketable securities $ 77.8 $ 94.9 $ 77.8 $ 94.9
(a) Includes restructuring charges of $44.2 million.
"This quarter was clearly a success for ATG," said Paul Shorthose, ATG president, CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. and chairman of the board. "Amid very challenging market conditions, we attracted a broad mix of new and repeat customers, closed two contracts greater than $1 million in the quarter, and maintained our healthy cash balance. This is the fourth consecutive quarter of meeting or exceeding guidance with regard to revenue and EPS (Encapsulated PostScript) A PostScript file format used to transfer a graphic image between applications and platforms. EPS files contain PostScript code as well as an optional preview image in TIFF, WMF, PICT or EPSI, the latter being an ASCII-only format. and exceeding guidance with regard to our cash position. These results are a testament to the strength and stability of our organization and our online CRM applications. Corporations continue to turn to ATG to increase ROI (Return On Investment) The monetary benefits derived from having spent money on developing or revising a system. In the IT world, there are more ways to compute ROI than Carter has liver pills (and for those of you who never heard of that expression, it means a lot). and build customer loyalty." SECOND-QUARTER BUSINESS HIGHLIGHTS -- ATG added 26 new customers, including The Finish Line, Inc., Gas Malaysia, JTB (Japan Travel Bureau), Kaiser, Merrill Lynch, New York University, Nintendo, Telewest, and Vodafone. -- ATG earned repeat business from existing customers, including Akamai, The American Heart Association, AT&T Wireless, Consignia, Deutsche Post, HP Education, Inktomi, Neiman Marcus, PG&E, Sony Australia, Target, The United Way, and Warner Music Group. -- The company strengthened its government solutions group by adding key management and sales leadership and by working with government partners such as Appian, EDS, GTSI, and RTGX. ATG presently has several government initiatives in progress, including the 1.2 million-user Army Knowledge Online (AKO) Portal for the U.S. Army, a web-based commodity ordering system for the U.S. Department of Agriculture (USDA), and a knowledge management employee portal for the Federal Aviation Administration (FAA). -- Updated versions of the ATG Commerce and Portal solutions and Relationship Management Platform were released with Japanese language capabilities, expanding opportunities in the Pacific Rim market. ATG also signed a partnership with HP Japan during the quarter, and has added JTB, Japan's largest travel agency, as a new customer this quarter. BUSINESS OUTLOOK "Throughout this prolonged pro·long tr.v. pro·longed, pro·long·ing, pro·longs 1. To lengthen in duration; protract. 2. To lengthen in extent. IT spending downturn Downturn The transition point between a rising, expanding economy to a falling, contracting one. downturn A decline in security prices or economic activity following a period of rising or stable prices or activity. , ATG continues to provide blue-chip customers with solutions that extend their ability to grow revenue through both direct and indirect channels," Shorthose said. "ATG enables organizations to sell more, faster and at higher profits by providing personalized per·son·al·ize tr.v. per·son·al·ized, per·son·al·iz·ing, per·son·al·iz·es 1. To take (a general remark or characterization) in a personal manner. 2. To attribute human or personal qualities to; personify. multi-channel commerce and portal solutions. Once ATG solutions are implemented, direct and indirect sales converge con·verge v. con·verged, con·verg·ing, con·verg·es v.intr. 1. a. To tend toward or approach an intersecting point: lines that converge. b. , and an enterprise can seamlessly service a customer through all major touch points. In the coming months, we are going to introduce new products and complementary technology alliances significantly expanding ATG's leading commerce and portal solutions, which are clearly differentiated by our scenario personalization Custom tailoring information to the individual. On the Web, personalization means returning a page that has been customized for the user, taking into consideration that person's habits and preferences. capabilities. These products will broaden our market opportunities by expanding our solutions in areas such as publishing, search, analytics, and integrations. While we are still seeing budgetary constraints CONSTRAINTS - A language for solving constraints using value inference. ["CONSTRAINTS: A Language for Expressing Almost-Hierarchical Descriptions", G.J. Sussman et al, Artif Intell 14(1):1-39 (Aug 1980)]. among corporations, ATG continues to build a strong foundation for revenue growth." For the third quarter of 2002, the company anticipates total revenues of between $24 million and $28 million, with sales in Europe expected to decline due to historical seasonality. ATG expects that its bottom-line results will range from ($0.01) to ($0.05) per share. ATG anticipates that as of September 30, 2002, its balance of cash, cash equivalents and marketable securities Marketable Securities Very liquid securities that can be converted into cash quickly at a reasonable price. Notes: Marketable securities are very liquid as they tend to have maturities less than one year, and the rate at which these securities can be bought or sold has will be in the range of $70 million to $75 million. Due to limited visibility and a continued challenging economic environment, ATG is adjusting the range of its full-year 2002 revenue guidance to between $105 million and $120 million. ATG continues to target a return to profitability in the second half of 2002. CONFERENCE CALL REMINDER ATG management will discuss the company's second-quarter 2002 financial results, business outlook and product rollout plans on its quarterly conference call for investors at 5:00 p.m. ET today, July 25, 2002. The conference call will be broadcast live over the Internet. Investors interested in listening to the Webcast should log onto the "Investors" section of the ATG Website, located at www.atg.com, at least 15 minutes before the event's broadcast. ABOUT ATG ATG (Art Technology Group, Inc.) is the leading developer of online CRM applications that deliver an integrated, personalized experience for customers, partners and employees: the frontline front·line also front line n. 1. A front or boundary, especially one between military, political, or ideological positions. 2. Basketball See frontcourt. 3. Football The linemen of a team. of every business. Customers around the globe rely on ATG for the frontline applications that help build and manage mutually beneficial Adj. 1. mutually beneficial - mutually dependent interdependent, mutualist dependent - relying on or requiring a person or thing for support, supply, or what is needed; "dependent children"; "dependent on moisture" relationships. Deployed on the industry's most popular application servers, ATG's application suites for e-commerce, portals, and relationship management are suitable for integrated e-business initiatives across the enterprise. Today, ATG has delivered e-business solutions to blue-chip companies Blue-chip company Used in the context of general equities. Large and creditworthy company. Company renowned for the quality and wide acceptance of its products or services, and for its ability to make money and pay dividends. Gilt-edged security. worldwide including Aetna Services, Inc., Alcatel, American Airlines American Airlines Major U.S. airline. American was created through a merger of several smaller U.S. airlines and incorporated in 1934. It continued to buy the routes of other airlines, becoming an international carrier in the 1970s; its routes include South America, the , AT&T, Barclays Global Investors Barclays Global Investors is a subsidiary of British-based Barclays Bank which is in the investment management industry. It is the largest corporate money manager in the world, with over £936 billion (US$1.77 trillion) under management as of March 2006[1]. , Best Buy, BMG BMG Bundesministerium für Gesundheit (Germand: Federal Ministry for Health) BMG Be My Girl BMG Blue Man Group BMG Bertelsmann Music Group BMG Be My Guest BMG Browning Machine Gun BMG Bulk Metallic Glass Direct, Eastman Kodak, Ford Motor Credit, HSBC HSBC Hongkong and Shanghai Banking Corporation HSBC Humane Society of Broward County (Florida) HSBC Humane Society of Bay County (Bay County, Michigan) , J.Crew, Sun Microsystems Sun Microsystems, Inc. (NASDAQ: JAVA[3]) is an American vendor of computers, computer components, computer software, and information-technology services, founded on 24 February 1982. , U.S. Army, USDA USDA, n.pr See United States Department of Agriculture. , Walgreen Company, and Wells Fargo Wells Fargo armored carriers of bullion. [Am. Hist.: Brewer Dictionary, 1147] See : Protectiveness Wells Fargo company that handled express service to western states; often robbed. [Am. Hist. . The company is headquartered in Cambridge, Massachusetts This article is about the city of Cambridge in Massachusetts. For the English university town, see Cambridge, England. For other places, see Cambridge (disambiguation). Cambridge, Massachusetts is a city in the Greater Boston area of Massachusetts, United States. , with additional locations throughout North America North America, third largest continent (1990 est. pop. 365,000,000), c.9,400,000 sq mi (24,346,000 sq km), the northern of the two continents of the Western Hemisphere. , Europe, and Asia. For more information about ATG, please visit our Web site at www.atg.com. (c)2002. ATG and Art Technology Group are registered trademarks of Art Technology Group, Inc. The statements in paragraphs 1, 2, and 3 of the section labeled Business Outlook of this press release include forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. . These statements involve known and unknown risks and uncertainties that may cause ATG's actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by such forward-looking statements. These risks include the effect of weakened weak·en tr. & intr.v. weak·ened, weak·en·ing, weak·ens To make or become weak or weaker. weak  en·er n. or weakening weak·en tr. & intr.v. weak·ened, weak·en·ing, weak·ens To make or become weak or weaker. weak en·er n. economic conditions or
perceived conditions on the level of spending by customers and
prospective customers for ATG's software and services; financial
and other effects of cost control measures; quarterly fluctuations in
ATG's revenues or other operating results; customization and
deployment delays or errors associated with ATG's products; the
result of longer sales cycles for ATG's products; satisfaction
levels of customers regarding the implementation and performance of
ATG's products; ATG's need to maintain and enhance business
relationships with resellers and other parties who may be affected by
changes in the economic climate; ATG's abilities to attract and
maintain qualified executives and other personnel and to motivate
employees; activities by ATG and others related to protection of
intellectual property; potential adverse financial and other effects of
litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute.When a person begins a civil lawsuit, the person enters into a process called litigation. and the release of competitive products and other activities by competitors. Further details on these risks are set forth in ATG's filings with the Securities and Exchange Commission, which are available on a Web site maintained by the Securities and Exchange Commission at http://www.sec.gov.
Art Technology Group, Inc.
Condensed Consolidated Statements of Operations
(In thousands, except per share data)
(Unaudited)
Three Months Ended Six Months Ended
June 30, June 30, June 30, June 30,
2002 2001 2002 2001
Revenues:
Product license $ 12,229 $ 19,083 $ 24,748 $ 44,564
Services 12,923 16,449 27,727 34,225
Total revenues 25,152 35,532 52,475 78,789
Cost of revenues:
Product license 1,096 1,100 2,139 2,147
Services 8,847 12,476 17,822 28,395
Total cost of
revenues 9,943 13,576 19,961 30,542
Gross profit 15,209 21,956 32,514 48,247
Gross profit % 60% 62% 62% 61%
Operating expenses:
Research &
development 5,563 8,146 11,133 17,179
Sales & marketing 11,178 26,725 23,557 56,835
General &
administrative 2,267 5,783 4,755 15,060
Stock-based
compensation 257 323 529 704
Total operating
expenses 19,265 40,977 39,974 89,778
Loss before
interest and taxes (4,056) (19,021) (7,460) (41,531)
Interest income, net 1,217 1,668 1,772 3,352
Loss before
restructuring and
benefit from income
taxes (2,839) (17,353) (5,688) (38,179)
Benefit from income
taxes -- 19,708 -- 27,622
Net loss before
restructuring $ (2,839) $ 2,355 $ (5,688) $(10,557)
Restructuring (89) 44,235 (89) 44,235
Net loss $ (2,750) $(41,880) $ (5,599) $(54,792)
Net loss per
share
Basic $ (0.04) $ (0.61) $ (0.08) $ (0.80)
Diluted $ (0.04) $ (0.61) $ (0.08) $ (0.80)
Weighted average
shares outstanding
Basic 69,786 68,595 69,574 68,387
Diluted 69,786 68,595 69,574 68,387
Art Technology Group, Inc.
Condensed Consolidated Balance Sheet
(In thousands, except per share data)
As of the period ended
June 30, December 31,
2002 2001
(Unaudited)
Assets:
Cash and equivalents $53,037 $66,250
Marketable securities 24,739 14,057
Accounts receivable, net 22,606 30,532
Prepaid expenses and
other current assets 4,915 5,815
Total current assets 105,297 116,654
Property and equipment, net 12,822 16,171
Intangibles and other assets, net 1,665 4,663
Total assets $119,784 $137,488
Liabilities and stockholders' equity:
Current maturities of long-term
obligations $ 1,000 $ 2,000
Accounts payable 3,422 4,160
Accrued expenses 20,204 24,718
Deferred revenue 16,003 17,628
Accrued restructuring short-term 9,571 13,398
Total current liabilities 50,200 61,904
Accrued restructuring long-term 30,731 32,675
Stockholders' equity 38,853 42,909
Total liabilities and stockholders'
equity $119,784 $137,488
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