ATG Announces Third-Quarter 2003 Results.Business Editors/High-Tech Writers CAMBRIDGE, Mass.--(BUSINESS WIRE)--Oct. 21, 2003 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 NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on : ARTG ARTG Australian Register of Therapeutic Goods ) today announced its results for the third quarter ended September 30, 2003. Total revenues for the third quarter of 2003 were $16.0 million, compared with total revenues for the third quarter of 2002 of $24.5 million. Net loss for the third quarter of 2003, in accordance with accounting principles generally accepted in the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. (GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). ), was $3.2 million, or ($0.04) per share, compared with a GAAP net loss of $3.1 million, or ($0.04) per share, in the third quarter of 2002. For the nine months ended September 30, 2003, total revenues were $56.7 million, compared with total revenues for the nine months ended September 30, 2002 of $77.0 million. The company's GAAP net income for the nine months ended September 30, 2003 was $0.1 million, or $0.00 per share, compared with a net loss for the nine months ended September 30, 2002 of $8.7 million, or ($0.12) per share. Net income for the nine months ended September 30, 2003 includes a net benefit from 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 $5.3 million. Excluding the net benefit, the company's net loss (non-GAAP) for the period would have been $5.2 million, or ($0.07) per share.
THIRD-QUARTER FINANCIAL HIGHLIGHTS
(In millions, except per share data, and percentages)
Three Months Ended Nine Months Ended
Sept. 30, Sept. 30, Sept. 30, Sept. 30,
2003 2002 2003 2002
Total revenues $16.0 $24.5 $56.7 $77.0
License revenue 5.0 11.8 22.0 36.6
Percent of total revenues 31% 48% 39% 48%
Services revenue 11.0 12.7 34.8 40.4
Percent of total revenues 69% 52% 61% 52%
Net income/(loss) (GAAP) (3.2) (3.1) 0.1 (8.7)
Net income/(loss) per share
(GAAP) (0.04) (0.04) 0.00 (0.12)
Cash, cash equivalents and
marketable securities $46.0 $72.5 $46.0 $72.5
"Although we are disappointed with these results, ATG had many significant accomplishments in the third quarter," said Bob Burke, ATG president and 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. . "We added significant new customers during the quarter and announced the general availability of ATG 6.1. We also remain on track for the delivery of further product releases in both the fourth quarter of 2003 and in the first half of 2004." "ATG made good progress in strengthening its balance sheet during the quarter," said Ed Terino, ATG chief financial officer. "We successfully negotiated a settlement for an excess lease obligation in Germany, which removed a significant liability from the company's balance sheet and will help the company get closer to cash flow positive performance. We also reduced our expense run rate, and we continue to be diligent dil·i·gent adj. Marked by persevering, painstaking effort. See Synonyms at busy. [Middle English, from Old French, from Latin d in managing our cash balance while investing in the future of ATG." THIRD-QUARTER HIGHLIGHTS During the third quarter of 2003, ATG: -- Earned repeat business from existing customers such as AT&T Business Services, AT&T Wireless, Bunge, Dresdner Bank Dresdner Bank AG is one of Germany's largest banking corporations and is based in Frankfurt. History 19th century Dresdner Bank was established on 12 November 1872 through the conversion of financial institution Michael Kaskel. , FranklinCovey, Friends Provident Friends Provident plc (LSE: FP.) manages a life assurance business mainly based in the United Kingdom and with offices throughout the world. Friends Provident is a financial services group and a member of the FTSE100 Index. Management Services, General Motors, Hyatt, J.Crew, Johnson & Johnson, Mercedes Benz Mercedes Benz expensive automobile and status symbol. [Trademarks: Crowley Trade, 368] See : Luxury and Warner Music Group Warner Music Group (WMG) is one of the four major record labels. Warner Music Group also has a publishing arm, Warner/Chappell Music, which dates back to 1929, when Jack Warner, president of Warner Bros. Pictures Inc. . -- Continued to add to ATG's blue-chip customer list by winning business with new customers such as Casual Male Retail Group, Chugai Pharmaceutical, Cushman Wakefield, Elano, Metropolitan Life Insurance Company, Saint James' Place and T-Mobile. -- Announced the general availability for ATG 6.1. This latest product release includes significant upgrades to ATG's dynamic Web content management product, support for industry-leading application servers and significant enhancements to ATG's innovative 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. . -- Settled an $11.8 million excess lease obligation for a facility located in Frankfurt, Germany for $6.4 million. In addition to the $6.4 million payment, the company made a $1.0 million payment for German Value Added Tax value added tax n (BRIT) → impuesto sobre el valor añadido or agregado (LAM) value added tax n (Brit (VAT). ATG expects to recover this $1.0 million payment in full during the fourth quarter of 2003. Year to date, ATG has settled approximately $50 million in excess lease obligations for $16.1 million. This has resulted in reducing ATG's accrued ac·crue v. ac·crued, ac·cru·ing, ac·crues v.intr. 1. To come to one as a gain, addition, or increment: interest accruing in my savings account. 2. restructuring liability from $52 million at December 31, 2002 to $22 million at September 30, 2003. -- Lowered total cost of revenues and total operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. from $21.0 million in the second quarter of 2003 (excluding the net benefit from restructuring charges of approximately $5.3 million) to $19.2 million in the third quarter of 2003. OUTLOOK "ATG has built a strong reputation of technology leadership. We believe the recent launch of ATG 6.1, planned enhancements to our core technology and introduction of new self-service application A software application that allows a user to obtain information or complete a business transaction on the computer that has traditionally required the help of a human representative. Voice response systems and Web sites are widely used for self-service applications. See kiosk. solutions in the coming quarters will enable us to build on this legacy," stated Burke. "We anticipate that, over time, these investments will enhance ATG's growth prospects." For the fourth quarter of 2003, the company anticipates sequential revenue growth from the third quarter of 2003. Additionally, the company anticipates flat, or a modest sequential increase, in total operating expenses and total cost of revenues. The company anticipates that as of December 31, 2003, 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 $40 million to $43 million. CONFERENCE CALL REMINDER ATG management will discuss the company's third-quarter 2003 financial results, business outlook for the fourth quarter of 2003 and continued product development plans on its quarterly conference call for investors at 5:30 p.m. EDT EDT abbr. Eastern Daylight Time EDT Eastern Daylight Time EDT n abbr (US) (= Eastern Daylight Time) → hora de verano de Nueva York EDT today, October 21, 2003. 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. FINANCIAL PRESENTATION The company is providing non-GAAP financial measures as the company believes that these figures are helpful in allowing individuals to more accurately assess the ongoing nature of ATG's core operations. Net loss (non-GAAP) excludes the net restructuring benefit associated with the favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. settlement of certain of ATG's excess lease obligations, offset by adjustments to other facilities and employee severance restructuring charges. These charges have been excluded from non-GAAP financial measures as management does not believe that they are representative of underlying trends in the company's performance and their exclusion provides individuals with additional information to more readily compare the company's results over multiple periods. The company uses the presented non-GAAP financial measures internally to focus management on period-to-period changes in the company's core business. Therefore, the company believes that this information is meaningful in addition to the information contained in the GAAP presentation of financial information. The presentation of this additional non-GAAP financial information is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with GAAP. ABOUT ATG ATG (Art Technology Group, Inc.) is a leading provider of innovative software applications for commerce and customer self-service. Customers around the globe rely on ATG for 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. applications that enhance and improve the entire customer lifecycle experience. Deployed on the industry's most popular application servers, ATG's application suites for e-commerce, portals, and relationship management are ideal for integrating online initiatives across the enterprise. ATG has delivered online 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, 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 , 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. , Walgreens, 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) 2003 Art Technology Group, Inc. ATG and Art Technology Group are registered trademarks of, and Scenario Personalization is a service mark of, Art Technology Group, Inc. All other product names, service marks, and trademarks mentioned herein are trademarks of their respective owners. The statements in paragraphs 3 and 4, bullet point bullet point n → punto; bullet points → elenco sg puntato 4 of the section labeled "Third-Quarter Highlights" and the statements in paragraphs 1 and 2 of the section labeled "Outlook" 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. . When and if future product releases will be made available remains at the sole discretion of ATG, and any references to ATG 6.1 or future products should be considered forward-looking statements. 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 or weakening 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 and ATG's ability to conclude sales based on purchasing decisions that are delayed; satisfaction levels of customers regarding the implementation and performance of ATG's products; ATG's need to maintain, enhance and leverage 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 Nine Months Ended
Sept. 30, Sept. 30, Sept. 30, Sept. 30,
2003 2002 2003 2002
Revenues:
Product license $5,001 $11,825 $21,971 $36,573
Services 11,008 12,677 34,769 40,404
Total Revenues 16,009 24,502 56,740 76,977
Cost of Revenues:
Product license 530 1,118 1,492 3,257
Services 4,598 8,119 15,391 25,941
Total Cost of Revenues 5,128 9,237 16,883 29,198
Gross Profit 10,881 15,265 39,857 47,779
Gross profit % 68% 62% 70% 62%
Operating Expenses:
Research & development 4,187 5,419 14,014 16,552
Sales & marketing 7,567 9,713 24,431 33,270
General & administrative 2,321 3,021 7,335 7,777
Stock-based compensation 18 246 117 775
Restructuring
expense/(benefit) - - (5,273) (89)
Total Operating Expenses 14,093 18,399 40,624 58,285
Loss from Operations (3,212) (3,134) (767) (10,506)
Interest and Other Income,
net 17 77 868 1,849
Income/(loss) before
provision for income taxes (3,195) (3,057) 101 (8,657)
Provision for income taxes - - - -
Net income/(loss) $(3,195) $(3,057) $101 $(8,657)
Basic net income/(loss) per
share $(0.04) $(0.04) $0.00 $(0.12)
Diluted net income/(loss)
per share $(0.04) $(0.04) $0.00 $(0.12)
Basic weighted average
common shares outstanding 72,052 69,954 71,503 69,737
Diluted weighted average
common shares outstanding 72,052 69,954 73,398 69,737
Art Technology Group, Inc.
Condensed Consolidated Balance Sheets
(In thousands)
(Unaudited)
As of the period ended
September 30, December 31,
2003 2002
Assets
Current assets:
Cash, cash equivalents and marketable
securities $46,016 $68,558
Accounts receivable, net 12,379 25,221
Prepaid expenses and other current
assets 2,171 2,489
Total current assets 60,566 96,268
Property and equipment, net 4,270 6,998
Other assets 2,283 1,569
Total assets $67,119 $104,835
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $1,970 $2,563
Accrued expenses 11,645 18,219
Deferred revenue 14,108 15,674
Accrued restructuring short-term 9,298 19,819
Total current liabilities 37,021 56,275
Accrued restructuring long-term 13,184 32,537
Stockholders' equity 16,914 16,023
Total liabilities and stockholders'
equity $67,119 $104,835
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