ATG Reports First Quarter 2006 Financial Results; Revenue Grew 9 Percent Year-Over-Year to $24 Million; GAAP Net Income Increased 86 Percent Year-Over-Year to $2.6 Million.CAMBRIDGE, Mass. -- 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 ) whose licensed and on demand technology powers e-commerce sites and supporting e-marketing and customer service solutions for the world's most customer-centric enterprises today reported financial results for the first quarter ended March 31, 2006. Revenue for the first quarter of 2006 was $24 million, a 9 percent increase over first-quarter 2005 revenue of $22 million. Net income for the first quarter of 2006, in accordance Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with 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. Generally Accepted Accounting Principles The standard accounting rules, regulations, and procedures used by companies in maintaining their financial records. Generally accepted accounting principles (GAAP) provide companies and accountants with a consistent set of guidelines that cover both broad accounting (GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). ), was $2.6 million, or $0.02 per diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share. This compares with net income of $1.4 million, or $0.01 per diluted share, in the first quarter of 2005. GAAP net income in the first quarter of 2006 includes equity-related compensation charges of approximately $594,000 reflecting the company's adoption of Statement of Financial Accounting Standards No. 123R ("SFAS SFAS Statement of Financial Accounting Standards SFAS Special Forces Assessment and Selection SFAS Student Financial Aid Services SFAS Sport Fishing Association of Singapore SFAS Safety Features Actuation System SFAS Statewide Fixed Assets System 123R") on January 1, 2006. 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 as of March 31, 2006 increased $2.6 million to $36.2 million from $33.6 million as of December 31, 2005. "ATG's first-quarter performance marks a positive start to 2006," said Bob Burke, ATG's 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. . "As evidenced by our customer and partner response to our recent Insight Live conference, our suite of product offerings closely aligns with the demands of the marketplace. The market is in the midst Adv. 1. in the midst - the middle or central part or point; "in the midst of the forest"; "could he walk out in the midst of his piece?" midmost of a growth cycle in the commerce arena as on-line commerce becomes just plain commerce." Julie Bradley, ATG's senior vice president and CFO See Chief Financial Officer. , said, "Our strong first-quarter performance reflects the success of our growth strategy as we continue to experience healthy demand for our commerce and service solutions, as well as our continued expense management." First-Quarter Highlights --Generated business from new and repeat customers such as Allstate, BT, Coca-Cola, GE/Genpact, Groupama, Harvard Business School Publishing Harvard Business School Publishing is a not-for-profit, wholly owned subsidiary of Harvard Business School. It operates as an umbrella corporation to manage a group of publishing products associated with the School, including Harvard Business Review (management journal), Harvard , Hewlett-Packard, The Loyalty Group, Neiman Marcus Neiman Marcus U.S. department-store chain. It was founded in Dallas, Texas, in 1907 by Herbert Marcus, his sister Carrie Marcus Neiman, and her husband, A.L. Neiman. , Orange, PayPal, Smith & Hawken, Sony, Upromise, USDA USDA, n.pr See United States Department of Agriculture. , and Urban Outfitters Urban Outfitters, Inc. NASDAQ: URBN owns and operates three retail clothing brands: Urban Outfitters, Anthropologie and Free People. The first store opened in 1970 in Philadelphia, Pennsylvania, focusing on "funky" fashion and household products. . --Introduced three new OnDemand solutions including ATG ATG antithymocyte globulin. lymphocyte immune globulin (antithymocyte globulin equine, ATG, ATG equine, LIG) Atgam Pharmacologic class: Immunoglobulin Therapeutic class: Immunosuppressant Commerce OnDemand, ATG Answers OnDemand and ATG Customer Care OnDemand. ATG now offers the power of its traditional licensed products in a software-as-a-service model. --Attained verification by the Consortium for Service Innovation for ATG Knowledge, a Wisdom-enabled assisted call center service and support solution. ATG Knowledge was among the select few products to be "KCS KCS keratoconjunctivitis sicca. Verified" for Knowledge-Centered Support, a proven methodology that enables organizations to improve service levels to customers, gain operational efficiencies, and increase the organization's value to their company. In April, ATG hosted a record number of customers, partners, and prospects for the third annual ATG Insight Live conference. Among the hundreds of customers and prospects attending were AARP AARP, a nonprofit, nonpartisan national organization dedicated to "enriching the experience of aging"; membership is open to people age 50 or older. Founded in 1958 by Ethel Percy Andrus as American Association of Retired Persons, AARP now has over 30 million , Allstate, American Eagle Outfitters, Best Buy, Cabela's, Cingular Wireless, Coca-Cola, Deutsche Post Deutsche Post AG (ISIN: DE0005552004, LSE: DPO) is a German post, logistics and courier headquartered in Bonn, previously the German state-owned mail monopoly. It has 520,000 employees in more than 220 countries and territories worldwide and generated revenue of € 60. , GE/Genpact, Hewlett-Packard, Hyatt Hotels, Intuit in·tu·it tr.v. in·tu·it·ed, in·tu·it·ing, in·tu·its Usage Problem To know intuitively. [Back-formation from intuition. , Neiman Marcus, New York New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of & Company, Nintendo, OfficeMax, PepsiCo, Sephora, Smith & Hawken, Symantec, Target, Urban Outfitters, Verisign and Vodafone. At the conference, ATG previewed new product developments in five areas, including live chat, dynamic navigation in ATG Commerce Search and Merchandising merchandising Element of marketing concerned especially with the sale of goods and services to customers. One aspect of merchandising is advertising, which aims to capture the interest of the segment of the population most likely to buy the product. , a new reporting and dashboard (1) See Mac Dashboard. (2) A software-based control panel for one or more applications, network devices or industrial machines. Dashboards display simulated gauges and dials that look somewhat like an automobile dashboard. suite, enhancements to transactional service and offer management in its service solutions. Financial Guidance and Business Outlook "Based on the underlying trends supporting our business and the continued cost savings that we experienced in Q1, we believe we are in a favorable position Noun 1. favorable position - the quality of being at a competitive advantage favourable position, superiority advantage, vantage - the quality of having a superior or more favorable position; "the experience gave him the advantage over me" to extend our first-quarter momentum throughout 2006," Bradley concluded. "As a result, we are reaffirming our previously announced 2006 guidance." For 2006, the company continues to expect to grow revenue to a range of $97 million to $105 million and produce GAAP net income for the year ending December 31, 2006 of $6 million to $9 million. This guidance includes an estimated $3 million to $4 million in non-cash stock-based compensation expense, reflecting the company's adoption of SFAS 123R effective January 1, 2006.
Forward-Looking Guidance Reconciliation
Year Ending December 31, 2006
GAAP Guidance Non-GAAP Guidance
(In FROM TO Adjustment FROM TO
millions,
except EPS)
Revenue $ 97 $ 105 $ 0 $ 97 $ 105
Net Income $ 6 $ 9 $ 5 - $6 (a) $ 11 $ 15
Diluted EPS $ 0.05 $ 0.08 $0.04 - $0.05 (b) $ 0.10 $ 0.13
Diluted
Shares 113 115 -- 113 115
(a) Estimated annual amortization of acquired intangibles of $2
million and estimated stock-based compensation expense of $3 - $4
million to be recorded for the periods indicated in accordance
with Statement of Financial Accounting Standards No. 123R,
Share-Based Payments, ("SFAS 123R") which is effective for periods
beginning January 1, 2006. Periods prior to 2006 do not include
stock-based compensation expense.
(b) Estimated per diluted share effect of amortization and stock-based
compensation noted in (a).
Conference Call Reminder ATG management will discuss the company's first-quarter 2006 financial results, recent highlights, and business outlook for the remainder of 2006 on its quarterly conference call for investors at 10:00 a.m. ET today, May 2, 2006. The conference call will be broadcast live over the Internet. Investors interested in listening to the webcast should log on to the "For Investors" section of the ATG website, www.atg.com. The live conference call also can be accessed by dialing (706) 643-3945 or (888) 349-5690. Please refer to conference ID # 7569220. Use of Non-GAAP Financial Measures ATG is providing the non-GAAP historical financial measures presented below as the company believes that these figures are helpful in allowing individuals to better assess the ongoing nature of ATG's core operations. A "non-GAAP financial measure" is a numerical numerical expressed in numbers, i.e. Arabic numerals of 0 to 9 inclusive. numerical nomenclature a numerical code is used to indicate the words, or other alphabetical signals, intended. measure of a company's historical or future financial performance that excludes amounts that are included in the most directly comparable measure calculated and presented in the GAAP statement of operations See Income statement. . Net income (non-GAAP) and net income per share (non-GAAP), as we present them in the financial data below included in this press release, have been normalized to exclude the net effects of restructuring restructuring - The transformation from one representation form to another at the same relative abstraction level, while preserving the subject system's external behaviour (functionality and semantics). actions and the amortization of intangible assets Intangible Asset An asset that is not physical in nature. Notes: Examples are things like copyrights, patents, intellectual property, and goodwill. These are the opposite of tangible assets. and non-cash compensation charges. Management believes that these normalized non-GAAP financial measures excluding restructuring and amortization better reflect its operating performance as these non-GAAP figures exclude the effects of non-recurring or non-cash stock expenses. Management believes that these charges are not necessarily representative of underlying trends in the company's performance and their exclusion provides individuals with additional information to compare the company's results over multiple periods. Also, the company's financial results have not historically reflected the impact of non-cash compensation charges required by the adoption of SFAS 123R effective in 2006, and management believes it may be helpful to investors to present a measure of its financial results that is prepared on a basis that is comparable to its reported results for prior periods. The company uses the normalized 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. In accordance with the requirements of Regulation G issued by the Securities and Exchange Commission, the table below presents the most directly comparable GAAP financial measure and reconciles the normalized non-GAAP financial metrics metrics Managed care A popular term for standards by which the quality of a product, service, or outcome of a particular form of Pt management is evaluated. See TQM. to the comparable GAAP measures.
ART TECHNOLOGY GROUP, INC.
(In thousands, except per share data)
(UNAUDITED)
Three Months Ended
-----------------------------
March 31, December March 31,
2006 31, 2005 2005
--------- --------- ---------
Net Income (GAAP) $ 2,641 $ 3,178 $ 1,408
Amortization of Acquired Intangibles 513 580 580
Net Restructuring - 62 204
Equity Related Compensation 594 - -
-------- -------- --------
Net Income (non-GAAP) $ 3,748 $ 3,820 $ 2,192
======== ======== ========
Net Income (non-GAAP) per share:
Basic $ 0.03 $ 0.03 $ 0.02
Diluted $ 0.03 $ 0.03 $ 0.02
Shares used in per share calculations:
Basic 110,928 110,221 108,685
Diluted 113,945 113,049 110,866
About ATG ATG (Art Technology Group, Inc., NASDAQ: ARTG) makes the software that the world's most customer-conscious companies use to create a more relevant and consistent customer experience, throughout the marketing, commerce, and service lifecycle, and across the Web, e-mail, call center, and mobile channels. Offering an alternative to the traditional silo-based approach to customer-facing applications, ATG Wisdom(TM) is the company's strategy for delivering a seamless, more compelling, and mutually valuable experience to each customer and segment. The company fulfills this strategy by providing fully integrated best-of-breed product suites installed on-premise or delivered on-demand. ATG's solutions power over 600 major brands, including A&E Networks, Airbus, 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 , American Eagle Outfitters, Best Buy, Boeing, Cingular Wireless, DirecTV, France Telecom, 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. , Hewlett-Packard, Hotels.com, Hyatt Hotels, HSBC HSBC Hongkong and Shanghai Banking Corporation HSBC Humane Society of Broward County (Florida) HSBC Humane Society of Bay County (Bay County, Michigan) , InterContinental Hotels Group InterContinental Hotels Group (IHG) (LSE: IHG NYSE: IHG) is a multinational company which operates several hotel brands. The largest hotel company by number of rooms (556,000 as of March 2007 [1]), its headquarters are in Windsor just outside Greater London and , Kingfisher kingfisher, common name for members of the family Alcedinidae, essentially tropical and subtropical land birds, with affinities to trogons and swifts and related to the hornbill. , Louis Vuitton The Louis Vuitton Company (more commonly known simply as Louis Vuitton) is a luxury French fashion and leather goods brand and company, headquartered in Paris, France. It is a division of the French holding company, LVMH Louis Vuitton Moët Hennessy S.A. , Merrill Lynch Merrill Lynch & Co., Inc. (NYSE: MER TYO: 8675 ), through its subsidiaries and affiliates, provides capital markets services, investment banking and advisory services, wealth management, asset management, insurance, banking and related products and services on a global basis. , Neiman Marcus, Philips, Procter & Gamble, Symantec, T-Mobile, Target, US Army, US Navy, Warner Music, 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. and Europe. For more information about ATG, please visit www.atg.com. (C) 2006 Art Technology Group, Inc. ATG and Art Technology Group are registered trademarks and ATG Wisdom is a trademark of Art Technology Group, Inc. All other product names, service marks, and trademarks mentioned herein are trademarks of their respective owners. This press release contains 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. about the company's estimated revenue and earnings. 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 risk 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 ability to attract and maintain qualified
executives and other personnel and to motivate employees; activities by
ATG and others related to the 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. (including intellectual property infringement claims) 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 (SEC), including the company's annual report on Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. for the period ended December 31, 2005, as filed with the SEC. These filings are available free of charge on a website maintained by the SEC at http://www.sec.gov.
ART TECHNOLOGY GROUP, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
(UNAUDITED)
Three Months Ended
--------------------------
March December March
31, 31, 31,
2006 2005 2005
------- ------- -------
Assets
Current assets:
Cash, cash equivalents and marketable
securities $36,155 $33,569 $27,350
Accounts receivable, net 20,425 21,459 20,734
Prepaid expenses and other current assets 1,618 1,130 2,554
------- ------- -------
Total current assets 58,198 56,158 50,638
Property and equipment, net 3,458 2,995 2,705
Intangible assets, net 4,346 4,859 6,598
Other assets 1,274 1,406 2,970
Goodwill 27,347 27,347 27,458
------- ------- -------
Total long-term assets 36,425 36,607 39,731
------- ------- -------
Total assets $94,623 $92,765 $90,369
======= ======= =======
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $ 3,210 $ 2,719 $ 1,989
Accrued expenses 11,149 13,359 11,891
Deferred revenue 21,549 21,113 22,344
Accrued restructuring, current portion 2,243 3,012 5,398
Other current liabilities 238 254 327
------- ------- -------
Total current liabilities 38,389 40,457 41,949
Accrued restructuring, less current portion 1,938 2,085 3,903
Capital lease obligations, less current
portion 42 63 99
------- ------- -------
Total long-term liabilities 1,980 2,148 4,002
Stockholders' equity 54,254 50,160 44,418
------- ------- -------
Total liabilities and stockholders'
equity $94,623 $92,765 $90,369
======= ======= =======
ART TECHNOLOGY GROUP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(UNAUDITED)
Three Months Ended
-----------------------------
March December March
31, 31, 31,
2006 2005 2005
-------- -------- --------
Revenues:
Product license $ 8,100 $ 10,051 $ 7,383
Services 15,856 15,635 14,611
-------- -------- --------
Total Revenue 23,956 25,686 21,994
Cost of Revenues:
Product license 498 403 593
Services 6,665 6,537 5,411
-------- -------- --------
Total cost of revenues 7,163 6,940 6,004
-------- -------- --------
Gross Profit 16,793 18,746 15,990
Gross Profit % 70% 73% 73%
Operating Expenses:
Research and development 4,827 4,373 4,589
Sales and marketing 6,923 8,304 6,799
General and administrative 2,680 2,792 2,988
Restructuring - 62 204
-------- -------- --------
Total Operating Expenses 14,430 15,531 14,580
Income from Operations 2,363 3,215 1,410
Interest and other income, net 278 (53) 11
-------- -------- --------
Income before tax provision 2,641 3,162 1,421
Provision (benefit) for income taxes - (16) 13
-------- -------- --------
Net Income $ 2,641 $ 3,178 $ 1,408
======== ======== ========
Earnings Per Share
Basic $ 0.02 $ 0.03 $ 0.01
Diluted $ 0.02 $ 0.03 $ 0.01
Shares Outstanding
Basic 110,928 110,221 108,685
Diluted 113,945 113,049 110,866
ART TECHNOLOGY GROUP, INC.
(In thousands, except per share data)
(UNAUDITED)
Three Months Ended
------------------------
March December March
31, 31, 31,
2006 2005 2005
------- -------- -------
Equity-Related Compensation:
Cost of Revenues $ 137 $ - $ -
Research and Development 154 - -
Sales and Marketing 173 - -
General and Administrative 130 - -
------ ------- ------
Total Equity-Related Compensation $ 594 $ - $ -
====== ======= ======
Depreciation and Amortization:
Depreciation $ 537 $ 476 $ 511
Amortization 513 580 580
Total Depreciation and Amortization $1,050 $ 1,055 $1,090
====== ======= ======
Capital Expenditures:
Purchases of Property and Equipment $1,001 $ 940 $ 108
====== ======= ======
Net Increase in cash, cash equivalents and
marketable securities $2,586 $ 3,653 $ 843
====== ======= ======
End of Period Statistics:
Number of Employees 321 309 313
Number of Hosted Sites 48 n/a n/a
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