Art Technology Group, Inc. Announces Record Quarterly and Year-End Results.Business/Technology Editors CAMBRIDGE, Mass.--(BUSINESS WIRE)--Jan. 25, 2000 Fourth-Quarter Revenues Increase 247% Over 1998 Levels; Customer Base Reaches New High of 262; System Integrators Increase Contribution Art Technology Group, Inc. (ATG ATG antithymocyte globulin. lymphocyte immune globulin (antithymocyte globulin equine, ATG, ATG equine, LIG) Atgam Pharmacologic class: Immunoglobulin Therapeutic class: Immunosuppressant ) (Nasdaq: ARTG ARTG Australian Register of Therapeutic Goods ), a leading developer of e-commerce and online 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. software, today announced record financial results for the fourth quarter and year ended December 31, 1999. (In millions, except per share data and percentages) Q4 1999 Q4 1998 % Growth Q3 1999 % Growth Total Revenue $ 13.3 $ 3.8 247% $ 8.1 64% Services Revenue $ 4.1 $ 2.2 86% $ 3.7 11% % of Total Revenue 31% 58% 45% Product Revenue $ 9.2 $ 1.6 475% $ 4.5 105% % of Total Revenue 69% 42% 55% Net Loss $ (1.5) $ (1.3) $ (5.3) Basic and Diluted Loss Per Share $ (0.05) $ (0.15) $ (0.20) Proforma Net Loss(1) $ (1.5) $ (1.1) $ (1.4) Proforma Basic and Diluted Loss Per Share(1) $ (0.05) $ (0.05) $ (0.05) Annual Financial Results Summary (In millions, except per share data and percentage) 1999 1998 % Growth Total Revenue $ 32.1 $ 12.1 165% Net Loss $ (9.5) $ (4.4) Basic and Diluted Loss Per Share $ (0.49) $ (0.50) Proforma Net Loss(1) $ (5.1) $ (2.9) Proforma Basic and Diluted Loss Per Share(1) $ (0.19) $ (0.16) (1)Proforma net loss per share is presented herein assuming (i) the net loss prior to the accretion of preferred stock dividends, discounts, and offerings costs, and (ii) the conversion of all the outstanding shares of preferred stock into common stock upon Art Technology Group's initial public offering using the as converted method from their respective dates of issuance. Comments on the Quarter &uot;We are extremely pleased to report our 8th consecutive quarter of record financial results,&uot; stated Jeet Singh, president and chief executive officer of Art Technology Group. &uot;We experienced tremendous growth in customer demand across vertical industries, as well as increasing activity in our systems integrator distribution channel, which contributed approximately 75% of our fourth-quarter product revenue. Our product/service revenue mix, now at 69%/31%, is at our target level, and our quarter-to-quarter growth of 64%, year-to-year growth of 247%, and annual growth of 165% have all exceeded our expectations.&uot; Key Customer Wins ATG signed a record number of new customers in the quarter, with 61 new accounts including Aetna Insurance, A.G. Edwards, Celestial Seasonings Celestial Seasonings is a tea company based in Boulder, Colorado, United States that specializes in herbal tea but also sells green and black tea (as well as white and oolong blends). They account for over $100,000,000 in Herbal Tea Blends Sales in the United States annually. , Egreetings.com, Kaplan Educational Centers, Miadora, Miller Freeman An earlier subsidiary of United News & Media (www.unm.com). Miller Freeman was a leading trade show organizer and publisher serving a variety of industries. In 1996, it acquired the Blenheim Group, producers of the popular PC EXPO trade show, and in 1999, it acquired the CMP , Petstore.com, Procter &Gamble Company, Smith &Hawken, and Tavolo.com. In addition, significant repeat business was closed with customers including AT&, eve.com, General Motors, Harvard Business School Harvard Business School, officially named the Harvard Business School: George F. Baker Foundation, and also known as HBS, is one of the graduate schools of Harvard University. , Herman Miller Herman Miller may refer to:
International, Channel, and Partnership Growth ATG continued to see increasing success in selling to Fortune 1000 firms, as well as to Internet-centric companies. International revenue contribution exceeded 10 percent in the recent quarter with sales in Sweden, Germany, United Kingdom, South Africa South Africa, Afrikaans Suid-Afrika, officially Republic of South Africa, republic (2005 est. pop. 44,344,000), 471,442 sq mi (1,221,037 sq km), S Africa. , Italy, and Japan. The company signed new systems integration partners in the fourth quarter while existing partners, including Cambridge Technology Partners, CSC (Card Security Code) A three- or four-digit number printed on the back of credit cards for security purposes. Called "Card Verification Value" (CVV) by Visa, "Card Validation Code" (CVC) by MasterCard and "Card Identification (CID) by American Express and Discover, , Ft. Point Partners, Scient, Organic, and PriceWaterhouseCoopers, began to make sizable siz·a·ble also size·a·ble adj. Of considerable size; fairly large. siz  a·ble·ness n. revenue contributions. ATG also deepened its existing
relationship with Interwoven in·ter·weave v. in·ter·wove , in·ter·wo·ven , inter·weav·ing, inter·weaves v.tr. 1. To weave together. 2. To blend together; intermix. v.intr. , and signed on new technology partnership agreements with vendors in the data analysis space including Broadbase, E.piphany and Personify per·son·i·fy tr.v. per·son·i·fied, per·son·i·fy·ing, per·son·i·fies 1. To think of or represent (an inanimate object or abstraction) as having personality or the qualities, thoughts, or movements of a living being: as well as RSW RSW Registered Social Worker RSW Resistance Spot Welding RSW Renegade Soundwave (band) RSW Royal Scottish Society of Painters in Watercolour RSW Refrigerated Seawater (fishing industry) Software. Recognition from Industry Leaders ATG was recognized by leading independent research firm Forrester Research Forrester Research is an independent technology and market research company that provides its clients with advice about technology's impact on business and consumers. Corporate facts
tr.v. en·ti·tled, en·ti·tling, en·ti·tles 1. To give a name or title to. 2. To furnish with a right or claim to something: &uot;Which Commerce Platform?,&uot; ATG's Dynamo Product Suite was cited as a &uot;winning choice&uot; in the crowded e-commerce server market and was singled out as excelling as a development foundation while offering commerce applications, including strong personalization. The company was also rewarded for its technology expertise with an Editor's Choice Award for Best Java Application A Java program that is run stand alone. The Java Virtual Machine in the client or server is interpreting the instructions. Contrast with Java applet. See servlet. Server by Java Developer's Journal. In addition, Jeet Singh was ranked among e-business visionaries by industry publication VARBusiness. Additional Fourth-quarter Achievements --Increased the company's total headcount to 324, which is a 125% percent increase from 1998. --Expanded West Coast headquarters with new San Francisco San Francisco (săn frănsĭs`kō), city (1990 pop. 723,959), coextensive with San Francisco co., W Calif., on the tip of a peninsula between the Pacific Ocean and San Francisco Bay, which are connected by the strait known as the Golden location to support growing Dynamo customer and partner base in the Western United States Noun 1. western United States - the region of the United States lying to the west of the Mississippi River West Santa Fe Trail - a trail that extends from Missouri to New Mexico; an important route for settlers moving west in the 19th century . --Completed a successful follow-on offering Follow-On Offering An offering of additional shares after a company has had an initial public offering. Notes: This sometimes means the company is strapped for cash. So they need to issue more shares to pay bills or finance a new project. of 4.5 million shares, at $67.50 per share, with the company selling 1.5 million shares and receiving net proceeds Net Proceeds The amount received after all costs are deducted from the sale of a piece of property or security. Notes: In the case of an investor selling a security, net proceeds represent the proceeds from the sale minus any trading costs (i.e. commissions). of $97.1 million. --Announced significant expansion of its partnership with Interwoven. Among the more than 20 customers who have turned to ATG's Dynamo and Interwoven TeamSite are: Tech Republic, the IT community hub; LookSmart, a leading category-based Web Directory; Tavolo, a specialty food and kitchenware online retailer; and Petstore.com providing expert advice and solutions for pets. --Signed additional technology partnership agreements with Just in Time Solutions, Broadbase, E.piphany Inc., Personify, RSW Software, Inc., Cybersource, and Channelpoint. --ATG released the latest version of its Dynamo Open Content Adapters which integrate with industry-leading content management systems such as Documentum, Interwoven, and Open Text. Comments on the Year-end Results &uot;This past year has been a truly rewarding one for Art Technology Group, our partners, our shareholders and our customers,&uot; continued Singh. &uot;In 1999, we completed a successful IPO (Initial Public Offering) The first time a company offers shares of stock to the public. While not a computer term per se, many founders, employees and insiders of computer companies have found this acronym more exciting than any tech term they ever heard. and follow-on offering, significantly advanced our technology and dramatically grew ATG's business. We also extended our global reach, opening offices in San Francisco, Chicago, Los Angeles Los Angeles (lôs ăn`jələs, lŏs, ăn`jəlēz'), city (1990 pop. 3,485,398), seat of Los Angeles co., S Calif.; inc. 1850. , Denver, the U.K. and Germany while gaining new customers in countries such as the U.K., Germany, Sweden and Japan.&uot; &uot;As we enter 2000, ATG's business is well positioned to capitalize on Cap´i`tal`ize on` v. t. 1. To turn (an opportunity) to one's advantage; to take advantage of (a situation); to profit from; as, to capitalize on an opponent's mistakes s>. the very large opportunities afforded by the e-commerce platform market. In the quarters ahead, we will aggressively increase our marketing and sales presence, pursue strategic alliances that complement our rapidly evolving product offerings, and continue to establish effective distribution channels. We will also significantly enhance our already proven Dynamo(R) product suite in order to continue to provide our customers with highly comprehensive, scalable and extensible platforms.&uot; About Art Technology Group Art Technology Group, Inc. is a leading provider of Internet customer relationship management and electronic commerce products and services. ATG offers an integrated suite of Java application server-based products and services, as well as related application development, integration and support services support services Psychology Non-health care-related ancillary services–eg, transportation, financial aid, support groups, homemaker services, respite services, and other services . ATG's Dynamo Product Suite enables Global 1000 enterprises, as well as new businesses using the Internet as their primary business channel, to understand, manage and build their online customer relationships and to more effectively market, sell and support their products and services over the Internet. The Company is headquartered in Cambridge, MA with additional locations throughout the U.S. and Europe. About Dynamo The Dynamo solution is designed to provide businesses with the core platform and software tools required to develop and deploy 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. , scalable and reliable e-commerce Web sites. Dynamo is licensed to over 200 customers including: 3M, BabyCenter, BellSouth, 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, Informix, John Hancock Funds, Inc., Network Solutions, Newbridge Networks Newbridge Networks was an Ottawa, Ontario, Canada company founded by Canadian/Welsh entrepreneur Terry Matthews. It was founded in 1986 to create data and voice networking products after Matthews was forced out of his original company Mitel. , Scudder Kemper Investments, Sun Microsystems and TheStreet.com. Dynamo is a registered trademark of Art Technology Group 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. for purposes of the safe harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. provisions under The Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995. For this purpose, any statements using the terms &uot;will,&uot; &uot;should,&uot; &uot;could,&uot; &uot;anticipates&uot; or &uot;believes&uot; or other comparable terminology, are 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. Among the important factors that could cause actual results to differ materially from those indicated by such forward-looking statements are: ATG's history of losses and limited operating history in selling software products; fluctuations in ATG's quarterly operating results; ATG's dependence on a small number of relatively large, nonrecurring orders each quarter; the new and rapidly evolving nature of the customer relationship management solutions market; intense competition; the possible loss of ATG's relationships with resellers and original equipment manufacturers; ATG's dependence on key personnel; ATG's need to expand its sales and distribution capabilities; ATG's dependence on third-party systems integrators; ATG's need to implement and improve operational systems; the possible loss of money on fixed-price contracts; the need to adapt to rapid changes so products do not become obsolete; ATG's reliance on the Java programming language; the possibility of errors or defects in ATG's software products; the adverse impact of future regulations; the adverse impact of privacy concerns relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc the Internet and ATG's products; as well as other risk factors described from time to time in ATG's periodic reports and registration statements filed with the Securities and Exchange Commission. ATG cannot guarantee any future results, levels of activity, performance or achievements. Moreover, neither ATG nor anyone else assumes responsibility for the accuracy and completeness of these statements. ATG undertakes no obligation to update any of the forward-looking statements after the date of this press release. Attached are the Company's condensed con·dense v. con·densed, con·dens·ing, con·dens·es v.tr. 1. To reduce the volume or compass of. 2. To make more concise; abridge or shorten. 3. Physics a. consolidated statements of operations and balance sheets.
ART TECHNOLOGY GROUP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(UNAUDITED)
Three Months Ended Year Ended
Dec. 31, Dec. 31, Dec. 31, Dec. 31,
1999 1998 1999 1998
REVENUES:
Services $ 4,065 $ 2,229 $ 13,487 $ 8,078
Product licenses 9,218 1,608 18,590 4,059
Total revenues 13,283 3,837 32,077 12,137
COST OF REVENUES 3,723 1,575 10,392 5,050
Gross profit 9,560 2,262 21,685 7,087
OPERATING EXPENSES:
Research and
development 2,109 1,049 6,343 3,355
Sales and marketing 7,787 1,444 15,921 4,074
General and
administrative 2,173 748 5,323 2,291
Amortization
of deferred
compensation 304 107 1,127 107
Total operating
expenses 12,373 3,348 28,714 9,827
LOSS FROM OPERATIONS (2,813) (1,086) (7,029) (2,740)
INTEREST INCOME 1,337 46 2,018 54
INTEREST EXPENSE -- (32) (121) (164)
Net loss (1,476) (1,072) (5,132) (2,850)
ACCRETION OF DIVIDENDS,
DISCOUNT AND OFFERING
COSTS ON PREFERRED STOCK -- (252) (4,395) (1,594)
Net loss available
for common $ (1,476) $ (1,324) $ (9,527) $ (4,444)
Basic and diluted
net loss per share $ (0.05) $ (0.15) $ (0.49) $ (0.50)
Shares used in computing
basic and diluted
net loss per share 32,024 9,045 19,389 8,967
Proforma net loss
per share (Note 1) $ (0.05) $ (0.05) $ (0.19) $ (0.16)
Note 1 - Proforma net loss per share is presented assuming (i) the net
loss without the accretion of preferred stock dividends, discounts,
and offering costs and (ii) the conversion of all outstanding
convertible preferred stock and redeemable preferred stock into common
stock upon Art Technology Group's initial public offering using the as
converted method from their representative date of issuance.
ART TECHNOLOGY GROUP, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
(UNAUDITED)
December 31, December 31,
1999 1998
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $124,711 $ 4,093
Marketable securities 5,137 --
Accounts receivable, net 12,539 2,318
Unbilled services 782 291
Prepaid expenses and other current assets 1,908 113
Total current assets 145,077 6,815
Marketable securities 19,394 --
Property and equipment, net 5,465 842
Other assets 799 109
$170,735 $ 7,766
LIABILITIES, REDEEMABLE PREFERRED STOCK AND STOCKHOLDERS' EQUITY
(DEFICIT)
CURRENT LIABILITIES:
Accounts payable $ 3,285 $ 721
Accrued expenses 4,728 1,220
Deferred revenue 8,337 878
Current maturities of long-term obligations -- 347
Total current liabilities 16,350 3,166
Long-term obligations, less current maturities -- 322
Redeemable convertible preferred stock -- 8,313
Stockholders' equity (deficit) 154,385 (4,035)
$170,735 $ 7,766
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