Art Technology Group, Inc. Settles Patent Litigation Resulting in Updated Fourth-Quarter and Year-End Results.Business/Technology Editors CAMBRIDGE Cambridge, city, Canada Cambridge (kām`brĭj), city (1991 pop. 92,772), S Ont., Canada, on the Grand River, NW of Hamilton. It was formed in 1973 with the amalgamation of Galt, Hespeler, and Preston, all founded in the early 19th cent. , Mass.--(BUSINESS WIRE)--Feb. 23, 2000 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 ) today announced the settlement of a previously disclosed lawsuit lawsuit: see procedure; tort. filed by BroadVision A family of e-business applications from BroadVision, Inc., Redwood City, CA (www.broadvision.com) that provide the tools to develop a complete, commercial Web site. The suite of integrated and self-service applications includes BroadVision Process; Commerce; Content; and Portal, all of against ATG in December December: see month. 1998, which alleged the infringement The encroachment, breach, or violation of a right, law, regulation, or contract. The term is most frequently used in reference to the invasion of rights secured by Copyright, patent, or trademark. of certain claims of U.S. Patent No. 5,710,887 owned by BroadVision. The settlement was amicably am·i·ca·ble adj. Characterized by or exhibiting friendliness or goodwill; friendly. [Middle English, from Late Latin am reached to avoid further 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. expenses and risks to both parties. As part of the settlement, BroadVision has dropped its claims of infringement, and ATG has dropped its claims of noninfringement and patent invalidity in·va·lid 1 n. One who is incapacitated by a chronic illness or disability. adj. 1. Incapacitated by illness or injury. 2. Of, relating to, or intended for invalids. tr.v. . ATG did not make any admission of wrongdoing wrong·do·er n. One who does wrong, especially morally or ethically. wrong  do , liability, violation of law, infringement or validity
regarding the patent in question.As is customary in patent litigation settlements, ATG, in return for cash payments, will receive a non-exclusive, worldwide, perpetual PERPETUAL. That which is to last without limitation as to time; as, a perpetual statute, which is one without limit as to time, although not expressed to be so. , paid-up Paid-Up The state of a settlement when all payment obligations for a security have been completed in a customer account. When an individual has paid up, he or she has paid for the security in full. license to make, use, and sell products arguably ar·gu·a·ble adj. 1. Open to argument: an arguable question, still unresolved. 2. That can be argued plausibly; defensible in argument: three arguable points of law. covered by BroadVision's patent and any other patents that may be issued in the future that are related to the original patent. ATG will pay BroadVision $8 million in February 2000 for alleged past use, and an additional $7 million over the next three years. Fourth-quarter and Year-end Results On January 25, 2000, ATG announced its preliminary financial results for the quarter and year ended December 31, 1999. Subsequent to the release of preliminary financial results, ATG reached a settlement agreement with BroadVision. The results for the quarter and year ended December 31, 1999 have been revised to reflect the $8.0 million payment to BroadVision in February 2000 as an expense (cost of revenues) in the fourth quarter of calendar 1999 and to record a liability for the amounts owed to BroadVision. The additional $7 million license fee will be expensed over a three year period beginning in the first quarter of 2000. ATG's adjusted financial results are summarized below:
ART TECHNOLOGY GROUP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(UNAUDITED)
Three Months Ended Year Ended
December December December December
31, 31, 31, 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:
Services 3,586 1,566 10,232 5,020
Product licenses (Note 1) 8,137 9 8,160 30
Total cost of revenues 11,723 1,575 18,392 5,050
Gross profit 1,560 2,262 13,685 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 (10,813) (1,086) (15,029) (2,740)
INTEREST INCOME 1,337 46 2,018 54
INTEREST EXPENSE -- (32) (121) (164)
Net loss (9,476) (1,072) (13,132) (2,850)
ACCRETION OF DIVIDENDS,
DISCOUNT AND
COSTS ON PREFERRED STOCK -- (252) (4,395) (1,594)
Net loss available for common $ (9,476)$ (1,324) $(17,527)$ (4,444)
stockholders (Note 1)
Basic and diluted net loss
per share $ (0.30)$ (0.15) $ (0.90)$ (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 2) $ (0.30)$ (0.05) $ (0.48)$ (0.16)
Note 1 - The quarter and year ended December 31, 1999 results include
an $8.0 million charge for a license fee paid to BroadVision upon
settlement of litigation in February 2000.
Note 2 - 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 7,799 109
$177,735 $ 7,766
LIABILITIES, REDEEMABLE PREFERRED
STOCK AND STOCKHOLDERS' EQUITY (DEFICIT)
CURRENT LIABILITIES:
Accounts payable $ 11,285 $ 721
Accrued expenses 4,728 1,220
Deferred revenue 8,337 878
Current maturities of long-term obligations 3,000 347
Total current liabilities 27,350 3,166
Long-term obligations, less current maturities 4,000 322
Redeemable convertible preferred stock -- 8,313
Stockholders' equity (deficit) 146,385 (4,035)
$177,735 $ 7,766
About Art Technology Group Art Technology Group, Inc. ("ATG") (Nasdaq: ARTG) is a leading provider of Internet Internet Publicly accessible computer network connecting many smaller networks from around the world. It grew out of a U.S. Defense Department program called ARPANET (Advanced Research Projects Agency Network), established in 1969 with connections between computers at the customer relationship management and electronic commerce products and services. ATG offers an integrated suite of 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-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(R) 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. |
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