ATG Posts Record-Breaking Fourth-Quarter Revenues and Earnings
Sees Acceleration of New Customer Wins, Strong Adoption Rates for eCRM Products
Raises Forecast for 2001
CAMBRIDGE, Mass.--(BUSINESS WIRE)--Jan. 25, 2001--ATG (Art Technology Group, Inc.)(NASDAQ: ARTG - news), developer of the ATG Dynamo®
e-Business Platform for online customer management and electronic commerce, today announced record financial results for the fourth quarter and for calendar year
2000.
Fourth-quarter Financial Performance
(In millions, except
per share data and Q4, Q4, % Q3, %
percentages) 2000 1999 Growth 2000 Growth
Total Revenue $62.8 $13.3 372% $46.3 36%
Product Revenue $47.2 $9.2 413% $34.2 38%
% of Total Revenue 75% 69% 74%
Services Revenue $15.6 $4.1 280% $12.1 29%
% of Total Revenue 25% 31% 26%
Operating Income (Loss) $6.6 $(10.8) 3.9
Net Income (Loss) $7.2 $(9.5) $5.0
Diluted Net Income (Loss) Per Share $0.10 $(0.15) $0.07
``ATG capped an extraordinary and profitable calendar year 2000 with a record-breaking quarter that was strong across all metrics,'' stated Jeet Singh, chief
executive officer of ATG. ``The increase in new customer wins to a record number of 131 this quarter, including brands such as Ford Motor Company, Pfizer, and
Reuters America, was complemented by excellent repeat business with our growing base of large enterprise customers such as Philips International, Procter &
Gamble, and Sun Microsystems. In particular, our traction among large enterprise customers in the Global 2000, and the rapid acceptance of our newest product
offering, ATG Dynamo 5, in this market were very encouraging.
``Our performance this quarter was also driven by our success in continuing to gain significant mindshare and revenue contribution from our solution providers such
as PricewaterhouseCoopers, Accenture, and many others, both large and small, '' Singh continued. ``Even as we make good progress deepening relationships with
our biggest revenue-producing partners, ATG continues to attract new partners at a rapid rate, with 40 new partners signed in the fourth quarter. We attribute this
continued high level of partner attraction to our increasing market presence and market share worldwide.
``ATG technology and the breadth of our application functionality continue to be the catalysts for our market success. ATG Dynamo 5, which includes extensive
personalization, commerce, and customer management products, is performing exceptionally well in the field, and customer adoption has exceeded even our own
expectations. In addition, Forrester Research, Inc. recently ranked ATG first among Internet commerce platform providers, following its research and testing of 10
market-leading vendors,'' Singh stated.
12-Month Financial Performance
(In millions, except
per share data and Year ended Year ended % Growth
percentages) Dec. 31, Dec. 31,
2000 1999
Total Revenue $163.3 $32.1 409%
Product Revenue $121.5 $18.6 553%
% of Total Revenue 74% 58%
Services Revenue $41.8 $13.5 210%
% of Total Revenue 26% 42%
Net Income (Loss) $14.5 $(17.5)
Diluted Net Income (Loss) Per Share $0.20 $(0.45)
``This past year was one of great accomplishment for ATG,'' continued Singh. ``The company furthered its technological lead, aggressively expanded its customer
and partner lists, and built out its infrastructure globally. These accomplishments, coupled with our focus on the bottom line, generated the company's first profit in the
second quarter and increased earnings through the remainder of the year, resulting in a profitable calendar year. Perhaps even more significantly, we have seen our
market presence worldwide grow tremendously over the last year, resulting in increased customer `pull' for our products. We believe the combination of highly
competitive product offerings, excellent market positioning, and broad customer base leaves us very well positioned for the coming year. As a result, we are raising
our revenue expectations for 2001.''
RECENT HIGHLIGHTS:
Partner and Channel Sales
Partner enabled and channel sales accounted for 85% of the company's revenues during the fourth quarter, with significant business coming from major solution
providers such as PricewaterhouseCoopers, Accenture, Modem Media, Fort Point Partners, and GTSI. The company signed 40 new partners during the fourth
quarter to bring its total partner count to 259 companies worldwide.
New Customer Wins
ATG gained 131 new customers during the fourth quarter, a record increase. As of December 31, 2000, the company's customer list totaled 670 companies
worldwide. Significant customer wins during the fourth quarter included AEGiS Insurance Services Inc., AEGON USA, American Heart Association, Bunge
Corporation, Cabelas, Carlton Interactive, Correspondent Network/National Bank Financial, CMP Media Inc., Cummins Inc., Daily News L.P., Ford Motor
Company, The Forzani Group Ltd., Friends Provident Management Services, GTSI Corporation, Lloyds of London, Martha Stewart Living Omnimedia, Meredith
Corporation, Oxygen Media, LLC., Pfizer, Pirelli SpA, Public Broadcasting Service, Reader's Digest, Reuters America, Trans World Entertainment Corporation,
and Transora.
Repeat Business
ATG also expanded relationships with existing customers, including A.G. Edwards, Bluelight.com, Eastman Kodak Company, Mars Music, Massachusetts Financial
Services, MTVi Group, Scholastic Inc., Sharper Image, Target Corporation, and Time Inc.
Infrastructure
ATG continued to focus on expanding its management team during the fourth quarter of 2000 and early 2001, hiring a senior vice president of services, a vice
president of global alliances and adding senior management in several key departments including corporate development and technical support. In addition, the
company continued to add experienced personnel to its 20 global offices. Headcount grew from 704 at the end of the third quarter to 943 as of December 31,
2000.
Business Outlook
(In millions, except
per share data) Q1, 2001 Year end
December 31, 2001
Total Revenue $70 - $72 $325 - $335
Net Income Per Share(a) $0.10 - $0.11 $0.54 - $0.56
(a)Reflects an effective tax rate of 39%
``ATG continues to see tremendous market opportunities and we have raised our revenue forecast for 2001 accordingly,'' stated Ann Brady, CFO and vice
president, finance at ATG. ``We are witnessing more strategic buying in our marketplace which continues to benefit ATG. Our customer base is seeking a broader
suite of customer management solutions that provide scalability, integration, and speed, as well as return on investment. With the recent addition of Dynamo Scenario
Server to our suite, we have dramatically broadened our appeal in this regard. We are confident that the strength of our technology and relationships with major
system integrators has positioned us for long-term success and increasing profitability. In the year ahead, we intend to secure our dominant market position by
continuing to deepen our relationships with global system intergrators, enhance the ATG Dynamo offering, and hire quality personnel.''
Conference Call Reminder
ATG management will discuss the company's fourth-quarter and year-end financial results on its quarterly conference call for investors at 5:00 p.m. ET on Thursday,
January 25. The call will be broadcast live over the Internet. Investors interested in listening to the Webcast should log onto the ``Investor Relations'' section of the
ATG Web site, located at www.atg.com, at least 15 minutes prior to the event's broadcast.
About ATG
ATG is a leading provider of online customer relationship management and electronic commerce products and services. ATG offers an integrated suite of Java(TM)
application server-based products, as well as related application development, integration, and support services. The ATG Dynamo® e-Business Platform enables
Global 2000 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.
With its network of 259 solution partners, ATG has delivered e-business solutions to 670 companies worldwide including 3M, Aetna Services, Inc., American
Airlines, Blockbuster, BMG Direct, ChipCenter, Eastman Kodak, HSBC, Herman Miller, J. Crew, Sun Microsystems, and Target. The company is headquartered
in Cambridge, Massachusetts with additional locations throughout North America, Europe, Asia, and Australia.
This press release contains forward-looking statements for purposes of the safe harbor provisions under The Private Securities Litigation Reform Act of 1995. For
this purpose, any statements using the terms ``will,'' ``should,'' ``could,'' ``anticipates,'' or ``believes,'' 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; the unpredictability caused by ATG's
lengthy sales cycle; 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 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 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.
ATG, Art Technology Group, and Dynamo are registered trademarks, and Scenario Server is a trademark of Art Technology Group, Inc.
Java and J2EE are trademarks or registered trademarks of Sun Microsystems, Inc. in the United States and other countries.
ART TECHNOLOGY GROUP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(UNAUDITED)
Three Months Ended Twelve Months Ended
Dec. 31, Dec. 31, Dec. 31, Dec. 31,
2000 1999 2000 1999
REVENUES:
Product license $47,234 $9,218 $121,525 $18,590
Services 15,596 4,065 41,817 13,487
Total revenues 62,830 13,283 163,342 32,077
COST OF REVENUES:
Product license 945 8,137 3,426 8,160
Services 12,766 3,586 34,739 10,232
Total cost of revenues 13,711 11,723 38,165 18,392
Gross profit 49,119 1,560 125,177 13,685
OPERATING EXPENSES:
Research and development 6,515 2,109 18,966 6,343
Sales and marketing 27,339 7,787 73,261 15,921
General and administrative 8,265 2,173 22,791 5,323
Amortization of deferred
compensation 386 304 1,273 1,127
Total operating expenses 42,505 12,373 116,291 28,714
INCOME (LOSS) FROM OPERATIONS 6,614 (10,813) 8,886 (15,029)
INTEREST INCOME 2,280 1,337 8,979 2,018
INTEREST EXPENSE -- -- -- (121)
Net Income (loss) before
provision for 8,894 (9,476) 17,865 (13,132)
income taxes
PROVISION FOR INCOME TAXES 1,678 -- 3,378 --
Net income (loss) 7,216 (9,476) 14,487 (13,132)
ACCRETION OF DIVIDENDS,
DISCOUNT, AND
OFFERING COSTS ON
PREFERRED STOCK -- -- -- (4,395)
Net income (loss)
available for common
stockholders $7,216 $(9,476) $14,487 $(17,527)
Basic net income (loss)
per share $0.11 $(0.15) $0.22 $(0.45)
Shares used in computing
basic net income (loss)
per share 67,790 64,048 66,932 38,777
Diluted net income (loss)
per share $0.10 $(0.15) $0.20 $(0.45)
Shares used in computing
diluted net income
(loss) per share 72,691 64,048 73,138 38,777
ART TECHNOLOGY GROUP, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
(UNAUDITED)
Dec. 31, Dec. 31,
2000 1999
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 53,255 $124,711
Marketable securities 73,218 5,137
Accounts receivable, net 52,440 12,539
Prepaid expenses and other current assets 9,051 2,690
Total current assets 187,964 145,077
Property and equipment, net 23,492 5,465
Long-term marketable securities 17,734 19,394
Intangible and other assets, net 13,246 7,799
Deferred tax asset 17,079 --
$259,515 $177,735
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Current maturities of long-term obligations $2,000 $3,000
Accounts payable 11,375 11,285
Accrued expenses 29,460 4,728
Deferred revenue 22,765 8,337
Total current liabilities 65,541 27,350
Long-term obligations, less current maturities 2,000 4,000
Stockholders' equity 191,973 146,385
$259,515 $177,735 |
