CAMBRIDGE, Mass.--(BUSINESS WIRE)--Oct. 25, 2005--ATG (Company
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Studies) (Art Technology Group, Inc., NASDAQ: ARTG), the software provider behind the most consistent and relevant on-line marketing, commerce, and customer service experiences, today reported its financial results for the third quarter ended September 30, 2005.
Total revenues for the third quarter of 2005 were $22.7 million, a 30 percent increase from $17.5 million in the third quarter of 2004 and a 12 percent increase from $20.3 million in the second quarter of 2005.
Net income in accordance with accounting principles generally accepted in the United States (GAAP) for the third quarter of 2005 was $1.5 million, or $0.01 per diluted share. This compares with net income of $0.1 million, or $0.00 per diluted share, in the third quarter of 2004 and a net loss of $0.3 million, or a loss of $0.00 per share, for the second quarter of 2005.
The company generated non-GAAP net income, which excludes amortization of intangible assets and the net effect of restructuring charges, of $2.0 million, or $0.02 per diluted share, in the third quarter of 2005. These results compare with non-GAAP net income of $0.1 million, or $0.00 per diluted share, in the third quarter of 2004 and non-GAAP net income of $0.9 million, or $0.01 per diluted share, in the second quarter of 2005. See "Use of Non-GAAP Financial Measures" below for definitions and a reconciliation of non-GAAP to GAAP financial measures.
Cash, cash equivalents, and marketable securities as of September 30, 2005 increased $1.2 million to $29.9 million from $28.7 million as of June 30, 2005.
Bob Burke, ATG's president and chief executive officer, said, "Our financial performance was built on a solid mix of commerce and service solutions. While the majority of our product revenues were driven by license sales, our ATG On-Demand(TM) offerings gained further traction during the third quarter, contributing a growing stream of recurring revenues that will benefit our business in the quarters and years ahead."
"In addition to these financial achievements, we introduced our highly anticipated Wisdom-enabled ATG Service Suite(TM). Offered as traditional on-premise licenses or hosted on-demand and as individual applications or an integrated suite, these seven offerings provide what we believe are the most advanced customer service and support capabilities on the market. We believe this offering will be an important contributor to our future results."
"Our third-quarter results are very encouraging and demonstrate the strength of our growth strategy and scalability of our business model," said Julie Bradley, ATG's senior vice president and chief financial officer. "With a steady contribution from the offerings we gained in our Primus acquisition and an increase in both product and service revenues, we grew sales by 30 percent year over year while keeping expenses in line. This resulted in improved operating margins and solid profitability on both a GAAP and non-GAAP basis."
Recent Highlights
* Generated business from new and repeat customers such as Constellation Energy, Fujitsu, Herbalife, Hotels.com, Merrill Lynch, Newell Rubbermaid, Road Runner Sports, Symantec, T-Mobile, Target, and Vodafone.
* Unveiled ATG Wisdom(TM), the company's strategy for enabling customer-conscious enterprises to create more relevant, compelling, consistent, and profitable customer interactions seamlessly across communications channels and throughout the marketing, sales, and service lifecycle.
* Launched its new Wisdom-enabled ATG Service Suite(TM), a comprehensive set of seven integrated applications that provides a full-featured, adaptively customized environment for managing all forms of customer service interactions with individual attention.
* Announced that one of its customers, Intercontinental Hotels Group, was awarded the 2005 Baseline ROI Leadership Award for Growth by Baseline magazine, Ziff Davis Media's acclaimed enterprise technology publication focused on technology implementation.
Business Outlook
"Looking ahead, we are optimistic about our prospects for growth," Burke said. "We believe our third-quarter results are a clear indication of the momentum we are establishing through a combination of product and services growth. In the months to come, we will focus on capitalizing on the roll out of our Wisdom-enabled ATG Service Suite. We also will build out our On-Demand business by launching additional offerings and establishing a dedicated sales effort for these hosted solutions. Based on our recent success, trends within our industry, and initiatives now underway, we believe ATG is positioned well for future growth."
Conference Call Reminder
ATG management will discuss the company's third-quarter financial results, recent highlights, and business outlook on its quarterly conference call for investors at 10:00 a.m. ET today, October 25, 2005. 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 (913) 981-5532 or (800) 289-0518.
Use of Non-GAAP Financial Measures
ATG is providing non-GAAP financial measures 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 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. Net income/(loss) (non-GAAP) and net income/(loss) per share (non-GAAP), as we present them in the financial data included in this press release, have been normalized to exclude the net effects of restructuring actions and the amortization of intangible assets. Management believes that these normalized non-GAAP financial measures better reflect its operating performance as these non-GAAP figures exclude the effects of non-recurring or non-cash expenses. Further, 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. 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 to the comparable GAAP measures.
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