Revenue Grew 14% Year-Over-Year GAAP Net Income Increased 68% Year-Over-Year Cash Flow from Operations Increased 95% Year-Over-Year
CAMBRIDGE, Mass.--Feb. 6, 2007--Art Technology Group, Inc. (NASDAQ: ARTG), the leading eCommerce platform provider, today reported financial results for the fourth quarter and year ended December 31, 2006.
Revenue for the fourth quarter of 2006 grew 25% to $32.2 million, compared with fourth quarter 2005 revenue of $25.7 million. Revenue for the year ended December 31, 2006 grew 14% to $103.2 million, compared with revenue of $90.6 million for 2005.
Net income in accordance with United States Generally Accepted Accounting Principles (GAAP), for the fourth quarter of 2006 was $5.1 million, or $0.04 per diluted share. This compares with net income of $3.2 million, or $0.03 per diluted share, in the fourth quarter of 2005.
GAAP net income for the year ended December 31, 2006 increased 68% to $9.7 million or $0.08 per diluted share. This compares with net income of $5.8 million or $0.05 per diluted share for 2005. GAAP net income includes a $2.6 million income tax benefit related to certain tax reserves in foreign locations that were no longer required due to closed audit years and to statue of limitation expirations.
Non-GAAP net income(1) was $4.6 million for the fourth quarter of 2006, or $0.04 per diluted share, compared with non-GAAP net income of $3.8 million, or $0.03 per diluted share for the fourth quarter of 2005. Non-GAAP net income for the year ended December 31, 2006 was $13.6 million, compared with $8.5 million for 2005.
"ATG had an excellent year of revenue growth and increased profitability," said Bob Burke, ATG`s president and CEO. "We executed on the financial objectives we set forth at the beginning of 2006, including significant improvement to our profitability while accelerating investment in our on demand business. The acquisition of eStara in the fourth quarter has been a great addition to ATG`s overall portfolio and a solid contributor to recurring revenue growth. In 2007, we expect to see even more demand for our eCommerce and eStara solutions, as the overall online business market continues to expand."
ATG generated business from new and repeat customers during the fourth quarter including AT&T;, Bluefly, Casual Male, CVS, Jenny Craig, Josten`s, Scotts, Simply Health and Sony Ericsson. In addition, eStara signed on several new customers including Autobytel, Fonecta, and Ziff Davis.
"We are very pleased with our 2006 results and specifically our cash flow from operations, which increased 95% year-over-year," said Julie Bradley, ATG`s senior vice president and CFO. "Looking ahead to 2007, we anticipate many of our license customers will also purchase ATG and eStara on demand offerings. As a result, we expect an increasing portion of our license revenue will be recognized ratably. We estimate this will have a near term impact on revenue and profitability; however, our ability to generate cash from operations will continue to accelerate."
Financial Guidance and Business Outlook
Revenue for 2007 is expected to be in the range of $117 million to $123 million. GAAP net income for the year ending December 31, 2007 is expected to be in the range of a loss of $4 million to breakeven. This guidance includes an estimated $5.0 - $6.0 million of non-cash equity-related compensation expense, reflecting the company`s adoption of SFAS 123R and amortization of acquired intangibles of $5.2 million. It also reflects our expectation that, as compared with 2006, an increasing percentage of our license revenue in 2007 will be recognized ratably. Overall, we expect revenue, plus change in deferred to grow at least 25% in 2007.
ATG (Art Technology Group, Inc., NASDAQ: ARTG) makes the software and delivers the on-demand solutions that the world`s most customer-conscious companies use to power their e-commerce web sites, attract prospects, convert them to buyers and ensure their satisfaction so they become loyal, repeat, profitable customers. Our B2C e-commerce suite is ranked the #1 current offering by Forrester Research, and powers more of the top 300 internet retailers than any other vendor. Our eStara brand provides customer interaction solutions to enhance conversions and customer support, and delivers the world`s most widely used click-to-call service. ATG`s solutions are used by over 900 major brands, including Amazon, American Eagle Outfitters, AOL, AT&T;, Best Buy, B&Q; Cabelas, Carrefour, Cingular, Coca Cola, Continental Airlines, CVS, Dell, DirecTV, El Corte Ingles, Expedia, France Telecom, Harvard Business School Publishing, Hewlett-Packard, Hilton, HSBC, Intuit, J. Crew, Macy`s, Meredith, Microsoft, Neiman Marcus, New York & Company, Nike, Nokia, OfficeMax, PayPal, Philips, Procter & Gamble, Sears, Sony, Symantec, Target, T Mobile, Urban Outfitters, Verizon, Viacom, Vodafone and Walgreens. The company is headquartered in Cambridge, Massachusetts, with additional locations throughout North America and Europe. For more information about ATG, please visit www.atg.com.
(C) 2007 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.
Art Technology Group, Inc.
Kimberly Maxwell, 617-386-1006
Tucker Walsh, 617-386-1159