ATG Announces Corporate Restructuring
Expects fourth-quarter results within guidance for revenue and cash; company reduces headcount by 20 percent in its drive for sustainable profitability; promotes Greg Lazar to SVP of worldwide sales and field operations
CAMBRIDGE, Mass., January 6, 2002 - In a move to accelerate the company`s path to profitability, ATG (Art Technology Group, Inc., Nasdaq: ARTG) today announced a restructuring effort that includes an approximate 20 percent headcount reduction.
The company also announced preliminary results for the fourth quarter ended December 31, 2002.
The workforce reduction of approximately 115 people is focused primarily on ATG`s professional services, general and administrative staff and internal sales support and operations. In addition to the headcount reduction, the company is closing and consolidating office space in selected locations. In conjunction with this reorganization, the company has promoted Greg Lazar to senior vice president of worldwide sales and field operations. In his new role, Lazar will be responsible for managing ATG`s global sales organizations and enhancing partnerships with systems integrators and other distribution channels.
The company anticipates taking a restructuring charge in the range of $22 to $24 million for the fourth quarter of 2002. ATG expects to complete the restructuring actions in the first quarter of 2003 and begin realizing the full cost savings, estimated at $12 to $16 million annually, in the second quarter of 2003.
Preliminary Fourth-Quarter Results
For the fourth quarter of 2002, the company expects to report:
--Total revenues in the range of $24 to $24.5 million, compared to total revenues in the fourth quarter of 2001 of $30.9 million. The company`s previously announced guidance for the fourth quarter of 2002 was a range of $24 to $29 million.
--A net loss per share in accordance with GAAP, including restructuring charges, in the range of ($0.35) to ($0.40), compared with a net loss per share of ($1.34) in the fourth quarter of 2001.
--A non-GAAP net loss per share, excluding the previously mentioned restructuring charges, in the range of ($0.02) to ($0.06). The company`s previously announced guidance for the fourth quarter of 2002 was a range of ($0.03) to $0.01 per share.
--A balance of cash, cash equivalents, marketable securities, and restricted cash as of December 31, 2002 in the range of $68 to $68.5 million. The company`s previously announced guidance for the fourth quarter of 2002 was a range of $68 to $72 million.
"Despite difficult market conditions, we continued to win significant orders from new and existing customers, including leading brands such as the BBC, Bell Canada, Cabela`s, Conseco, Dreyfus, General Motors, Newell Rubbermaid, Target, Veritas, and Walgreens," stated Bob Burke, ATG president and CEO.
"While we expect to report final results within our range of revenue guidance for the fourth quarter, we initiated this restructuring effort given the ongoing uncertainty surrounding near-term corporate IT spending," Burke continued. "This was a difficult decision to make. However, we believe taking these proactive steps is the right course of action as we drive toward long-term, sustainable profitability. By streamlining our operations and enhancing alternative channels to distribute our products and services, we will reduce our quarterly expense run rate to approximately $23 to $24.5 million. At the same time, we will continue to invest in the superior ATG solutions that our customers have come to rely upon."
Conference Call Information
In conjunction with this news release, ATG management will host a conference call for investors at 11:00 a.m. ET today, Monday, January 6. 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. To access the live conference call, please dial (913) 981-5538. A replay of the conference call can be accessed for a period of one week by dialing (719) 457-0820 (confirmation code: 661071) or via Webcast on ATG`s Web site.
ATG plans to announce its fourth-quarter and year-end financial results on Thursday, January 23, 2003. In conjunction with this announcement, ATG will host its quarterly conference call for investors at 5:00 p.m. ET on January 23. The call will be broadcastlive over the Internet. Investors interested in listening to the Webcast should log onto the "Investor Relations" section of ATG`s Web site, located at www.atg.com, at least 15 minutes prior to the event`s broadcast.
ATG (Art Technology Group, Inc.) is a leading developer of online marketing, sales, and service solutions for global consumer-facing organizations. Customers around the globe rely on ATG for frontline applications that enhance and improve the entire customer lifecycle experience. Deployed on the industry`s most popular application servers, ATG`s application suites for e-commerce, portals, and relationship management are ideal for integrating online initiatives across the enterprise.
Today, ATG has delivered online solutions to blue-chip companies worldwide including Aetna Services, Alcatel, American Airlines, Barclays Global Investors, Best Buy, BMG Direct, Eastman Kodak, Ford Motor Credit, HSBC, J.Crew, Sun Microsystems, Walgreens, and WellsFargo. The company isheadquartered in Cambridge, Massachusetts, with additional locations throughout North America, Europe, and Asia.
For more information about ATG, please visit our Web site at www.atg.com.
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©2003 ATG and Art Technology Group are registered trademarks of Art Technology Group, Inc. All other product names, service marks, and trademarks mentioned herein are trademarks of their respective owners.
The statements in paragraphs 3, 4 and 6 of this press release include 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. These risks include the effect of weakened or weakening economic conditions or perceived conditions on the level of spending by customers and prospective customers for ATG`s software and services; financial and other effects of cost control measures; quarterly fluctuations in ATG`s revenues or other operating results; customization and deployment delays or errors associated with ATG`s products; the result of longer sales cycles for ATG`s products; satisfaction levels of customers regarding the implementation and performance of ATG`s products; ATG`s need to maintain and enhance business relationships with resellers and other parties who may be affected by changes in the economic climate; ATG`s abilities to attract and maintain qualified executives and other personnel and to motivate employees; activities by ATG and others related to protection of intellectual property; potential adverse financial and other effects of litigation and the release of competitive products and other activities by competitors. Further details on these risks are set forth in ATG`s filings with the Securities and Exchange Commission, which are available on a Web site maintained by the Securities and Exchange Commission at http://www.sec.gov.
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