Art Technology (ARTG) 8-K ATG Reports Fourth Quarter and Full Year 2009 Financial Results

Exhibit 99.1

ATG Reports Fourth Quarter and Full Year 2009 Financial Results

For the Full Year 2009, Company Achieves Record Revenue and Net IncomeATG to Host Conference Call Today, February 1, 2010 at 10:00 a.m. ET

CAMBRIDGE, Mass.--(BUSINESS WIRE)--February 1, 2010--Art Technology Group, Inc. (NASDAQ: ARTG), the premier provider of commerce solutions, today reported financial results for the fourth quarter and full year ended December 31, 2009.

Revenue for the fourth quarter of 2009 grew to $49.7 million, a 9% increase over fourth quarter 2008 revenue of $45.4 million. Revenue for the full year 2009 grew to $179.4 million, a 9% increase over full year 2008 revenue of $164.6 million.

“2009 was another year of record financial results and significant accomplishments for ATG,” stated Bob Burke, ATG’s president and CEO. “Revenue and net income were the highest in company history and we signed an impressive roster of new customers throughout the year. Looking ahead to 2010, we are very excited about customer demand as companies continue to invest in e-commerce.”

Product license bookings, a non-GAAP measure which the company defines as the sale of perpetual software licenses, grew 8% to $17.5 million for the fourth quarter from $16.2 million in the year ago quarter. Product license bookings for the full year 2009 were $56.9 million, an 8% increase over full year 2008 product license bookings of $52.8 million.

Net income in accordance with GAAP for the fourth quarter of 2009 increased to $5.2 million, or $0.04 per diluted share compared with net income of $3.5 million, or $0.03 per diluted share, in the fourth quarter of 2008. GAAP net income for the full year 2009 increased to $16.8 million, or $0.13 per diluted share compared with GAAP net income of $3.8 million, or $0.03 per diluted share in 2008.

Non-GAAP net income increased to $8.2 million for the fourth quarter of 2009, or $0.06 per diluted share compared with non-GAAP net income of $8.3 million, or $0.06 per diluted share for the fourth quarter of 2008. Non-GAAP net income for the full year 2009 increased to $27.5 million, or $0.21 per diluted share compared with non-GAAP net income of $17.6 million, or $0.13 per diluted share in 2008.

Cash flow from operations for the fourth quarter was $7.2 million. In 2009, cash flow from operations was $30.2 million. At December 31, 2009, ATG had $85.5 million in cash, cash equivalents, and marketable securities.

Julie Bradley, ATG’s senior vice president and CFO stated, “We are extremely pleased with our 2009 results. Through strong execution and cost containment efforts, we were able to increase revenue while expanding gross margins and net income. We achieved these results while continuing to invest in our business for future growth in 2010 and beyond.”

Quarterly Conference Call

ATG management will discuss the company’s fourth quarter and full year 2009 financial results, recent highlights, and business outlook on its quarterly conference call for investors at 10:00 a.m. ET today. The conference call will be broadcast live over the Internet. Investors interested in listening to the webcast should log on to the “Investors” section of the ATG website, www.atg.com. The live conference call also can be accessed by dialing (866) 723-3575 (or (706) 634-8872 for international calls) and using conference ID No. 48716325. A replay of the call will be available on the company’s website later in the day.

About ATG

A trusted, global specialist in e-commerce, ATG (Art Technology Group, Inc., NASDAQ: ARTG) has spent the last decade focused on helping the world's premier brands maximize the success of their online businesses. ATG Commerce is the commerce platform and business user application solution top-rated by industry analysts for powering highly personalized, efficient and effective e-commerce sites. ATG's platform-neutral optimization services can be easily added to any Web site to increase conversions and reduce abandonment. These services include ATG Recommendations and ATG’s eStara Click to Call and Click to Chat services. The company is headquartered in Cambridge, Massachusetts, with additional locations throughout North America and Europe. For more information, please visit http://www.atg.com.

© 2010 Art Technology Group, Inc. ATG and Art Technology Group are registered trademarks. All other product names, service marks, and trademarks mentioned herein are trademarks of their respective owners.

ART TECHNOLOGY GROUP, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
(UNAUDITED)
		December 31,		September 30,		December 31,
		2009		2009		2008
ASSETS
Current Assets:
	Cash, cash equivalents and marketable securities (including
	restricted cash of $50, $0, and $1,669 as of December 31,
	2009, September 30, 2009 and December 31, 2008,
	respectively)	$	79,094	$	73,972	$	60,983
	Accounts receivable, net		41,522		31,850		35,109
	Deferred costs, current		767		1,126		924
	Deferred tax assets, current		430		534		560
	Prepaid expenses and other current assets		3,359		2,910		3,814
Total current assets			125,172		110,392		101,390
	Property and equipment, net		9,934		10,168		10,098
	Intangible assets, net		4,064		4,991		7,770
	Deferred costs, less current portion		1,387		1,391		1,984
	Marketable securities (including restricted cash of $738, $419,
	and $419 as of December 31, 2009, September 30, 2009 and
	December 31, 2008, respectively)		6,439		4,129		419
	Deferred tax assets, less current portion		450		-		-
	Other assets		907		1,483		1,423
	Goodwill		65,683		65,683		65,683
Total long-term assets			88,864		87,845		87,377
Total assets		$	214,036	$	198,237	$	188,767
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
	Accounts payable	$	5,720	$	4,245	$	2,958
	Accrued expenses		18,873		16,203		18,875
	Deferred revenue, current portion		42,640		40,025		38,782
	Accrued restructuring, current portion		-		-		146
Total current liabilities			67,233		60,473		60,761
Other liabilities			536		249		1,775
Deferred revenue, less current portion			10,356		9,956		15,285
Total long-term liabilities			10,892		10,205		17,060
Stockholders' equity			135,911		127,559		110,946
Total liabilities and stockholders' equity		$	214,036	$	198,237	$	188,767

ART TECHNOLOGY GROUP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(UNAUDITED)
	Three months ended						Twelve months ended
	December 31,		September 30,		December 31,		December 31,		December 31,
	2009		2009		2008		2009		2008
Revenue:
Product licenses	$	16,974	$	10,890	$	15,108	$	54,370	$	47,429
Recurring services		26,500		24,904		23,704		98,535		91,039
Professional and education services		6,189		7,587		6,585		26,477		26,173
Total revenue		49,663		43,381		45,397		179,382		164,641
Cost of Revenue:
Product licenses		572		399		741		1,818		2,186
Recurring services		9,774		9,393		8,619		36,786		34,077
Professional and educational services		5,487		6,029		5,817		22,323		25,619
Total cost of revenue		15,833		15,821		15,177		60,927		61,882
Gross Profit		33,830		27,560		30,220		118,455		102,759
Operating Expenses:
Research and development		7,788		7,599		7,275		30,520		29,329
Sales and marketing		14,861		12,503		12,594		52,193		49,569
General and administrative		5,000		4,831		5,350		18,990		19,432
Total operating expenses		27,649		24,933		25,219		101,703		98,330
Income from operations		6,181		2,627		5,001		16,752		4,429
Interest and other income (expense), net		(180)		(314)		(140)		56		960
Income before provision for income taxes		6,001		2,313		4,861		16,808		5,389
Provision (benefit) for income taxes		762		(1,650)		1,354		12		1,590
Net income	$	5,239	$	3,963	$	3,507	$	16,796	$	3,799
Basic net income per share	$	0.04	$	0.03	$	0.03	$	0.13	$	0.03
Diluted net income per share	$	0.04	$	0.03	$	0.03	$	0.13	$	0.03
Basic weighted average common shares outstanding		127,137		127,224		127,680		126,842		128,534
Diluted weighted average common shares outstanding		134,985		134,736		130,823		133,054		133,916

ART TECHNOLOGY GROUP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(UNAUDITED)
		Three months ended						Twelve months ended
		December 31,		September 30,		December 31,		December 31,		December 31,
		2009		2009		2008		2009		2008
Cash Flows from Operating Activities:
Net income		$	5,239	$	3,963	$	3,507	$	16,796	$	3,799
	Adjustments to reconcile net income to net cash provided by operating activities:
	Depreciation and amortization		2,392		2,149		2,377		9,221		8,895
	Non-cash stock-based compensation expense		2,124		2,463		2,072		8,944		7,896
	Non-cash tax (benefit) expense		208		(1,871)		2,009		(1,663)		2,009
	Net changes in operating assets and liabilities		(2,795)		3,237		1,638		(3,140)		11,484
	Net cash provided by operating activities		7,168		9,941		11,603		30,158		34,083
Cash Flows from Investing Activities:
Purchases of marketable securities			(6,263)		(19,433)		(2,177)		(34,550)		(19,771)
Maturities of marketable securities			5,720		5,400		2,427		20,445		25,288
Purchases of property and equipment			(668)		(978)		(1,398)		(5,288)		(7,010)
Collateralization of letters of credit			-		-		-		-		(2,088)
Payment of acquisition costs, net of cash acquired			-		-		(244)		-		(9,766)
	Net cash (used in) investing activities		(1,211)		(15,011)		(1,392)		(19,393)		(13,347)
Cash Flows from Financing Activities:
Proceeds from exercise of stock options			699		915		644		2,127		2,252
Proceeds from employee stock purchase plan			289		279		224		1,086		978
Repurchase of common stock			-		(4,265)		(7,429)		(4,265)		(8,908)
Payment of employee restricted stock tax withholdings			(65)		(45)		(24)		(938)		(529)
	Net cash provided by (used in) financing activities		923		(3,116)		(6,585)		(1,990)		(6,207)
Effect of foreign exchange rate changes on cash and cash equivalents			1		388		(814)		1,131		(1,535)
Net increase (decrease) in cash and cash equivalents			6,881		(7,798)		2,812		9,906		12,994
Cash and cash equivalents, beginning of period			50,438		58,236		44,601		47,413		34,419
Cash and cash equivalents, end of period		$	57,319	$	50,438	$	47,413	$	57,319	$	47,413

ART TECHNOLOGY GROUP, INC.
STATEMENTS OF OPERATIONS DATA
(In thousands)
(UNAUDITED)
	Three months ended						Twelve months ended
	December 31,		September 30,		December 31,		December 31,		December 31,
	2009		2009		2008		2009		2008
Equity-Related Compensation:
Cost of revenue	$	455	$	498	$	411	$	1,851	$	1,556
Research and development		387		435		412		1,624		1,565
Sales and marketing		553		653		565		2,327		2,253
General and administrative		729		877		684		3,142		2,522
Total equity-related compensation	$	2,124	$	2,463	$	2,072	$	8,944	$	7,896
Depreciation and Amortization:
Depreciation
Cost of revenue	$	1,008	$	746	$	428	$	3,482	$	2,378
Research and development		252		259		409		1,081		1,120
Sales and marketing		139		152		307		659		721
General and administrative		66		65		148		293		367
	$	1,465	$	1,222	$	1,292	$	5,515	$	4,586
Amortization
Cost of revenue	$	401	$	401	$	649	$	1,601	$	1,921
Research and development		-		-		(162)		-		-
Sales and marketing		526		526		598		2,105		2,388
	$	927	$	927	$	1,085	$	3,706	$	4,309
Total depreciation and amortization	$	2,392	$	2,149	$	2,377	$	9,221	$	8,895
Capital Expenditures:
Purchases of property and equipment	$	668	$	978	$	1,398	$	5,288	$	7,010

ART TECHNOLOGY GROUP, INC.
RECONCILIATION OF GAAP TO NON-GAAP NET INCOME
(In thousands)
(UNAUDITED)
	Three months ended,						Twelve months ended
	December 31,		September 30,		December 31,		December 31,		December 31,
	2009		2009		2008		2009		2008
Net income (GAAP)	$	5,239	$	3,963	$	3,507	$	16,796	$	3,799
Amortization of acquired intangibles		927		927		1,085		3,706		4,309
Equity-related compensation		2,124		2,463		2,072		8,944		7,896
Tax adjustments		(112)		(1,871)		1,595		(1,983)		1,595
Net income (non-GAAP)	$	8,178	$	5,482	$	8,259	$	27,463	$	17,599
Net income (non-GAAP) per share:
Basic	$	0.06	$	0.04	$	0.06	$	0.22	$	0.14
Diluted	$	0.06	$	0.04	$	0.06	$	0.21	$	0.13
Shares used in per share calculations:
Basic		127,137		127,224		127,680		126,842		128,534
Diluted		134,985		134,736		130,823		133,054		133,916
Reconciliation of Product License Bookings
(In thousands)
(UNAUDITED)
	Three months ended,						Twelve months ended
	December 31,		September 30,		December 31,		December 31,		December 31,
	2009		2009		2008		2009		2008
Product license bookings	$	17,492	$	10,436	$	16,155	$	56,888	$	52,782
Product license bookings not recognized		(5,058)		(4,321)		(6,105)		(21,357)		(25,546)
Product license deferred revenue recognized		4,540		4,775		5,058		18,839		20,193
Product license revenue	$	16,974	$	10,890	$	15,108	$	54,370	$	47,429

Use of Non-GAAP Financial Measures

ATG is providing the non-GAAP historical financial measures presented above 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 (non-GAAP) and net income 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 amortization of acquired intangible assets, equity-related compensation, and related tax adjustments. Management believes that these normalized non-GAAP financial measures excluding these items better reflect the company’s operating performance as these non-GAAP figures exclude the effects of non-recurring or non-cash expenses. Management believes that these charges are not necessarily representative of underlying trends in the company's performance and their exclusion provides investors with additional information to compare the company's results over multiple periods.

ATG considers “product license bookings,” a non-GAAP financial measure which the company defines as product license revenue recognized plus net change in deferred license revenue during any given period, to be an important indicator of growth in its software license business, as its business increasingly evolves toward a recurring, ratable revenue model.

The company uses these 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 tables above present the most directly comparable GAAP financial measure and reconcile non-GAAP net income and product license bookings to the comparable GAAP measures.

ATG Statement Under Private Securities Litigation Reform Act

This press release contains forward-looking statements including references to the company’s future growth and demand for its products and services. 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 the recent recession, 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 risk of longer sales cycles for ATG’s products and ATG’s ability to conclude sales based on purchasing decisions that are delayed; satisfaction levels of customers regarding the implementation and performance of ATG’s products; ATG’s need to maintain, enhance, and leverage business relationships with resellers and other parties who may be affected by changes in the economic climate; ATG’s ability to attract and maintain qualified executives and other personnel and to motivate employees; activities by ATG and others related to the protection of intellectual property; potential adverse financial and other effects of litigation (including intellectual property infringement claims) 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 (SEC), including the company’s annual report on Form 10-K for the period ended December 31, 2008 and its quarterly report on Form 10-Q for the period ended September 30, 2009, as filed with the SEC. These filings are available free of charge on a website maintained by the SEC at http://www.sec.gov.

CONTACT:
Art Technology Group, Inc.
Kim Maxwell, 617-386-1006
Director, Investor Relations
kmaxwell@atg.com