ATG Shares Soar as Company Reports Q4 Results

Company ignites interest with cost controls, new revenue streams and new channel

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Though still struggling with profitability, ATG has successfully re-ignited interest in the software company, which saw shares soar nearly 20 percent Thursday as the company released financial results for the fourth quarter and year end.

Sales for the fourth quarter 2001 ended Dec. 31 totaled $30.9 million, down sharply from a year ago when ATG reported sales of $62.8 million. As down as they were, however, sales were roughly on par with the third quarter of 2001 when the company reported sales of $30 million. The results suggest the company's business has solidified after a period of significant restructuring.

"After a tough 2001, particularly in the first half, we came back with solid, predictable results, blue-chip customer wins and a solidified [channel strategy," said ATG president and CEO Paul Shorthose.

Among the challenges still facing ATG: profitability, which the company thinks it can return to sometime in the second half of this year. That can't come soon enough. For the quarter, losses totaled $92.2 million. For the year, they swelled to $156 million on sales of $138.9 million. In 2000, sales totaled $163.3 million.

Though through cost cutting and loan guarantees, ATG believes it has the fiscal strength to weather any storm for the foreseeable future.

Losses aside, Shorthose said the company made progress in a number of areas. During the quarter, it added 22 new customers, including Meridian Health Systems, National Public Radio, Pacific Gas and Electric and Six Continents Hotels. ATG also delivered a version of Dynamo on BEA's WebLogic server in the fourth quarter and showcased a preview of the IBM WebSphere Beta to key customers.

Shorthose was particularly pleased that ATG has transitioned from a provider of application server software to a developer of promising Internet applications. Today, sales of application server software account for just 3 percent of sales.

As for the channel, Shorthose says ATG made significant progress with partners and with its partner strategy. Near the end of the fourth quarter, for example, ATG named IBM and Lotus veteran Al Stoddard to the position of vice president of channel programs.

"Now we have an executive that is 100 percent focused on driving our channel strategy. He'll look at what types of partners will drive our business and also start to align our leadership strategy [with partners," Shorthose said.

Though it's cutting back on the number of partners it engages, Shorthose expects partners to continue to drive upwards of 50 percent of his company's sales.

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