Welcome!

News Feed Item

ARI Network Services Announces Fiscal Year 2013 First Quarter Financial Results

MILWAUKEE, Dec. 17, 2012 /PRNewswire/ -- ARI Network Services (OTCBB: ARIS), a leader in creating, marketing, and supporting software, SaaS, and DaaS solutions that connect consumers, dealers, distributors, and manufacturers in selected vertical markets, reported financial results today for the first quarter of fiscal 2013 ended October 31, 2012.

Highlights for the quarter included:

  • On August 17, 2012 the Company acquired substantially all of the assets of Ready2Ride, Inc. ("R2R"), the first-to-market and leading provider of aftermarket fitment data to the powersports industry, adding approximately $134,000 to revenue for the first quarter of fiscal 2013.
  • Total revenue for the first quarter of fiscal 2013 increased 9.8% to $5.9 million compared to $5.4 million in fiscal 2012.
  • Recurring revenue for the quarter increased 8.9% to $4.9 million, or 83.1% of total revenue, from $4.5 million, or 83.9% of total revenue, in fiscal 2012. 
  • For the quarter ended October 31, 2012, churn (the measure of customers that do not renew) improved approximately 21.2% compared to the same quarter last year.
  • Subsequent to the end of quarter, on November 28, 2012, ARI acquired the assets of the Retail Division of Fifty Below Sales & Marketing, Inc., a leading provider of dealer websites to the powersports, auto and tire aftermarket, medical equipment, and pool and spa industries. 

Fiscal Year 2013 First Quarter Financials

ARI reported revenue of $5.9 million for the first quarter of fiscal 2013 versus $5.4 million for the same period last year; an increase of 9.8%. Recurring revenue comprised approximately 83.1% of total year to date revenue in fiscal 2013, compared to 83.9% for the same period last year. 

Total operating expenses increased 12.0% from $3.8 million for the three months ended October 31, 2011 to $4.2 million for the three months ended October 31, 2012. This increase was primarily due to legal fees related to the Company's business development activities.  Operating income for the quarter was $303,000 compared to $496,000 for the same period last year.

The company reported income before tax of $239,000, or $0.03 per share, for the quarter ended October 31, 2012, compared to $440,000 or $0.06 per share for the same period last year.  Net income was $113,000 or $0.01 per share for the quarter ended October 31, 2012, compared to $272,000 or $0.03 per share for the same period last year. 

EBITDA, a non-GAAP measure, was $1.0 million for the first quarter of fiscal 2013, compared to $1.2 million for the same period last year.

Management Discussion

Roy W. Olivier, President and Chief Executive Officer of ARI, commented, "I am very pleased to report that we have achieved 9.8% year-over-year revenue growth in the first quarter of fiscal 2013 continuing to make progress toward our goal of double digit growth. Total revenue for the quarter was $5.9 million, of which 83% is recurring revenue."

Mr. Olivier continued, "We are very focused on the execution of our revenue growth strategy and are making strategic investments to achieve this growth.  In addition to the R2R acquisition, on November 28, 2012, we acquired the Retail Services Division of Fifty Below Sales and Marketing, Inc. ("50 Below") which is a leading provider of eCommerce websites in the powersports, automotive tire & wheel aftermarket, medical equipment and pool and spa industries, adding over 3,000 new dealers to our customer base and opening us up to new markets. 

"The R2R acquisition is consistent with our strategic objectives to launch new products and provide differentiated content to our customers.  R2R has a unique database of powersports parts, garments, and accessories that will help our dealers sell more stuff.  We plan on launching a new product based on that database in February 2013 and we believe that it will provide nice growth in our catalog segment in the coming years. 

"The 50 Below acquisition is consistent with our objective of being a market share leader in the markets we serve.  The combined entity's powersports dealer websites positions ARI as a leader in the space. In addition, it provides ARI an entry into the automotive aftermarket space, a new vertical for us.  We now have over 2,000 wheel and tire dealer websites and believe we can grow that business in the coming years.  This new vertical is larger than all of our current verticals combined and we believe our core competencies translate well into this new space as we expect it to be a driver of top-line growth in the coming years."

Darin Janecek, Chief Financial Officer of ARI, commented, "Our strategic investments over the past year are beginning to pay dividends in the form of recurring revenue growth.  Our two recent acquisitions will provide further growth; combined, ARI now powers more than 5,000 dealer websites, providing an even greater opportunity to sell value-added features and enhancements to existing customers.  While we believe we will be through with the non-recurring costs associated with the acquisitions by the end of the third fiscal quarter, our overall fiscal year operating income and cash flows will be impacted. However, we expect to enter fiscal 2014 with momentum as a much larger and dominant player in the vertical markets we serve, and our increased revenue base will further leverage our fixed operating costs."

Non-GAAP Measures

EBITDA, a non-GAAP measure, is defined as earnings before interest, income taxes, depreciation and amortization.  Management believes EBITDA to be a meaningful indicator of our performance that provides useful information to investors regarding our financial condition and results of operations. While management considers EBITDA to be an important measure of comparative operating performance, it should be considered in addition to, but not as a substitute for, net income and other measures of financial performance reported in accordance with generally accepted accounting principles (GAAP). Not all companies calculate EBITDA in the same manner and the measure as presented may not be comparable to similarly titled measures presented by other companies.  A reconciliation of net income to EBITDA can be found on the investor relations section of our website for all periods presented.

First quarter Conference Call

ARI will conduct a conference call today, Monday, December 17, 2012, at 4:30 pm EST to review the financial results for the first quarter of fiscal 2013 ended October 31, 2012. Interested parties can access the conference call by dialing (877) 317-6789 or (412) 317-6789 or can listen via a live Internet web cast, which is available in the Investor Relations section of the Company's website at http://www.arinet.com

A teleconference replay of the call will be available for three days at (877) 344-7529 or (412) 317-0088, confirmation #10022072. A web cast replay will be available in the Investor Relations section of the Company's website at http://www.arinet.com until the next earnings conference call. 

About ARI
ARI Network Services, Inc. ("ARI" or the "Company") is a leader in creating, marketing, and supporting software, software as a service ("SaaS") and data as a service ("DaaS") solutions that enhance revenue and reduce costs for our customers. Our innovative, technology-enabled solutions connect the community of consumers, dealers, distributors, and manufacturers to help our customers efficiently service and sell more whole goods, parts, garments, and accessories ("PG&A") worldwide in selected vertical markets that include powersports, outdoor power equipment, marine, and white goods.  We estimate that more than 22,000 equipment dealers, 140 manufacturers, and 195 distributors worldwide leverage our technology to drive revenue, gain efficiencies and increase customer satisfaction.

Forward-Looking Statements

Certain statements in this news release contain "forward‐looking statements" regarding future events and our future results that are subject to the safe harbors created under the Securities Act of 1933.  All statements other than statements of historical facts are statements that could be deemed to be forward-looking statements.  These statements are based on current expectations, estimates, forecasts, and projects about the markets in which we operate and the beliefs and assumptions of our management.  Words such as  "expects," "anticipates," "targets," "goals," "projects", "intends," "plans," "believes," "seeks," "estimates," "endeavors," "strives," "may," or variations of such words, and similar expressions are intended to identify such forward-looking statements. Readers are cautioned that these forward‐looking statements are subject to a number of risks, uncertainties and assumptions that are difficult to predict, estimate or verify.  Therefore, actual results may differ materially and adversely from those expressed in any forward-looking statements.  Such risks and uncertainties include those factors described in Part 1A of the Company's annual report on Form 10‐K for fiscal year ended July 31, 2012, filed with the Securities and Exchange Commission. Readers are cautioned not to place undue reliance on these forward‐looking statements. The forward‐looking statements are made only as of the date hereof, and the Company undertakes no obligation to publicly release the result of any revisions to these forward‐looking statements. For more information, please refer to the Company's filings with the Securities and Exchange Commission.

For more information, contact:

Darin Janecek, Chief Financial Officer
ARI Network Services, Inc.
Phone: (414) 973-4300

Investor Contact:
Joe Dorame, Robert Blum, Joe Diaz
Lytham Partners, LLC
Phone: (602) 889-9700
[email protected]

ARI Network Services, Inc.

Consolidated Statements of Income

(Dollars in Thousands, Except per Share Data)










(Unaudited)



Three months ended October 31



2012


2011

Net revenue


$

5,942


$

5,410

Cost of revenue 



1,408



1,136

Gross profit



4,534



4,274

Operating expenses:







Sales and marketing



1,046



1,033

Customer operations and support



1,008



846

Software development and technical support (net of capitalized







software product costs)



577



388

General and administrative 



1,320



1,108

Depreciation and amortization (exclusive of amortization of







software product costs included in cost of revenue)



280



403

Net operating expenses



4,231



3,778

Operating income



303



496

Other income (expense):







Interest expense



(68)



(62)

Other, net



4



6

Total other income (expense)



(64)



(56)

Income before provision for income tax



239



440

Income tax benefit (expense)



(126)



(168)

Net income


$

113


$

272








Net income per common share:







Basic


$

0.01


$

0.03

Diluted


$

0.01


$

0.03








    

ARI Network Services, Inc.

Consolidated Balance Sheets

(Dollars in Thousands, Except per Share Data)










(Unaudited)


(Audited)


October 31


July 31



2012


2012

ASSETS







Cash and cash equivalents


$

261


$

1,350

Trade receivables, less allowance for doubtful accounts of $251







and $215 at October 31, 2012 and July 31, 2012, respectively



1,364



1,187

Work in process



270



151

Prepaid expenses and other



768



766

Deferred income taxes



2,632



2,686

Total current assets



5,295



6,140

Equipment and leasehold improvements:







Computer equipment and software for internal use



2,645



2,592

Leasehold improvements



609



584

Furniture and equipment



2,304



1,989




5,558



5,165

Less accumulated depreciation and amortization



3,408



3,214

Net equipment and leasehold improvements



2,150



1,951

Capitalized software product costs:







Amounts capitalized for software product costs



19,009



18,247

Less accumulated amortization



15,694



15,298

Net capitalized software product costs



3,315



2,949

Deferred income taxes



2,392



2,443

Other long term assets



1,032



148

Other intangible assets



2,224



1,439

Goodwill



5,972



5,439

Total assets


$

22,380


$

20,509

           

              

ARI Network Services, Inc.

Consolidated Balance Sheets

(Dollars in Thousands, Except per Share Data)



(Unaudited)


(Audited)


October 31


July 31



2012


2012

LIABILITIES







Current borrowings on line of credit


$

220


$

-

Current portion of long-term debt



1,085



1,084

Current portion of contingent liabilities



331




Accounts payable



530



725

Deferred revenue



4,717



4,926

Accrued payroll and related liabilities



845



758

Accrued sales, use and income taxes



119



216

Other accrued liabilities



574



214

Current portion of capital lease obligations



118



150

Total current liabilities



8,539



8,073

Long-term debt



3,640



2,888

Long-term portion of contingent liabilities



418



-

Capital lease obligations



41



58

Other long term liabilities



255



274

Total non-current liabilities



4,354



3,220

Total liabilities



12,893



11,293








SHAREHOLDERS' EQUITY







Cumulative preferred stock, par value $.001 per share, 1,000,000 shares authorized; 0 shares issued and outstanding at October 31, 2012 and July 31, 2012, respectively



-



-

Junior preferred stock, par value $.001 per share, 100,000 shares authorized; 0 shares issued and outstanding at October 31, 2012 and July 31, 2012, respectively



-



-

Common stock, par value $.001 per share, 25,000,000 shares authorized; 8,169,550 and 8,037,750 shares issued and outstanding at October 31, 2012 and July 31, 2012, respectively



8



8

Common stock warrants and options



1,324



1,287

Additional paid-in capital



96,062



95,931

Accumulated deficit



(87,896)



(88,009)

Other accumulated comprehensive loss



(11)



(1)

Total shareholders' equity



9,487



9,216

Total liabilities and shareholders' equity


$

22,380


$

20,509

SOURCE ARI Network Services, Inc.

More Stories By PR Newswire

Copyright © 2007 PR Newswire. All rights reserved. Republication or redistribution of PRNewswire content is expressly prohibited without the prior written consent of PRNewswire. PRNewswire shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon.

Latest Stories
As businesses adopt functionalities in cloud computing, it’s imperative that IT operations consistently ensure cloud systems work correctly – all of the time, and to their best capabilities. In his session at @BigDataExpo, Bernd Harzog, CEO and founder of OpsDataStore, presented an industry answer to the common question, “Are you running IT operations as efficiently and as cost effectively as you need to?” He then expounded on the industry issues he frequently came up against as an analyst, and ...
The question before companies today is not whether to become intelligent, it’s a question of how and how fast. The key is to adopt and deploy an intelligent application strategy while simultaneously preparing to scale that intelligence. In her session at 21st Cloud Expo, Sangeeta Chakraborty, Chief Customer Officer at Ayasdi, will provide a tactical framework to become a truly intelligent enterprise, including how to identify the right applications for AI, how to build a Center of Excellence to ...
"We're a cybersecurity firm that specializes in engineering security solutions both at the software and hardware level. Security cannot be an after-the-fact afterthought, which is what it's become," stated Richard Blech, Chief Executive Officer at Secure Channels, in this SYS-CON.tv interview at @ThingsExpo, held November 1-3, 2016, at the Santa Clara Convention Center in Santa Clara, CA.
In his session at 20th Cloud Expo, Mike Johnston, an infrastructure engineer at Supergiant.io, discussed how to use Kubernetes to set up a SaaS infrastructure for your business. Mike Johnston is an infrastructure engineer at Supergiant.io with over 12 years of experience designing, deploying, and maintaining server and workstation infrastructure at all scales. He has experience with brick and mortar data centers as well as cloud providers like Digital Ocean, Amazon Web Services, and Rackspace. H...
You know you need the cloud, but you’re hesitant to simply dump everything at Amazon since you know that not all workloads are suitable for cloud. You know that you want the kind of ease of use and scalability that you get with public cloud, but your applications are architected in a way that makes the public cloud a non-starter. You’re looking at private cloud solutions based on hyperconverged infrastructure, but you’re concerned with the limits inherent in those technologies.
SYS-CON Events announced today that Massive Networks will exhibit at SYS-CON's 21st International Cloud Expo®, which will take place on Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. Massive Networks mission is simple. To help your business operate seamlessly with fast, reliable, and secure internet and network solutions. Improve your customer's experience with outstanding connections to your cloud.
DevOps is under attack because developers don’t want to mess with infrastructure. They will happily own their code into production, but want to use platforms instead of raw automation. That’s changing the landscape that we understand as DevOps with both architecture concepts (CloudNative) and process redefinition (SRE). Rob Hirschfeld’s recent work in Kubernetes operations has led to the conclusion that containers and related platforms have changed the way we should be thinking about DevOps and...
Given the popularity of the containers, further investment in the telco/cable industry is needed to transition existing VM-based solutions to containerized cloud native deployments. The networking architecture of the solution isolates the network traffic into different network planes (e.g., management, control, and media). This naturally makes support for multiple interfaces in container orchestration engines an indispensable requirement.
Everything run by electricity will eventually be connected to the Internet. Get ahead of the Internet of Things revolution and join Akvelon expert and IoT industry leader, Sergey Grebnov, in his session at @ThingsExpo, for an educational dive into the world of managing your home, workplace and all the devices they contain with the power of machine-based AI and intelligent Bot services for a completely streamlined experience.
Because IoT devices are deployed in mission-critical environments more than ever before, it’s increasingly imperative they be truly smart. IoT sensors simply stockpiling data isn’t useful. IoT must be artificially and naturally intelligent in order to provide more value In his session at @ThingsExpo, John Crupi, Vice President and Engineering System Architect at Greenwave Systems, will discuss how IoT artificial intelligence (AI) can be carried out via edge analytics and machine learning techn...
FinTechs use the cloud to operate at the speed and scale of digital financial activity, but are often hindered by the complexity of managing security and compliance in the cloud. In his session at 20th Cloud Expo, Sesh Murthy, co-founder and CTO of Cloud Raxak, showed how proactive and automated cloud security enables FinTechs to leverage the cloud to achieve their business goals. Through business-driven cloud security, FinTechs can speed time-to-market, diminish risk and costs, maintain continu...
SYS-CON Events announced today that Datera, that offers a radically new data management architecture, has been named "Exhibitor" of SYS-CON's 21st International Cloud Expo ®, which will take place on Oct 31 - Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. Datera is transforming the traditional datacenter model through modern cloud simplicity. The technology industry is at another major inflection point. The rise of mobile, the Internet of Things, data storage and Big...
Consumers increasingly expect their electronic "things" to be connected to smart phones, tablets and the Internet. When that thing happens to be a medical device, the risks and benefits of connectivity must be carefully weighed. Once the decision is made that connecting the device is beneficial, medical device manufacturers must design their products to maintain patient safety and prevent compromised personal health information in the face of cybersecurity threats. In his session at @ThingsExpo...
Existing Big Data solutions are mainly focused on the discovery and analysis of data. The solutions are scalable and highly available but tedious when swapping in and swapping out occurs in disarray and thrashing takes place. The resolution for thrashing through machine learning algorithms and support nomenclature is through simple techniques. Organizations that have been collecting large customer data are increasingly seeing the need to use the data for swapping in and out and thrashing occurs ...
As many know, the first generation of Cloud Management Platform (CMP) solutions were designed for managing virtual infrastructure (IaaS) and traditional applications. But that’s no longer enough to satisfy evolving and complex business requirements. In his session at 21st Cloud Expo, Scott Davis, Embotics CTO, will explore how next-generation CMPs ensure organizations can manage cloud-native and microservice-based application architectures, while also facilitating agile DevOps methodology. He wi...