Welcome!

Microsoft Cloud Authors: Elizabeth White, Liz McMillan, Mihai Corbuleac, Pat Romanski, David Bermingham

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.

@ThingsExpo Stories
SYS-CON Events announced today that ContentMX, the marketing technology and services company with a singular mission to increase engagement and drive more conversations for enterprise, channel and SMB technology marketers, has been named “Sponsor & Exhibitor Lounge Sponsor” of SYS-CON's 18th Cloud Expo, which will take place on June 7-9, 2016, at the Javits Center in New York City, New York. “CloudExpo is a great opportunity to start a conversation with new prospects, but what happens after the...
WebRTC is bringing significant change to the communications landscape that will bridge the worlds of web and telephony, making the Internet the new standard for communications. Cloud9 took the road less traveled and used WebRTC to create a downloadable enterprise-grade communications platform that is changing the communication dynamic in the financial sector. In his session at @ThingsExpo, Leo Papadopoulos, CTO of Cloud9, will discuss the importance of WebRTC and how it enables companies to fo...
The IoT is changing the way enterprises conduct business. In his session at @ThingsExpo, Eric Hoffman, Vice President at EastBanc Technologies, discuss how businesses can gain an edge over competitors by empowering consumers to take control through IoT. We'll cite examples such as a Washington, D.C.-based sports club that leveraged IoT and the cloud to develop a comprehensive booking system. He'll also highlight how IoT can revitalize and restore outdated business models, making them profitable...
SYS-CON Events announced today that MangoApps will exhibit at SYS-CON's 18th International Cloud Expo®, which will take place on June 7-9, 2016, at the Javits Center in New York City, NY. MangoApps provides modern company intranets and team collaboration software, allowing workers to stay connected and productive from anywhere in the world and from any device. For more information, please visit https://www.mangoapps.com/.
SYS-CON Events announced today the How to Create Angular 2 Clients for the Cloud Workshop, being held June 7, 2016, in conjunction with 18th Cloud Expo | @ThingsExpo, at the Javits Center in New York, NY. Angular 2 is a complete re-write of the popular framework AngularJS. Programming in Angular 2 is greatly simplified. Now it’s a component-based well-performing framework. The immersive one-day workshop led by Yakov Fain, a Java Champion and a co-founder of the IT consultancy Farata Systems and...
What a difference a year makes. Organizations aren’t just talking about IoT possibilities, it is now baked into their core business strategy. With IoT, billions of devices generating data from different companies on different networks around the globe need to interact. From efficiency to better customer insights to completely new business models, IoT will turn traditional business models upside down. In the new customer-centric age, the key to success is delivering critical services and apps wit...
Join us at Cloud Expo | @ThingsExpo 2016 – June 7-9 at the Javits Center in New York City and November 1-3 at the Santa Clara Convention Center in Santa Clara, CA – and deliver your unique message in a way that is striking and unforgettable by taking advantage of SYS-CON's unmatched high-impact, result-driven event / media packages.
In his keynote at 18th Cloud Expo, Andrew Keys, Co-Founder of ConsenSys Enterprise, will provide an overview of the evolution of the Internet and the Database and the future of their combination – the Blockchain. Andrew Keys is Co-Founder of ConsenSys Enterprise. He comes to ConsenSys Enterprise with capital markets, technology and entrepreneurial experience. Previously, he worked for UBS investment bank in equities analysis. Later, he was responsible for the creation and distribution of life ...
SYS-CON Events announced today that BMC Software has been named "Siver Sponsor" of SYS-CON's 18th Cloud Expo, which will take place on June 7-9, 2015 at the Javits Center in New York, New York. BMC is a global leader in innovative software solutions that help businesses transform into digital enterprises for the ultimate competitive advantage. BMC Digital Enterprise Management is a set of innovative IT solutions designed to make digital business fast, seamless, and optimized from mainframe to mo...
SYS-CON Events announced today that MobiDev will exhibit at SYS-CON's 18th International Cloud Expo®, which will take place on June 7-9, 2016, at the Javits Center in New York City, NY. MobiDev is a software company that develops and delivers turn-key mobile apps, websites, web services, and complex software systems for startups and enterprises. Since 2009 it has grown from a small group of passionate engineers and business managers to a full-scale mobile software company with over 200 develope...
As cloud and storage projections continue to rise, the number of organizations moving to the cloud is escalating and it is clear cloud storage is here to stay. However, is it secure? Data is the lifeblood for government entities, countries, cloud service providers and enterprises alike and losing or exposing that data can have disastrous results. There are new concepts for data storage on the horizon that will deliver secure solutions for storing and moving sensitive data around the world. ...
SoftLayer operates a global cloud infrastructure platform built for Internet scale. With a global footprint of data centers and network points of presence, SoftLayer provides infrastructure as a service to leading-edge customers ranging from Web startups to global enterprises. SoftLayer's modular architecture, full-featured API, and sophisticated automation provide unparalleled performance and control. Its flexible unified platform seamlessly spans physical and virtual devices linked via a world...
Companies can harness IoT and predictive analytics to sustain business continuity; predict and manage site performance during emergencies; minimize expensive reactive maintenance; and forecast equipment and maintenance budgets and expenditures. Providing cost-effective, uninterrupted service is challenging, particularly for organizations with geographically dispersed operations.
The IoTs will challenge the status quo of how IT and development organizations operate. Or will it? Certainly the fog layer of IoT requires special insights about data ontology, security and transactional integrity. But the developmental challenges are the same: People, Process and Platform. In his session at @ThingsExpo, Craig Sproule, CEO of Metavine, will demonstrate how to move beyond today's coding paradigm and share the must-have mindsets for removing complexity from the development proc...
SYS-CON Events announced today TechTarget has been named “Media Sponsor” of SYS-CON's 18th International Cloud Expo, which will take place on June 7–9, 2016, at the Javits Center in New York City, NY, and the 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. TechTarget is the Web’s leading destination for serious technology buyers researching and making enterprise technology decisions. Its extensive global networ...
SYS-CON Events announced today that Commvault, a global leader in enterprise data protection and information management, has been named “Bronze Sponsor” of SYS-CON's 18th International Cloud Expo, which will take place on June 7–9, 2016, at the Javits Center in New York City, NY, and the 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. Commvault is a leading provider of data protection and information management...
The essence of data analysis involves setting up data pipelines that consist of several operations that are chained together – starting from data collection, data quality checks, data integration, data analysis and data visualization (including the setting up of interaction paths in that visualization). In our opinion, the challenges stem from the technology diversity at each stage of the data pipeline as well as the lack of process around the analysis.
A strange thing is happening along the way to the Internet of Things, namely far too many devices to work with and manage. It has become clear that we'll need much higher efficiency user experiences that can allow us to more easily and scalably work with the thousands of devices that will soon be in each of our lives. Enter the conversational interface revolution, combining bots we can literally talk with, gesture to, and even direct with our thoughts, with embedded artificial intelligence, wh...
Designing IoT applications is complex, but deploying them in a scalable fashion is even more complex. A scalable, API first IaaS cloud is a good start, but in order to understand the various components specific to deploying IoT applications, one needs to understand the architecture of these applications and figure out how to scale these components independently. In his session at @ThingsExpo, Nara Rajagopalan is CEO of Accelerite, will discuss the fundamental architecture of IoT applications, ...
SYS-CON Events announced today that Tintri Inc., a leading producer of VM-aware storage (VAS) for virtualization and cloud environments, will exhibit at the 18th International CloudExpo®, which will take place on June 7-9, 2016, at the Javits Center in New York City, New York, and the 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA.