ARI Net Income Increases by 7 Cents Per Share in First Quarter; Core Electronic Catalog Business Continues to Grow.MILWAUKEE Milwaukee (mĭlwŏk`ē), city (1990 pop. 628,088), seat of Milwaukee co., SE Wis., at the point where the Milwaukee, Menominee, and Kinnickinnic rivers enter Lake Michigan; inc. 1846. -- ARI ARI Acute respiratory infection, see there (OTCBB OTCBB See OTC Bulletin Board (OTCBB). :ARIS ARIS American Religious Identification Survey ARIS Architecture of Integrated Information Systems ARIS Active Rack Isolation System ARIS Aggregate Route-based IP Switching ARIS Agentia Romana pentru Investitii Straine ), a leading provider of electronic parts catalogs Noun 1. parts catalog - a list advertising parts for machinery along with prices parts catalogue catalogue, catalog - a complete list of things; usually arranged systematically; "it does not pretend to be a catalog of his achievements" and related technology and services to increase sales and profits for dealers in the manufactured equipment markets, today reported results for the first quarter of fiscal 2005 ended October October: see month. 31, 2004. Revenues for the first quarter of fiscal 2005 were $3.28 million, compared to revenues of $3.29 million for the first quarter of the prior fiscal year. Net income was $494,000 or $0.08 per diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share for the first quarter of fiscal 2005, compared to net income of $72,000 or $0.01 per diluted share for the comparable prior period. "Our core electronic catalog catalog, descriptive list, on cards or in a book, of the contents of a library. Assurbanipal's library at Nineveh was cataloged on shelves of slate. The first known subject catalog was compiled by Callimachus at the Alexandrian Library in the 3d cent. B.C. business in North America North America, third largest continent (1990 est. pop. 365,000,000), c.9,400,000 sq mi (24,346,000 sq km), the northern of the two continents of the Western Hemisphere. continues to grow, with revenues from this business increasing 6% in the first quarter over last year," said Brian The name Brian (sometimes spelled Bryan) comes from an Irish backround. It is of Celtic origin and its meaning may be "hill" or "strong, noble, and high"[1]. E. Dearing Dearing, as a name, may refer to:
emanating from or pertaining to Europe. European bat lyssavirus see lyssavirus. European beech tree fagussylvaticus. European blastomycosis see cryptococcosis. catalog business and the anticipated decrease in revenues from our non-strategic business areas." Dearing said the decline in European catalog revenues reflected the loss of a key customer in the power generation market and the discontinuation dis·con·tin·u·a·tion n. A cessation; a discontinuance. Noun 1. discontinuation - the act of discontinuing or breaking off; an interruption (temporary or permanent) discontinuance of a legacy microfiche Pronounced "micro-feesh." A 4x6" sheet of film that holds several hundred miniaturized document pages. See micrographics. publishing application, which was done as an accommodation for another catalog customer. "We remain excited about the opportunity in the European market. We are continuing to invest in new products for this market and have strengthened our international operations Internal Operations (I.O., IO or I/O) is a fictional American Intelligence Agency in Wildstorm comics. It was originally called International Operations. I.O. first appeared in WildC.A.T.S. volume 1 #1 (August, 1992) and was created by Brandon Choi and Jim Lee. with the recent addition of Paul Paul, 1901–64, king of the Hellenes (1947–64), brother and successor of George II. He married (1938) Princess Frederika of Brunswick. During Paul's reign Greece followed a pro-Western policy, and the Cyprus question was temporarily resolved. W. Versteeg as Director of International Operations. Paul is Paul I, 1754–1801, czar of Russia (1796–1801), son and successor of Catherine II. His mother disliked him intensely and sought on several occasions to change the succession to his disadvantage. a talented manager and sales executive with more than 25 years of international experience. He will be responsible for increasing sales, improving customer support and introducing new products in the international marketplace," said Dearing. "Much of the increase in net income for the first quarter was due to a reduction of approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. $250,000 in non-cash expenses Noun 1. non-cash expense - an expense (such as depreciation) that is not paid for in cash disbursal, disbursement, expense - amounts paid for goods and services that may be currently tax deductible (as opposed to capital expenditures) resulting from the completion of the amortization of the Network Dynamics acquisition. Another factor was the unusually high level of legal expenses in last year's first quarter, which was associated with the repurchase re·pur·chase tr.v. re·pur·chased, re·pur·chas·ing, re·pur·chas·es To buy (something) again. n. The act of buying something that one previously sold or owned. Noun 1. of shares from WITECH, the institution of a Shareholder Rights Plan, and the Option Exchange Program. Net income also benefited from the one-time one-time adj. 1. or one·time a. Occurring or undertaken only once: a one-time winner in 1995. b. reversal reversal n. the decision of a court of appeal ruling that the judgment of a lower court was incorrect and is reversed. The result is that the lower court which tried the case is instructed to dismiss the original action, retry the case, or is ordered to change its of an accrual accrual, n continually recurring short-term liabilities. Examples are accrued wages, taxes, and interest. for sales tax sales tax, levy on the sale of goods or services, generally calculated as a percentage of the selling price, and sometimes called a purchase tax. It is usually collected in the form of an extra charge by the retailer, who remits the tax to the government. liabilities after a favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. result with the State of Wisconsin Wisconsin, state, United States Wisconsin (wĭskŏn`sən, –sĭn), upper midwestern state of the United States. It is bounded by Lake Superior and the Upper Peninsula of Michigan, from which it is divided by the Menominee ," said Dearing. Earnings before interest, taxes, depreciation and amortization Earnings before interest, taxes, depreciation and amortization (EBITDA) is a non-GAAP metric that can be used to evaluate a company's profitability.
"Our cash balance of $3.2 million at the end of the first quarter of fiscal 2005 was still very healthy, but was lower than at the end of the previous quarter. The decrease reflects an expenditure of approximately $400,000 related to the acquisition of software from a third party. We intend to use this software as the basis of a new ARI offering that is currently under development for release this winter," said Dearing. "This is consistent with our strategy to re-deploy cash back into the business to fund our future growth." Dearing said the company also recently introduced ARI ServiceSmart(TM), a new fleet equipment electronic maintenance management tool. The software enables fleet managers to accurately and cost-effectively manage their preventive maintenance The routine checking of hardware that is performed by a field engineer on a regularly scheduled basis. See remedial maintenance. preventive maintenance - (PM) To bring down a machine for inspection or test purposes. See provocative maintenance, scratch monkey. services, inventory and records to extend the life of their equipment and reduce equipment downtime The time during which a computer is not functioning due to hardware, operating system or application program failure. . "This is the next step in our strategy to provide a comprehensive suite of products and services that dealers and professionals can use to increase their sales, profits and productivity. In addition to enhanced versions of our market-leading PartSmart(TM) and EMPARTweb(TM) electronic catalog products, we have introduced a suite of Integrated Marketing Services to help dealers increase their sales, including ARI MailSmart(TM) and WebsiteSmart(TM)," said Dearing. "Throughout fiscal 2005, we will be implementing the requirements of Section 404 of the Sarbanes-Oxley Act See SOX. (SOX (1) (Schema for Object-oriented XML) An XML schema developed by Veo Systems and Muzino Communications, which was submitted to the W3C. SOX is based on DTD, but adds data typing and reuse mechanisms. 404), which relate to internal controls. Complying with SOX404 will require expenditures of time and money each year going forward, but the greatest portion of the expenses will be in fiscal 2005, the first year we are required to implement these new rules," Dearing said. "Our objective is to obtain an opinion from our external auditors The examples and perspective in this article or section may not represent a worldwide view of the subject. Please [ improve this article] or discuss the issue on the talk page. that the Company is indeed in compliance as of July July: see month. 31, 2005, the end of our current fiscal year." "Looking ahead to the remainder of the year, we expect net income to increase vs. last year, partly due to the completion of the amortization of the Network Dynamics acquisition, and partly due to continuing cost control. However, we expect EBITDA to increase only modestly or remain flat as we use some of our cash flow to invest in growth. We expect the core catalog business to remain solid, and that revenues from our new products will begin to make a positive difference in our revenues during the second half of the year," Dearing said. About ARI ARI is a leading provider of electronic parts catalogs and related technology and services to increase sales and profits for dealers in the manufactured equipment markets. ARI currently provides approximately 78 parts catalogs (many of which contain multiple lines of equipment) for approximately 65 equipment manufacturers in the U.S. and Europe Europe (y  r`əp), 6th largest continent, c.4,000,000 sq mi (10,360,000 sq km) including adjacent islands (1992 est. pop. 512,000,000). . More
than 88,000 catalog subscriptions are provided through ARI to more than
28,000 dealers and distributors in more than 120 countries in a dozen
segments of the worldwide equipment market including outdoor power,
power sports, ag equipment, recreation vehicle, floor maintenance, auto
and truck parts aftermarket AftermarketSee: Secondary market. aftermarket See secondary market. , marine and construction. The Company builds and supports a full suite of multi-media electronic catalog publishing and viewing software for the Web or CD and provides expert catalog publishing and consulting services Noun 1. consulting service - service provided by a professional advisor (e.g., a lawyer or doctor or CPA etc.) service - work done by one person or group that benefits another; "budget separately for goods and services" . ARI also provides dealer marketing services, including technology-enabled direct mail and a template-based dealer website service that makes it quick and easy for an equipment dealer to have a professional and attractive website. In addition, ARI e-Catalog systems support a variety of electronic pathways for parts orders, warranty An assurance, promise, or guaranty by one party that a particular statement of fact is true and may be relied upon by the other party. Warranties are used in a variety of commercial situations. In many instances a business may voluntarily make a warranty. claims and other transactions between manufacturers and their networks of sales and service points. ARI currently operates three offices in the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. and one in Europe and has sales and service agents in Australia Australia (ôstrāl`yə), smallest continent, between the Indian and Pacific oceans. With the island state of Tasmania to the south, the continent makes up the Commonwealth of Australia, a federal parliamentary state (2005 est. pop. , England England, the largest and most populous portion of the United Kingdom of Great Britain and Northern Ireland (1991 pop. 46,382,050), 50,334 sq mi (130,365 sq km). It is bounded by Wales and the Irish Sea on the west and Scotland on the north. and France providing marketing and support of its products and services. First Quarter Earnings Conference Call ARI's First Quarter Conference Call is scheduled for Thursday Thursday: see week. , December December: see month. 2, 2004 at 3:30 p.m. Central Time/4:30 p.m. Eastern Time. If you would like to participate on a listen-only basis, please dial in five to ten minutes prior to the starting time Noun 1. starting time - the time at which something is supposed to begin; "they got an early start"; "she knew from the get-go that he was the man for her" commencement, get-go, offset, outset, showtime, start, kickoff, beginning, first at 1-800-967-7134 (International callers dial 1-719-457-2625) and ask for conference code 752723 or request to be connected to Brian Dearing's conference call. A rebroadcast will be available beginning at 5:30 p.m. Central Time, Thursday, December 2, 2004 by calling 1-888-203-1112 (International callers dial 1-719-457-0820) and entering passcode 752723. A replay of ARI's conference call, as well as notes and financial information presented in the call, will also be available on ARI's website, www.arinet.com, after 6:00 p.m. Central Time on Friday Friday: see Sabbath; week. Friday young Indian rescued by Crusoe and kept as servant and companion. [Br. Lit.: Robinson Crusoe] See : Servant , December 3, 2004. Click on the "Investor Relations Investor relations The process by which the corporation communicates with its investors. " tab to access the information. Statements in this news release are "forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. " within the meaning of the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and . The forward-looking statements can generally be identified by words such as "believes," "anticipates," "expects" or words of similar meaning. Forward-looking statements also include statements relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc the Company's future performance, such as future prospects, revenues, profits and cash flows. The forward-looking statements are subject to risks and uncertainties, which may cause actual results to be materially different from any future performance suggested in the forward-looking statements. Such risks and uncertainties include those factors described under "Forward Looking Statements Disclosure" in Exhibit 99.1 of the Company's annual report on Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. for fiscal year ended July 31, 2004 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 here·of adv. Of this. hereof Adverb Formal or law of or concerning this Adv. 1. hereof - of or concerning this; "the twigs hereof are physic" , and the Company undertakes no obligation to publicly release the result of any revisions ReVisions is a 2004 anthology of alternate history short-stories. It is edited by Julie E. Czerneda and Isaac Szpindel. Contents Title Author The Resonance of Light James Alan Gardner Out of China Julie E. to these forward-looking statements. For more information, please refer to the Company's filings with the Securities and Exchange Commission.
ARI Network Services, Inc.
Statements of Operations
(In thousands, except per share data)
(Unaudited)
Three months ended
October 31
2004 2003
---------- ----------
Net revenues:
Subscriptions, support and other services fees $2,402 $2,289
Software licenses and renewals 576 589
Professional services 297 407
---------- ----------
3,275 3,285
Operating expenses:
Cost of products and services sold:
Subscriptions, support and other services
fees 193 155
Software licenses and renewals (a) 154 462
Professional services 82 191
---------- ----------
429 808
Depreciation and amortization (exclusive of
amortization of software products included
in cost of products and services sold) 54 35
Customer operations and support 262 283
Selling, general and administrative 1,709 1,758
Software development and technical support 421 341
---------- ----------
Operating expenses before amounts capitalized 2,875 3,225
Less capitalized portion (162) (64)
---------- ----------
Net operating expenses 2,713 3,161
---------- ----------
Operating income (loss) 562 124
Other income (expense)
Interest expense (44) (81)
Other, net 12 29
---------- ----------
Total other expense (32) (52)
---------- ----------
Income before provision for income taxes 530 72
Income tax expense (36) -
---------- ----------
Net income (loss) $494 $72
========== ==========
Average common shares outstanding:
Basic 5,942 5,796
Diluted 6,239 5,921
Basic and diluted net income (loss) per share:
Basic $0.08 $0.01
========== ==========
Diluted $0.08 $0.01
========== ==========
(a) includes amortization of software products of $141 and $443 and
excluding other depreciation and amortization shown separately
Reconciliation of Non-Gaap Measures
Earnings before Interest, Taxes, Depreciation
and Amortization
Net Income $494 $72
Plus: Interest 44 81
Amortization of software products 141 443
Other depreciation and amortization 54 35
Income tax expense 36 -
---------- ----------
Earnings before interest, taxes, depreciation
and amortization $769 $631
========== ==========
ARI Network Services, Inc.
Balance Sheets
(In thousands, except share and per share data)
(Unaudited)
October 31 July 31
ASSETS 2004 2004
---------- ----------
Current Assets:
Cash $3,170 $3,357
Trade receivables, less allowance for
doubtful accounts of $65 at October 31, 2004
and $44 at July 31, 2004 752 1,121
Prepaid expenses and other 109 187
---------- ----------
Total Current Assets 4,031 4,665
Equipment and leasehold improvements:
Computer equipment 4,670 4,607
Leasehold improvements 73 73
Furniture and equipment 1,497 1,491
---------- ----------
6,240 6,171
Less accumulated depreciation and amortization 5,684 5,630
---------- ----------
Net equipment and leasehold improvements 556 541
Other assets 39 15
Capitalized software product costs 10,805 10,203
Less accumulated amortization 9,374 9,233
---------- ----------
Net capitalized software product costs 1,431 970
---------- ----------
Total Assets $6,057 $6,191
========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT)
Current liabilities:
Current portion of notes payable $1,000 $1,000
Accounts payable 282 260
Deferred revenue 4,843 5,453
Accrued payroll and related liabilities 1,185 951
Accrued sales, use and income taxes 429 489
Other accrued liabilities 623 564
Current portion of capital lease obligations 7 10
---------- ----------
Total Current Liabilities 8,369 8,727
Long term liabilities:
Notes payable (net of discount) 3,033 3,306
Long term payroll related 495 495
Other long term liabilities 211 211
Capital lease obligations 3 3
---------- ----------
Total Long Term Liabilities 3,742 4,015
Shareholders' equity (deficit):
Cumulative preferred stock, par value $.001
per share, 1,000,000 shares authorized;
0 shares issued and outstanding at
October 31, 2004 and July 31,2004,
respectively - -
Common stock, par value $.001 per share,
25,000,000 shares authorized; 5,963,347
and 5,923,034 shares issued and outstanding
at October 31, 2004 and July 31,2004,
respectively 5 5
Common stock warrants and options 36 36
Additional paid-in-capital 93,628 93,625
Accumulated deficit (99,723) (100,217)
---------- ----------
Total Shareholders' Equity (Deficit) (6,054) (6,551)
---------- ----------
Total Liabilities and Shareholders' Equity
(Deficit) $6,057 $6,191
========== ==========
ARI Network Services, Inc.
Statements of Cash Flows
(In thousands)
(Unaudited)
Three months ended
October 31
2004 2003
-------------------
Operating activities
Net income (loss) $494 $72
Adjustments to reconcile net income (loss) to net
cash provided by operating activities:
Amortization of software products 141 443
Amortization of deferred financing costs, debt
discount and excess carrying value over face
amount of notes payable (21) (15)
Depreciation and other amortization 54 35
Stock issued as contribution to 401(k) plan 37 37
Net change in receivables, prepaid expenses
and other current assets 422 149
Net change in accounts payable, deferred
revenue, accrued liabilities and long term
liabilities (392) (653)
-------------------
Net cash provided by operating activities 735 68
Investing activities
Purchase of equipment and leasehold improvements (69) (17)
Purchase of assets related to acquisitions - (108)
Software product costs capitalized (602) (64)
-------------------
Net cash used in investing activities (671) (189)
Financing activities
Payments under notes payable (251) (200)
Payments of capital lease obligations (3) (7)
Debt issuance costs incurred - (20)
Proceeds from issuance of common stock 3 2
-------------------
Net cash used in financing activities (251) (225)
-------------------
Net increase (decrease) in cash (187) (346)
Cash at beginning of period 3,357 -
-------------------
Cash at end of period $3,170 $(346)
===================
Cash paid for interest $64 $22
===================
Cash paid for income taxes $55 $-
===================
Noncash investing and financing activities
Issuance of common stock in connection with
acquisitions - 37
Exchange of equity to debt - 1,000
Reconciliation of Non-Gaap Measures
Earn/Burn Rate
Cash provided by operations $735 $68
less: Net change in receivables, prepaid expenses
and other current assets (422) (149)
Net change in payables, deferred revenue,
accrued liabilities and long term liabilities 392 653
Cash used in investing (671) (189)
-------------------
Earn/Burn Rate $34 $383
===================
Revenue by Industry Sector
(In thousands)
Three months ended
October 31
Percent
Industry Sector: 2004 2003 Change
---------- ---------- -------
Equipment Industry
North American
Recurring $2,492 $2,355 6%
Non-recurring 395 366 8%
---------- ----------
Subtotal 2,887 2,721 6%
Non-North American
Recurring 224 295 -24%
Non-recurring - 68 -100%
---------- ----------
Subtotal 224 363 -38%
Total Equipment Industry
Recurring 2,716 2,650 3%
Non-recurring 395 434 -9%
---------- ----------
Total 3,111 3,084 1%
Non-equipment Industry
Recurring 164 201 -18%
Non-recurring - - -100%
---------- ----------
Total 164 201 -18%
Total Revenue
Recurring 2,880 2,851 1%
Non-recurring 395 434 -9%
---------- ----------
Total $3,275 $3,285 0%
========== ==========
Revenue by Product in the Equipment Industry
(In thousands)
Three months ended
October 31
Percent
Product: 2004 2003 Change
---------- ---------- -------
Catalog and related
Recurring $2,599 $2,517 3%
Non-recurring 395 428 -8%
---------- ----------
Subtotal 2,994 2,945 2%
Communication
Recurring 117 133 -12%
Non-recurring - 6 -100%
---------- ----------
Subtotal 117 139 -16%
---------- ----------
Total Equipment Industry $3,111 $3,084 1%
========== ==========
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