ARI Reports Increased First Quarter Revenues; Fiscal 2006 Off to Good Start with Renewed Growth.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 sales and profit-building technology solutions for equipment dealers, today reported increased revenues for the first quarter ended October October: see month. 31, 2005. E[acute accent acute accent n. A mark (´) indicating: a. that a vowel is close or tense, as é in French été. b. that a vowel or syllable has a high or rising pitch, as in Chinese or Ancient Greek. c. ]First Quarter 2006 Highlights E[acute accent]--Revenues increased 7% to $3.5 million from $3.3 million for the first quarter of fiscal 2005. E[acute accent]--Operating income was $524,000 for the first quarter of fiscal 2006, a 7% decrease from operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. of $562,000 for the same period in the prior year. E[acute accent]--Net income was $498,000 or $0.07 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 in the first quarter of fiscal 2006, a 1% increase from net income of $494,000 or $0.08 per diluted share for the first quarter of fiscal 2005. E[acute accent]"Our revenue growth was driven by a worldwide increase in our core 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. products and services, supported by a renewal rate of over 85%. And, although the numbers are still very small relative to the total business, we saw strong double-digit dou·ble-dig·it adj. Being between 10 and 99 percent: double-digit inflation. growth in our new Dealer Marketing Services area," 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. operations and modest infrastructure investments. E[acute accent]"We believe the expenses related to Dealer Marketing Services and our European operations are investments in our future growth. The Dealer Marketing Services product area leverages our strong customer base of manufactured equipment dealers by providing products that help these customers to market their businesses. In the European business, we have taken steps to strengthen the business and expand our presence in this major market, including introducing new products, adding experienced managers and staff, opening a new office in the Netherlands Netherlands (nĕth`ərləndz), Du. Nederland or Koninkrijk der Nederlanden, officially Kingdom of the Netherlands, constitutional monarchy (2005 est. pop. 16,407,000), 15,963 sq mi (41,344 sq km), NW Europe. and repositioning repositioning Laparoscopic surgery The changing of a Pt's position during a procedure to improve access or visualization of the operative field, which may be linked to complications, as it changes anatomic planes of operation. Cf Laparoscopic surgery. the business to the dealer-centric model which has proven to be successful 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. ," said Dearing. E[acute accent]"Our financial position continues to be strong. We paid down debt by an additional $250,000 in the first quarter; our long-term debt Long-Term Debt Loans and financial obligations lasting over one year. Notes: For example debts obligations such as bonds and notes which have maturities greater than one year would be considered long-term debt. will be paid off according to according to prep. 1. As stated or indicated by; on the authority of: according to historians. 2. In keeping with: according to instructions. 3. its terms on December December: see month. 31, 2007. We have moved some of our cash into short-term Short-term Any investments with a maturity of one year or less. short-term 1. Of or relating to a gain or loss on the value of an asset that has been held less than a specified period of time. commercial paper, and we have more cash and short-term securities than debt," added Dearing. E[acute accent]Progress on Strategic Growth Initiatives E[acute accent]"We are on track with our strategic growth initiatives for fiscal 2006. First, we are maintaining and enhancing our core electronic catalog business; our renewal rate remains over 85% and our recurring re·cur intr.v. re·curred, re·cur·ring, re·curs 1. To happen, come up, or show up again or repeatedly. 2. To return to one's attention or memory. 3. To return in thought or discourse. revenues are continuing to climb. Second, we are gaining traction Traction Definition Traction is the use of a pulling force to treat muscle and skeleton disorders. Purpose Traction is usually applied to the arms and legs, the neck, the backbone, or the pelvis. with our new Dealer Marketing Services products, showing strong double-digit growth over last year. Third, our European operation showed 17% growth over last year and is positioned for continued growth in the future. Fourth, we are continually con·tin·u·al adj. 1. Recurring regularly or frequently: the continual need to pay the mortgage. 2. evaluating potential acquisition candidates that meet our criteria criteria (krītēr´ē  ),n. for accretive growth," added Dearing. E[acute accent]Summary and Outlook E[acute accent]"We had a good first quarter, with organic revenue growth and positive early signs on our growth initiatives. We continue to anticipate organic revenue growth in the high single digits for the balance of this fiscal year. We expect that operating income will be somewhat lower than last year as a result of our investments in initiatives to grow the business, primarily the Dealer Marketing Services product line and the European catalog business. We believe our investments in both of these areas will contribute to increased growth and profitability over the long term," said Dearing. E[acute accent]About ARI E[acute accent]ARI is 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. ARI currently provides approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. 88 parts catalogs (many of which contain multiple lines of equipment) for approximately 70 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). . Approximately 83,000 catalog subscriptions are provided
through ARI to more than 30,000 dealers and distributors in
approximately 89 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, email 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 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. E[acute accent]First Quarter Earnings Conference Call E[acute accent]ARI's First Quarter Conference Call is scheduled for Thursday Thursday: see week. , December 1, 2005 at 3:30 p.m. Central Time/4:30 p.m. Eastern Time. If you would like to participate, please pre-register at http://www.myrcplus.com/rsvp-index.asp?BWebID=&CID Cid or Cid Campeador (sĭd, Span. thēth kämpāäthōr`) [Span.,=lord conqueror], d. 1099, Spanish soldier and national hero, whose real name was Rodrigo (or Ruy) Díaz de Vivar. =5380349. At that time you will be provided with the numbers to use to join the conference call. 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 2, 2005. Click on the "Investor Relations Investor relations The process by which the corporation communicates with its investors. " tab to access the information. E[acute accent]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-KSB for fiscal year ended July July: see month. 31, 2005 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
2005 2004
---------- ----------
Net revenues:
Subscriptions, support and other services
fees $2,564 $2,402
Software licenses and renewals 518 576
Professional services 409 297
---------- ----------
3,491 3,275
Cost of products and services sold:
Subscriptions, support and other services
fees 181 193
Software licenses and renewals (1) 158 154
Professional services 111 82
---------- ----------
450 429
---------- ----------
Gross Margin 3,041 2,846
Operating expenses:
Depreciation and amortization (exclusive of
amortization of software products included in
cost of products and services sold) 80 54
Customer operations and support 303 262
Selling, general and administrative 1,859 1,709
Software development and technical support 275 259
---------- ----------
Net operating expenses 2,517 2,284
---------- ----------
Operating income 524 562
Other income (expense)
Interest expense (49) (44)
Other, net 23 12
---------- ----------
Total other expense (26) (32)
---------- ----------
Income before provision for income taxes 498 530
Income tax benefit (provision) - (36)
---------- ----------
Net income $498 $494
========== ==========
Average common shares outstanding:
Basic 6,126 5,951
Diluted 6,729 6,248
Basic and diluted net income (loss) per share:
Basic $0.08 $0.08
========== ==========
Diluted $0.07 $0.08
========== ==========
(1) includes amortization of software products of $145 and $141 and
excluding other depreciation and amortization shown separately
ARI Network Services, Inc.
Consolidated Balance Sheets
(In thousands, except share and per share data)
(Unaudited)
October 31 July 31
ASSETS 2005 2005
---------- ----------
Current Assets:
Cash and cash equivalents $3,555 $3,651
Trade receivables, less allowance for
doubtful accounts of $83 and $71 at
October 31, 2005 and July 31, 2005,
respectively 912 1,023
Prepaid expenses and other 195 203
Deferred income taxes 160 160
---------- ----------
Total Current Assets 4,822 5,037
Equipment and leasehold improvements:
Computer equipment 4,815 4,813
Leasehold improvements 73 73
Furniture and equipment 1,777 1,702
---------- ----------
6,665 6,588
Less accumulated depreciation and
amortization 5,974 5,893
---------- ----------
Net equipment and leasehold improvements 691 695
Deferred income taxes 705 705
Other assets 9 10
Capitalized software product costs 11,105 10,927
Less accumulated amortization 9,586 9,441
---------- ----------
Net capitalized software product costs 1,519 1,486
---------- ----------
Total Assets $7,746 $7,933
========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
(DEFICIT)
Current liabilities:
Current portion of notes payable $1,300 $1,200
Accounts payable 402 323
Deferred revenue 4,690 5,441
Accrued payroll and related liabilities 1,243 1,134
Accrued sales, use and income taxes 82 74
Other accrued liabilities 841 772
Current portion of capital lease obligations 4 4
---------- ----------
Total Current Liabilities 8,562 8,948
Long term liabilities:
Notes payable (net of discount) 1,670 2,037
Long term payroll related 480 461
Other long term liabilities 91 96
Capital lease obligations - -
---------- ----------
Total Long Term Liabilities 2,241 2,594
Shareholders' equity (deficit):
Cumulative preferred stock, par value $.001
per share, 1,000,000 shares authorized;
0 shares issued and outstanding at
October 31, 2005 and July 31, 2005,
respectively - -
Common stock, par value $.001 per share,
25,000,000 shares authorized; 6,150,764 and
6,064,534 shares issued and outstanding at
October 31, 2005 and July 31, 2005,
respectively 5 5
Common stock warrants and options 36 36
Additional paid-in-capital 93,806 93,752
Accumulated deficit (96,904) (97,402)
---------- ----------
Total Shareholders' Equity (Deficit) (3,057) (3,609)
---------- ----------
Total Liabilities and Shareholders' Equity
(Deficit) $7,746 $7,933
========== ==========
ARI Network Services, Inc.
Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)
Three months ended
October 31
2005 2004
----------------------
Operating activities
Net income $498 $494
Adjustments to reconcile net income to net cash
provided by operating activities:
Amortization of software products 145 141
Amortization of deferred financing costs,
debt discount and excess carrying value
over face amount of notes payable (16) (21)
Depreciation and other amortization 81 54
Deferred income taxes - -
Stock issued as contribution to 401(k) plan 21 37
Net change in receivables, prepaid expenses
and other assets 119 422
Net change in accounts payable, deferred
revenue, accrued liabilities and long term
liabilities (472) (392)
----------------------
Net cash provided by operating activities 376 735
Investing activities
Purchase of equipment and leasehold improvements (77) (69)
Software product costs capitalized (178) (602)
----------------------
Net cash used in investing activities (255) (671)
Financing activities
Payments under notes payable (250) (251)
Payments of capital lease obligations - (3)
Proceeds from issuance of common stock 33 3
----------------------
Net cash used in financing activities (217) (251)
----------------------
Net increase in cash (96) (187)
Cash at beginning of period 3,651 3,357
----------------------
Cash at end of period $3,555 $3,170
======================
$-
Cash paid for interest $65 $64
======================
Cash paid for income taxes $- $55
======================
Revenue by Location and Service
(In Thousands)
Three months ended
October 31
Percent
2005 2004 Change
---- ---- -------
North America
Catalog subscriptions $2,577 $2,425 6%
Catalog professional services 355 295 20%
Dealer marketing services 68 48 40%
Dealer & distributor communications 227 281 -19%
--------------------
Subtotal 3,228 3,050 6%
Rest of the World
Catalog subscriptions 214 216 -1%
Catalog professional services 49 10 394%
--------------------
Subtotal 263 226 17%
Total Revenue
Catalog subscriptions 2,792 2,641 6%
Catalog professional services 404 305 32%
Dealer marketing services 68 48 40%
Dealer & distributor communications 227 281 -19%
--------------------
Total 3,491 3,275 7%
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