ARI Reports Increased Second Quarter Revenues and Net Income; Company profitable for second consecutive quarter.Business Editors MILWAUKEE--(BUSINESS WIRE)--Feb. 26, 2004 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 e-Catalog business solutions that connect equipment manufacturers with their service and distribution networks, today reported results for the second quarter of fiscal 2004 ended January January: see month. 31, 2004. Revenues for the second quarter of fiscal 2004 were $3.3 million, a 6% increase from revenues of $3.1 million for the same period in the prior fiscal year. 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. for the second quarter of fiscal 2004 was $232,000, up significantly from operating income of $8,000 for the same period in fiscal 2003. Net income was $175,000 or $0.03 per share for the second quarter of fiscal 2004, compared to a net loss of $375,000 or $0.06 per share for last year's second quarter. "Our second quarter was another profitable one for ARI, as we continued to pick up steam 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. business," 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:
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 in our core catalog business increased 17% over last year and overall catalog sales were up 13% in the second quarter. Total recurring revenues from our primary customer base of equipment manufacturers increased 15% for the quarter, with solid increases achieved in both 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. 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). ," added Dearing.Dearing said the improvement in net income was the result of increased revenues, ongoing expense control and reduced interest expense as a result of restructuring restructuring - The transformation from one representation form to another at the same relative abstraction level, while preserving the subject system's external behaviour (functionality and semantics). the Company's debt in the prior fiscal year. For the first half of fiscal 2004, revenues were $6.6 million, a 7% increase from revenues of $6.1 million for the same period in the prior year. Operating income was $356,000 for the first half of fiscal 2004, compared to operating income of $101,000 for the comparable prior period. Net income was $247,000 or $0.04 per share for the first half of fiscal 2004, compared to a net loss of $620,000 or $0.10 per share for the same period in fiscal 2003. Dearing noted that 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.
"In addition to the improvement in revenues and net income, we also continued to strengthen our financial position. We ended the second quarter with a cash balance of $2.7 million, of which approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. $1.0 million has been segregated to cover the principal and interest payments on our debt through the end of our fiscal year on July July: see month. 31, 2004. In addition, our cash earn/burn rate, which is one of the measures we use to evaluate our cash flows, improved to a positive $461,000 in the second quarter of fiscal 2004, compared to a positive $273,000 for the same period in the prior year," said Dearing. "With two profitable quarters in the first half of fiscal 2004, we continue to anticipate that ARI will be profitable for the full fiscal year. We also anticipate positive cash earn/burn and EBITDA for the year," said Dearing. Dearing also announced that the lawsuits and counterclaims between ARI and the former holder of a convertible debenture Convertible Debenture Any type of debenture that can be converted into some other security. Notes: For example, a convertible bond can be converted into stock. have been dismissed dis·miss tr.v. dis·missed, dis·miss·ing, dis·miss·es 1. To end the employment or service of; discharge. 2. in United States District Court for the District of Delaware The United States District Court for the District of Delaware is the Federal district court having jurisdiction over the entire state of Delaware. The Court sits in Wilmington. Currently, three judges and two magistrate judges preside over the court. . "We are disappointed with the results, but the issue is now behind us and we can focus all of our energy and resources on our growth strategies," he said. About ARI ARI is a leading provider of e-Catalog business solutions for sales, service and life-cycle life-cycle - software life-cycle product support in the manufactured equipment market. ARI currently provides approximately 75 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" (many of which contain multiple lines of equipment) for approximately 56 equipment manufacturers in the U.S. and Europe. More than 84,000 catalog subscriptions are provided through ARI to approximately 23,000 dealers and distributors in more than 100 countries in a dozen segments of the worldwide manufactured equipment market including outdoor power, recreation vehicle, floor maintenance, auto and truck parts aftermarket Aftermarket See: Secondary market. aftermarket See secondary market. , power sports, 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 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. Second Quarter Earnings Conference Call ARI's Second Quarter Conference Call is scheduled for Thursday Thursday: see week. , February February: see month. 26, 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 1-800-915-4836 (International callers dial 1-973-317-5319) and request to be connected to Brian Dearing's conference call. A rebroadcast is available beginning at 5:30 p.m. Central Time, Thursday, February 26, 2004 by calling 1-800-428-6051 (International callers dial 1-973-709-2089) and enter passcode #339437. A replay of ARI's conference call, as well as notes and financial information presented in the call, will be available on ARI's website, www.arinet.com, after 6:00 p.m. Central Time on February 27, 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, 2003 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 Six months ended
January 31 January 31
2004 2003 2004 2003
-------- -------- -------- --------
Net revenues:
Subscriptions, support and
other services fees $2,260 $2,040 $4,549 $4,031
Software licenses and renewals 604 548 1,193 1,105
Professional services 429 505 836 1,012
-------- -------- -------- --------
3,293 3,093 6,578 6,148
Operating expenses:
Cost of products and services
sold:
Subscriptions, support and
other services fees 129 112 284 301
Software licenses and
renewals (a) 458 448 920 873
Professional services 149 194 340 344
-------- -------- -------- --------
736 754 1,544 1,518
Depreciation and amortization
(exclusive of amortization
of software products included
in cost of products and
services sold) 37 53 72 112
Customer operations and
support 291 312 574 622
Selling, general and
administrative 1,758 1,688 3,516 3,202
Software development and
technical support 362 401 703 876
-------- -------- -------- --------
Operating expenses before
amounts capitalized 3,184 3,208 6,409 6,330
Less capitalized portion (123) (123) (187) (283)
-------- -------- -------- --------
Net operating expenses 3,061 3,085 6,222 6,047
-------- -------- -------- --------
Operating income (loss) 232 8 356 101
Other income (expense)
Interest expense (64) (344) (145) (679)
Other, net 7 (39) 36 (42)
-------- -------- -------- --------
Total other expense (57) (383) (109) (721)
-------- -------- -------- --------
Net income (loss) $175 $(375) $247 $(620)
======== ======== ======== ========
Average common shares outstanding:
Basic 5,780 6,437 5,788 6,383
Diluted 5,998 6,437 6,006 6,383
Basic and diluted net income
(loss) per share:
Basic $0.03 ($0.06) $0.04 ($0.10)
======== ======== ======== ========
Diluted $0.03 ($0.06) $0.04 ($0.10)
======== ======== ======== ========
(a) includes amortization of software products of $445, $445,
$888 and $864 and excluding other depreciation and
amortization shown separately
Reconciliation of Non-Gaap Measures
Earnings before Interest, Taxes, Depreciation and Amortization
Net Income $175 $(375) $247 $(620)
Plus: Interest 64 344 145 679
Amortization of software
products 445 445 888 864
Other depreciation and
amortization 37 53 72 112
-------- -------- -------- --------
Earnings before interest, taxes,
depreciation and amortization $721 $467 $1,352 $1,035
======== ======== ======== ========
ARI Network Services, Inc.
Balance Sheets
(In thousands, except share and per share data)
(Unaudited)
January 31 July 31
ASSETS 2004 2003
---------- ----------
Current Assets:
Cash $2,723 $2,120
Trade receivables, less allowance for
doubtful accounts of $109 at
January 31, 2004 and $98 at July 31, 2003 654 1,088
Prepaid expenses and other 67 115
---------- ----------
Total Current Assets 3,444 3,323
Equipment and leasehold improvements:
Computer equipment 4,480 4,475
Leasehold improvements 73 73
Furniture and equipment 1,444 1,372
---------- ----------
5,997 5,920
Less accumulated depreciation and
amortization 5,546 5,474
---------- ----------
Net equipment and leasehold improvements 451 446
Other assets 18 0
Capitalized software product costs 9,931 9,602
Less accumulated amortization 8,609 7,721
---------- ----------
Net capitalized software product costs 1,322 1,881
---------- ----------
Total Assets $5,235 $5,650
========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT)
Current liabilities:
Current portion of notes payable $1,000 $400
RFC line of credit - 346
Accounts payable 230 401
Deferred revenue 5,208 5,280
Accrued payroll and related liabilities 1,061 1,088
Other accrued liabilities 780 601
Current portion of capital lease obligations 12 20
---------- ----------
Total Current Liabilities 8,291 8,136
Long term liabilities:
Notes payable (net of discount) 3,888 3,769
Other long term liabilities 553 559
Capital lease obligations 8 16
---------- ----------
Total Long Term Liabilities 4,449 4,344
Shareholders' equity (deficit):
Cumulative preferred stock, par value $.001
per share, 1,000,000 shares authorized;
0 and 20,350 shares issued and outstanding
at January 31, 2004 and July 31, 2003,
respectively - -
Common stock, par value $.001 per share,
25,000,000 shares authorized; 5,814,484 and
6,645,191 shares issued and outstanding
at January 31, 2004 and July 31, 2003,
respectively 5 6
Common stock warrants and options 36 141
Additional paid-in-capital 93,479 94,295
Accumulated deficit (101,025) (101,272)
---------- ----------
Total Shareholders' Equity (Deficit) (7,505) (6,830)
---------- ----------
Total Liabilities and Shareholders' Equity
(Deficit) $5,235 $5,650
========== ==========
ARI Network Services, Inc.
Statements of Cash Flows
(In thousands)
(Unaudited)
Three months ended Six months ended
January 31 January 31
2004 2003 2004 2003
------------------ ------------------
Operating activities
Net income (loss) $175 $(375) $247 $(620)
Adjustments to reconcile net
income (loss) to net cash
provided by operating activities:
Amortization of software
products 445 445 888 864
Amortization of deferred
financing costs, debt discount
and excess carrying value over
face amount of notes payable (14) 273 (29) 510
Depreciation and other
amortization 37 53 72 112
Stock issued as contribution
to 401(k) plan - - 37 -
Net change in receivables,
prepaid expenses and other
current assets 338 (56) 487 77
Net change in accounts payable,
deferred revenue, accrued
liabilities and long term
liabilities 208 155 (445) (215)
------------------ ------------------
Net cash provided by operating
activities 1,189 495 1,257 728
Investing activities
Purchase of equipment and
leasehold improvements (60) - (77) (3)
Purchase of assets related to
acquisitions - - (108) -
Software product costs
capitalized (123) (123) (187) (283)
------------------ ------------------
Net cash used in investing
activities (183) (123) (372) (286)
Financing activities
Borrowings under notes payable - 58 - 58
Payments under notes payable (50) (23) (250) (103)
Payments of capital lease
obligations (9) (41) (16) (88)
Debt issuance costs incurred - - (20) -
Proceeds from issuance of common
stock 2 44 4 44
------------------ ------------------
Net cash used in financing
activities (57) 38 (282) (89)
------------------ ------------------
Net increase (decrease) in cash 949 410 603 353
Cash at beginning of period 1,774 822 2,120 879
------------------ ------------------
Cash at end of period $2,723 $1,232 $2,723 $1,232
================== ==================
Cash paid for interest $90 $75 $112 $104
================== ==================
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 $1,189 $495 $1,257 $728
less: Net change in receivables,
prepaid expenses and
other current assets (338) 56 (487) (77)
Net change in payables,
deferred revenue,
accrued liabilities and
long term liabilities (208) (155) 445 215
Cash used in investing (183) (123) (372) (286)
--------------------------------------
Earn/Burn Rate $460 $273 $843 $580
======== ======== ======== ========
ARI Network Services, Inc.
Revenue by Industry Sector
(In thousands)
Three months ended Six months ended
January 31 January 31
Percent Percent
Industry Sector: 2004 2003 Change 2004 2003 Change
---- ---- ------ ---- ---- ------
Equipment Industry
North American
Recurring $2,428 $2,147 13% $4,783 $4,085 17%
Non-recurring 369 365 1% 735 813 -10%
------------------ ------------------
Subtotal 2,797 2,512 11% 5,518 4,898 13%
Non-North American
Recurring 289 211 37% 584 484 21%
Non-recurring 66 104 -37% 134 151 -11%
------------------ ------------------
Subtotal 355 315 13% 718 635 13%
Total Equipment Industry
Recurring 2,717 2,358 15% 5,367 4,569 17%
Non-recurring 435 469 -7% 869 964 -10%
------------------ ------------------
Total 3,152 2,827 11% 6,236 5,533 13%
Non-equipment Industry
Recurring 141 230 -39% 342 579 -41%
Non-recurring - 36 100% - 36 100%
------------------ ------------------
Total 141 266 -47% 342 615 -44%
Total Revenue
Recurring 2,858 2,588 10% 5,709 5,148 11%
Non-recurring 435 505 -14% 869 1,000 -13%
------------------ ------------------
Total $3,293 $3,093 6% $6,578 $6,148 7%
================== ==================
Revenue by Product in the Equipment Industry
(In thousands)
Three months ended Six months ended
January 31 January 31
Percent Percent
Product: 2004 2003 Change 2004 2003 Change
---- ---- ------ ---- ---- ------
Catalog and related
Recurring $2,603 $2,230 17% $5,120 $4,344 18%
Non-recurring 434 467 -7% 862 952 -9%
------------------ ------------------
Subtotal 3,037 2,697 13% 5,982 5,296 13%
Communication
Recurring 114 128 -11% 247 225 10%
Non-recurring 1 2 -50% 7 12 -42%
------------------ ------------------
Subtotal 115 130 -12% 254 237 7%
------------------ ------------------
Total Equipment
Industry $3,152 $2,827 11% $6,236 $5,533 13%
================== ==================
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