ARI Reports Increased Third Quarter Revenues and Net Income; New Products Contribute to Continued Improvement.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 services for equipment dealers, today reported results for the third quarter ended April 30, 2005. Revenues for the third quarter of fiscal 2005 were $3.5 million, a 3% increase from revenues of $3.4 million for the third quarter of the prior 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. was $554,000 in the third quarter of fiscal 2005, up from operating income of $246,000 for the comparable prior period. Net income was $495,000 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 third quarter of fiscal 2005, compared to net income of $180,000 or $0.03 per diluted share for the same period in fiscal 2004. "As we expected, our profits continued to grow: it was our seventh consecutive quarter of year-over-year net income growth. Overall revenues also grew this quarter after a flat first half of this year, returning to the revenue growth trajectory Trajectory The curve described by a body moving through space, as of a meteor through the atmosphere, a planet around the Sun, a projectile fired from a gun, or a rocket in flight. that began in fiscal 2004. Compared to the third quarter of last year, revenues from the North American North American named after North America. North American blastomycosis see North American blastomycosis. North American cattle tick see boophilusannulatus. segment of the worldwide equipment industry - our core market - grew by 5%, more than offsetting declines in the non-North American American, river, 30 mi (48 km) long, rising in N central Calif. in the Sierra Nevada and flowing SW into the Sacramento River at Sacramento. The discovery of gold at Sutter's Mill (see Sutter, John Augustus) along the river in 1848 led to the California gold rush of segment and in the non-equipment market," 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 increased 5% versus last year's third quarter, indicating a growing base of business." Dearing said the company's increased net income was due to the higher revenues and the 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) as a result of the completion of the amortization of an acquisition. "Included in the equipment industry 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. and related revenues are the new revenues from Dealer Marketing Services, an exciting new product area for ARI, which includes ARI MailSmart(TM) and WebsiteSmart(TM), as well as from ServiceSmart(TM), a new product to help end users of equipment manage the maintenance of the units they operate. While we do not plan to break out these revenues formally until next year, I can tell you that these growth initiatives have generated nearly $250,000 in revenues so far this year," added Dearing. "Our newest product, which we introduced late in the third quarter, is ARI WarrantySmart(TM), an electronic 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. claim processing system to help dealers and manufacturers streamline streamline, path of a fluid flowing steadily and without appreciable turbulence. A body is said to be streamlined if its shape offers the least possible resistance to a current of air, water, or other fluid. the warranty administration process. Together, our new products provide a strong platform for expanding our business by obtaining new customers and enhancing relationships with our existing customers," said Dearing. "Also on a positive note, our cash balance at the end of the third quarter exceeded non-trade debt. At the same time, we are continuing to invest in new product development and in improving the performance of our European European emanating from or pertaining to Europe. European bat lyssavirus see lyssavirus. European beech tree fagussylvaticus. European blastomycosis see cryptococcosis. catalog business. We have increased our staff in 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). in order to move from a manufacturer-centric business
model to the dealer-centric model which has been so successful for us 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. ," Dearing continued. Dearing also noted that ARI
is among the small businesses who recently received a one-year adj. 1. completing its life cycle within a year.Adj. 1. one-year - completing its life cycle within a year; "a border of annual flowering plants" annual phytology, botany - the branch of biology that studies plants extension from the Securities and Exchange Commission for meeting the requirements of Section 404 of the Sarbanes-Oxley Act See SOX. . "We were on schedule to complete the necessary work this year. We will now be able to spread the remaining cost over a longer period of time," said Dearing. For the first nine months of fiscal 2005, ARI reported revenues of $10.0 million, compared to revenues of $9.9 million for the same period in the prior year. Operating income was $1.6 million for the first nine months of fiscal 2005, compared to operating income of $602,000 for the comparable prior period. Net income was $1.4 million or $0.22 per diluted share for the first nine months of fiscal 2005, compared to net income of $427,000 or $0.07 per diluted share for the first nine months of fiscal 2004. 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.
"While we may have fluctuations in the rate of growth from quarter to quarter, overall we believe ARI is entering a period of renewed re·new v. re·newed, re·new·ing, re·news v.tr. 1. To make new or as if new again; restore: renewed the antique chair. 2. revenue growth. Our established core catalog business and innovative new products provide the platform for sustainable, profitable growth: profits from the catalog business enable us to invest in new products to drive growth, while the recurring nature of the revenue enables that growth to be sustainable. As indicated previously, we anticipate that we will report increased net income for the year, with EBITDA flat or up slightly as we continue to invest in new products and in improving our operations," said Dearing. Dearing added that the company received two awards from the 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 business community in the third quarter - eInnovate's Technical Knock-Out knock·out n. 1. a. The act of knocking out. b. The state of being knocked out. c. A blow that knocks out an opponent. 2. Sports a. Award and the IQ (Innovation Quotient quotient - The number obtained by dividing one number (the "numerator") by another (the "denominator"). If both numbers are rational then the result will also be rational. ) Award from Small Business Times magazine and the Wisconsin Technology Council. "I am very proud of our employees, whose creativity and dedication to our customers resulted in these awards." About ARI 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 83 parts catalogs (many of which contain multiple lines of equipment) for approximately 70 equipment manufacturers in the U.S. and Europe. More than 86,000 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 Aftermarket See: 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 claims and other transactions between manufacturers and their networks of sales and service points. ARI currently operates three offices in the United States 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. Third Quarter Earnings Conference Call ARI's Third Quarter Conference Call is scheduled for Thursday Thursday: see week. , May 19, 2005 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 pre-register at http://www.myrcplus.com/rsvp-index.asp?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. =8922124. 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 , May 20, 2005. 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-KSB for fiscal year ended July July: see month. 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 Nine months ended
April 30 April 30
2005 2004 2005 2004
--------- --------- --------- ---------
Net revenues:
Subscriptions, support and
other services fees $2,534 $2,263 $7,358 $6,812
Software licenses and
renewals 552 590 1,686 1,783
Professional services 373 505 994 1,341
--------- --------- --------- ---------
3,459 3,358 10,038 9,936
Operating expenses:
Cost of products and services
sold:
Subscriptions, support and
other services fees 186 98 612 382
Software licenses and
renewals (a) 153 470 452 1,390
Professional services 134 306 264 646
--------- --------- --------- ---------
473 874 1,328 2,418
Depreciation and amortization
(exclusive of amortization
of software products
included in cost of products
and services sold) 67 38 190 110
Customer operations and
support 265 249 784 823
Selling, general and
administrative 1,805 1,696 5,259 5,212
Software development and
technical support 487 399 1,353 1,102
--------- --------- --------- ---------
Operating expenses before
amounts capitalized 3,097 3,256 8,914 9,665
Less capitalized portion (192) (144) (498) (331)
--------- --------- --------- ---------
Net operating expenses 2,905 3,112 8,416 9,334
--------- --------- --------- ---------
Operating income (loss) 554 246 1,622 602
Other income (expense)
Interest expense (49) (55) (140) (200)
Other, net 3 (11) 25 25
--------- --------- --------- ---------
Total other expense (46) (66) (115) (175)
--------- --------- --------- ---------
Income before provision for
income taxes 508 180 1,507 427
Income tax expense (13) - (63) -
--------- --------- --------- ---------
Net income (loss) $495 $180 $1,444 $427
========= ========= ========= =========
Average common shares
outstanding:
Basic 6,008 5,861 5,974 5,812
Diluted 6,598 6,115 6,564 6,066
Basic and diluted net income
(loss) per share:
Basic $0.08 $0.03 $0.24 $0.07
========= ========= ========= =========
Diluted $0.08 $0.03 $0.22 $0.07
========= ========= ========= =========
(a) includes amortization of software products of $143, 435, 417, and
$1,323 and excluding other depreciation and amortization shown
separately
Reconciliation of Non-Gaap Measures
Earnings before Interest,
Taxes, Depreciation and
Amortization
Net Income $495 $180 $1,444 $427
Plus: Interest 49 55 140 200
Amortization of software
products 143 435 417 1,323
Other depreciation and
amortization 67 38 190 110
Income tax expense 13 - 63 -
--------- --------- --------- ---------
Earnings before interest,
taxes, depreciation and
amortization $767 $708 $2,254 $2,060
========= ========= ========= =========
ARI Network Services, Inc.
Balance Sheets
(In thousands, except share and per share data)
(Unaudited)
April 30 July 31
ASSETS 2005 2004
----------- -----------
Current Assets:
Cash $3,632 $3,357
Trade receivables, less allowance for
doubtful accounts of $86 at
April 30, 2005 and $44 at July 31, 2004 759 1,121
Prepaid expenses and other 148 187
----------- -----------
Total Current Assets 4,539 4,665
Equipment and leasehold improvements:
Computer equipment 4,812 4,607
Leasehold improvements 73 73
Furniture and equipment 1,518 1,491
----------- -----------
6,403 6,171
Less accumulated depreciation and
amortization 5,820 5,630
----------- -----------
Net equipment and leasehold improvements 583 541
Other assets 37 15
Capitalized software product costs 11,142 10,203
Less accumulated amortization 9,650 9,233
----------- -----------
Net capitalized software product costs 1,492 970
----------- -----------
Total Assets $6,651 $6,191
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT)
Current liabilities:
Current portion of notes payable $1,000 $1,000
Accounts payable 208 260
Deferred revenue 5,337 5,453
Accrued payroll and related liabilities 949 951
Accrued sales, use and income taxes 182 489
Other accrued liabilities 696 564
Current portion of capital lease obligations 6 10
----------- -----------
Total Current Liabilities 8,378 8,727
Long term liabilities:
Notes payable (net of discount) 2,495 3,306
Long term payroll related 568 495
Other long term liabilities 211 211
Capital lease obligations - 3
----------- -----------
Total Long Term Liabilities 3,274 4,015
Shareholders' equity (deficit):
Cumulative preferred stock, par value $.001
per share, 1,000,000 shares authorized;
0 shares issued and outstanding
at April 30, 2005 and July 31,2004,
respectively - -
Common stock, par value $.001 per share,
25,000,000 shares authorized; 6,012,582
and 5,923,034 shares issued and
outstanding at April 30, 2005 and
July 31,2004, respectively 5 5
Common stock warrants and options 36 36
Additional paid-in-capital 93,731 93,625
Accumulated deficit (98,773) (100,217)
----------- -----------
Total Shareholders' Equity (Deficit) (5,001) (6,551)
----------- -----------
Total Liabilities and Shareholders'
Equity (Deficit) $6,651 $6,191
=========== ===========
ARI Network Services, Inc.
Statements of Cash Flows
(In thousands)
(Unaudited)
Three months ended Nine months ended
April 30 April 30
2005 2004 2005 2004
------------------- -------------------
Operating activities
Net income (loss) $495 $180 $1,444 $427
Adjustments to reconcile net
income (loss) to net cash
provided by operating
activities:
Amortization of software
products 143 435 417 1,323
Amortization of deferred
financing costs, debt
discount and
excess carrying value
over face amount of
notes payable (16) (13) (58) (42)
Depreciation and other
amortization 67 38 190 110
Stock issued as
contribution to 401(k)
plan - - 37 37
Net change in receivables,
prepaid expenses and
other current assets (77) (272) 376 215
Net change in accounts
payable, deferred
revenue, accrued
liabilities and long term
liabilities 208 75 (272) (370)
------------------- -------------------
Net cash provided by operating
activities 820 443 2,134 1,700
Investing activities
Purchase of equipment and
leasehold improvements (79) (29) (232) (106)
Purchase of assets related to
acquisitions - - - (108)
Software product costs
capitalized (193) (144) (939) (331)
------------------- -------------------
Net cash used in investing
activities (272) (173) (1,171) (545)
Financing activities
Payments under notes payable (250) (250) (750) (500)
Payments of capital lease
obligations (1) (3) (7) (19)
Debt issuance costs incurred - - - (20)
Proceeds from issuance of
common stock 9 7 69 11
------------------- -------------------
Net cash used in financing
activities (242) (246) (688) (528)
------------------- -------------------
Net increase (decrease) in cash 306 24 275 627
Cash at beginning of period 3,326 2,723 3,357 2,120
------------------- -------------------
Cash at end of period $3,632 $2,747 $3,632 $2,747
=================== ===================
Cash paid for interest $66 $241 $197 $353
=================== ===================
Cash paid for income taxes $- $- $55 $-
=================== ===================
Noncash investing and financing
activities
Issuance of common stock in
connection with deferred
executive compensation $- $130 $- $130
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 $819 $443 $2,133 $1,700
less:Net change in receivables,
prepaid expenses and
other current assets 77 272 (376) (215)
Net change in payables,
deferred revenue,
accrued liabilities and
long term liabilities (208) (75) 272 370
Cash used in investing (271) (173) (1,170) (545)
------------------- -------------------
Earn/Burn Rate $417 $467 $859 $1,310
=================== ===================
Revenue by Industry Sector
(In thousands)
Three months Nine months
ended ended
April 30 April 30
Percent Percent
Industry Sector: 2005 2004 Change 2005 2004 Change
---- ---- ------- ---- ---- -------
Equipment Industry
North American
Recurring $2,644 $2,495 6% $7,809 $7,278 7%
Non-recurring 449 439 2% 1,159 1,174 -1%
-------------- ---------------
Subtotal 3,093 2,934 5% 8,968 8,452 6%
Non-North American
Recurring 227 250 -9% 654 834 -22%
Non-recurring 12 34 -64% 12 168 -93%
-------------- ---------------
Subtotal 239 284 -16% 666 1,002 -34%
Total Equipment Industry
Recurring 2,871 2,745 5% 8,463 8,112 4%
Non-recurring 461 473 -2% 1,171 1,342 -13%
-------------- ---------------
Total 3,332 3,218 4% 9,634 9,454 2%
Non-equipment Industry
Recurring 127 140 -9% 404 482 -16%
Non-recurring - - -100% - - -100%
-------------- ---------------
Total 127 140 -9% 404 482 -16%
Total Revenue
Recurring 2,998 2,885 4% 8,867 8,594 3%
Non-recurring 461 473 -2% 1,171 1,342 -13%
-------------- ---------------
Total $3,459 $3,358 3% $10,038 $9,936 1%
============== ===============
Revenue by Product in the Equipment Industry
(In thousands)
Three months Nine months
ended ended
April 30 April 30
Percent Percent
Product: 2005 2004 Change 2005 2004 Change
---- ---- ------- ---- ---- -------
Catalog and related
Recurring $2,759 $2,669 3% $8,116 $7,789 4%
Non-recurring 461 456 1% 1,171 1,318 -11%
-------------- ---------------
Subtotal 3,220 3,125 3% 9,287 9,107 2%
Communication
Recurring 112 76 47% 347 323 7%
Non-recurring - 17 -100% - 24 -100%
-------------- ---------------
Subtotal 112 93 20% 347 347 0%
-------------- ---------------
Total Equipment Industry $3,332 $3,218 4% $9,634 $9,454 2%
============== ===============
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