ARI Reports Increased Third Quarter Revenues and Net Income; Steady improvement continues; profitable fiscal year anticipated.Business Editors MILWAUKEE--(BUSINESS WIRE)--May 20, 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 third quarter of fiscal 2004 ended April 30, 2004. Revenues for the third quarter of fiscal 2004 were $3.4 million, a 3% increase from revenues of $3.3 million for the third quarter of 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 third quarter of fiscal 2004 was $246,000, compared to an operating loss operating loss The excess of operating expenses over revenue. As with operating income, operating losses exclude revenues and expenses from operations that are not considered a regular part of the business. Also called deficit. Compare operating income. of $371,000 for the same period in fiscal 2003. Net income was $180,000 or $0.03 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 2004, compared to a net loss of $654,000 or $0.10 per diluted share for last year's third quarter. "We continued our steady improvement in the third quarter, with increased revenues in our core business and our core market of equipment manufacturers, distributors and dealers. 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 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 increased 8% over the third quarter of last year and total recurring revenues from our primary customer base of equipment manufacturers, distributors and dealers increased 7% for the quarter," 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:
Dearing said the company was profitable for the third consecutive quarter. "The improvement in net income reflects the higher revenues and reduced interest and legal expenses in the third quarter of fiscal 2004 compared to the same period last year." For the first nine months of fiscal 2004, revenues were $9.9 million, a 6% increase from revenues of $9.4 million for the same period in fiscal 2003. Operating income was $602,000 for the first nine months of fiscal 2004, compared to a net loss of $270,000 for the comparable period last year. Net income for the first nine months of fiscal 2004 was $427,000 or $0.07 per diluted share, compared to a net loss of $1.3 million or $0.20 per diluted share for the same period in fiscal 2003. 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.
"We made the first payment of principal and interest on the restructured debt in the third quarter, as well as the next payment to WITECH, which together paid down our debt principal by $250,000. Our cash balance of $2.7 million at the end of the third quarter includes amounts we have segregated for the next two payments on the debt. In addition, we settled outstanding deferred compensation of $260,000 owed to some of our executive officers. The outstanding amounts were settled for half cash and half stock. This settlement, which was agreed to by all the affected executives, conserved con·serve v. con·served, con·serv·ing, con·serves v.tr. 1. a. To protect from loss or harm; preserve: cash and increased the stock ownership of our management team. We believe this settlement is an expression by our executive team of their confidence in the Company," said Dearing. Dearing said the company's cash earn/burn rate, which is one of the measures management uses to evaluate cash flows, improved to a positive $467,000 in the third quarter of fiscal 2004. This was more than double the positive $177,000 for the third quarter of the prior year. "We have also made good progress on the non-financial elements of our business plan. We continue to enhance our suite of products to extend our capabilities. For example, we have broadened the market for our innovative EMPARTweb-ASP(TM) e-Catalog solution for manufacturers to include distributors as well as dealers. We have added a seamless See seamless integration. , XML-based ordering solution that enables distributors and manufacturers to receive orders directly from their dealers. Our integrated family of e-Catalog solutions now addresses the needs of the entire service and distribution channel - manufacturers, distributors and dealers," said Dearing. "Looking forward, it's it's 1. Contraction of it is. 2. Contraction of it has. See Usage Note at its. it's it is or it has it's be ~have important to remember that the amortization of the Network Dynamics acquisition ended in mid-May n. 1. the middle part of May. Noun 1. mid-May - the middle part of May period, period of time, time period - an amount of time; "a time period of 30 years"; "hastened the period of time of his recovery"; "Picasso's blue period" . As a result, our operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. will be reduced by approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. $225,000 in the fourth quarter of fiscal 2004 and approximately $250,000 in subsequent quarters. We anticipate this will contribute to additional increases in operating income, beginning in the fourth quarter. We look forward to a profitable year for ARI - not only this year, but next year as well," said Dearing. 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 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 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, power
sports, 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 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. Third Quarter Earnings Conference Call ARI's Third Quarter Conference Call is scheduled for Thursday Thursday: see week. , May 20, 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, May 20, 2004 by calling 1-800-428-6051 (International callers dial 1-973-709-2089) and enter passcode 357118. 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 May 21, 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 July: see month. 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 Nine months
ended ended
April 30 April 30
2004 2003 2004 2003
------- ------- ------- --------
Net revenues:
Subscriptions, support and other
services fees $2,263 $2,137 $6,812 $6,168
Software licenses and renewals 590 608 1,783 1,713
Professional services 505 509 1,341 1,521
------- ------- ------- --------
3,358 3,254 9,936 9,402
Operating expenses:
Cost of products and services sold:
Subscriptions, support and other
services fees 98 152 382 453
Software licenses and renewals (1) 470 455 1,390 1,328
Professional services 306 242 646 586
------- ------- ------- --------
874 849 2,418 2,367
Depreciation and amortization (exclusive of
amortization of software products included
in cost of products and services
sold) 38 52 110 164
Customer operations and support 249 290 823 912
Selling, general and administrative 1,696 2,157 5,212 5,359
Software development and technical
support 399 363 1,102 1,239
------- ------- ------- --------
Operating expenses before amounts
capitalized 3,256 3,711 9,665 10,041
Less capitalized portion (144) (86) (331) (369)
------- ------- ------- --------
Net operating expenses 3,112 3,625 9,334 9,672
------- ------- ------- --------
Operating income (loss) 246 (371) 602 (270)
Other income (expense)
Interest expense (55) (291) (200) (970)
Other, net (11) 8 25 (34)
------- ------- ------- --------
Total other expense (66) (283) (175) (1,004)
------- ------- ------- --------
Net income (loss) $180 $(654) $427 $(1,274)
======= ======= ======= ========
Average common shares outstanding:
Basic 5,861 6,581 5,812 6,449
Diluted 6,115 6,581 6,066 6,449
Basic and diluted net income (loss)
per share:
Basic $0.03 ($0.10) $0.07 ($0.20)
======= ======= ======= ========
Diluted $0.03 ($0.10) $0.07 ($0.20)
======= ======= ======= ========
(1)includes amortization of software products of $435, $440, $1,323
and $1,304 and excluding other depreciation and amortization shown
separately
Reconciliation of Non-Gaap Measures
Earnings before Interest, Taxes, Depreciation and Amortization
Net Income $180 $(654) $427 $(1,274)
Plus: Interest 55 291 200 970
Amortization of software
products 435 440 1,323 1,304
Other depreciation and
amortization 38 52 110 164
------- ------- ------- --------
Earnings before interest, taxes,
depreciation and amortization $708 $129 $2,060 $1,164
======= ======= ======= ========
ARI Network Services, Inc.
Balance Sheets
(In thousands, except share and per share data)
(Unaudited)
April 30 July 31
ASSETS 2004 2003
--------- ---------
Current Assets:
Cash $2,747 $2,120
Trade receivables, less allowance for doubtful
accounts of $110 at April 30, 2004 and $98 at
July 31, 2003 856 1,088
Prepaid expenses and other 137 115
--------- ---------
Total Current Assets 3,740 3,323
Equipment and leasehold improvements:
Computer equipment 4,480 4,475
Leasehold improvements 73 73
Furniture and equipment 1,473 1,372
--------- ---------
6,026 5,920
Less accumulated depreciation and amortization 5,584 5,474
--------- ---------
Net equipment and leasehold improvements 442 446
Other assets 16 0
Capitalized software product costs 10,075 9,602
Less accumulated amortization 9,044 7,721
--------- ---------
Net capitalized software product costs 1,031 1,881
--------- ---------
Total Assets $5,229 $5,650
========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT)
Current liabilities:
Current portion of notes payable $1,000 $400
RFC line of credit - 346
Accounts payable 196 401
Deferred revenue 5,364 5,280
Accrued payroll and related liabilities 955 1,088
Other accrued liabilities 709 601
Current portion of capital lease obligations 12 20
--------- ---------
Total Current Liabilities 8,236 8,136
Long term liabilities:
Notes payable (net of discount) 3,623 3,769
Other long term liabilities 553 559
Capital lease obligations 5 16
--------- ---------
Total Long Term Liabilities 4,181 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 April 30, 2004
and July 31, 2003, respectively - -
Common stock, par value $.001 per share, 25,000,000
shares authorized; 5,921,034 and 6,645,191 shares
issued and outstanding at April 30, 2004 and July 31,
2003, respectively 5 6
Common stock warrants and options 36 141
Additional paid-in-capital 93,616 94,295
Accumulated deficit (100,845) (101,272)
--------- ---------
Total Shareholders' Equity (Deficit) (7,188) (6,830)
--------- ---------
Total Liabilities and Shareholders' Equity
(Deficit) $5,229 $5,650
========= =========
ARI Network Services, Inc.
Statements of Cash Flows
(In thousands)
(Unaudited)
Three months Nine months
ended ended
April 30 April 30
2004 2003 2004 2003
--------------- ----------------
Operating activities
Net income (loss) $180 $(654) $427 $(1,274)
Adjustments to reconcile net income
(loss) to net cash provided by
operating activities:
Amortization of software products 435 440 1,323 1,304
Amortization of deferred financing
costs, debt discount and excess
carrying value over face amount of
notes payable (13) 191 (42) 701
Depreciation and other amortization 38 52 110 164
Interest expense converted to
subordinated debt - 229 - 229
Stock issued as consideration to
vendor - 44 - 44
Stock issued as contribution to
401(k) plan - - 37 -
Net change in receivables, prepaid
expenses and other current assets (272) 326 215 403
Net change in accounts payable, deferred revenue,
accrued liabilities and long term
liabilities 75 409 (370) 194
--------------- ----------------
Net cash provided by operating
activities 443 1,037 1,700 1,765
Investing activities
Purchase of equipment and leasehold
improvements (29) (39) (106) (42)
Purchase of assets related to
acquisitions - - (108) -
Software product costs capitalized (144) (86) (331) (369)
--------------- ----------------
Net cash used in investing activities (173) (125) (545) (411)
Financing activities
Borrowings under notes payable - 58 - 58
Payments under notes payable (250) (531) (500) (634)
Payments of capital lease obligations (3) (37) (19) (125)
Debt issuance costs incurred - - (20) -
Proceeds from issuance of common stock 7 - 11 44
--------------- ----------------
Net cash used in financing activities (246) (510) (528) (657)
--------------- ----------------
Net increase (decrease) in cash 24 402 627 697
Cash at beginning of period 2,723 1,232 2,120 879
--------------- ----------------
Cash at end of period $2,747 $1,634 $2,747 $1,576
=============== ================
Cash paid for interest $241 $(39) $353 $65
=============== ================
Noncash investing and financing activities
Capital lease obligations incurred for
computer equipment $- $15 $- $15
Issuance of common stock in connection
with deferred executive compensation 130 - 130 -
Issuance of common stock in
connection with acquisitions - - 37 -
Issuance of common stock warrants in
connection with restructuring of debt - - - 36
Conversion of accrued interest to
subordinated debt - - - 493
Exchange of equity to debt - - 1,000 -
See notes to unaudited condensed financial statements.
Reconciliation of Non-Gaap Measures
Earn/Burn Rate
Cash provided by operations $443 $1,037 $1,700 $1,765
less: Net change in receivables, prepaid
expenses and other current assets 272 (326) (215) (403)
Net change in payables, deferred
revenue, accrued liabilities and
long term liabilities (75) (409) 370 (194)
Cash used in investing (173) (125) (545) (411)
--------------- ----------------
Earn/Burn Rate $467 $177 $1,310 $757
=============== ================
Revenue by Industry Sector
(In thousands)
Three months ended Nine months ended
April 30 April 30
Percent Percent
Industry Sector: 2004 2003 Change 2004 2003 Change
------------------------ -----------------------
Equipment Industry
North American
Recurring $2,495 $2,313 8% $7,278 $6,398 14%
Non-recurring 439 449 -2% 1,174 1,262 -7%
----------------- ----------------
Subtotal 2,934 2,762 6% 8,452 7,660 10%
Non-North American
Recurring 250 264 -5% 834 748 12%
Non-recurring 34 42 -20% 168 193 -13%
----------------- ----------------
Subtotal 284 306 -7% 1,002 941 6%
Total Equipment Industry
Recurring 2,745 2,577 7% 8,112 7,146 14%
Non-recurring 473 491 -4% 1,342 1,455 -8%
----------------- ----------------
Total 3,218 3,068 5% 9,454 8,601 10%
Non-equipment Industry
Recurring 140 176 -20% 482 755 -36%
Non-recurring - 10 -100% - 46 -100%
----------------- ----------------
Total 140 186 -25% 482 801 -40%
Total Revenue
Recurring 2,885 2,753 5% 8,594 7,901 9%
Non-recurring 473 501 -6% 1,342 1,501 -11%
----------------- ----------------
Total $3,358 $3,254 3% $9,936 $9,402 6%
================= ================
Revenue by Product in the Equipment Industry
(In thousands)
Three months ended Nine months ended
April 30 April 30
Percent Percent
Product: 2004 2003 Change 2004 2003 Change
------------------------ -----------------------
Catalog and related
Recurring $2,669 $2,475 8% $7,789 $6,819 14%
Non-recurring 456 480 -5% 1,318 1,432 -8%
----------------- ----------------
Subtotal 3,125 2,955 6% 9,107 8,251 10%
Communication
Recurring 76 102 -25% 323 327 -1%
Non-recurring 17 11 55% 24 23 4%
----------------- ----------------
Subtotal 93 113 -18% 347 350 -1%
----------------- ----------------
Total Equipment
Industry $3,218 $3,068 5% $9,454 $8,601 10%
================= ================
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