ARI Reports Increased Year Over Year Net Income in Second Quarter; Continued Growth in North American Core Electronic Catalog Business.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 second quarter of fiscal 2005 ended January January: see month. 31, 2005. Revenues for the second quarter of fiscal 2005 were $3.30 million, compared to revenues of $3.29 million for the second 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. increased to $506,000 for the second quarter of fiscal 2005, from operating income of $232,000 for the comparable prior period. Net income was $455,000 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 for the second quarter of fiscal 2005, compared to net income of $175,000 or $0.03 per diluted share for the comparable prior period. "Overall, our results for the second quarter were consistent with our expectations. 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 increased 10% 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 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. in the second quarter of fiscal 2005 over the second quarter of last year, while overall North American North American named after North America. North American blastomycosis see North American blastomycosis. North American cattle tick see boophilusannulatus. catalog revenues increased 7% over the same prior period, highlighting the continued strength of this business for ARI," 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 revenues due to the loss of a key customer 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 publishing application, both of which affected the first quarter as well. The expected decline in revenues from our non-strategic businesses also contributed to the relatively flat revenues in the second quarter." "We are focused on improving the performance of our European operations," said Dearing. "We have invested in new products and staffing for this business and are in the process of converting this organization to the dealer-centric model that has been so successful for us in the U.S." "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 and an additional adjustment 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. settlement boosted net income," said Dearing "We maintained our level of investment in new product development and in sales and marketing and continued to incur To become subject to and liable for; to have liabilities imposed by act or operation of law. Expenses are incurred, for example, when the legal obligation to pay them arises. An individual incurs a liability when a money judgment is rendered against him or her by a court. implementation expenses to meet the requirements of Section 404 of the Sarbanes-Oxley Act See SOX. . Our financial position remains strong, with a cash balance of $3.3 million at the end of the second quarter. We continued to pay down debt during the quarter and have earmarked a portion of our cash balance for our next three debt payments," said Dearing. For the first half of fiscal 2005, revenues of $6.6 million were the same as in the first half of the prior year. Operating income increased to $1.1 million for the first half of fiscal 2005, compared to operating income of $356,000 for the comparable prior period. Net income was $949,000 or $0.15 per diluted share for the first half of fiscal 2005, compared to net income of $247,000 or $0.04 per diluted share for the same period in 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.
"Looking ahead, we will continue to focus on our primary customer base of manufactured equipment dealers. We believe there are excellent opportunities for ARI to build on our core electronic catalog business by expanding into adjacent areas such as integrated marketing services. This expansion will help our customers to better manage and market their businesses, while at the same time contribute to the growth of ARI. Our recent enhancements to WebsiteSmart(TM) and the introduction of ARI MailSmart(TM) are the first steps in providing integrated marketing solutions for dealers," said Dearing. "We plan to further develop our relationships with existing dealers and attract new dealers by offering a broader product suite that meets their needs." "In the second half of the year, we expect to begin seeing increases in revenue from our new products. For the full year, we believe we are still on track to report increased net income, with EBITDA flat or up slightly as we continue to invest in our future growth," 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 82 parts catalogs (many of which contain multiple lines of equipment) for approximately 69 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 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. 24, 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 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 1-800-210-9006 (International callers dial 1-719-457-2621) and ask for conference code 8937490 or request to be connected to Brian Dearing's 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 , February 25, 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 Six months ended
January 31 January 31
2005 2004 2005 2004
--------- --------- --------- ---------
Net revenues:
Subscriptions, support and
other services fees $2,422 $2,260 $4,824 $4,549
Software licenses and
renewals 558 604 1,134 1,193
Professional services 324 429 621 836
--------- --------- --------- ---------
3,304 3,293 6,579 6,578
Operating expenses:
Cost of products and services
sold:
Subscriptions, support and
other services fees 233 129 426 284
Software licenses and
renewals(a) 145 458 299 920
Professional services 48 149 130 340
--------- --------- --------- ---------
426 736 855 1,544
Depreciation and amortization
(exclusive of amortization
of software products included
in cost of products and
services sold) 69 37 123 72
Customer operations and
support 257 291 519 574
Selling, general and
administrative 1,745 1,758 3,454 3,516
Software development and
technical support 445 362 866 703
--------- --------- --------- ---------
Operating expenses before
amounts capitalized 2,942 3,184 5,817 6,409
Less capitalized portion (144) (123) (306) (187)
--------- --------- --------- ---------
Net operating expenses 2,798 3,061 5,511 6,222
--------- --------- --------- ---------
Operating income (loss) 506 232 1,068 356
Other income (expense)
Interest expense (47) (64) (91) (145)
Other, net 10 7 22 36
--------- --------- --------- ---------
Total other expense (37) (57) (69) (109)
--------- --------- --------- ---------
Income before provision for
income taxes 469 175 999 247
Income tax expense (14) - (50) -
--------- --------- --------- ---------
Net income (loss) $455 $175 $949 $247
========= ========= ========= =========
Average common shares
outstanding:
Basic 5,974 5,780 5,958 5,788
Diluted 6,445 6,039 6,429 6,047
Basic and diluted net income
(loss) per share:
Basic $0.08 $0.03 $0.16 $0.04
========= ========= ========= =========
Diluted $0.07 $0.03 $0.15 $0.04
========= ========= ========= =========
(a) includes amortization of software products of $133, $445, $274,
and $888 and excluding other depreciation and amortization shown
separately
Reconciliation of Non-Gaap Measures
Earnings before Interest, Taxes,
Depreciation and Amortization
Net Income $455 $175 $949 $247
Plus: Interest 47 64 91 145
Amortization of software
products 133 445 274 888
Other depreciation and
amortization 69 37 123 72
Income tax expense 14 - 50 -
--------- --------- --------- ---------
Earnings before interest,
taxes, depreciation and
amortization $718 $721 $1,487 $1,352
========= ========= ========= =========
ARI Network Services, Inc.
Balance Sheets
(In thousands, except share and per share data)
(Unaudited)
January 31 July 31
ASSETS 2005 2004
---------- ----------
Current Assets:
Cash $3,326 $3,357
Trade receivables, less allowance for doubtful
accounts of $83 at January 31, 2005 and $44
at July 31, 2004 729 1,121
Prepaid expenses and other 101 187
---------- ----------
Total Current Assets 4,156 4,665
Equipment and leasehold improvements:
Computer equipment 4,751 4,607
Leasehold improvements 73 73
Furniture and equipment 1,500 1,491
---------- ----------
6,324 6,171
Less accumulated depreciation and amortization 5,753 5,630
---------- ----------
Net equipment and leasehold improvements 571 541
Other assets 38 15
Capitalized software product costs 10,949 10,203
Less accumulated amortization 9,507 9,233
---------- ----------
Net capitalized software product costs 1,442 970
---------- ----------
Total Assets $6,207 $6,191
========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT)
Current liabilities:
Current portion of notes payable $1,000 $1,000
Accounts payable 248 260
Deferred revenue 5,302 5,453
Accrued payroll and related liabilities 805 951
Accrued sales, use and income taxes 168 489
Other accrued liabilities 641 564
Current portion of capital lease obligations 5 10
---------- ----------
Total Current Liabilities 8,169 8,727
Long term liabilities:
Notes payable (net of discount) 2,762 3,306
Long term payroll related 568 495
Other long term liabilities 211 211
Capital lease obligations 2 3
---------- ----------
Total Long Term Liabilities 3,543 4,015
Shareholders' equity (deficit):
Cumulative preferred stock, par value $.001
per share, 1,000,000 shares authorized; 0
shares issued and outstanding at
January 31, 2005 and July 31, 2004, respectively - -
Common stock, par value $.001 per share,
25,000,000 shares authorized; 6,005,707 and
5,923,034 shares issued and outstanding
at January 31, 2005 and July 31,2004, respectively 5 5
Common stock warrants and options 36 36
Additional paid-in-capital 93,722 93,625
Accumulated deficit (99,268) (100,217)
---------- ----------
Total Shareholders' Equity (Deficit) (5,505) (6,551)
---------- ----------
Total Liabilities and Shareholders'
Equity (Deficit) $6,207 $6,191
========== ==========
ARI Network Services, Inc.
Statements of Cash Flows
(In thousands)
(Unaudited)
Three months ended Six months ended
January 31 January 31
2005 2004 2005 2004
------------------- -------------------
Operating activities
Net income (loss) $455 $175 $949 $247
Adjustments to reconcile net
income (loss) to net cash
provided by operating
activities:
Amortization of software
products 133 445 274 888
Amortization of deferred
financing costs, debt
discount and excess carrying
value over face amount of
notes payable (21) (14) (42) (29)
Depreciation and other
amortization 69 37 123 72
Stock issued as contribution
to 401(k) plan - - 37 37
Net change in receivables,
prepaid expenses and other
current assets 31 338 453 487
Net change in accounts payable,
deferred revenue, accrued
liabilities and long term
liabilities (88) 208 (480) (445)
------------------- -------------------
Net cash provided by operating
activities 579 1,189 1,314 1,257
Investing activities
Purchase of equipment and
leasehold improvements (84) (60) (153) (77)
Purchase of assets related to
acquisitions - - - (108)
Software product costs
capitalized (144) (123) (746) (187)
------------------- -------------------
Net cash used in investing
activities (228) (183) (899) (372)
Financing activities
Payments under notes payable (249) (50) (500) (250)
Payments of capital lease
obligations (3) (9) (6) (16)
Debt issuance costs incurred - - - (20)
Proceeds from issuance of
common stock 57 2 60 4
------------------- -------------------
Net cash used in financing
activities (195) (57) (446) (282)
------------------- -------------------
Net increase (decrease) in cash 156 949 (31) 603
Cash at beginning of period 3,170 1,774 3,357 2,120
------------------- -------------------
Cash at end of period $3,326 $2,723 $3,326 $2,723
=================== ===================
Cash paid for interest $67 $90 $131 $112
=================== ===================
Cash paid for income taxes $37 $- $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 $579 $1,189 $1,314 $1,257
less: Net change in
receivables, prepaid
expenses and other
current assets (31) (338) (453) (487)
Net change in payables,
deferred revenue, accrued
liabilities and long term
liabilities 88 (208) 480 445
Cash used in investing (228) (183) (899) (372)
------------------- -------------------
Earn/Burn Rate $408 $460 $442 $843
=================== ===================
Revenue by Industry Sector
(In thousands)
Three months ended Six months ended
January 31 January 31
Percent Percent
Industry Sector: 2005 2004 Change 2005 2004 Change
------------------------ ------------------------
Equipment Industry
North American
Recurring $2,673 $2,428 10% $5,165 $4,783 8%
Non-recurring 315 369 -15% 710 735 -3%
---------------- ----------------
Subtotal 2,988 2,797 7% 5,875 5,518 6%
Non-North American
Recurring 203 289 -30% 427 584 -27%
Non-recurring - 66 -100% - 134 -100%
---------------- ----------------
Subtotal 203 355 -43% 427 718 -41%
Total Equipment
Industry
Recurring 2,876 2,717 6% 5,592 5,367 4%
Non-recurring 315 435 -28% 710 869 -18%
---------------- ----------------
Total 3,191 3,152 1% 6,302 6,236 1%
Non-equipment
Industry
Recurring 113 141 -20% 277 342 -19%
Non-recurring - - -100% - - -100%
---------------- ----------------
Total 113 141 -20% 277 342 -19%
Total Revenue
Recurring 2,989 2,858 5% 5,869 5,709 3%
Non-recurring 315 435 -28% 710 869 -18%
---------------- ----------------
Total $3,304 $3,293 0% $6,579 $6,578 0%
================ ================
Revenue by Product in the Equipment Industry
(In thousands)
Three months ended Six months ended
January 31 January 31
Percent Percent
Product: 2005 2004 Change 2005 2004 Change
------------------------ ------------------------
Catalog and related
Recurring $2,758 $2,603 6% $5,357 $5,120 5%
Non-recurring 315 434 -27% 710 862 -18%
---------------- ----------------
Subtotal 3,073 3,037 1% 6,067 5,982 1%
Communication
Recurring 118 114 4% 235 247 -5%
Non-recurring - 1 -100% - 7 -100%
---------------- ----------------
Subtotal 118 115 3% 235 254 -7%
---------------- ----------------
Total Equipment
Industry $3,191 $3,152 1% $6,302 $6,236 1%
================ ================
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