ARI Reports Record Net Income for Fiscal 2004; Company Poised for Growth in 2005.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 increased revenues and record net income for the fiscal year ended July July: see month. 31, 2004. ARI reported revenues of $13.4 million for fiscal 2004, a 7% increase from revenues of $12.6 for fiscal 2003. 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 fiscal 2004 was $1.3 million, 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 $341,000 in fiscal 2003. Net income was $1.1 million or $0.17 per diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share in fiscal 2004, compared to a loss of $1.3 million or $0.21 per diluted share in fiscal 2003. For the fourth quarter of fiscal 2004, revenues were $3.5 million, up 9% from revenues of $3.2 million for the fourth quarter of the prior year. Operating income was $684,000 for the fourth quarter of fiscal 2004, compared to a loss of $71,000 for the comparable prior period. Net income was $628,000 or $0.10 per diluted share for the fourth quarter of fiscal 2004, compared to a loss of $74,000 or $0.01 per diluted share for the comparable prior period. "We anticipated that fiscal 2004 would be a good year for ARI, and it was," 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:
"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 business and total recurring revenues in our core market of equipment manufacturers, distributors and dealers both increased 14% in fiscal 2004. The improvement reflects an increase in the number of dealers we serve to over 27,000 at the end of fiscal 2004. We also benefited from the introduction of several new and enhanced products during the year." 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.
"ARI's balance sheet also improved in fiscal 2004. We ended the year with a cash balance of $3.4 million up from $2.1 million at the end of last year and paid off $750,000 of debt principal during the year," said Dearing. Dearing also noted that common shares outstanding were reduced by 11% during the year as a result of the repurchase re·pur·chase tr.v. re·pur·chased, re·pur·chas·ing, re·pur·chas·es To buy (something) again. n. The act of buying something that one previously sold or owned. Noun 1. of common stock from the company's largest shareholder. In addition, stock options outstanding or grantable were reduced by 17% through a voluntary stock option exchange program completed in May 2004. "We strengthened our product portfolio in fiscal 2004 and early fiscal 2005 with enhancements to our Website Smart(TM) template-based website creation service and our EMPARTweb-ASP(TM) electronic parts catalog software. We also introduced our new ARI MailSmart(TM) personalized per·son·al·ize tr.v. per·son·al·ized, per·son·al·iz·ing, per·son·al·iz·es 1. To take (a general remark or characterization) in a personal manner. 2. To attribute human or personal qualities to; personify. postcard service, and re-launched our acquisition program with the acquisition of VertX Commerce Corporation last October October: see month. ," said Dearing. "We expect to continue our momentum in fiscal 2005. We anticipate continuing increases in revenues, operating income and net income for the year," Dearing said. "We are at an inflection point Inflection Point An event that changes the way we think and act. -Andy Grove, Founder of Intel. Notes: For example, the fall of the Berlin Wall was an inflection point in global politics and the commercialization of the Internet was an inflection point in technology. this year, because we are consciously re-investing in our business after an extended period of cost-cutting," Dearing continued. "There will be a partially offsetting reduction in expenses due to the completion of the amortization of the Network Dynamics acquisition. Therefore, while net income will increase, EBITDA should increase only modestly or remain flat as we re-deploy cash back into the business to fund our future growth. With a growing customer base, new products in the pipeline, our ongoing focus on controlling expenses and a stronger financial position, we believe we are well positioned for future growth." 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 for dealers, distributors and manufacturers in the equipment industry. ARI currently provides approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. 78 parts catalogs (many of which contain multiple lines of equipment) for approximately 60 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 over 27,000 dealers and distributors in more than 100 countries in a
dozen segments of the worldwide 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 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 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. Fourth Quarter Earnings Conference Call ARI's Fourth Quarter Conference Call is scheduled for Thursday Thursday: see week. , October 14, 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 1-800-967-7134 (International callers dial 1-719-457-2625) and ask for conference code 859975 or request to be connected to Brian Dearing's conference call. A rebroadcast is available beginning at 5:30 p.m. Central Time, Thursday, October 14, 2004 by calling 1-719-457-0820 (International callers dial 1-888-203-1112) and enter passcode 859975. 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 October 14, 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)
(Audited)
Three months ended Twelve months ended
July 31 July 31
2004 2003 2004 2003
--------- --------- --------- ---------
Net revenues:
Subscriptions, support and
other services fees $2,479 $2,049 $9,291 $8,217
Software licenses and renewals 595 619 2,378 2,332
Professional services 429 547 1,770 2,068
--------- --------- --------- ---------
3,503 3,215 13,439 12,617
Operating expenses:
Cost of products and services
sold:
Subscriptions, support and
other services fees 132 150 514 603
Software licenses and
renewals (i) 174 440 1,564 1,768
Professional services 114 233 760 819
--------- --------- --------- ---------
420 823 2,838 3,190
Depreciation and amortization
(exclusive of amortization of
software products included in
cost of products and services
sold) 46 48 156 212
Customer operations and support 281 278 1,104 1,190
Selling, general and
administrative 1,792 1,914 7,004 7,273
Software development and
technical support 408 395 1,510 1,634
--------- --------- --------- ---------
Operating expenses before
amounts capitalized 2,947 3,458 12,612 13,499
Less capitalized portion (128) (172) (459) (541)
--------- --------- --------- ---------
Net operating expenses 2,819 3,286 12,153 12,958
--------- --------- --------- ---------
Operating income (loss) 684 (71) 1,286 (341)
Other income (expense)
Interest expense 9 (66) (191) (1,036)
Other, net (3) 63 22 29
--------- --------- --------- ---------
Total other expense 6 (3) (169) (1,007)
--------- --------- --------- ---------
Income before provision for
income taxes 690 (74) 1,117 (1,348)
Income tax expense (62) - (62) -
--------- --------- --------- ---------
Net income (loss) $628 $(74) $1,055 $(1,348)
========= ========= ========= =========
Average common shares
outstanding:
Basic 5,922 6,581 5,840 6,449
Diluted 6,225 6,581 6,143 6,449
Basic and diluted net income
(loss) per share:
Basic $0.11 ($0.01) $0.18 ($0.21)
========= ========= ========= =========
Diluted $0.10 ($0.01) $0.17 ($0.21)
========= ========= ========= =========
(i) includes amortization of software products of $189, $422, $1,512
and $1,726 and excluding other depreciation and amortization shown
separately
Reconciliation of Non-Gaap Measures (Unaudited)
Earnings before Interest, Taxes,
Depreciation and Amortization
Net Income $628 $(74) $1,055 $(1,348)
Plus: Interest (9) 66 191 1,036
Amortization of software
products 189 862 1,512 1,726
Other depreciation and
amortization 46 48 156 212
Income tax expense 62 - 62 -
--------- --------- --------- ---------
Earnings before interest,
taxes, depreciation and
amortization $916 $902 $2,976 $1,626
========= ========= ========= =========
ARI Network Services, Inc.
Balance Sheets
(In thousands, except share and per share data)
(Audited)
July 31 July 31
ASSETS 2004 2003
--------- ---------
Current Assets:
Cash $3,357 $2,120
Trade receivables, less allowance for doubtful
accounts of $44 and $88 at July 31, 2004 and
2003, respectively 1,121 1,088
Prepaid expenses and other 187 115
--------- ---------
Total Current Assets 4,665 3,323
Equipment and leasehold improvements:
Computer equipment 4,607 4,475
Leasehold improvements 73 73
Furniture and equipment 1,491 1,372
--------- ---------
6,171 5,920
Less accumulated depreciation and amortization 5,630 5,474
--------- ---------
Net equipment and leasehold improvements 541 446
Other assets 15 0
Capitalized software product costs 10,203 9,602
Less accumulated amortization 9,233 7,721
--------- ---------
Net capitalized software product costs 970 1,881
--------- ---------
Total Assets $6,191 $5,650
========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT)
Current liabilities:
Current portion of notes payable $1,000 $400
RFC line of credit - 346
Accounts payable 260 401
Deferred revenue 5,453 5,280
Accrued payroll and related liabilities 951 1,088
Other accrued liabilities 1,053 601
Current portion of capital lease obligations 10 20
--------- ---------
Total Current Liabilities 8,727 8,136
Long term liabilities:
Notes payable (net of discount) 3,306 3,769
Other long term liabilities 706 559
Capital lease obligations 3 16
--------- ---------
Total Long Term Liabilities 4,015 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 July 31, 2004
and 2003, respectively - -
Common stock, par value $.001 per share,
25,000,000 shares authorized; 5,923,034 and
6,645,191 shares issued and outstanding
at July 31,2004 and 2003, respectively 5 6
Common stock warrants and options 36 141
Additional paid-in-capital 93,625 94,295
Accumulated deficit (100,217) (101,272)
--------- ---------
Total Shareholders' Equity (Deficit) (6,551) (6,830)
--------- ---------
Total Liabilities and Shareholders'
Equity (Deficit) $6,191 $5,650
========= =========
ARI Network Services, Inc.
Statements of Cash Flows
(In thousands)
(Audited)
Three months ended Twelve months ended
July 31 July 31
2004 2003 2004 2003
------------------- -------------------
Operating activities
Net income (loss) $628 $(74) $1,055 $(1,348)
Adjustments to reconcile net
income (loss) to net cash
provided by operating activities:
Amortization of software
products 189 422 1,512 1,726
Amortization of deferred
financing costs, debt discount
and excess carrying value over
face amount of notes payable (66) (19) (108) 682
Depreciation and other
amortization 46 48 156 212
Interest expense converted to
subordinated debt - 229
Stock issued as consideration
to vendor - 44
Stock issued as contribution
to 401(k) plan - 39 37 39
Net change in receivables,
prepaid expenses and other
current assets (315) 221 (100) 624
Net change in accounts
payable, deferred revenue,
accrued liabilities and
long term liabilities 646 311 276 505
------------------- -------------------
Net cash provided by operating
activities 1,128 948 2,828 2,713
Investing activities
Purchase of equipment and
leasehold improvements (145) (104) (251) (146)
Purchase of assets related to
acquisitions - - (108) -
Software product costs
capitalized (128) (172) (459) (541)
------------------- -------------------
Net cash used in investing
activities (273) (276) (818) (687)
Financing activities
Borrowings under notes payable - (42) - 16
Payments under notes payable (250) (31) (750) (665)
Payments of capital lease
obligations (4) (16) (23) (141)
Debt issuance costs incurred - - (20) -
Proceeds from issuance of
common stock 9 (39) 20 5
------------------- -------------------
Net cash used in financing
activities (245) (128) (773) (785)
------------------- -------------------
Net increase (decrease) in cash 610 544 1,237 1,241
Cash at beginning of period 2,747 1,576 2,120 879
------------------- -------------------
Cash at end of period $3,357 $2,120 $3,357 $2,120
=================== ===================
Cash paid for interest $(5) $17 $348 $82
=================== ===================
Cash paid for income taxes $19 $- $19 $-
=================== ===================
Noncash investing and financing
activities
Capital lease obligations
incurred for computer
equipment $- $- $- $15
Issuance of common stock in
connection with
deferred executive
compensation - - 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 -
Reconciliation of Non-Gaap Measures (Unaudited)
Earn/Burn Rate
Cash provided by operations $1,128 $948 $2,828 $2,713
less: Net change in receivables,
prepaid expenses and other
current assets 315 (221) 100 (624)
Net change in payables,
deferred revenue, accrued
liabilities and long term
liabilities (646) (311) (276) (505)
Cash used in investing (273) (276) (818) (687)
------------------- -------------------
Earn/Burn Rate $524 $140 $1,834 $897
=================== ===================
Revenue by Industry Sector
(In thousands)
Three months ended Twelve months ended
July 31 July 31
Percent Percent
Industry Sector: 2004 2003 Change 2004 2003 Change
------------------------- -------------------------
Equipment Industry
North American
Recurring $2,449 $2,015 22% $9,727 $8,413 16%
Non-recurring 471 432 9% 1,645 1,694 -3%
------------------ ------------------
Subtotal 2,920 2,447 19% 11,372 10,107 13%
Non-North American
Recurring 328 414 -21% 1,163 1,162 0%
Non-recurring 27 48 -44% 194 241 -19%
------------------ ------------------
Subtotal 355 462 -23% 1,357 1,403 -3%
Total Equipment Industry
Recurring 2,777 2,429 14% 10,890 9,575 14%
Non-recurring 498 480 4% 1,839 1,935 -5%
------------------ ------------------
Total 3,275 2,909 13% 12,729 11,510 11%
Non-equipment Industry
Recurring 228 296 -23% 710 1,051 -32%
Non-recurring - 10 -100% - 56 -100%
------------------ ------------------
Total 228 306 -25% 710 1,107 -36%
Total Revenue
Recurring 3,005 2,725 10% 11,600 10,626 9%
Non-recurring 498 490 2% 1,839 1,991 -8%
------------------ ------------------
Total $3,503 $3,215 9% $13,439 $12,617 7%
================== ==================
Revenue by Product in the Equipment Industry
(In thousands)
Three months ended Twelve months ended
July 31 July 31
Percent Percent
Product: 2004 2003 Change 2004 2003 Change
------------------------- -------------------------
Catalog and related
Recurring $2,646 $2,324 14% $10,436 $9,143 14%
Non-recurring 484 428 13% 1,801 1,860 -3%
------------------ ------------------
Subtotal 3,130 2,752 14% 12,237 11,003 11%
Communication
Recurring 131 105 25% 454 432 5%
Non-recurring 14 52 -73% 38 75 -49%
------------------ ------------------
Subtotal 145 157 -8% 492 507 -3%
------------------ ------------------
Total Equipment
Industry $3,275 $2,909 13% $12,729 $11,510 11%
================== ==================
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