ARI Reports Third Quarter Results; Core Business Growth, Expense Controls Fuel Strong Cash Flow, Bottom Line Improvement.Business Editors MILWAUKEE--(BUSINESS WIRE)--May 30, 2002 ARI ARI Acute respiratory infection, see there Network Services, Inc. (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 catalog-enabled business solutions for manufacturers, distributors and dealers, today reported results for the third quarter and first nine months of fiscal 2002. The Milwaukee-based firm reported third quarter revenues of $3.4 million for the quarter ended April 30, 2002, compared to revenues of $3.9 million for the same quarter in the previous fiscal year. ARI had a net income of $18,000 or $0.00 per share in the third quarter of fiscal 2002, compared to a net loss of $1.5 million or $0.24 per share in the previous year's third quarter. EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) A metric used to show a company's profitability, but not its cash flow. EBITDA became popular in the 1980s to show the potential profitability of leveraged buyouts, but has become (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.
"Our bottom line has shown considerable improvement over the prior year and we have been able to grow our core business in a very difficult economy," 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:
The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. by 39% compared to the prior year's third quarter and produced 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. of $353,000. We've we've Contraction of we have. we've have been able to generate over $1 million in cash this year after paying down our debt principal by $671,000 year-to-date Year-to-date (YTD) The period beginning at the start of the calendar year up to the current date. ," Dearing said. Dearing indicated that revenue from catalog software and services provided to the U.S. equipment industry grew 6% for the quarter compared to last year, while 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. revenue from that industry grew 32%. At the same time, revenue from non-equipment businesses was down 42%, largely due to the expected loss of a contract with the Associated Press Associated Press: see news agency. Associated Press (AP) Cooperative news agency, the oldest and largest in the U.S. and long the largest in the world. . "We are particularly pleased that, in keeping with our strategic plan, we have been able to increase our revenues from our catalog business, which is our core focus today. Over time, we anticipate that these revenues will more than offset the decline in the non-equipment sector," Dearing said. For the first nine months of fiscal 2002, ARI's revenues totaled $10.5 million, compared to revenues of $12.1 million in the first nine months of the last fiscal year. ARI had net income of $115,000 or $0.02 per share for the first three quarters of fiscal 2002, compared to a net loss of $4.2 million or $0.69 per share in the first nine months of fiscal 2001. Through the first nine months of the current fiscal year, EBITDA was $2.6 million, compared to $481,000 in the first nine months of the prior year. "We believe we are positioned to continue to generate strong cash flows, produce positive EBITDA, control our costs and grow our core business in the remainder of the year," Dearing said. ARI Network Services, Inc. is a leading provider of electronic catalog-enabled business solutions for sales, service and life-cycle life-cycle - software life-cycle product support in the manufactured equipment market. ARI currently serves approximately 100 lines of manufactured equipment and 25,000 dealers in more than 100 countries in a dozen segments of the worldwide manufactured equipment market including outdoor power, recreation vehicle, floor maintenance, auto and truck parts aftermarket Aftermarket See: Secondary market. aftermarket See secondary market. , power sports, marine and construction. The Company builds and supports a full suite of multi-media electronic catalog publishing and viewing software for the Web or CD and provides expert catalog publishing and consulting services Noun 1. consulting service - service provided by a professional advisor (e.g., a lawyer or doctor or CPA etc.) service - work done by one person or group that benefits another; "budget separately for goods and services" . ARI communications systems In telecommunication, a communications system is a collection of individual communications networks, transmission systems, relay stations, tributary stations, and data terminal equipment (DTE) usually capable of interconnection and interoperation to form an integrated whole. provide a global electronic pathway pathway /path·way/ (path´wa) 1. a course usually followed. 2. the nerve structures through which an impulse passes between groups of nerve cells or between the central nervous system and an organ or muscle. for parts orders, product registrations, warranty claims and other transactions between manufacturers and their networks of sales and service points. 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. 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 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). 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 30, 2002 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 1-800-388-8975 (International callers dial 1-973-694-2225) and request to be connected to Brian Dearing's conference call. A rebroadcast is available beginning at 5:30 p.m. CST CST abbr. 1. Central Standard Time 2. convulsive shock treatment CST Central Standard Time Noun 1. , Thursday, May 30, 2002 by calling 1-800-428-6051 (International callers dial 1-973-709-2089) and enter passcode #244075. A replay of ARI's conference call as well as notes and financial information presented in the call will be available on ARI's Web site, www.arinet.com, after 6:00 p.m. Central Time on May 31. 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, 2001 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 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.
Balance Sheets
(In thousands, except share and per share data)
(Unaudited)
April 30 July 31
ASSETS 2002 2001
-------- --------
Current Assets:
Cash $ 1,343 $ 313
Trade receivables, less allowance for
doubtful accounts of $502 at
April 30, 2002 and $757 at July 31, 2001 1,358 2,084
Prepaid expenses and other 45 140
-------- --------
Total Current Assets 2,746 2,537
Equipment and leasehold improvements:
Computer equipment 4,394 4,394
Leasehold improvements 239 239
Furniture and equipment 1,024 1,000
-------- --------
5,657 5,633
Less accumulated depreciation and
amortization 5,445 5,293
-------- --------
Net equipment and leasehold improvements 212 340
Goodwill, less accumulated amortization of
$64 at April 30, 2002 and $54 at July 31, 2001 5 15
Deferred financing costs, less accumulated
amortization of $298 at April 30, 2002 and
$203 at July 31, 2001 112 207
Capitalized software development 24,116 23,533
Less accumulated amortization 20,777 19,572
-------- --------
Net capitalized software development 3,339 3,961
-------- --------
Total Assets $ 6,414 $ 7,060
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT)
Current liabilities:
Current portion of notes payable to
shareholder $ 152 $ 333
Current portion of notes payable 3,312 2,902
Current portion of line of credit to
shareholder - 200
RFC line of credit 660 469
Accounts payable 353 482
Deferred revenue 4,668 4,811
Accrued payroll and related liabilities 1,355 1,487
Other accrued liabilities 1,102 1,499
Current portion of capital lease obligations 175 173
-------- --------
Total Current Liabilities 11,777 12,356
Long term liabilities:
Notes payable to shareholder - 15
Notes payable 8 78
Capital lease obligations 47 158
Accrued restructuring costs 303 303
-------- --------
Total Long Term Liabilities 358 554
Shareholders' equity (deficit):
Cumulative preferred stock, par value
$.001 per share, 1,000,000 shares
authorized; 20,350 shares issued and
outstanding at April 30, 2002 and
July 31, 2001 - -
Common stock, par value $.001 per share,
25,000,000 shares authorized; 6,223,342
and 6,184,281 shares issued and outstanding
at April 30, 2002 and July 31, 2001,
respectively 6 6
Common stock warrants and options 2,459 2,459
Additional paid-in-capital 91,811 91,797
Accumulated deficit (99,997) (100,112)
-------- --------
Total Shareholders' Equity (Deficit) (5,721) (5,850)
-------- --------
Total Liabilities and Shareholders' Equity
(Deficit) $ 6,414 $ 7,060
======== ========
ARI Network Services, Inc.
Statements of Operations
(In thousands, except per share data)
(Unaudited)
Three months ended Nine months ended
April 30 April 30
2002 2001 2002 2001
-------- -------- -------- --------
Net revenues:
Subscriptions,
support and other
services fees $ 2,106 $ 2,515 $ 6,789 $ 7,617
Software licenses
and renewals 637 823 2,128 2,424
Professional
services 665 538 1,629 2,063
-------- -------- -------- --------
3,408 3,876 10,546 12,104
Operating expenses:
Cost of products
and services sold:
Subscriptions,
support and other
services fees 30 579 182 1,269
Software licenses
and renewals(i) 435 529 1,254 2,403
Professional
services 266 269 626 1,173
-------- -------- -------- --------
731 1,377 2,061 4,845
Depreciation and
amortization
(exclusive of
amortization of
software products
included in cost
of products and
services sold) 55 382 162 1,152
Customer operations
and support 308 423 902 1,236
Selling, general
and administrative 1,657 2,407 5,174 6,840
Software development
and technical support 457 955 1,644 2,630
-------- -------- -------- --------
Operating expenses
before amounts
capitalized 3,208 5,544 9,943 16,703
Less capitalized
portion (153) (556) (583) (1,496)
-------- -------- -------- --------
Net operating expenses 3,055 4,988 9,360 15,207
-------- -------- -------- --------
Operating income (loss) 353 (1,112) 1,186 (3,103)
Other income (expense)
Interest expense (342) (366) (1,082) (1,133)
Other, net 7 (24) 11 (4)
-------- -------- -------- --------
Total other expense (335) (390) (1,071) (1,137)
-------- -------- -------- --------
Net income (loss) $ 18 $ (1,502) $ 115 $ (4,240)
======== ======== ======== ========
Average common shares
outstanding 6,223 6,184 6,201 6,174
Basic and diluted net
income (loss)
per share $0.00 ($0.24) $0.02 ($0.69)
======== ======== ======== ========
(i) includes amortization of software products of $410, $764, $1,205
and $2,436 and excluding other depreciation and amortization shown
separately
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