ARI Reports Third Quarter Results; Revenue Growth in Strategic Business Lines Fuels Strong Cash Flow.Business Editors MILWAUKEE--(BUSINESS WIRE)--May 29, 2003 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 that connect equipment manufacturers with their service and distribution networks, today reported results for the third quarter of fiscal 2003 ended April 30, 2003. The Milwaukee-based firm reported third quarter revenues of $3.3 million, compared to revenues of $3.4 million for the same quarter in the previous fiscal year. ARI reported a net loss of $654,000 or $0.10 per share, which includes approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. $400,000 in expenses associated with the restructuring restructuring - The transformation from one representation form to another at the same relative abstraction level, while preserving the subject system's external behaviour (functionality and semantics). of the debt, in the third quarter of fiscal 2003, compared to net income of $18,000 or $0.00 per share in the previous year's third quarter. "During the quarter, we were able to restructure our debt for less than the face value and accrued interest Accrued Interest The interest that has accumulated on a bond since the last interest payment up to but not including the settlement date. There are two methods for calculating accrued interest: 1) 360-day year method, used for corporate and municipal bonds. of the original note. We expect this restructuring to have a positive impact on the Company's earnings and cash flow in the coming quarters," 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 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 $445,000 or 22% over the third quarter of last year, due to significant expansion of our business among our existing customer base and new customers. And, we ended the quarter with over $1.5 million in cash after paying an initial debt re-payment of $500,000," Dearing said. Dearing indicated that revenue from the electronic catalog software and services provided to the Equipment Industry grew $155,000 or 6% overall for the quarter compared to last year. As anticipated, revenue from dealer communications and the non-equipment businesses continued to decline. "I am particularly gratified grat·i·fy tr.v. grat·i·fied, grat·i·fy·ing, grat·i·fies 1. To please or satisfy: His achievement gratified his father. See Synonyms at please. 2. at how our entire company responded when challenged this past quarter to increase our core catalog revenues in spite of in opposition to all efforts of; in defiance or contempt of; notwithstanding. See also: Spite the soft economy. This energetic response enabled us to increase overall revenues by $161,000 or 5% over the immediately preceding quarter, which I believe is a significant achievement that confirms the commitment of our staff to growing the business," Dearing said. Dearing also indicated that successfully restructuring its $4.0 million convertible subordinated debenture subordinated debenture An unsecured bond with a claim to assets that is subordinate to all existing and future debt. Thus, in the event that the issuer encounters financial difficulties and must be liquidated, all other claims must be satisfied before in late April was key to ARI moving forward and focusing on business opportunities. "It is also significant that the new holders have assigned as·sign tr.v. as·signed, as·sign·ing, as·signs 1. To set apart for a particular purpose; designate: assigned a day for the inspection. 2. to us all their legal rights and claims against RGC RGC Royal Government of Cambodia RGC Retinal Ganglion Cell RGC Responsible Gambling Council RGC Rio Grande City (Texas) RGC Routing Group Connector (Microsoft) International Investors (Rose Glen), the original holders of the debenture debenture (dəbĕn`chər), document acknowledging indebtedness. In Great Britain a debenture is practically the same as a bond, and debenture stock is similar to preferred stock. , and its affilitiates," Dearing said. For the first nine months of fiscal 2003, ARI's revenues totaled $9.4 million, compared to revenues of $10.5 million in the first nine months of the last fiscal year. ARI had a net loss of $1,274,000 or $0.20 per share for the first three quarters of fiscal 2003, compared to net income of $115,000 or $0.02 per share in the first nine months of fiscal 2002. "As we move toward year-end year-end also year·end n. The end of a year. adj. Occurring or done at the end of the year: a year-end audit. Noun 1. , we anticipate revenues and cash flows will remain consistent with the third quarter, while our expenses should be lower now that the debt has been restructured," Dearing said. ARI 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 provides approximately 80 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 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 75,000 catalog subscriptions are provided through ARI to
approximately 20,000 dealers and distributors 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 AftermarketSee: 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 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. In addition, 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 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 29, 2003 at 3:30 p.m. Central Daylight For other uses, see Daylight (disambiguation). Daylight or the light of day is the combination of all direct and indirect sunlight outdoors during the daytime (and perhaps twilight). 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. CDT CDT abbr. Central Daylight Time CDT Central Daylight Time CDT n abbr (US) (= Central Daylight Time) → hora de verano del centro; (BRIT , Thursday, May 29, 2003 by calling 1-800-428-6051 (International callers dial 1-973-709-2089) and enter passcode #294841. 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 Daylight Time on May 30. 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, 2002 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
2003 2002 2003 2002
-------- -------- -------- --------
Net revenues:
Subscriptions, support and
other services fees $2,137 $2,106 $6,168 $6,789
Software licenses and renewals 608 637 1,713 2,128
Professional services 509 665 1,521 1,629
-------- -------- -------- --------
3,254 3,408 9,402 10,546
Operating expenses:
Cost of products and services sold:
Subscriptions, support and
other services fees 152 30 453 181
Software licenses and
renewals(i) 455 435 1,328 1,254
Professional services 242 266 586 626
-------- -------- -------- --------
849 731 2,367 2,061
Depreciation and amortization
(exclusive of amortization of
software products included in
cost of products and services
sold) 52 55 164 162
Customer operations and support 290 308 912 902
Selling, general and
administrative 2,157 1,657 5,359 5,174
Software development and
technical support 363 457 1,239 1,644
-------- -------- -------- --------
Operating expenses before amounts
capitalized 3,711 3,208 10,041 9,943
Less capitalized portion (86) (153) (369) (583)
-------- -------- -------- --------
Net operating expenses 3,625 3,055 9,672 9,360
-------- -------- -------- --------
Operating income (loss) (371) 353 (270) 1,186
Other income (expense)
Interest expense (291) (342) (970) (1,082)
Other, net 8 7 (34) 11
-------- -------- -------- --------
Total other expense (283) (335) (1,004) (1,071)
-------- -------- -------- --------
Net income (loss) $(654) $18 $(1,274) $115
======== ======== ======== ========
Average common shares outstanding 6,581 6,223 6,449 6,201
Basic and diluted net income
(loss) per share ($0.10) $0.00 ($0.20) $0.02
======== ======== ======== ========
(i) includes amortization of software products of $440, $410, $1,304,
and $1,205 and excluding other depreciation and amortization shown
separately
Earnings before Interest, Taxes, Depreciation and Amortization
Net Income $(654) $18 $(1,274) $115
Plus: Interest 291 342 970 1,082
Amortization of software
products 440 410 1,304 1,205
Other depreciation and
amortization 52 55 164 162
-------- -------- -------- --------
Earnings before interest, taxes,
depreciation and amortization $129 $825 $1,164 $2,564
======== ======== ======== ========
ARI Network Services, Inc.
Balance Sheets
(In thousands, except share and per share data)
(Unaudited)
April 30 July 31
ASSETS 2003 2002
--------- --------
Current Assets:
Cash $1,576 $879
Trade receivables, less allowance for doubtful
accounts of $133 at April 30, 2003 and $140
at July 31, 2002 1,332 1,743
Prepaid expenses and other 92 84
--------- --------
Total Current Assets 3,000 2,706
Equipment and leasehold improvements:
Computer equipment 4,430 4,394
Leasehold improvements 73 73
Furniture and equipment 1,313 1,292
--------- --------
5,816 5,759
Less accumulated depreciation and amortization 5,426 5,262
--------- --------
Net equipment and leasehold improvements 390 497
Other assets - 105
Capitalized software product costs 23,954 23,585
Less accumulated amortization 21,823 20,519
--------- --------
Net capitalized software product costs 2,131 3,066
--------- --------
Total Assets $5,521 $6,374
========= ========
LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT)
Current liabilities:
Current portion of notes payable to shareholder $ - $ 50
Current portion of notes payable 258 3,490
RFC line of credit 662 360
Accounts payable 226 567
Deferred revenue 5,172 4,619
Accrued payroll and related liabilities 1,010 1,140
Other accrued liabilities 450 1,042
Current portion of capital lease obligations 47 151
--------- --------
Total Current Liabilities 7,825 11,419
Long term liabilities:
Notes payable (net of discount) 3,988 -
Capital lease obligations 20 26
Other long term liabilities 444 535
--------- --------
Total Long Term Liabilities 4,452 561
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, 2003
and July 31, 2002 - -
Common stock, par value $.001 per share,
25,000,000 shares authorized; 6,645,191 and
6,329,301 shares issued and outstanding at
April 30, 2003 and July 31, 2002, respectively 6 6
Common stock warrants and options 36 2,459
Additional paid-in-capital 94,400 91,853
Accumulated deficit (101,198) (99,924)
--------- --------
Total Shareholders' Equity (Deficit) (6,756) (5,606)
--------- --------
Total Liabilities and Shareholders' Equity
(Deficit) $5,521 $6,374
========= ========
ARI Network Services, Inc.
Statements of Cash Flows
(In thousands)
(Unaudited)
Three months ended Nine months ended
April 30 April 30
2003 2002 2003 2002
------------------ -----------------
Operating activities
Net income (loss) $(654) $18 $(1,274) $115
Adjustments to reconcile net income
(loss) to net cash
provided by operating activities:
Amortization of software
products 440 410 1,304 1,205
Amortization of goodwill - 4 - 10
Amortization of deferred
financing costs and debt
discount 191 237 701 710
Depreciation and other
amortization 52 51 164 152
Interest expense converted to
subordinated debt 229 - 229 -
Stock issued as consideration
to vendor 44 - 44 -
Net change in receivables,
prepaid expenses and other
current assets 326 683 403 821
Net change in accounts payable,
deferred revenue, accrued
liabilities and long term
liabilities 409 (270) 194 (610)
------------------ -----------------
Net cash provided by operating
activities 1,037 1,133 1,765 2,403
Investing activities
Purchase of equipment and
leasehold improvements (39) - (42) -
Software product costs capitalized (86) (153) (369) (583)
------------------ -----------------
Net cash used in investing
activities (125) (153) (411) (583)
Financing activities
Borrowings (repayments) under
line of credit - - - (200)
Borrowings under notes payable - - 58 -
Payments under notes payable (531) (83) (634) (471)
Payments of capital lease
obligations (37) (44) (125) (133)
Proceeds from issuance of common
stock - - 44 14
------------------ -----------------
Net cash used in financing
activities (568) (127) (657) (790)
------------------ -----------------
Net increase (decrease) in cash 344 853 697 1,030
Cash at beginning of period 1,232 490 879 313
------------------ -----------------
Cash at end of period $1,576 $1,343 $1,576 $1,343
================== =================
Cash paid for interest $(39) $105 $65 $372
================== =================
Noncash investing and financing
activities
Capital lease obligations incurred
for:
Computer equipment $15 $24 $15 $24
Conversion of accrued interest to
subordinated debt 493 - 493 -
Issuance of common stock warrants
in connection with refinancing
debt 36 - 36 -
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