Welcome!

@CloudExpo Authors: Elizabeth White, Liz McMillan, Peter Galvin, Sanjay Zalavadia, Pat Romanski

News Feed Item

ARI Network Services Announces Fiscal Year 2013 First Quarter Financial Results

MILWAUKEE, Dec. 17, 2012 /PRNewswire/ -- ARI Network Services (OTCBB: ARIS), a leader in creating, marketing, and supporting software, SaaS, and DaaS solutions that connect consumers, dealers, distributors, and manufacturers in selected vertical markets, reported financial results today for the first quarter of fiscal 2013 ended October 31, 2012.

Highlights for the quarter included:

  • On August 17, 2012 the Company acquired substantially all of the assets of Ready2Ride, Inc. ("R2R"), the first-to-market and leading provider of aftermarket fitment data to the powersports industry, adding approximately $134,000 to revenue for the first quarter of fiscal 2013.
  • Total revenue for the first quarter of fiscal 2013 increased 9.8% to $5.9 million compared to $5.4 million in fiscal 2012.
  • Recurring revenue for the quarter increased 8.9% to $4.9 million, or 83.1% of total revenue, from $4.5 million, or 83.9% of total revenue, in fiscal 2012. 
  • For the quarter ended October 31, 2012, churn (the measure of customers that do not renew) improved approximately 21.2% compared to the same quarter last year.
  • Subsequent to the end of quarter, on November 28, 2012, ARI acquired the assets of the Retail Division of Fifty Below Sales & Marketing, Inc., a leading provider of dealer websites to the powersports, auto and tire aftermarket, medical equipment, and pool and spa industries. 

Fiscal Year 2013 First Quarter Financials

ARI reported revenue of $5.9 million for the first quarter of fiscal 2013 versus $5.4 million for the same period last year; an increase of 9.8%. Recurring revenue comprised approximately 83.1% of total year to date revenue in fiscal 2013, compared to 83.9% for the same period last year. 

Total operating expenses increased 12.0% from $3.8 million for the three months ended October 31, 2011 to $4.2 million for the three months ended October 31, 2012. This increase was primarily due to legal fees related to the Company's business development activities.  Operating income for the quarter was $303,000 compared to $496,000 for the same period last year.

The company reported income before tax of $239,000, or $0.03 per share, for the quarter ended October 31, 2012, compared to $440,000 or $0.06 per share for the same period last year.  Net income was $113,000 or $0.01 per share for the quarter ended October 31, 2012, compared to $272,000 or $0.03 per share for the same period last year. 

EBITDA, a non-GAAP measure, was $1.0 million for the first quarter of fiscal 2013, compared to $1.2 million for the same period last year.

Management Discussion

Roy W. Olivier, President and Chief Executive Officer of ARI, commented, "I am very pleased to report that we have achieved 9.8% year-over-year revenue growth in the first quarter of fiscal 2013 continuing to make progress toward our goal of double digit growth. Total revenue for the quarter was $5.9 million, of which 83% is recurring revenue."

Mr. Olivier continued, "We are very focused on the execution of our revenue growth strategy and are making strategic investments to achieve this growth.  In addition to the R2R acquisition, on November 28, 2012, we acquired the Retail Services Division of Fifty Below Sales and Marketing, Inc. ("50 Below") which is a leading provider of eCommerce websites in the powersports, automotive tire & wheel aftermarket, medical equipment and pool and spa industries, adding over 3,000 new dealers to our customer base and opening us up to new markets. 

"The R2R acquisition is consistent with our strategic objectives to launch new products and provide differentiated content to our customers.  R2R has a unique database of powersports parts, garments, and accessories that will help our dealers sell more stuff.  We plan on launching a new product based on that database in February 2013 and we believe that it will provide nice growth in our catalog segment in the coming years. 

"The 50 Below acquisition is consistent with our objective of being a market share leader in the markets we serve.  The combined entity's powersports dealer websites positions ARI as a leader in the space. In addition, it provides ARI an entry into the automotive aftermarket space, a new vertical for us.  We now have over 2,000 wheel and tire dealer websites and believe we can grow that business in the coming years.  This new vertical is larger than all of our current verticals combined and we believe our core competencies translate well into this new space as we expect it to be a driver of top-line growth in the coming years."

Darin Janecek, Chief Financial Officer of ARI, commented, "Our strategic investments over the past year are beginning to pay dividends in the form of recurring revenue growth.  Our two recent acquisitions will provide further growth; combined, ARI now powers more than 5,000 dealer websites, providing an even greater opportunity to sell value-added features and enhancements to existing customers.  While we believe we will be through with the non-recurring costs associated with the acquisitions by the end of the third fiscal quarter, our overall fiscal year operating income and cash flows will be impacted. However, we expect to enter fiscal 2014 with momentum as a much larger and dominant player in the vertical markets we serve, and our increased revenue base will further leverage our fixed operating costs."

Non-GAAP Measures

EBITDA, a non-GAAP measure, is defined as earnings before interest, income taxes, depreciation and amortization.  Management believes EBITDA to be a meaningful indicator of our performance that provides useful information to investors regarding our financial condition and results of operations. While management considers EBITDA to be an important measure of comparative operating performance, it should be considered in addition to, but not as a substitute for, net income and other measures of financial performance reported in accordance with generally accepted accounting principles (GAAP). Not all companies calculate EBITDA in the same manner and the measure as presented may not be comparable to similarly titled measures presented by other companies.  A reconciliation of net income to EBITDA can be found on the investor relations section of our website for all periods presented.

First quarter Conference Call

ARI will conduct a conference call today, Monday, December 17, 2012, at 4:30 pm EST to review the financial results for the first quarter of fiscal 2013 ended October 31, 2012. Interested parties can access the conference call by dialing (877) 317-6789 or (412) 317-6789 or can listen via a live Internet web cast, which is available in the Investor Relations section of the Company's website at http://www.arinet.com

A teleconference replay of the call will be available for three days at (877) 344-7529 or (412) 317-0088, confirmation #10022072. A web cast replay will be available in the Investor Relations section of the Company's website at http://www.arinet.com until the next earnings conference call. 

About ARI
ARI Network Services, Inc. ("ARI" or the "Company") is a leader in creating, marketing, and supporting software, software as a service ("SaaS") and data as a service ("DaaS") solutions that enhance revenue and reduce costs for our customers. Our innovative, technology-enabled solutions connect the community of consumers, dealers, distributors, and manufacturers to help our customers efficiently service and sell more whole goods, parts, garments, and accessories ("PG&A") worldwide in selected vertical markets that include powersports, outdoor power equipment, marine, and white goods.  We estimate that more than 22,000 equipment dealers, 140 manufacturers, and 195 distributors worldwide leverage our technology to drive revenue, gain efficiencies and increase customer satisfaction.

Forward-Looking Statements

Certain statements in this news release contain "forward‐looking statements" regarding future events and our future results that are subject to the safe harbors created under the Securities Act of 1933.  All statements other than statements of historical facts are statements that could be deemed to be forward-looking statements.  These statements are based on current expectations, estimates, forecasts, and projects about the markets in which we operate and the beliefs and assumptions of our management.  Words such as  "expects," "anticipates," "targets," "goals," "projects", "intends," "plans," "believes," "seeks," "estimates," "endeavors," "strives," "may," or variations of such words, and similar expressions are intended to identify such forward-looking statements. Readers are cautioned that these forward‐looking statements are subject to a number of risks, uncertainties and assumptions that are difficult to predict, estimate or verify.  Therefore, actual results may differ materially and adversely from those expressed in any forward-looking statements.  Such risks and uncertainties include those factors described in Part 1A of the Company's annual report on Form 10‐K for fiscal year ended July 31, 2012, 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, 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.

For more information, contact:

Darin Janecek, Chief Financial Officer
ARI Network Services, Inc.
Phone: (414) 973-4300

Investor Contact:
Joe Dorame, Robert Blum, Joe Diaz
Lytham Partners, LLC
Phone: (602) 889-9700
[email protected]

ARI Network Services, Inc.

Consolidated Statements of Income

(Dollars in Thousands, Except per Share Data)










(Unaudited)



Three months ended October 31



2012


2011

Net revenue


$

5,942


$

5,410

Cost of revenue 



1,408



1,136

Gross profit



4,534



4,274

Operating expenses:







Sales and marketing



1,046



1,033

Customer operations and support



1,008



846

Software development and technical support (net of capitalized







software product costs)



577



388

General and administrative 



1,320



1,108

Depreciation and amortization (exclusive of amortization of







software product costs included in cost of revenue)



280



403

Net operating expenses



4,231



3,778

Operating income



303



496

Other income (expense):







Interest expense



(68)



(62)

Other, net



4



6

Total other income (expense)



(64)



(56)

Income before provision for income tax



239



440

Income tax benefit (expense)



(126)



(168)

Net income


$

113


$

272








Net income per common share:







Basic


$

0.01


$

0.03

Diluted


$

0.01


$

0.03








    

ARI Network Services, Inc.

Consolidated Balance Sheets

(Dollars in Thousands, Except per Share Data)










(Unaudited)


(Audited)


October 31


July 31



2012


2012

ASSETS







Cash and cash equivalents


$

261


$

1,350

Trade receivables, less allowance for doubtful accounts of $251







and $215 at October 31, 2012 and July 31, 2012, respectively



1,364



1,187

Work in process



270



151

Prepaid expenses and other



768



766

Deferred income taxes



2,632



2,686

Total current assets



5,295



6,140

Equipment and leasehold improvements:







Computer equipment and software for internal use



2,645



2,592

Leasehold improvements



609



584

Furniture and equipment



2,304



1,989




5,558



5,165

Less accumulated depreciation and amortization



3,408



3,214

Net equipment and leasehold improvements



2,150



1,951

Capitalized software product costs:







Amounts capitalized for software product costs



19,009



18,247

Less accumulated amortization



15,694



15,298

Net capitalized software product costs



3,315



2,949

Deferred income taxes



2,392



2,443

Other long term assets



1,032



148

Other intangible assets



2,224



1,439

Goodwill



5,972



5,439

Total assets


$

22,380


$

20,509

           

              

ARI Network Services, Inc.

Consolidated Balance Sheets

(Dollars in Thousands, Except per Share Data)



(Unaudited)


(Audited)


October 31


July 31



2012


2012

LIABILITIES







Current borrowings on line of credit


$

220


$

-

Current portion of long-term debt



1,085



1,084

Current portion of contingent liabilities



331




Accounts payable



530



725

Deferred revenue



4,717



4,926

Accrued payroll and related liabilities



845



758

Accrued sales, use and income taxes



119



216

Other accrued liabilities



574



214

Current portion of capital lease obligations



118



150

Total current liabilities



8,539



8,073

Long-term debt



3,640



2,888

Long-term portion of contingent liabilities



418



-

Capital lease obligations



41



58

Other long term liabilities



255



274

Total non-current liabilities



4,354



3,220

Total liabilities



12,893



11,293








SHAREHOLDERS' EQUITY







Cumulative preferred stock, par value $.001 per share, 1,000,000 shares authorized; 0 shares issued and outstanding at October 31, 2012 and July 31, 2012, respectively



-



-

Junior preferred stock, par value $.001 per share, 100,000 shares authorized; 0 shares issued and outstanding at October 31, 2012 and July 31, 2012, respectively



-



-

Common stock, par value $.001 per share, 25,000,000 shares authorized; 8,169,550 and 8,037,750 shares issued and outstanding at October 31, 2012 and July 31, 2012, respectively



8



8

Common stock warrants and options



1,324



1,287

Additional paid-in capital



96,062



95,931

Accumulated deficit



(87,896)



(88,009)

Other accumulated comprehensive loss



(11)



(1)

Total shareholders' equity



9,487



9,216

Total liabilities and shareholders' equity


$

22,380


$

20,509

SOURCE ARI Network Services, Inc.

More Stories By PR Newswire

Copyright © 2007 PR Newswire. All rights reserved. Republication or redistribution of PRNewswire content is expressly prohibited without the prior written consent of PRNewswire. PRNewswire shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon.

@CloudExpo Stories
SaaS companies can greatly expand revenue potential by pushing beyond their own borders. The challenge is how to do this without degrading service quality. In his session at 18th Cloud Expo, Adam Rogers, Managing Director at Anexia, discussed how IaaS providers with a global presence and both virtual and dedicated infrastructure can help companies expand their service footprint with low “go-to-market” costs.
In his keynote at 18th Cloud Expo, Andrew Keys, Co-Founder of ConsenSys Enterprise, provided an overview of the evolution of the Internet and the Database and the future of their combination – the Blockchain. Andrew Keys is Co-Founder of ConsenSys Enterprise. He comes to ConsenSys Enterprise with capital markets, technology and entrepreneurial experience. Previously, he worked for UBS investment bank in equities analysis. Later, he was responsible for the creation and distribution of life sett...
There are several IoTs: the Industrial Internet, Consumer Wearables, Wearables and Healthcare, Supply Chains, and the movement toward Smart Grids, Cities, Regions, and Nations. There are competing communications standards every step of the way, a bewildering array of sensors and devices, and an entire world of competing data analytics platforms. To some this appears to be chaos. In this power panel at @ThingsExpo, moderated by Conference Chair Roger Strukhoff, Bradley Holt, Developer Advocate a...
The pace of innovation, vendor lock-in, production sustainability, cost-effectiveness, and managing risk… In his session at 18th Cloud Expo, Dan Choquette, Founder of RackN, discussed how CIOs are challenged finding the balance of finding the right tools, technology and operational model that serves the business the best. He also discussed how clouds, open source software and infrastructure solutions have benefits but also drawbacks and how workload and operational portability between vendors ...
Cognitive Computing is becoming the foundation for a new generation of solutions that have the potential to transform business. Unlike traditional approaches to building solutions, a cognitive computing approach allows the data to help determine the way applications are designed. This contrasts with conventional software development that begins with defining logic based on the current way a business operates. In her session at 18th Cloud Expo, Judith S. Hurwitz, President and CEO of Hurwitz & ...
Digital Initiatives create new ways of conducting business, which drive the need for increasingly advanced security and regulatory compliance challenges with exponentially more damaging consequences. In the BMC and Forbes Insights Survey in 2016, 97% of executives said they expect a rise in data breach attempts in the next 12 months. Sixty percent said operations and security teams have only a general understanding of each other’s requirements, resulting in a “SecOps gap” leaving organizations u...
In his general session at 18th Cloud Expo, Lee Atchison, Principal Cloud Architect and Advocate at New Relic, discussed cloud as a ‘better data center’ and how it adds new capacity (faster) and improves application availability (redundancy). The cloud is a ‘Dynamic Tool for Dynamic Apps’ and resource allocation is an integral part of your application architecture, so use only the resources you need and allocate /de-allocate resources on the fly.
"A lot of times people will come to us and have a very diverse set of requirements or very customized need and we'll help them to implement it in a fashion that you can't just buy off of the shelf," explained Nick Rose, CTO of Enzu, in this SYS-CON.tv interview at 18th Cloud Expo, held June 7-9, 2016, at the Javits Center in New York City, NY.
A strange thing is happening along the way to the Internet of Things, namely far too many devices to work with and manage. It has become clear that we'll need much higher efficiency user experiences that can allow us to more easily and scalably work with the thousands of devices that will soon be in each of our lives. Enter the conversational interface revolution, combining bots we can literally talk with, gesture to, and even direct with our thoughts, with embedded artificial intelligence, wh...
It's easy to assume that your app will run on a fast and reliable network. The reality for your app's users, though, is often a slow, unreliable network with spotty coverage. What happens when the network doesn't work, or when the device is in airplane mode? You get unhappy, frustrated users. An offline-first app is an app that works, without error, when there is no network connection. In his session at 18th Cloud Expo, Bradley Holt, a Developer Advocate with IBM Cloud Data Services, discussed...
19th Cloud Expo, taking place November 1-3, 2016, at the Santa Clara Convention Center in Santa Clara, CA, will feature technical sessions from a rock star conference faculty and the leading industry players in the world. Cloud computing is now being embraced by a majority of enterprises of all sizes. Yesterday's debate about public vs. private has transformed into the reality of hybrid cloud: a recent survey shows that 74% of enterprises have a hybrid cloud strategy. Meanwhile, 94% of enterpri...
What does it look like when you have access to cloud infrastructure and platform under the same roof? Let’s talk about the different layers of Technology as a Service: who cares, what runs where, and how does it all fit together. In his session at 18th Cloud Expo, Phil Jackson, Lead Technology Evangelist at SoftLayer, an IBM company, spoke about the picture being painted by IBM Cloud and how the tools being crafted can help fill the gaps in your IT infrastructure.
SYS-CON Events announced today that Bsquare has been named “Silver Sponsor” of SYS-CON's @ThingsExpo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. For more than two decades, Bsquare has helped its customers extract business value from a broad array of physical assets by making them intelligent, connecting them, and using the data they generate to optimize business processes.
"SpeedyCloud's specialty lies in providing cloud services - we provide IaaS for Internet and enterprises companies," explained Hao Yu, CEO and co-founder of SpeedyCloud, in this SYS-CON.tv interview at 18th Cloud Expo, held June 7-9, 2016, at the Javits Center in New York City, NY.
Internet of @ThingsExpo, taking place November 1-3, 2016, at the Santa Clara Convention Center in Santa Clara, CA, is co-located with 19th Cloud Expo and will feature technical sessions from a rock star conference faculty and the leading industry players in the world. The Internet of Things (IoT) is the most profound change in personal and enterprise IT since the creation of the Worldwide Web more than 20 years ago. All major researchers estimate there will be tens of billions devices - comp...
There is little doubt that Big Data solutions will have an increasing role in the Enterprise IT mainstream over time. Big Data at Cloud Expo - to be held November 1-3, 2016, at the Santa Clara Convention Center in Santa Clara, CA - has announced its Call for Papers is open. Cloud computing is being adopted in one form or another by 94% of enterprises today. Tens of billions of new devices are being connected to The Internet of Things. And Big Data is driving this bus. An exponential increase is...
Machine Learning helps make complex systems more efficient. By applying advanced Machine Learning techniques such as Cognitive Fingerprinting, wind project operators can utilize these tools to learn from collected data, detect regular patterns, and optimize their own operations. In his session at 18th Cloud Expo, Stuart Gillen, Director of Business Development at SparkCognition, discussed how research has demonstrated the value of Machine Learning in delivering next generation analytics to imp...
The 19th International Cloud Expo has announced that its Call for Papers is open. Cloud Expo, to be held November 1-3, 2016, at the Santa Clara Convention Center in Santa Clara, CA, brings together Cloud Computing, Big Data, Internet of Things, DevOps, Digital Transformation, Microservices and WebRTC to one location. With cloud computing driving a higher percentage of enterprise IT budgets every year, it becomes increasingly important to plant your flag in this fast-expanding business opportuni...
Creating replica copies to tolerate a certain number of failures is easy, but very expensive at cloud-scale. Conventional RAID has lower overhead, but it is limited in the number of failures it can tolerate. And the management is like herding cats (overseeing capacity, rebuilds, migrations, and degraded performance). Download Slide Deck: ▸ Here In his general session at 18th Cloud Expo, Scott Cleland, Senior Director of Product Marketing for the HGST Cloud Infrastructure Business Unit, discusse...
Cloud computing is being adopted in one form or another by 94% of enterprises today. Tens of billions of new devices are being connected to The Internet of Things. And Big Data is driving this bus. An exponential increase is expected in the amount of information being processed, managed, analyzed, and acted upon by enterprise IT. This amazing is not part of some distant future - it is happening today. One report shows a 650% increase in enterprise data by 2020. Other estimates are even higher....