Fiscal 2015 revenue increases 23% to more than $40M, Adjusted EBITDA increases 49% to $6.6M
Milwaukee, Wis., October 28, 2015 – ARI Network Services, Inc. (NASDAQ: ARIS), an award-winning provider of SaaS, software tools and marketing services that help dealers, distributors and manufacturers Sell More Stuff!™, reported financial results today for its fiscal fourth quarter and fiscal year ended July 31, 2015.
Highlights for the fiscal year 2015 included:
- Revenue increased 22.5% to $40.4 million, which compares with $33.0 million for the same period last year. Recurring revenue was $36.5 million, or 90.2% of revenue, compared with $30.9 million, or 93.6% of revenue, for the same period last year.
- Operating income was $2.3 million, compared with $0.4 million for the same period last year, an increase of 550%. Net Income was $1.1 million, compared with a net loss of $0.1 million last year.
- Adjusted EBITDA, a non-GAAP measure, was $6.6 million or 16.3% of revenue. This compares with Adjusted EBITDA of $4.4 million or 13.4% of revenue in the same period last year.
- Cash generated from operations was $6.3 million, compared with $2.4 million for the same period last year, an increase of 165%.
- The Company completed the acquisitions of TCS Technologies (“TCS”), TASCO Corporation and its affiliated company Signal Extraprise Corporation (collectively “TASCO”) and Direct Communications Inc. (“DCi”). These acquisitions expanded the ARI customer base by more than 2, 000 customers and accelerated its growth in the auto tire and wheel aftermarket and the overall automotive aftermarket.
Highlights for the fourth quarter of fiscal 2015 included:
- Revenue increased 27.7% to $10.9 million, which compares with $8.5 million for the same period last year and $10.3 million in 3Q15. Recurring revenue was $9.8 million, or 90.1% of revenue, which compares with $7.8 million for the same period last year and $9.3 million in 3Q15.
- Operating income was $686, 000, compared with $430, 000 for the same period last year and $675, 000 in 3Q15.
- Adjusted EBITDA was $1.8 million, or 16.5% of revenue. This compares with Adjusted EBITDA of $1.6 million, or 18.8% of revenue in the same period last year and $1.7 million, or 16.8% of revenue in 3Q15.
- Cash generated from operations was $1.7 million, compared with $1.3 million for the same period last year and $1.9 million in 3Q15.
- On July 13, 2015, the Company completed the acquisition of DCi, a leading provider of differentiated product content and electronic catalog software serving manufacturers, distributors, jobbers and independent retailers in the $300 billion automotive aftermarket.
Fiscal Year 2015 Financials
Fiscal 2015 was another record year for ARI. The Company achieved record results in total revenues, operating income, Adjusted EBITDA and cash flow from operations.
The Company also returned to a net operating profit, with net income of $1.1 million or $0.07 per share, compared with a net loss of $0.1 million or ($0.01) per share in the prior year.
Roy W. Olivier, President and Chief Executive Officer of ARI, commented, “As a result of successfully executing on our strategy in fiscal 2015, it was a transformative year for ARI in many respects. In addition to another year of record results, we closed three acquisitions that complement ARI’s strategic opportunities and position us well for the future. Just a few years ago, we were effectively serving four vertical markets with two products and a total addressable market of about 25, 000 dealers in the U.S. As a result of the actions we have taken in the past few years, we are now serving seven vertical markets with four products and services and a total addressable market of about 150, 000 dealers in the U.S. I believe this better positions our Company for continued growth.”
William Nurthen, Chief Financial Officer of ARI, commented, “Our operating profit and Adjusted EBITDA performance for the fourth quarter and fiscal year 2015 were especially strong considering the impact of costs related to acquisitions. The Q4 results were impacted by approximately $200, 000 in transaction costs, and the fiscal year 2015 results were impacted by more than $500, 000 in transactions costs related to the three acquisition completed in the year.”
Fiscal 2015 Conference Call
ARI will conduct a conference call on Wednesday October 28, 2015, at 4:30 p.m. EDT, to review the financial results for the year ended and fiscal quarter ended July 31, 2015. Interested parties can access the conference call by dialing 877.359.3639 or 408.427.3725 and referring to Conference ID: 10333777. The conference call is also being webcast and is available via the Company’s investor relations website at investor.arinet.com. A replay of the webcast will be archived on the Company’s investor relations website for 60 days.
Adjusted EBITDA, a non-GAAP measure, is defined as earnings before interest, income taxes, depreciation and amortization, excluding stock-based compensation. Management believes Adjusted 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 Adjusted 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 Adjusted 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 Adjusted EBITDA can be found in this release and at the Company’s investor relations website for all periods presented.
About ARI ARI Network Services, Inc. (ARI) (NASDAQ: ARIS) offers an award-winning suite of SaaS, software tools and marketing services to help dealers, equipment manufacturers and distributors in selected vertical markets Sell More Stuff!™ – online and in-store. Our innovative products are powered by a proprietary data repository of enriched original equipment and aftermarket electronic content spanning more than 17 million active part and accessory SKUs and 750, 000 equipment models. Business is complicated, but we believe our customers’ technology tools don’t have to be. We remove the complexity of selling and servicing new and used vehicle inventory, parts, garments and accessories (PG&A) for customers in the automotive tire and wheel aftermarket, powersports, outdoor power equipment, marine, home medical equipment, recreational vehicles and appliance industries. More than 23, 500 equipment dealers, 195 distributors and 3, 360 brands worldwide leverage our web and eCatalog platforms to Sell More Stuff!™ For more information on ARI, visit investor.arinet.com.
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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 most recent annual report on Form 10‐K, as such may be amended or supplemented by subsequent quarterly reports on Form 10-Q, or other reports 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 media inquiries, contact: Colleen Malloy, Director of Marketing, ARI, +1.414.973.4323, Colleen.Malloy@arinet.com
Investor inquiries, contact: Steven Hooser, Three Part Advisors, +1.214.872.2710, firstname.lastname@example.org