MILWAUKEE – ARI, a provider of technology solutions that help dealers, distributors and manufacturers in selected vertical markets sell and service their products, today reported results for the fourth fiscal quarter and fiscal year ended July 31, 2009.
Full Year Fiscal 2009 Highlights
- Revenues increased to $17.6 million for fiscal 2009, from revenues of $16.9 million in fiscal 2008.
- Operating income was $767,000 for fiscal 2009, compared to operating income of $821,000 for the prior fiscal year.
- Net income was $424,000 or $0.06 per diluted share for fiscal 2009, compared to net income of $1.4 million or $0.20 per diluted share for fiscal 2008.
Fourth Quarter Fiscal 2009 Highlights
- Revenues increased 24 percent to $5.3 million for the fourth quarter of fiscal 2009, from revenues of $4.3 million for the fourth quarter of fiscal 2008.
- Operating loss was $105,000 for the fourth quarter of fiscal 2009, compared to an operating loss of $237,000 for the fourth quarter of the prior year.
- The company recorded a net loss of $114,000 or $0.02 per diluted share for the fourth quarter of fiscal 2009, compared to net income of $378,000 or $0.05 per diluted share for the fourth quarter of fiscal 2008.
“Fiscal 2009 was a good year for ARI. We increased revenues, remained profitable and successfully completed two acquisitions, all within a challenging economic environment,” said Roy W. Olivier, president and chief executive officer of ARI. “We generated $2.7 million in cash from operations for the year, which we used for the two acquisitions, investments in equipment and software development and for the repayment of debt and capital lease obligations.”
Olivier said the increased revenues reflected the continued growth of the company’s marketing services business and increased revenues from catalog subscriptions, partially offset by a decline in professional services fees as companies delayed projects in response to the economic downturn. The two businesses acquired during the year, Channel Blade Technologies Corp. and the finance and insurance assets of Powersports Outsourcing Group, LLC, also contributed to the higher fiscal 2009 revenues. Catalog revenues benefited from the July, 2008 acquisition of InfoAccess, an electronic parts catalog business.
“Recurring revenues remained consistent at over 90 percent renewals for our two core product lines, WebsiteSmartPro and PartSmart,” said Olivier.
“The small decrease in operating income for the year was primarily due to expenses related to the two acquisitions and their integration into ARI,” added Brian E. Dearing, chairman and interim chief financial officer of ARI. “Factors contributing to the decrease in net income included non-cash charges related to increased valuation reserves for deferred tax assets and amortization expense related to acquired intangible assets. There is also a cash charge related to higher interest payments for debt associated with the Channel Blade acquisition. In addition, shareholders’ equity, an indicator of our financial stability, continued to increase in fiscal 2009.”
“We made excellent progress on growing our marketing services business over the past year,” Oliver added. “We expanded into the marine and recreation vehicle markets through the acquisition of Channel Blade Technologies, the leading provider of websites, lead management and marketing automation solutions for these markets. The synergies with Channel Blade include opportunities to expand its lead generation platform, Footsteps, to our existing customer base, further enhancing the value ARI brings to manufacturers, dealers and distributors in key markets.”
“Our recurring revenue model provided stability for ARI during a challenging year for the economy. Because our products support the service and accessorizing side of our customers’ businesses, we benefited as many people repaired or enhanced their existing outdoor power equipment, power sports vehicles, motorcycles and other equipment rather than making new purchases. In fact, we saw an 18 percent increase in parts and accessory sales processed on our e-commerce customer platform during the year,” said Olivier.
“We enter fiscal 2010 in a good position. The two acquisitions will contribute to revenues for the full year, as will our key new products SearchEngineSmart and PartStream, each of which we developed and launched during fiscal year 2009. We also expect to generate cash and remain profitable as we continue to benefit from our significantly reduced cost structure. Our priorities for the year include expanding sales to new customers, retaining current customers and providing additional products to this established customer base, further integrating the two acquisitions and continuing to invest in new product development,” added Olivier.
For additional commentary and detail, please reference ARI’s annual report on Form 10-K for the fiscal year ended July 31, 2009, which has been filed with the SEC as of today.
ARI is a provider of technology-enabled services that help dealers, distributors and manufacturers reduce cost and increase sales in selected vertical markets. Specifically, ARI provides electronic parts catalogs, dealer e-commerce solutions, professional services and/or outsourced F&I services in about a dozen vertical markets worldwide, including outdoor power, power sports, motorcycles, marine, recreation vehicles, appliances, agricultural equipment, floor maintenance and construction. ARI currently serves over 20,000 dealers, over 100 manufacturers and over 150 distributors in more than 100 countries worldwide.
For more information, visit www.arinet.com.