Milwaukee-based ARI Network Services reported total revenue for the second quarter of fiscal 2012 increased 5.0 percent to $5.5 million, compared to $5.2 million in the second quarter of fiscal 2011.
Recurring revenue for the quarter increased 7.4 percent to $4.7 million, or 84.6 percent of total revenue, from $4.3 million (82.7 percent of total revenue) in the second quarter of fiscal 2011. Compared to the first quarter of fiscal 2012, recurring revenue increased 2.5 percent.
Operating cash flows for the quarter were $540,000, a 29.9 percent decline from the second quarter of last year, resulting from strategic technology investments.
The company paid down $287,000 of debt in the second quarter, whereas for the same period last year the company increased its debt obligations by $92,000.
In the second quarter the company added 156 new customers and a new reseller agreement.
For the six-month period, churn (the measure of customers that do not renew) improved 23.3 percent compared to the first half of fiscal year 2011.
Operating income for the second quarter was $170,000, compared to $254,000 in the second quarter of 2011.
“We are pleased with the results of the quarter and the first half of the year as we continue to make strategic investments to better position the company for improved operational and financial performance,” said Roy W. Olivier, president and CEO of ARI. “Our recurring revenue for the first half of the year increased to 84.6 percent of total revenue. Additionally, we reduced our rate of churn by 23 percent over this period. These improvements resulted in an increase in recurring revenue of nearly 7 percent. As we add new customers, continue to expand recurring revenue and reduce the number of existing customers that drop our service, we expect to produce more consistent revenue growth and profitability.”
ARI reported net income of $61,000, or $0.01 per share, in the second quarter of 2012, compared to net income of $123,000, or $0.02 per share in the second quarter of 2011.