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 percent 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 percent of revenue, compared with $30.9 million, or 93.6 percent 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 percent. 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 percent of revenue. This compares with Adjusted EBITDA of $4.4 million or 13.4 percent 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 percent.
- 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 percent 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 percent 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 percent of revenue. This compares with Adjusted EBITDA of $1.6 million, or 18.8 percent of revenue in the same period last year and $1.7 million, or 16.8 percent 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.”