MILWAUKEE (June 13, 2013) — Software, website and data solutions provider ARI Network Services Inc. reported a 44-percent jump in sales for its third quarter of fiscal 2013 ended April 30 but sustained a loss in income for the period.
ARI said total revenue for the quarter was $8.2 million, a 44-percent increase over the $5.7 million in sales for the same period last year. The Milwaukee-based firm also reported that recurring revenue for the quarter increased 60.1 percent to $7.7 million—or 93 percent of total revenue—from $4.8 million—or 83.7 percent of total revenue—for the same period in fiscal 2012. Gross margin for the third quarter was 77.1 percent, vs. 75.9 percent for the same period last year.
However, the company reported it incurred a net loss of $571,000—or $0.05 per share—for the quarter ended April 30 compared to net income of $210,000 or $0.03 per share for the same period last year. It chalked up the loss primarily to a non-cash loss of $682,000 related to the early repayment of debt and a $420,000 impairment charge to a long-lived asset.
On Nov. 28, 2012, the company acquired the assets out of bankruptcy of the retail division of 50 Below Sales & Marketing Inc., a provider of e-commerce websites to the powersports, automotive tire and wheel aftermarket and medical equipment industries. ARI said the 50 Below operation generated an operating profit during the quarter, though it did not specify the earnings.
Additionally, ARI said that it entered into agreements in March with various accredited investors in a private placement of $4.8 million (3.2 million shares) of its common stock at a purchase price of $1.50 per share. The company also issued warrants to purchase 1.1 million shares at a price per share of $2. The funds raised in the private placement were used to pay down a substantial portion of ARI's outstanding debt.
In April the firm closed new senior secured credit facilities with Silicon Valley Bank that included a $4.5 million term loan and a $3 million revolving credit facility. The proceeds from that transaction were used to pay down the remaining portion of the company's outstanding debt with Fifth Third Bank and with a shareholder, according to ARI.