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ARI: Revenues crack $30.1 million in 2013

Oliver-Fiscal2013

By Christopher Gerber
November 1, 2013
Filed under Features, Top Stories

It’s been a busy year for ARI. Not much said in the latest earnings report about the marine industry, but additions to the powersports side strengthened the company’s revenues in 2013.

After acquiring several companies in the powersports industry, including a substantial portion of Ready2Ride, Inc. and all of the assets of the web-services provider 50 Below, ARI Network Services, Inc. posted a record revenue of $30.1 million in fiscal 2013, a 33.8% increase over the $22.5 million in the books in 2012.

In the fiscal fourth quarter, ARI said the company’s revenues were up 44.0-percent, coming in at $8.5 million for the quarter ending on July 31, 2013.

Recurring revenues alone for the fiscal year were at $27.0 million, a 44.3-percent increase for the fiscal year over 2012. Recurring revenues during the fourth quarter specifically were up 65.1% over fiscal Q4 of 2012, making up 93.6-percent of revenue during the quarter.

Despite the glowing news, ARI Network Services incurred a net loss of $753,000 during the year due to acquisition-related costs and other non-cash losses.

Reducing debt and new acquisitions during the year played a large part in the losses. Olivier said that funds raised in a private placement transaction were used to reduce post-acquisition debt, but the company still incurred a loss of $682 million during the year related to early repayment of debt.

“Fiscal 2013 was a transformational year for ARI,” President and CEO Roy Olivier said in the company’s release.  “We completed two acquisitions, which provided us with a first-to-market opportunity in the powersports industry and introduced ARI to several new markets – aftermarket wheel and tire and durable medical equipment.

The company’s acquisition of 50 Below Sales and Marketing, Inc., which was completed last November despite higher bids from competing companies, played a part in 2013’s net losses but also attributed to the record profits for the year. The acquisition contributed to 2013’s net loss, but ARI is already seeing a positive cash flow from 50 Below ahead of original expectations, Olivier said in the release.

“The 50 Below operation, which we acquired out of bankruptcy in November 2012, recorded an operating loss of $3.4 million on revenues of $9.2 million for the trailing twelve months ended October 31, 2012,” Olivier said. “By the quarter ended April 30, 2013, we had already achieved positive cash flow and [earnings before interest, taxes, depreciation and amortization] for 50 Below, ahead of our original expectations.”

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