ARI Network Services: Announces 2013 fiscal third quarter results

MILWAUKEE, June 11, 2013 (GLOBE NEWSWIRE) — ARI Network Services
(OTCBB:ARIS), a leading provider of website, software, and data
solutions that help dealers, distributors, and manufacturers Sell More
Stuff!(TM), reported financial results today for its third quarter of
fiscal 2013 ended April 30, 2013.

Highlights for the quarter included:

— Total revenue for the quarter was $8.2 million, a 44.0% increase over
the third quarter of fiscal year 2012.

— Recurring revenue for the quarter increased 60.1% to $7.7 million, or
93.0% of total revenue, from $4.8 million, or 83.7% of total revenue,
for the same period in fiscal 2012.

— On November 28, 2012, the Company acquired the assets of the retail
division of 50 Below Sales & Marketing, Inc., a leading provider of
eCommerce websites to the powersports, automotive tire and wheel
aftermarket and medical equipment industries. The 50 Below operation,
which was purchased out of bankruptcy, generated an operating profit
during the quarter, only the second quarter under ARI ownership.

— On March 13, 2013, the Company announced that it entered into agreements
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 $2.00. The funds raised in the private
placement were used to pay down a substantial portion of the Company’s
outstanding debt.

— On April 25, 2013, the Company announced that it closed new senior
secured credit facilities with Silicon Valley Bank. The facilities
include a $4.5 million term loan and a $3.0 million revolving credit
facility. The proceeds from the transaction were used to pay down the
remaining portion of the Company’s outstanding debt with Fifth Third
Bank and with a shareholder.

Fiscal Year 2013 Third Quarter Financials

ARI reported revenue of $8.2 million for the third quarter of fiscal
2013 versus $5.7 million for the same period last year, an increase of
44.0%. Recurring revenue comprised 93.0% of total revenue during the
quarter versus 88.3% last quarter and 83.7% for the third quarter of
fiscal year 2012.

Gross margin for the third quarter was 77.1%, versus 75.9% for the same
period last year.

The company incurred a net loss of $571,000 or $0.05 per share for the
quarter ended April 30, 2013, compared to net income of $210,000 or
$0.03 per share for the same period last year, primarily due 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.

Management Discussion

Roy W. Olivier, President and Chief Executive Officer of ARI,
commented, “We are pleased with the progress we have made integrating
our two fiscal 2013 acquisitions. We were able to generate a profit
from the 50 Below operation in the second quarter of our ownership. For
the most recent fiscal year prior to the acquisition ended July 31,
2012, the 50 Below operations lost approximately $4 million on $9
million revenue. Integration activities will continue over the next
9-12 months and we expect the 50 Below operations, as well as our
combined operations, to become increasingly more profitable.”

Mr. Olivier continued, “ARI is now one of the leading providers of
websites in each of the markets we serve; we currently host and
maintain more than 5,500 sites, and we expect this number to continue
to grow. Our new AccessorySmart(TM) aftermarket parts lookup solution,
which is a first of its kind in the powersports industry, continues to
gain traction in the marketplace after its February launch. We have
also launched significant improvements to our products aimed at the
automotive wheel and tire aftermarket, a market for which we have
significant growth expectations.”

Darin Janecek, Chief Financial Officer of ARI, commented, “While our
fiscal 2013 operating results continue to be affected by the various
events and one-time charges that have occurred year-to-date, including
two acquisitions, a $4.8 million private placement, and a debt
refinancing and transition to a new banking partner, we do expect a
return to profitability in the fourth quarter and anticipate further
revenue growth and increased profitability in fiscal 2014.”

Third Quarter Conference Call

ARI will conduct a conference call on Tuesday June 11, 2013 at 4:30 pm
EDT to review the financial results for the third quarter of fiscal
2013 ended April 30, 2013. Interested parties can access the conference
call by dialing (877) 359-3639 or (408) 427-3725 and referring to
conference ID: 79028219. The conference call is also being webcast,
which is available in the Investor Relations section of the company’s
website at A replay of the webcast will be
archived on the Company’s website for 60 days.

About ARI

ARI Network Services, Inc. (“ARI”) (OTCBB:ARIS), creates award-winning
software-as-a-service (“SaaS”) and data-as-a-service (“DaaS”) solutions
that help equipment manufacturers, distributors and dealers in selected
vertical markets Sell More Stuff!(TM) — online and in-store. Our
innovative products are powered by a proprietary library of enriched
original equipment and aftermarket content that spans more than 10.5
million active part and accessory SKUs, 469,000 models and $1.7 billion
in retail product value. We remove the complexity of selling and
servicing new and used inventory, parts, garments, and accessories
(“PG&A”) for customers in automotive tire and wheel, powersports,
outdoor power equipment, marine, RV and white goods industries. More
than 22,000 equipment dealers, 195 distributors and 140 manufacturers
worldwide leverage our web and eCatalog platforms to Sell More
Stuff!(TM). For more information on ARI, visit

Additional Information

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