50 Below drives increased revenue at ARI

Publish Date: 
Oct 30, 2013

MILWAUKEE, Wis. - ARI Network Services is turning a profit on its 50 Below assets which it purchased in 2012. ARI posted record annual revenue of $30.1 million, a 33.8 percent increase over fiscal year 2012’s $22.5 million.

“Our acquisition of 50 Below in November 2012 was a game-changer for ARI. We posted record revenues in fiscal 2013, exceeding $30 million for the first time in the company’s history, and now host and maintain more than 5,500 websites,” president and CEO Roy Olivier told investors in reporting the company’s fiscal 2013 financial results.

“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 12 months ended Oct. 31, 2012. By the quarter ended April 30, 2013, we had already achieved positive cash flow and EBITDA for 50 Below, ahead of our original expectations,” he said.

The company reported $8.5 million in revenue for the fourth quarter of fiscal year 2013 ended July 31, a 44 percent increase over the same period last year.

The company incurred a net loss of $753,000 for the year, compared to net income of $1,055,000 last year. The loss was driven by acquisition-related costs of about $1.2 million, a non-cash loss on the fair market valuation of stock warrants of $635,000, a non-cash loss of $682,000 related to the early repayment of debt and a $420,000 non-cash impairment charge to a long-lived asset. The charges were offset in part by a non-cash gain recognized on a change in estimate of contingent liabilities of $180,000 and an income tax benefit of $1.13 million.

“Fiscal 2013 was a transformational year for ARI. 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.  We raised $4.5 million in a private placement transaction that was used to reduce our post-acquisition debt and are excited about our new relationship with Silicon Valley Bank, which we believe will be a critical growth partner for the company.”   

The other acquisition was aftermarket fitment data provider Ready2Ride, Inc., purchased in August 2012. ARI leveraged this data in its February 2013 release of AccessorySmart, a fitment-driven parts lookup system.

Posted by Holly Wagner