ARI Network Services, Inc. (ARIS) has reported an 8.48 percent fall in profit for the quarter ended Oct. 31, 2016. The company has earned $0.36 million, or $0.02 a share in the quarter, compared with $0.39 million, or $0.02 a share for the same period last year.
Revenue during the quarter grew 4.56 percent to $12.27 million from $11.74 million in the previous year period. Gross margin for the quarter contracted 102 basis points over the previous year period to 81.35 percent. Total expenses were 93.74 percent of quarterly revenues, up from 93.12 percent for the same period last year. That has resulted in a contraction of 63 basis points in operating margin to 6.26 percent.
Operating income for the quarter was $0.77 million, compared with $0.81 million in the previous year period.
Adjusted EBITDA for the quarter was almost stable at $2.02 million, when compared with the prior year period. At the same time, adjusted EBITDA margin contracted 78 basis points in the quarter to 16.43 percent from 17.21 percent in the last year period.
Roy W. Olivier, president and chief executive officer of ARI, commented, "We are off to a good start for our fiscal 2017. We posted another record quarterly revenue performance and our recurring revenue growth continues to outpace our overall revenue growth. When you combine this with the declines in churn we have achieved over the last couple of quarters, we are well positioned to expand organic growth through the remainder of the fiscal year. This growth will also be complemented by the acquisition of Auction123, which we closed on November 1, 2016. Due to our strong earnings and cash flow performance in fiscal 2016, we were able to complete this acquisition with a combination of excess cash and senior debt. We expect Auction123 to add over $3 million to our fiscal 2017 revenue, and it will be immediately accretive to our margins. All things considered, we remain on track for another record year at ARI."
Operating cash flow improves marginally
ARI Network Services, Inc. has generated cash of $1.77 million from operating activities during the quarter, up 1.79 percent or $0.03 million, when compared with the last year period. The company has spent $0.78 million cash to meet investing activities during the quarter as against cash outgo of $0.66 million in the last year period.
The company has spent $0.48 million cash to carry out financing activities during the quarter as against cash outgo of $0.17 million in the last year period.
Cash and cash equivalents stood at stood at $5.62 million as at Oct. 31, 2016.
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