Ari Network Services (ARIS) has reported 45.98 percent plunge in profit for the quarter ended Jan. 31, 2017. The company has earned $0.24 million, or $0.01 a share in the quarter, compared with $0.45 million, or $0.03 a share for the same period last year.
Revenue during the quarter grew 12.70 percent to $13.24 million from $11.75 million in the previous year period. Gross margin for the quarter contracted 209 basis points over the previous year period to 80.35 percent. Total expenses were 94.93 percent of quarterly revenues, up from 92.57 percent for the same period last year. That has resulted in a contraction of 235 basis points in operating margin to 5.07 percent.
Operating income for the quarter was $0.67 million, compared with $0.87 million in the previous year period.
However, the adjusted EBITDA for the quarter stood at $2.21 million compared with $2.10 million in the prior year period. At the same time, adjusted EBITDA margin contracted 112 basis points in the quarter to 16.71 percent from 17.83 percent in the last year period.
"We are pleased with where we stand halfway through our fiscal year," said Roy W. Olivier, president and chief executive officer of ARI. "With our proxy matter concluded and several one-time charges behind us, we are well-positioned to expand adjusted EBITDA margins in the back half of the year. In addition, the initiatives we have put forth to address churn are working as we experienced our third straight quarter of year-over-year churn improvement. Combined with the strong second quarter bookings, we expect stronger organic revenue growth in the second half of the year, complemented by the revenue we are driving through our acquisition of Auction 123."
Operating cash flow improves significantlyAri Network Services has generated cash of $3.82 million from operating activities during the first half, up 29.28 percent or $0.86 million, when compared with the last year period. The company has spent $11.60 million cash to meet investing activities during the first six months as against cash outgo of $1.47 million in the last year period.
Cash flow from financing activities was $7.22 million for the first six months as against cash outgo of $0.60 million in the last year period.
Cash and cash equivalents stood at $4.56 million as on Jan. 31, 2017, up 43.87 percent or $1.39 million from $3.17 million on Jan. 31, 2016.
Working capital remains negative
Working capital of Ari Network Services was negative $3.06 million on Jan. 31, 2017 compared with negative $2.78 million on Jan. 31, 2016. Current ratio was at 0.78 as on Jan. 31, 2017, up from 0.77 on Jan. 31, 2016.
Cash conversion cycle (CCC) has increased to 9 days for the quarter from 4 days for the last year period. Days sales outstanding were almost stable at 9 days for the quarter, when compared with the last year period.
Days inventory outstanding has decreased to 3 days for the quarter compared with 4 days for the previous year period. At the same time, days payable outstanding went up to 20 days for the quarter from 16 for the same period last year.
Debt increases substantiallyAri Network Services has witnessed an increase in total debt over the last one year. It stood at $16.33 million as on Jan. 31, 2017, up 63.50 percent or $6.34 million from $9.99 million on Jan. 31, 2016. Total debt was 27.50 percent of total assets as on Jan. 31, 2017, compared with 20.49 percent on Jan. 31, 2016. Debt to equity ratio was at 0.53 as on Jan. 31, 2017, up from 0.35 as on Jan. 31, 2016. Interest coverage ratio deteriorated to 3.08 for the quarter from 7.28 for the same period last year. Disclaimer: Please note that this is an auto-generated article. IRIS does not guarantee the accuracy, adequacy or completeness of any information and is not responsible for any errors or omissions or for the results obtained from the use of such information. IRIS especially states that it has no financial liability whatsoever to any user on account of the use of information provided on its website. For queries contact: [email protected]
