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ARI Network Services, Inc. Annual Shareholders’ Meeting State of the Business Presentation

ARI Network Services, Inc. Annual Shareholders’ Meeting State of the Business Presentation. ARI Basics + Update on Recent Changes Financial Results Report Card Strategy Overview and Outlook. December 17, 2009.

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ARI Network Services, Inc. Annual Shareholders’ Meeting State of the Business Presentation

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  1. ARI Network Services, Inc.Annual Shareholders’ MeetingState of the Business Presentation ARI Basics + Update on Recent Changes Financial Results Report Card Strategy Overview and Outlook December 17, 2009 www.arinet.com

  2. ARI Network Services, Inc.Annual Shareholders’ MeetingState of the Business Presentation ARI Basics + Update on Recent Changes Financial Results Report Card Strategy Overview and Outlook www.arinet.com

  3. Mission “Be recognized as the leader in creating, marketing and supporting the best solutions that enhance revenue or reduce costs for our customers” www.arinet.com

  4. Brand Promise Enhance your revenue Reduceyour cost Increase your customers’ satisfaction www.arinet.com

  5. Core Values - PRIDE PEOPLE ORIENTED • We promote a fun, team oriented environment where people are invested in and respected RAPID INNOVATION • We expect to be known as the innovator in every market we serve. We expect all employees to be innovative in every aspect of their work INITIATIVE • We expect employees to make personal decisions to strive for something beyond the status quo DELIVERY AND EXECUTION • We take pride in doing what we say we are going to do EMBRACE THE CUSTOMER • We exist to serve our customers. We expect all employees to keep the customers’ interests central in every aspect of their work www.arinet.com

  6. ARI at a Glance • 1981 Founded to provide electronic publishing services to the agriculture industry • 1996 Evolved to equipment industry focus providing parts and service catalogs • 2005 Expanded to technology-enabled marketing services • 2007 Expanded e-commerce and professional services business with OC-Net acquisition • 2009 Acquired Channel Blade Technologies and Powersports Outsourcing Group HeadquartersMilwaukee, Wisconsin ARI F&I ServicesSchenectady, New York Development & Marketing ServicesCypress, California Intl. Sales/SupportThe Netherlands • 20,000+ dealers • 150+ distributors • 100+ manufacturers • 100+ catalogs • 9+ market segments • 100+ countries • Solid Financials • Public Company Marine/RV Sales/Support Virginia Beach, VA www.arinet.com

  7. Primary Markets Powersports Marine RV Outdoor Power Agriculture Appliance www.arinet.com

  8. Partial Manufacturer List www.arinet.com

  9. High Level Product Categories SearchEngineSmart MailSmart ePro Mobile WebsiteSmartPro Lead Storm eXceleratePro 2 Footsteps www.arinet.com

  10. ARI Product Solutions www.arinet.com

  11. Generates Parts Sales on any Website • Integrates with Existing Website Shopping Carts • Customizable Application Appearance to Match Website Branding • Search by Part Number or Model Hierarchy • Dynamic Presentation of Content • Over 75 Parts Catalogs Available www.arinet.com

  12. Full Featured CRM • Channel Lead Tool • Accepts Leads from Multiple Sources • Allows for Workflow by Role • Analytics and Full Reporting • Easily Generated Marketing Campaigns • Promotes Lead Nurturing throughout Customer Lifecycle www.arinet.com

  13. Ensures website is seen on all the major search engines • Customer chooses relevant keywords • Customer selects geographic coverage desired • ARI ensures site is advertised within those parameters • Numerous reports available to determine campaign effectiveness • Campaign can be changed at any time • Ad dollars are stretched based on results! www.arinet.com

  14. Brian Dearing, Board Chairman • Technology and Marketing Experience • GEIS, Sterling Commerce • Mike Tenpas, VP – Global Sales and Marketing • Management, Sales & Marketing Experience • Norlight Telecom, Dealership Mgt. • Robert Hipp, CTO • Technology Management Experience • OC-Net • Darin Janecek, VP - Finance • M&A and Public Accounting Experience • Johnson Controls, Deloitte & Touche Experienced Management Team • Roy W. Olivier, President & CEO • Technology Management and Sales Experience • MSI, ProQuest, Pacific Telesis www.arinet.com

  15. Awards and Honors Dealers Choice Award for Footsteps - 2009Awarded by Power Equipment Trade Magazine 82 of Top 100 Marine Dealers use ARI services - 2009 As designated by Boating Industry Magazine Editor's Choice Award for SearchEngineSmart - 2009 Awarded by Powersports Business Magazine Best Dealer Website of the Year: MarineMax.com - 2009 Awarded by National Marine Manufacturers Association Dealers Choice Award for WebsiteSmart Pro - 2007Awarded by Power Equipment Trade Magazine Small Business Success Stories - 2006Awarded by Corporate Report Wisconsin Editor's Choice Award for WebsiteSmart - 2006Awarded by Powersports Business Magazine IQ Award Technology/Internet Category - 2005Awarded by The Small Business Times and Wisconsin Technology Council e!nnovate’s Technical Knock-Out Award - 2005Awarded by e!nnovate, WE Energies and The Business Journal www.arinet.com

  16. Channel Blade Acquisition • #1 in OEM and dealer websites for marine industry • ~75 manufacturers • 1,600+ dealer locations • 4,400+ end users • Products Include: • Footsteps – CRM and Lead Generation Platform • E-Pro 1 – Dealer Website Platform • E-Pro 2 – OEM Website Platform • Historic Results • 5.8M leads managed for CBT dealers since inception • $189B retail sales by CBT dealers since inception www.arinet.com

  17. PSOG Acquisition • Outsourced F&I Services • Potential long-term opportunity for ARI • 52% of 2.8M Powersports units sold each year financed at dealership • About 50% of dealerships do not have an in-house F&I professional • Profit-sharing business model – dealer pays only if program is successful www.arinet.com

  18. ARI Network Services, Inc.Annual Shareholders’ MeetingState of the Business Presentation ARI Basics + Update on Recent Changes Financial Results Report Card Strategy Overview and Outlook www.arinet.com

  19. FY09 vs. FY08 Statement of Income (dollars in thousands, except per share data) • Revenue up 4% in a down economy • Additional costs due to April acquisitions • Operating income held steady www.arinet.com

  20. Q1-2010 vs. Q1-2009 Statement of Income (dollars in thousands, except per share data) • Revenue up 31% in a down economy • Marketing services up 3x - acquisition + internal growth • Additional costs due to integrating April acquisitions • Operating income up 16% www.arinet.com

  21. Financial Results: Revenue Growth FY2009: Revenue growth continued 10% Compounded Annual Growth Rate www.arinet.com

  22. Financial Results: Operating Income 6th Profitable Year in a Row www.arinet.com

  23. Financial Results: EBITDA EBITDA * A reconciliation of EBITDA to net income is posted on our website, www.arinet.com, under “Company/Investors” www.arinet.com

  24. Financial Results: Net Income Net Income www.arinet.com

  25. ARI Network Services, Inc.Annual Shareholders’ MeetingState of the Business Presentation ARI Basics + Update on Recent Changes Financial Results Report Card Strategy Overview and Outlook www.arinet.com

  26. Valuation $7 million Market Capitalization; 19.6 P-E Ratio; $12 million Enterprise value: 4.1 multiple of TTM EBITDA Price as of December 15, 2009, Net Income & EBITDA as of October 31, 2009 www.arinet.com

  27. FY09 Report Card Key Initiatives for Last Year (FY09) • Simplify Business • Target our Development Efforts • Move the ARI Culture Forward • Product Road Maps • Improve Internal Processes • Define Sales Strategy • Acquisitions • Organic Revenue Initiatives www.arinet.com

  28. Key Initiatives Progress • Simplify Business: • Outsourced CD Processing • Outsourced Manual Data Conversion • Consolidation of Publishing & Development • Organizational Structure – Clear lines of Reporting • Target our Development Efforts : • Clarified Development Team’s Focus • Four Teams: • ARI Products • Professional Services • Website Development • Application Development Support (Temp) www.arinet.com

  29. Key Initiatives Progress • Move the ARI Culture Forward : • Vision and Values (PRIDE) • Senior Leadership and Director Level • Creating a Culture of Accountability • Invested in People & Training • Headquarters Move • Renewed Excitement • Contemporary “feel” • Focus on Innovation (New Products) www.arinet.com

  30. Key Initiatives Progress • Product Road Maps : • Product Steering Committee • Narrow/Deep Focus on current Verticals • Must help ARI customers move Products/Services • Product Management Team Formed • Launched New Product Development Process • Launched Two New Products • PartStream • Search Engine Smart www.arinet.com

  31. Key Initiatives Progress • Improve Internal Processes : • New Product Steering Committee • New departmental budgeting process and accountability • Agile development process • Improved Order Processing www.arinet.com

  32. Key Initiatives Progress • Sales Strategy : • Deployed New Sales Structure and Process • Account Manager Implementation • Dedicated Catalog Sales Team • Vertical Focus on Marine with Channel Blade Team • More Markets • Narrow/Deep Industry Focus • 18% NCV Growth over FY08 www.arinet.com

  33. Key Initiatives Progress 7. Acquisitions: • Integrated Info Access Acquisition • Acquired and began integration of Channel Blade • Acquired F&I Business www.arinet.com

  34. Key Initiatives Progress 8 FY09 Revenue Initiatives • 4 out of the 8 Initiatives generated the following results: • $1.2M in NCV in FY09 • $515K in Revenue in FY09 • Resulting in additional focus on Organic Revenue Initiatives for FY10 www.arinet.com

  35. ARI Network Services, Inc.Annual Shareholders’ MeetingState of the Business Presentation ARI Basics + Update on Recent Changes Financial Results Report Card Strategy Overview and Outlook www.arinet.com

  36. Strategy Summary Short Term (2010): Growth Initiatives Medium Term (2010-11): New products, markets Long Term (2011+): • Focus on organic growth initiatives to drive incremental growth • Integrate Channel Blade acquisition (Cross sell) • Develop F&I business • Refine organization and processes • Evaluate and enter new markets • Continue to develop new products and product extensions • Add additional acquisitions where they make sense to expand customer base, vertical markets, and/or product categories • Drive sustained long-term earnings growth from prior phases • Execute and deliver new revenue categories • Leverage additional capital capacity www.arinet.com

  37. FY10 Key Performance Indicators • Achieve Sales Objectives • Increased Team Activity/Productivity • Cross Sell Channel Blade/ARI Products • Add new Customers • Products • Execute on Product Road Maps • Create scalable “global” platforms • Hire/Retain the Best People • Continue to invest in Training/Skill Development • Focus on recruiting leadership excellence at all levels • Customer Retention • Improve Customer Service/Satisfaction • Improve IT Infrastructure • Improved Average Revenue per Customer • Cost Control • Complete Acquisition Integration plan • Drive down overall cost structure www.arinet.com

  38. Q & A www.arinet.com

  39. Thank You! www.arinet.com

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