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INVESTOR PRESENTATION
NASDAQ: ARIS
FY15 ARI Network Services, Inc. | investor.arinet.com
SAFE HARBOR STATEMENT
Statements in this presentation are "forward-looking statements" within the meaning of the Private Securities Litigation
Reform Act. The forward-looking statements can generally be identified by words such as "believes," "anticipates,"
"expects" or words of similar meaning. Forward-looking statements also include statements relating to the Company's
future performance, such as future prospects, revenues, profits and cash flows. The forward-looking statements are
subject to risks and uncertainties, which may cause actual results to be materially different from any future performance
suggested in the forward-looking statements. Such risks and uncertainties include those factors described in Part 1A of
the Company’s most recent Annual Report on Form 10-K, as such may be amended or supplemented by subsequent
Quarterly Reports on Form 10-Q or other reports filed with the Securities and Exchange Commission. Readers are
cautioned not to place undue reliance on these forward-looking statements. The forward-looking statements are made
only as of the date hereof, and the Company undertakes no obligation to publicly release the result of any revisions to
these forward-looking statements. For more information, please refer to the Company’s filings with the Securities and
Exchange Commission.
During this presentation, we will discuss GAAP measure such as net income, as well as certain non-GAAP measures
such as EBITDA. We have posted on www.investor.arinet.com, a reconciliation of these non-GAAP financial measures
to the most comparable financial measures under GAAP.
1
COMPANY OVERVIEW
Roy W. Olivier, President & CEO
ARI’S INVESTMENT HIGHLIGHTS
Strategic Financial
• Industry-leading provider of software tools and
marketing services
• Leader in solutions to help dealers, distributors and
OEMs in selected markets Sell More Stuff!
• #1 or #2 in all core markets served
• Dominant player in powersports, outdoor power and
marine markets with 40%+ market share
• Manage largest content library in markets served
• Attractive market opportunity
• Breadth of offering means no single competitor
competes across every vertical
• Recently entered new verticals that expand total
addressable market by 5X
• Multiple growth opportunities
• Expanded service offerings to grow both customer
base and average revenue per customer
• Europe and Asia remain largely untapped
• Consistent track record of growth and
profitability
• 22% revenue CAGR over last three years
• In FY15, Adjusted EBITDA and cash flow growth
outpacing revenue growth
• Strong recurring revenue profile• Roughly 90% of revenue is recurring
• Highly diversified customer base
• 22,000+ equipment dealers
• 195+ distributors
• 1,500+ manufacturers
• Profitable and Cash Flow Positive
• TTM Adjusted EBITDA margins of 16%
• Operational cash flow inline with Adjusted EBITDA
• Low capital intensity• Strong free cash flow given low capital expenditure
requirements
3
WHAT DO WE DO?
We help our customers Sell More Stuff™
In-Store
• Dealer business management system
• OEM parts lookup
• Aftermarket Parts, Garments &
accessories (PG&A) lookup
• Lead management
Online
• Lead generation
• eCommerce
• OEM parts
• Aftermarket PG&A
• Digital marketing services
4
WHO ARE OUR CUSTOMERS
Dealers Distributors Manufacturers (OEM)
Our Customers are:
PowersportsOutdoor Power Marine RVAppliances
CORE
Tire & Wheel HME
Markets We Serve:
GROWTH
Aftermarket
Auto Service
What “Stuff”?Whole Goods
(Tires, Bike, Boat,
RV)
OEM PartsAftermarket Parts,
Garments &
Accessories (PG&A)
Service & Tire
5
CONTENT THAT DRIVES COMMERCE
Aftermarket PG&A1,400+ Manufacturers
500K Parts
Whole Goods315 Manufacturers
176K Models
OEM Parts120+ Manufacturers
500K Models
10MParts
MONETIZED VIA
Lead Gen
Websites
eCommerce
Websites DaaSDigital
Marketing
Mobile
Apps
Business
Management
6
HOW DO WE HELP?
CONTENT
OEM Parts120+ Manufacturers
500K Models
10MParts
Aftermarket PG&A1,400+ Manufacturers
500K Parts
Whole Goods315 Manufacturers
176K Models
7
Improves productivity and
profitability at Dealership
Business
Management
POS / Inventory Mgmt.
& Accounting
SEM
ORM
SOCIAL
EMAIL / TEXT
Digital Marketing
Leads for major units
eCommerce sales
Web Presence
Lead Gen &
eCommerce
Websites
eCatalogs
Increases sales in Dealership
Improves customer satisfaction
BUSINESS MODEL
Business Mgmt.eCatalogsLead Gen + eCommerce
Websites
ARPD = Average Recurring Revenue Per Dealer
Data as of and for the year ending July 31, 2015
¹Does not include bulk customers
Digital Marketing
SaaS / Subscription
55% of Total Revenue
ARPD: $3,000
Target Growth: 10% - 20%
34% of Total Revenue
ARPD: $1,800¹
Target Growth: 2% - 4%
5% of Total Revenue
New Offering with
TCS Acquisition
(Acquired 9/30/14)
3% of Total Revenue
ARPD: $6,400
8
SERVICING MULTI-LINE DEALERS
Appliances Marine & RV Outdoor Power Wheel & Tire Powersports
9
GROWTH DRIVERS
All Markets
• New Logos
• Increase ARPD²
• Lower Churn
• Digital Marketing
Acquisitions that align with our strategy
¹Total addressable market represented by the green bars . Percentages represent ARI’s market share , or the percentage of U.S. dealers that currently use 1 or more of our
products. For example, ARI currently has 40% market-share of the OPE vertical; with 40% of those dealers using 1 or more of ARI’s products.
²Average revenue per dealer
³Home Medical Equipment
66%
40%
90%10%
25K dealers
MA
RK
ET
SIZ
E
New Markets
• HME³
• Tire & Wheel
• Aftermarket Auto
Service
66%
40%
90% 10%
2%
17%
0%
25K dealers 125K dealers
10
HISTORICAL GROWTH
$0
$5,000
$10,000
$15,000
$20,000
$25,000
$30,000
$35,000
$40,000
$45,000
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Historical Revenue
Other
Non-Strategic RevenueNon-Recurring Revenue• Pro Svcs• Older Businesses
11
HISTORICAL GROWTH
$0
$5,000
$10,000
$15,000
$20,000
$25,000
$30,000
$35,000
$40,000
$45,000
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Historical Revenue
Other eCatalog
eCatalog• $14M Revenue• 16,000 +Dealers• 100 Countries
12
HISTORICAL GROWTH
In FY13 Q3 we made a change to our lead generation service business model, eliminating the pass-through cost of purchased ad words from the search engine providers on behalf
of our customers.
$0
$5,000
$10,000
$15,000
$20,000
$25,000
$30,000
$35,000
$40,000
$45,000
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Historical Revenue
Other eCatalog Website
Lead Gen/eCom Websites• $22M Revenue• 6,000 Websites
13
HISTORICAL GROWTH
In FY13 Q3 we made a change to our lead generation service business model, eliminating the pass-through cost of purchased ad words from the search engine providers on behalf
of our customers.
$0
$5,000
$10,000
$15,000
$20,000
$25,000
$30,000
$35,000
$40,000
$45,000
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Historical Revenue
Other eCatalog Website Digital Marketing
Digital Marketing Services• $1M Revenues• 175 Customers
14
HISTORICAL GROWTH
¹Point of Sale
In FY13 Q3 we made a change to our lead generation service business model, eliminating the pass-through cost of purchased ad words from the search engine providers on behalf
of our customers.
$0
$5,000
$10,000
$15,000
$20,000
$25,000
$30,000
$35,000
$40,000
$45,000
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Historical Revenue
Other eCatalog Website Digital Marketing POS
Business Mgmt System/POS¹• $2M Revenues• 1,500 Locations
15
HISTORICAL GROWTH
¹Point of Sale
In FY13 Q3 we made a change to our lead generation service business model, eliminating the pass-through cost of purchased ad words from the search engine providers on behalf
of our customers.
$0
$5,000
$10,000
$15,000
$20,000
$25,000
$30,000
$35,000
$40,000
$45,000
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Other eCatalog Website Digital Marketing POS
Over $40 M in Revenue for FY15
16
RESULT OF STRATEGY
FY12 FY15
Revenues $22.5M $40.4M
Sales & Marketing Spend 20.4% 25.8%
Sales & Marketing Head Count 38 121
TAM in Dollars $100 Million $1.5+ Billion
TAM – Total Addressable MarketFY12 results based on public filings; TAM based on 4 verticals and two productsFY15 results based on public filings; TAM based on 7 verticals and four products
17
MANAGEMENT TEAM
Roy W. Olivier President & CEO
Rob A. Ostermann Chief Technology Officer
Bill Nurthen Chief Financial Officer
Brad Smith V.P. Product Management
Management & Insiders own 8.65%
Robert JonesV.P. of Sales
Joined ARI September 2006 as Vice President of Global Sales and Marketing / Appointed as President and CEO in May 2008 /
Director since 2008 / Previously worked for three Fortune 500 companies before starting his first software company in 1989 focused
on developing multi-media CD-ROM titles. Sold that company in 1993 to start a software company focused on developing software to
help dealers in the construction, material handling, mining, and outdoor power vertical markets which was sold to ProQuest (now
Snap-On) in 2000.
Joined ARI as Chief Financial Officer in November 2013 / CFO of Cabrera Capital Markets, LLC 2011-2013 / CFO of bioLytical
Laboratories 2008 to 2011 / Vice President of Finance and then CFO of Inforte Corp., NASDAQ (INFT) 1999 to 2007 / Financial
operations roles at Platinum Technology International NASDAQ (PLAT) / MBA from The Kellogg School of Management at
Northwestern University / BBA undergraduate degree from The University of Notre Dame.
Appointed Chief Technology Officer of ARI in August 2012 having served as Executive Director of Technology since November 2011
and Director of Product Engineering since joining the Company in June 2008 / Served in various technology management and
development roles at Parcel Pro Inc. in Torrance, California and The California Breath Clinics in Los Angeles, California from 2003-
2008 / Lead developer at OC-Net, Inc. in Cypress, California / B.S. in Business Administration, Computer Information Systems from
California State University.
Appointed Vice President of Sales in August 2014 / Most recently served as ARI’s Executive Director of Sales and served as Director
of Dealer Sales following ARI’s November 2012 acquisition of Duluth, Minn.-based 50 Below / Joined 50 Below as supervisor of the
UPS Program in the Financial Services Division in 2011 / Promoted to Sales Manager of the Powersports division in January 2012
and Director of Sales and Service in May 2012.
Appointed Vice President of Product Management in January 2014 / Joined ARI in 2007 and most recently served as Director of
Product Management and General Manager of Aftermarket / Double B.A. in Web/Technology Development and Spanish from the
University of Wisconsin-Stevens Point / MBA from the University of Wisconsin-Eau Claire in 2012 / In conjunction with MBA program,
consulted on an East Asian supply-chain consultancy for a Fortune 500 marine manufacturer.
*Long-term equity bonus plan aligned with Shareholder interests. Management team granted restricted stock that vests at $6, $7, $8 & $9
18
FINANCIAL OVERVIEW
Bill Nurthen, CFO
MOST RECENT QUARTER HIGHLIGHTS¹
1 as of and for the quarter ending July 31, 2015
² YoY for the year ending July 31, 2015
³ Customer Acquisition Costs
10 years of Positive Adjusted EBITDA & Operating Cash Flows
• Total Revenue $10.9M
• 90.1% Recurring Revenue
• 82.5% Gross Margin
• Dealer Sales Bookings Up 17.0%²
• Operating Cash Flow of $1.7M
• Total CAC³ ‐ 11.3 months
• Adjusted EBITDA Margin of 16.5%
Mill
ion
s
Quarterly Recurring Revenue (QRR)
FY 13 FY 14 FY 15
$5.0
$6.0
$7.0
$8.0
$9.0
$10.0
$11.0
Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
QRR
20
$0.0
$5.0
$10.0
$15.0
$20.0
$25.0
$30.0
$35.0
$40.0
$45.0
FY11 FY12 FY13 FY14 FY15
Mill
ion
s
FY = Fiscal Year Ending July 31
Recurring Revenue Total Revenue
5-yr Total Company Recurring Revenue Growth CAGR = 16.4%
$21.3 $22.5
$30.1
$40.4
81.7%
$33.0
REVENUE GROWTH
83.2% 89.7% 93.6% 90.2%
21
-$1.0
$0.0
$1.0
$2.0
$3.0
$4.0
$5.0
$6.0
$7.0
FY11 FY12 FY13 FY14 FY15
Adjusted EBITDA Operating Cash Flow Free Cash Flow
$4.6
$3.8
$4.4
$6.6
Mill
ion
s
24.4% 20.5% 12.7%
FY = Fiscal Year Ending July 31
13.4% 16.3%
ADJUSTED EBITDA & CASH FLOW
Includes $1.2M of
acquisition-related costs.
Integration related cost-reduction in
FY14Q2, $2.5M annualized
$3.5
22
$5.2
$3.5
$2.4 $2.4
$6.3
$1.1 $1.1
($0.1)
$4.2
Free Cash Flow = cash flow from operations less capital expenditures and capitalized software development
($0.0)
BALANCE SHEET HIGHLIGHTS¹
FY15
Cash and Investments: $2.3M
Federal NOLs of $4.5M
Total Debt and Lease Obligations: $10.8M
Shares Outstanding: 17.1M
Stock Price*: $3.96
Market Cap.: $67.7M
Enterprise Value: $76.3M
TTM Enterprise Value/Adjusted EBITDA: 11.6x
TTM Enterprise Value/Revenues: 1.9x
¹ As of and for the year ending July 31, 2015
* As of Market Close 11/6/15
23
DCi ACQUISITION
Direct Communications Inc. (“DCi”) is a leading provider of differentiated product content and electronic parts catalog software serving manufacturers, distributors, jobbers and independent retailers in the $300 billion automotive aftermarket.
Date: 7/14/15
Consideration: $3.75M cash at closing
$2.0M Seller Note (4 yrs., 4% interest to be adjusted based on
working capital adjustment as defined in the Purchase Agreement)
$0.5M equity (159,795 shares of ARI Common Stock)
Funded: Primarily through proceeds from the May 2015 equity offering.
Financial Commentary: Expected to add $4M to FY16 revenue and be accretive to FY16
adjusted EBITDA.
24
PEER GROUP ANALYSIS
Software Equity Group Multiples1
ARI2 SaaS Index3 Software Index4 Internet Index5
EV/Revenue 1.9 5.6 – 7.3 2.9 – 3.1 1.8 – 2.1
EV/EBITDA 11.6* 46.2 – 61.7 14.6 – 15.5 16.7 – 19.1
1 Based on the Software Equity Group’s Software Industry Financial Report for Q1 152 As of Market Close 11/6/15*Adjusted EBITDA3 57 Public Companies4 137 Public Companies5 104 Public Companies
25
RECENT TRANSACTIONS
• Cox Acquires DealerTrack (TRAK) (6/15)
– 4.7x EV/Revenue
– 36.1x EV/EBITDA
– 60% Premium¹
• INCADEA (INCA) Acquired by DealerTrack (12/14)
– 3.0x TEV/Revenue
– 19.3x TEV/EBITDA
– 70% Premium²
26
¹ Offer represents premium of 60% to 6/12/15 stock price.
² Offer represents premium of over 70% to 1 year average.
APPENDICES
YEAR COMPANY PRODUCT VERTICAL
2015 DCi eCat Automotive Aftermarket
2015 TASCO Corporation Business Management Systems (“BMS”) Tire & Wheel
2014 TCS DMS, Lead Gen/eCommerce Tire & Wheel
2013 DUO Web Services Digital Marketing Services Powersports
2012 50 Below Lead Gen/eCommerce Home Medical, Tire & Wheel
2012 Ready2Ride eCat Powersports
2009 Channel Blade Lead Gen/eCommerce Marine
2008 Info Access eCat Appliances
2007 OC-Net Lead Gen/eCommerce Powersports
2003 VertX Commerce Lead Gen/eCommerce Powersports
1999 Network Dynamics eCat Outdoor Power
1998 POWERCOM-2000 eCat Outdoor Power
1997 Empart Technologies eCat RV
1996 CD*\.IMG eCat Outdoor Power, Powersports, Marine
APPENDIX 1: ACQUISITION HISTORY
28
# U.S.
Dealers4,700 11,000 3,100 30,000 2,000 18,000 25,000 80,000
ARI Website
Customers1,721 1,222 418 N/A 20 3,250** 490 0
ARI
eCatalog
Customers
4,200* 4,011* 3,000* 1,700* 20 N/A N/A 0
ARI POS¹
Customers0 0 0 0 0 1,500² 0 0
*total number is approximate and includes a large bulk customer’s estimates
** includes TCS acquisition
¹ Point of Sale
² Total number of physical location rooftops
Powersports Outdoor Power Marine RVAppliances
CORE
Tire & Wheel HME
GROWTH
APPENDIX 2: TOTAL ADDRESSABLE MARKET (TAM)
Aftermarket
Auto Service
29
3 Sales
Channels• OEM Sales
• Dealer Inside Sales
• International Sales
100Over
Countries Served
2 Geographic
MarketsAmericas & EMEA
Headquarters Milwaukee, WI Int’l Sales/Support The Netherlands
387Employees
*
*includes DCi, TCS & TASCO acquisitions
APPENDIX 3: LOCATIONS
eCatalog Installs
Website Installs 30
APPENDIX 4: BENEFICIAL OWNERSHIP¹
Amount of Beneficial Ownership1
Percent Ownership
Wellington Management Company (2) 1,725,300 9.65%
Michael D. Sifen, Inc. (3) 1,205,128 6.74%
Samjo Capital, LLC (4) 1,100,000 6.15%
Park City Capital, LLC (5) 1,000,000 5.59%
Grand Slam Asset Management, LLC (6) 945,861 5.29%
All affiliates as a group 5,976,28 33.43%
31
(1) Except as otherwise noted, the persons named in the above table have sole voting and investment power with respect to all shares shown as beneficially owned by them. Includes options exercisable within
60 days of June 1, 2015.
(2) Ownership information is provided as of December 31, 2014 based upon Schedule 13G amendment filed on February 12, 2015. Includes 250,000 shares acquired in connection with the May 7, 2015 equity
offering.
(3) Ownership information is provided as of March 15, 2013 based upon Schedule 13G filed on May 22, 2013 by Michael D. Sifen, Inc. Total includes 498,461 shares of common stock held by Michael D. Sifen
and 706,667 shares of common stock held by Michael D. Sifen, Inc., an entity controlled by Mr. Sifen.
(4) Ownership information is provided as of May 12, 2015 as the result of the purchase through a public offering by the Company.
(5) Ownership information is provided as of the Schedule 13D filed December 10, 2014.
(6) Ownership information is provided as December 31, 2014, based upon Schedule 13G amendment filed February 11, 2015. Includes 150,000 shares acquired in connection with the May 7, 2015 equity
offering.
APPENDIX 5: INSIDER OWNERSHIP¹
Name of Officer / Director Amount of Direct Beneficial Ownership Percent Ownership
Roy W. Olivier (2)(3) – President & CEO 856,645 4.79%
William A. Nurthen (3) – Chief Financial Officer 151,215 *
Chad J. Cooper – Director 138,040 *
William C. Mortimore – Director 107,726 *
William H. Luden, III – Director 95,315 *
Robert Y. Newell, IV - Director 80,826 *
P. Lee Poseidon – Director 60,064 *
Marvin A. Berg, III (4) – VP Operations 55,636 *
All current executive officers and directors as a group 1,545,467 8.65%
32
* Denotes less than 1%
(1) Except as otherwise noted, the persons named in the above table have sole voting and investment power with respect to all shares shown as beneficially owned by them. Includes options exercisable within
60 days of October 21, 2015.
(2) Mr. Olivier’s total includes 172,955 shares held in the Company’s 401(k) plan, of which Mr. Olivier is a trustee with voting power. Mr. Olivier disclaims any beneficial ownership in these shares in excess of his
pecuniary interest 13,246 shares.
(3) Management team granted 110,000 shares of performance based restricted stock that vests at $6, $7, $8 & $9.
(4) Mr. Berg resigned from the Company effective July 31, 2015.
APPENDIX 6: COMPETITIVE LANDSCAPE
eCatalogs
Lead Gen +
eCommerce Websites
Business Management
Digital Marketing
33
APPENDIX 7: COMPANY ANNOUNCES PRICING OF
UNDERWRITTEN OFFERING ALIGNED WITH ITS
ACQUISITION STRATEGY
ARI communicated its intention to use the net proceeds from the offering to
invest in or to acquire, from time to time, businesses that align with ARI’s core
acquisition strategy, to repay the outstanding balance of $1,750,000 on its
line of credit which was incurred in connection with its recent acquisition of
the assets of TASCO Corporation, thus making it fully available for additional
transactions, and for general corporate purposes.
Date: 5/7/2015
Shares: 1,760,000
Price: $3.00
Gross Proceeds: $5.3M
Net Proceeds: $4.8M
34
APPENDIX 8: TASCO ACQUISITION
TASCO Corporation (“TASCO”), is a leading provider of business management,
point of sale and other software exclusively designed for automotive tire and
wheel dealers (“T&W”).
Date: 4/28/15
Consideration: $1.75M cash at closing
$800K equity (242,424 shares ARI Common Stock)
$200K cash payment on anniversary of transaction (subject to
set-off & working capital adjustment)
Funded: Cash from operations & Line of Credit with Silicon Valley Bank
Consolidates two industry-leading business management software platforms
cementing ARI’s position as the most complete technology provider in the T&W
market.
35
APPENDIX 9: TCS ACQUISITION
Tire Company Solutions, LLC (“TCS”), a leading provider of software,
websites and marketing services designed exclusively for automotive tire and
wheel dealers.
Date: 10/1/14
Consideration: $4.2M cash at closing
$3.0M Seller Note
$1.9M equity (619K shares of ARI Common Stock)
Earn-out (to be paid contingent upon specified revenue goals)
Funded: Combination of refinancing Senior Debt with Silicon Valley
Bank, our Line of Credit and cash from operations.
36