Ariel Corporation Reports Preliminary First Quarter Results
CRANBURY, N.J., May 10 /PRNewswire/ -- Ariel Corp. (Nasdaq: ADSP) today reported net sales of $3,073,529 for the three months ended March 31, 1999, a decrease of $3,203,088 from net sales of $6,276,617 for the three months ended March 31, 1998. Ariel reported a net loss of approximately ($2,914,313) or a loss per share of ($.30) for the three months ended March 31, 1999 compared to a net loss of ($1,798,930) or ($0.19) per share for the three months ended March 31, 1998. Gross margin rates improved from 41% for the three months ending March 31, 1998 to 55% for the same quarter this year reflecting a larger percentage of sales concentrated in Technical OEMs and end-users such as ISPs. The revenue decrease in this same comparison includes a reduction in sales to PC Integrators of approximately $2.2 million as Ariel continues to focus on its two primary markets, Technical OEMs (TOEM) and Internet Service Providers (ISPs). First quarter 1999 results also reflect the first full quarter in which Ariel's newly acquired European subsidiary's financials are consolidated. European operations increased expenses by approximately $790,000 including $250,000 in amortization of goodwill arising from the acquisition. Jay H. Atlas, CEO and President, commented "First quarter results are in line with our expectations as we implemented improvements in internal operations, integrated our new European operations, and built and began implementing our new marketing and sales programs targeting the Internet Service Provider and Technical OEM markets. Ariel's recent announcements of our PowerPOP(TM) architecture for ISPs, support for Linux-based systems, and our new relationship with Red Hat Software have been exceptionally well- received by industry experts and our target customers alike. Ariel's focus on technical original equipment manufacturers and internet service providers will sharpen throughout 1999, and we expect the bulk of our 1999 revenue to come from these targets. This new focus reflects our expectations that weak demand for remote access hardware from pc manufacturers and integrators targeting enterprise markets will continue throughout 1999." More About Ariel Ariel Corp. (Nasdaq: ADSP) is a leading provider of high-density remote access plug-in cards for applications such as Internet access, corporate Intranet/Extranet access, on-line services, telecommuting, transaction processing, and unified messaging. Ariel's remote access products make it easy for OEMs and system integrators targeting ISPs, corporate enterprises and other service providers to add high-density remote access to open systems platforms running a variety of popular operating systems, including Windows NT and Linux. Ariel's high-density remote access cards provide V.34, V.90- compatible 56K, and basic rate ISDN remote dial-in, LAN dial-out, and Internet back-haul. Available in ISA, PCI and CompactPCI formats, the cards connect to T1, E1, ISDN, and POTS lines. Ariel's remote access products run Windows NT and Linux out of the box. An SDK is available for OEMs who want to use Ariel's remote access products with other operating systems. For more information on Ariel products, please contact Ariel Corporation at 2540 Route 130, Cranbury, NJ 08512. Phone: 609-860-2900. Fax: 609-860-1155. Email: email@example.com. World Wide Web: http://www.ariel.com. Statements contained in this press release that are not historical facts are forward-looking statements that are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, as amended. Forward-looking statements involve risks and uncertainties, including market acceptance of the Company's products by technical original equipment manufacturers and internet service providers, the timely development and acceptance of new products, the impact of competitive products and pricing, changing market conditions and the other risks detailed from time to time in the Company's filings with the SEC. These risks and uncertainties could cause actual results to differ materially from those projected or currently expected. These forward-looking statements represent the Company's judgement as of the date of this release. The Company disclaims, however, any intent or obligation to update these forward-looking statements. ARIEL CORPORATION CONDENSED PRELIMINARY CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) Three Months Ended March 31, 1999 1998 SALES $3,073,529 $6,726,617 GROSS MARGIN 1,679,931 2,596,238 LOSS FROM OPERATIONS ($2,929,450) ($1,711,026) OTHER INCOME (EXPENSE), NET 15,137 (87,904) INCOME/(LOSS) BEFORE TAX PROVISION ($2,914,313) ($2,635,407) INCOME TAX 0 0 NET INCOME/(LOSS) ($2,914,313) ($1,798,930) BASIC PER SHARE DATA: BASIC WEIGHTED AVERAGE OF COMMON SHARES OUTSTANDING 9,755,150 9,380,293 BASIC EARNINGS/(LOSS) PER SHARE ($0.30) ($0.19) ARIEL CORPORATION CONDENSED PRELIMINARY CONSOLIDATED BALANCE SHEET (Unaudited) March 31, December 31, ASSETS 1999 1998 Current Assets Cash and cash equivalents $12,858,830 $17,996,575 Accounts receivable, net 2,910,536 3,593,709 Inventories 2,263,012 2,857,326 Prepaid Expenses 354,875 449,691 Other receivables 1,164,534 1,378,781 19,551,786 26,276,082 Equipment, net 1,392,443 1,365,354 Goodwill & Other Intangible Assets 4,802,655 5,341,599 Other assets 640,223 690,435 Total assets $26,387,107 $33,682,380 LIABILITIES & STOCKHOLDER'S EQUITY Liabilities $9,862,676 $13,976,883 Stockholder's equity 16,524,431 19,705,497 Total liabilities & stockholder's equity $26,387,107 $33,682,380
SOURCE Ariel Corporation
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