Ariel Corporation Reports Preliminary Second Quarter Results
CRANBURY, N.J., July 26 /PRNewswire/ -- Ariel Corp. (Nasdaq: ADSP) today reported net sales of $2,760,021 for the three months ended June 30, 1999, a decrease of $1,351,169 from net sales of $4,111,190 for the three months ended June 30, 1998. Ariel reported a net loss of ($3,247,936) or ($0.33) for the three months ended June 30, 1999 compared to a net loss of ($3,378,261) or ($0.35) per share for the three months ended June 30, 1998. Ariel's net sales for the six months ended June 30, 1999 decreased 44% to $5,824,661 from the $10,387,807 reported for the six months ended June 30, 1998. For the six months ended June 30, 1999, Ariel reported a net loss of ($6,254,744) or ($0.64) per share, compared with a net loss of ($5,177,191) or ($0.54) per share for the comparable period in 1998. The revenue decrease in 1999 as compared with 1998 includes a reduction in sales to PC Integrators of approximately $3.3 million as PC Integrator demand for high-end communications options remains weak industry-wide -- as anticipated by Ariel's transition to focus on internet service providers (ISPs) and technical original equipment manufacturers. Gross margin for the three months ending June 30, 1999 was $1,585,290 or 57% of sales, as compared to $1,643,126 or 40% for the same period in 1998. For the six months ending June 30, 1999 gross margins were $3,257,792 or 56% of sales as compared to $4,239,363 or 41% for the same period last year. The increase in gross margin as a percent of sales reflects a significantly improved mix of sales concentrated in Technical OEMs and ISPs vs. lower-margin PC Integrator business. Jay H. Atlas, CEO and President, commented, "Second quarter results were in line with our expectations as we continue to transition our products, marketing, and sales programs to more effectively focus on the Internet Service Provider and Technical OEM markets. Demand for Ariel's TOEM products remains strong, and our recent announcement of Ariel Access Architecture(TM) is expected to further strengthen our position with technical original equipment manufacturers. Internet industry opinion and initial customer reactions to our PowerPOP(TM) architecture continue to be positive. We expect our aggressive efforts to fully implement Ariel's transition to this market focus will continue through the second half of 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. 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: firstname.lastname@example.org. World Wide Web: http://www.ariel.com. ARIEL CORPORATION CONDENSED PRELIMINARY CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) Three Months Ended Six Months Ended June 30, June 30, 1999 1998 1999 1998 SALES $2,760,021 $4,111,190 $5,824,661 $10,387,808 GROSS MARGIN 1,585,290 1,643,126 3,257,792 4,239,363 LOSS FROM OPERATIONS ($3,264,687) ($3,281,625) ($6,284,618) ($4,992,652) OTHER INCOME (EXPENSE), NET 16,751 (96,635) 29,874 (184,539) INCOME/(LOSS) BEFORE TAX PROVISION ($3,247,936) ($3,378,261) ($6,254,744) ($5,177,191) INCOME TAX 0 0 0 0 NET INCOME/(LOSS) ($3,247,936) ($3,378,261) ($6,254,744) ($5,177,191) BASIC PER SHARE DATA: BASIC WEIGHTED AVERAGE OF COMMON SHARES OUTSTANDING 9,755,150 9,697,114 9,755,150 9,514,482 BASIC EARNINGS/(LOSS) PER SHARE ($0.33) ($0.35) ($0.64) ($0.54) ARIEL CORPORATION CONDENSED PRELIMINARY CONSOLIDATED BALANCE SHEET (Unaudited) June 30, December 31, ASSETS 1999 1998 Current Assets Cash and cash equivalents $11,026,567 $17,996,575 Accounts receivable, net 2,453,554 3,593,709 Inventories 2,051,706 2,857,326 Prepaid Expenses 467,150 449,691 Other receivables 1,099,123 1,378,781 17,098,100 26,276,082 Equipment, net 1,308,213 1,365,354 Goodwill & Other Intangible Assets 4,227,179 5,341,599 Other assets 647,218 699,345 Total assets $23,280,710 $33,682,380 LIABILITIES & STOCKHOLDER'S EQUITY Liabilities $10,185,996 $13,976,883 Stockholder's equity 13,094,714 19,705,497 Total liabilities & stockholder's equity $23,280,710 $33,682,380
SOURCE Ariel Corporation
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