Ariel Corporation Reports Preliminary Unaudited Second Quarter Results
CRANBURY, N.J., Aug. 9 /PRNewswire/ -- Ariel Corp. (Nasdaq: ADSP) today reported net sales of $1,097,211 for the three months ended June 30, 2000 compared to net sales of $2,760,021 for the three months ended June 30, 1999. Ariel reported a net loss of ($6,785,563) or ($0.52) basic and dilutive loss per share for the three months ended June 30, 2000 compared to net loss of ($3,267,936) or basic and dilutive loss per share of ($.33) for the three months ended June 30, 1999. Per share losses for the three months ended June 30, 2000 were ($.34) prior to restructuring and other charges. In June 2000 the board of directors approved a plan to phase out the Company's low end products and reduce ongoing investment in these products in Europe. Accordingly, results for the quarter were impacted by other non-recurring charges of $2.3 million including goodwill of $1.5 million as well as restructuring of approximately $800,000. Of the $2.3 million approximately $2.0 are non-cash charges. For the six months ended June 30, 2000, net sales were $3,169,432, compared to net sales of $5,824,661 for the six months ended June 30, 1999. Ariel reported a net loss of ($9,598,539) or ($0.78) basic and dilutive loss per share for the six months ended June 30, 2000 compared to net loss of ($6,274,744) or basic earnings and dilutive loss per share of ($.64) for the six months ended June 30, 1999. Per share losses for the six months ended June 30, 2000 were ($.59) prior to restructuring and other charges. The decrease in sales reflects two major transitions; original equipment manufacturer (OEM) customers using older products supplied by Ariel are approaching the end of their products' respective life cycles and a delayed ramp-up of both new OEM and ISP projects. Gross margins were impacted by a write-down of approximately $548,000 in inventories as the Company continues to phase out products focused outside of its targeted markets. Margins were approximately 57% before recording inventory reserves. "In the second quarter, Ariel successfully worked through significant transitions and structural changes. I believe these changes significantly improve Ariel's opportunity for future success and I remain positive about our ISP and OEM prospects in future quarters," said CEO and President, Dennis Schneider. For the three months ended June 30, 2000, operating expenses decreased $399,463 to $4,515,514 from $4,914,977 before non-recurring restructuring charges. Operating expenses for the six month period decreased $1,075,041 to $8,532,369 from $9,607,410 for the comparable period last year before non-recurring restructuring charges. Ariel recorded a backlog of $1.7 million and working capital of $8.4 million as of June 30, 2000. 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 judgment 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 Six Months Ended June 30, June 30, 2000 1999 2000 1999 SALES $1,097,211 $2,760,021 $3,169,432 $5,824,661 GROSS MARGIN 75,829 1,630,290 1,279,676 3,302,792 OPERATING EXPENSES 4,515,514 4,914,977 8,532,369 9,607,410 RESTRUCTURING AND OTHER CHARGES 2,356,656 0 2,356,656 0 LOSS FROM OPERATIONS ($6,796,341) ($3,284,687) ($9,609,349) ($6,304,618) OTHER INCOME 10,778 16,751 10,810 29,874 (LOSS) BEFORE PROVISION FOR INCOME TAXES ($6,785,563) ($3,267,936) ($9,598,539) ($6,274,744) PROVISION FOR INCOME TAXES 0 0 0 0 NET (LOSS) ($6,785,563) ($3,267,936) ($9,598,539) ($6,274,744) BASIC PER SHARE DATA: BASIC WEIGHTED AVERAGE OF COMMON SHARES OUTSTANDING 13,073,920 9,760,150 12,376,934 9,760,150 BASIC (LOSS) PER SHARE ($0.52) ($0.33) ($0.78) ($0.64) ARIEL CORPORATION CONDENSED PRELIMINARY CONSOLIDATED BALANCE SHEET (Unaudited) June 30, December 31, ASSETS 2000 1999 Current Assets Cash and cash equivalents $6,749,205 $7,088,431 Accounts receivable, net 841,053 3,091,362 Inventories 3,074,080 3,303,057 Prepaid Expenses 755,091 775,943 Other receivables 336,642 383,676 11,756,071 14,642,469 Equipment, net 1,406,121 1,387,128 Goodwill, Intangible & Other assets 1,626,807 3,787,475 Total assets $14,788,999 $19,817,072 LIABILITIES & STOCKHOLDER'S EQUITY Liabilities $5,018,833 $8,819,833 Stockholder's equity 9,770,166 10,997,239 Total liabilities & stockholder's equity $14,788,999 $19,817,072
SOURCE Ariel Corporation
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