Ariel Corporation Reports Preliminary Unaudited Third Quarter Results
CRANBURY, N.J., Oct. 25 /PRNewswire/ -- Ariel Corp. (Nasdaq: ADSP) today reported net sales of $2,180,597 for the third quarter ended September 30, 2000 compared to net sales of $1,097,211 for the second quarter ended June 30, 2000 and $2,869,593 for the third quarter ended September 30, 1999. Ariel reported a net loss of ($3,144,488) or ($0.24) basic and dilutive loss per share for the third quarter ended September 30, 2000 compared to a net loss of ($6,785,563) or basic and dilutive loss per share of ($.52) for the second quarter ended June 30, 2000 and a net loss for the third quarter ended September 30, 1999 of ($2,983,993) or basic and dilutive loss per share of ($.31). Gross margins were approximately 61% for both the third quarter and nine months ended September 30, 2000 before recording inventory reserves. Gross margin percentages for the second quarter ended June 30, 2000 were also 61% before recording inventory reserves. Gross margins for the third quarter were impacted by a write-down of approximately $395,000 in inventories as the Company continues to phase out low end products. Gross Margins for the nine months ended September 30, 2000 were impacted by approximately $1.0 million of inventory write-downs. For the nine months ended September 30, 2000, net sales were $5,350,029, compared to net sales of $8,694,254 for the nine months ended September 30, 1999. Ariel reported a net loss of ($12,743,028) or ($1.01) basic and dilutive loss per share for the nine months ended September 30, 2000 compared to a net loss of ($9,258,737) or basic and dilutive loss per share of ($.95) for the nine months ended September 30, 1999. Per share losses for the nine months ended September 30, 2000 were ($.82) prior to restructuring and other charges. For the third quarter ended September 30, 2000, operating expenses decreased $406,965 to $4,108,549 compared to $4,515,514 for the second quarter ended June 30, 2000. For the nine month period ended September 30, 2000 operating expenses, before non-recurring restructuring charges, were $12,640,919. This represents a decrease of $1,218,915 from $13,859,834 for the comparable period last year. Results for the current nine month period include non-recurring charges of $2.4 million for the impairment of goodwill related to the phase out of the Company's low end products as well as restructuring costs. Approximately $2.0 million of the $2.4 million are non-cash charges. Ariel recorded a backlog of $3.2 million as of September 30, 2000 compared to $1.7 million as of June 30, 2000. Ariel had working capital of $5.1 million as of September 30, 2000. "Ariel's sales growth over the previous quarter reflects the first full quarter of availability of the RS4200 and a greater mix of Internet infrastructure sales as we continue our shift to the ISP market. We are optimistic about Ariel's future because of these improving results, the strengthening of our backlog position, the recent awards for the RS4200, OEM opportunities and the introduction and certification of our BypaSS7(R) products," said CEO and President, Dennis Schneider. 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: firstname.lastname@example.org. 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 Sept. 30, June 30, March 31, 2000 2000 2000 Sales $2,180,597 $1,097,211 $2,072,221 Gross margin 1,322,251 668,829 1,248,847 Inventory reserves 395,000 593,000 45,000 Operating expenses 4,108,549 4,515,514 4,016,856 Restructuring and other charges 0 2,356,656 0 Loss From Operations ($3,181,298) ($6,796,341) ($2,813,009) Other income 36,810 10,778 32 (Loss) before provision for income taxes ($3,144,488) ($6,785,563) ($2,812,977) Provision for income taxes 0 0 0 Net (loss) ($3,144,788) ($6,785,563) ($2,812,977) Basic per share data: Basic weighted average of common shares outstanding 13,073,920 13,073,920 11,703,359 Basic (loss) per share ($0.24) ($0.52) ($0.24) Ariel Corporation Condensed Preliminary Consolidated Statements of Operations (Unaudited) Three Months Ended Nine Months Ended September 30, September 30, 2000 1999 2000 1999 Sales $2,180,597 $2,869,593 $5,350,029 $8,694,254 Gross margin 1,322,251 1,781,512 3,239,927 5,144,304 Inventory reserves 395,000 45,000 1,033,000 105,000 Operating expenses 4,108,549 4,252,424 12,640,919 13,859,834 Restructuring and other charges 0 369,528 2,356,656 369,528 loss from operations ($3,181,298) ($2,885,440)($12,790,648) ($9,190,058) Net ineterest & other income/(expense) 36,810 (98,553) 47,620 (68,679) (Loss) before provision for income taxes ($3,144,488) ($2,983,993)($12,743,028) ($9,258,737) Provision for income taxes 0 0 0 0 Net (loss) ($3,144,488) ($2,983,993)($12,743,028) ($9,258,737) Basic per share data: basic weighted average of common shares outstanding 13,073,920 9,760,150 12,610,958 9,760,150 Basic (loss) per share ($0.24) ($0.31) ($1.01) ($0.95) Ariel Corporation Condensed Preliminary Consolidated Balance Sheet (Unaudited) September 30, December 31, ASSETS 2000 1999 Current Assets Cash and cash equivalents $3,915,528 $7,088,431 Accounts receivable, net 1,465,669 3,091,362 Inventories 2,540,995 3,303,057 Prepaid and other current assets 967,697 1,159,619 8,889,889 14,642,469 Equipment, net 1,269,793 1,387,128 Goodwill, Intangible & Other assets 1,465,399 3,787,475 Total assets $11,625,081 $19,817,072 LIABILITIES & STOCKHOLDER'S EQUITY Liabilities $5,371,216 $8,819,833 Stockholder's equity 6,253,865 10,997,239 Total liabilities & stockholder's equity $11,625,081 $19,817,072
SOURCE Ariel Corporation
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