Ariel Corporation Reports Unaudited First Quarter Results

Apr 26, 2000, 01:00 ET from Ariel Corporation

    CRANBURY, N.J., April 26 /PRNewswire/ -- Ariel Corp. (Nasdaq:   ADSP) today
 reported net sales for the three months ended March 31, 2000 of $2,072,221 as
 compared to net sales of $3,073,529 reported for the three months ending March
 31, 1999.  The net loss for the three months ending March 31, 2000 was
 ($2,812,977) or ($.24) basic and dilutive loss per share.  Comparatively, the
 first quarter 1999 net loss was ($3,008,817) or basic and dilutive loss per
 share of ($.31).
     The decrease in sales is the result of a shift in orders from original
 equipment manufacturers (OEMs) to future quarters and a delay in the release
 of new RS4200 remote access products.
     The Company recorded a backlog of approximately $2 million as of March 31,
 2000 as compared to $519,000 as of December 31, 1999.
     As a percent of sales, gross margins were 58% for the quarter ending March
 31, 2000 as compared to 55% for the first quarter of 1999.  Gross margin
 percent improvement from 55% to 58% was the result of continued focus on
 pricing and inventories.
     Operating expenses decreased $758,474 (or 16%) to $4,016,856 from
 $4,775,330 for the three months ending December 31, 1999.  The decrease in
 operating expenses was $687,029 (or 15%) as compared with the same period last
     Despite the reduction in revenues, operating losses were reduced by
 $471,093 to ($2,813,009) as compared to the quarter ending December 31, 1999.
 The operating loss was reduced by $210,945 as compared to ($3,023,954) for the
 three months ended March 31, 1999.
     On February 24, 2000 the Company completed a private placement resulting
 in proceeds of approximately $8 million.  Cash as of March 31, 2000 was
 $11,122,527 and working capital was $12,871,272 as compared to cash of
 $7,088,431 and working capital of $7,827,522 as of December 31, 1999.
     "In Q1, we reduced the operating loss and increased backlog.  Our new
 RS4200 products began shipping and have been well received and the field trial
 process for our signaling gateway technology has begun.  As a result of the
 expense control programs implemented last year, operating expenses were
 reduced 15% as compared to the fourth quarter of 1999 and we continue to
 aggressively manage expenses and cash", commented CEO and President, Jay H.
 Atlas.  He added, "While we are not happy with Q1 sales performance, we remain
 optimistic about both our OEM and ISP prospects for the mid and long term."
     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:
 World Wide Web:
     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
                                                       Three Months Ended
                                                           March 31,
                                                     2000             1999
     SALES                                         $2,072,221     $3,073,529
      GROSS MARGIN                                  1,203,847      1,679,931
     OPERATING EXPENSES                             4,016,856      4,703,885
      LOSS FROM OPERATIONS                       ($2,813,009)   ($3,023,954)
     OTHER INCOME (EXPENSE), NET                           32         15,137
      INCOME TAXES                               ($2,812,977)   ($3,008,817)
     PROVISION FOR INCOME TAXES                             0              0
     NET INCOME/(LOSS)                           ($2,812,977)   ($3,008,817)
      COMMON SHARES OUTSTANDING                    11,703,359      9,755,150
     BASIC EARNINGS/(LOSS) PER SHARE                  ($0.24)        ($0.31)
                               ARIEL CORPORATION
                             CONDENSED PRELIMINARY
                           CONSOLIDATED BALANCE SHEET
                                                 March 31,       December 31,
     ASSETS                                         2000             1999
     Current Assets
       Cash and cash equivalents                  $11,122,527     $7,088,431
       Accounts receivable, net                     1,968,415      3,091,362
       Inventories                                  3,104,783      3,303,057
       Prepaid Expenses                               670,521        775,943
       Other receivables                              356,993        383,676
                                                   17,223,239     14,642,469
     Equipment, net                                 1,460,681      1,387,128
     Goodwill, Intangible & Other assets            3,603,867      3,787,475
       Total assets                               $22,287,787    $19,817,072
     Liabilities                                   $6,193,324     $8,819,833
     Stockholder's equity                          16,094,463     10,997,239
     Total liabilities & stockholder's equity     $22,287,787    $19,817,072

SOURCE Ariel Corporation