Wall Street Transcript Interview with Roy W. Olivier, President and Chief Executive Officer of ARI Network Services, Inc. (ARIS)

Wall Street Transcript

67 WALL STREET, New York - November 30, 2012 - The Wall Street Transcript has just published its Business and Application Software Report offering a timely review of the sector to serious investors and industry executives. This special feature contains expert industry commentary through in-depth interviews with public company CEOs, Equity Analysts and Money Managers. The full issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.

Topics covered: Application Software Consolidation Activity - Cloud Computing and SaaS Trends - Health Care Transition to ICD-10 - Outsourcing and Offshoring Trends

Companies include: ARI Network Services, Inc. (ARIS)

In the following excerpt from the Business and Application Software Report, the President and CEO of ARI Network Services discusses the outlook for his company for investors:

TWST: Please begin with a brief summary on ARI Networks, and then tell us what the company is doing today.

Mr. Olivier: Well, you know ARI is really in the business of helping our customers sell more stuff. And "stuff" to us is defined as a lead for a whole good, the sale of parts, garments and accessories in a number of vertical markets, including outdoor power, marine, RV, power sports, white goods and consumer ag. For instance, if someone needs parts or accessories for, let's say, a Harley-Davidson or Yamaha motorcycle, we can provide the online information to order those parts directly from the manufacturer or from aftermarket providers. This includes things like extra seats, jackets, helmets, etc. So pretty much all of our solutions fall into that umbrella of helping our customer sell more merchandise.

TWST: Looking at what ARI provides, which is essentially software as a service, otherwise known as SaaS, would that be a correct assumption?

Mr. Olivier: Yes, we have three core products. Two of the three are pure software as a service, and the third is a hybrid software as a service. All of our products are subscription based, and about 84% of our revenue is recurring from subscriptions or fees from software as a service.

TWST: What are some of the dominating or prevalent trends you see out there today? And over the next two years, what impact will these trends have on ARI?

Mr. Olivier: An important positive trend is the continuing dramatic growth of online sales. Many dealers are reporting well under double-digit, year-over-year sales of OEM and aftermarket parts and accessories in their brick-and-mortar locations. So clearly, the online component of their businesses is growing much faster than the brick-and-mortar operations that they're in today.

In terms of negative trends, particularly in 2008 and 2009, we saw a lot of dealer consolidation. We saw dealers going out of business. We saw dealers merging with larger stronger dealers in their market segments. As a result, we have fewer dealers today than we had four or five years ago. That being said, the dealers that are left today are stronger, and they run their businesses in a way that benefits ARI because our value proposition is to increase the efficiency of their parts counter.

Our focus is to drive more sales online, as well as at the brick-and-mortar parts counter. We don't typically get much pushback from our clients for the $300 to $500 a month fee. They recognize the value proposition, and I know that they are going to sell more stuff, and that's going to more than pay for the expense. So overall, we've seen some nice organic growth over the last few years, even though we've seen some dealer consolidation in our vertical markets.

TWST: Regarding client profiles, do you see them changing or evolving over the next few years? What's going on there?

For more of this interview and many others visit the Wall Street Transcript - a unique service for investors and industry researchers - providing fresh commentary and insight through verbatim interviews with CEOs, portfolio managers and research analysts. This special issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.

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