Milwaukee-based ARI Network Services Inc. spent about $200,000 on its efforts to quell a proxy contest and the integration of a new acquisition in its fiscal second quarter, according to an earnings report filed with the SEC Thursday.
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Those costs ate into the sales software and marketing company’s profit. ARI reported net income of $242,000, or 1 cent per share, in the second quarter, down from $448,000, or 3 cents per share, in the second quarter of 2016.
ARI’s operating income was $672,000, down from $873,000 in the year-ago quarter, which the company attributed to both the proxy contest costs and the integration of Auction 123, which it acquired for $10.3 million in November.
The proxy fight with private investment firm Park City Capital LLC, which sought to elect two of its own directors, ended at the annual shareholder meeting in January. ARI’s directors retained control.
Revenue totaled $13.2 million in the second quarter, up 12.7 percent from $11.8 million in the second quarter of 2016.
“We are pleased with where we stand halfway through our fiscal year,” said Roy Olivier, president and chief executive officer of ARI. “With our proxy matter concluded and several one-time charges behind us, we are well-positioned to expand adjusted EBITDA margins in the back half of the year. In addition, the initiatives we have put forth to address churn are working, as we experienced our third straight quarter of year-over-year churn improvement. Combined with the strong second quarter bookings, we expect stronger organic revenue growth in the second half of the year, complemented by the revenue we are driving through our acquisition of Auction 123.”
